In this episode of Company Breakdowns, host Lorenzo Bartolini and Footprint Co-founder and CEO Eli Wachs discuss the complex landscape of digital identity verification and fraud prevention. Wachs explains how his company addresses the growing sophistication of identity fraud through "portable identity" infrastructure, enabling secure user onboarding for financial services. — 📰 Be notified early when Turpentine's drops new publication: https://www.turpentine.co/exclusiveaccess  — SPONSOR: CARTA | NETSUITE | SHOPIFY | ADQUICK Carta Carta is offering up to 40% off a new Carta plan, including cap table management, QSBS Attestation, and Carta Total Compensation. This limited-time offer runs through the end of July at ⁠z.carta.com/econ102⁠. NetSuite More than 41,000 businesses have already upgraded to NetSuite by Oracle, the #1 cloud financial system bringing accounting, financial management, inventory, HR, into ONE proven platform. Download the CFO's Guide to AI and Machine learning: ⁠⁠⁠⁠⁠https://netsuite.com/102 Shopify Shopify is the world's leading e-commerce platform, offering a market-leading checkout system Shoppay and exclusive AI apps. Nobody does selling better than Shopify. Get a $1 per month trial at https://shopify.com/momentofzen.⁠⁠⁠⁠⁠ AdQuick The easiest way to book out-of-home ads (like billboards, vehicle wraps, and airport displays) the same way you would order an Uber. Ready to get your brand the attention it deserves? Visit ⁠⁠⁠⁠⁠https://adquick.com/⁠⁠⁠⁠⁠ today to start reaching your customers in the real world. -- RECOMMENDED PODCAST: Check out Modern Relationships, where Erik Torenberg interviews tech power couples and leading thinkers to explore how ambitious people actually make partnerships work. Founders Fund's Delian Asparouhov and researcher Nadia Asparouhova kick off the series with an unfiltered conversation about their relationship evolution. Apple: https://podcasts.apple.com/us/podcast/id1786227593 Spotify: https://open.spotify.com/show/5hJzs0gDg6lRT6r10mdpVg YouTube: https://www.youtube.com/@ModernRelationshipsPod -- LINKS: Footprint: https://www.onefootprint.com/ -- X: @lozo_the_bozo (Lorenzo) @EliWachs (Eli) @turpentinemedia (Turpentine) -- KEY HIGHLIGHTS: 42 million US adults were victims of identity fraud in 2023 - that's 1 in 5 people, with $30-50 billion lost annually AI is exponentially worsening fraud by enabling sophisticated synthetic identities and deepfakes Most current identity verification is fundamentally flawed - companies blindly send data through APIs without observing user behavior Footprint's "portable identity" approach treats fraud as a math problem: instead of finding every fraudster, detect when two people claim the same identity Former Macau mafia now operates sophisticated fraud networks from the Laos-Myanmar-Thai border, targeting Americans through "pig farming" operations The identity verification market is worth $700 million with room for multiple public companies Synthetic identity fraud accounts for 20% of credit losses at some lenders and is the fastest-growing fraud type Fraudsters have significant advantages: no red tape, no bureaucracy, and fraud is their full-time job Early customers won't question your trustworthiness - they believe in your vision so deeply they don't think to ask Contrarian startup advice: win on price early, be willing to act as a "dev shop" for large customers, and measure success by customer testimonials The Power Broker hiring rule: automatically hire any frontend engineer who has read the 1,600-page book about urban planner Robert Moses Network effects will determine winners - first company to 150 million portable identities gains major advantage "If you live in America, your identity's been leaked" - focus should be on detection and mitigation, not prevention Best identity protection remains surprisingly analog: passkeys, two-factor authentication, and verification through trusted channels