FTC 221 | Giving It 100%

221: Stumbling Into Something That Works: Giving It 100% With Nicholas Hinrichsen

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Failure is not the endpoint. In this episode, Nicholas Hinrichsen, Founder and CEO of WithClutch, joins Mitch as they discuss the opportunities in failure and the importance of giving it 100%. From soccer and golf to successful entrepreneur, Nicholas talks about his journey and the revolutionary that he is. Mitch and Nicholas take a deeper look into Nicholas’ success and the outside forces that played a huge role in helping him pivot amidst failures. Tune in and discover how Nicholas stumbled into something that works and the ideas you can apply to your success.

Stumbling Into Something That Works: Giving It 100% With Nicholas Hinrichsen

Welcome to this moment in time where you get to chill out, tune in, and extract wisdom you can use to grow your business with your first thousand clients. Do you want more publicity, more leads, and more clients? I got exactly what you need and you can get it right now. I have collected my absolute best tactical steps for getting on podcasts. If you follow these directions, you can be scheduled for 2 to 10 new appearances. It’s free. Since it’s free, I can’t offer you a money-back guarantee. I will say that you will find a fantastic way to spread the word. Besides that, I’m also going to share my method of creating killer press releases that will get distributed to thousands of news sources, all with detailed instructions and all free. While you’re at it, I’ll also help you find a joint venture partnership using the same cheat sheet I use for my own team. All of this is completely free. You can get it at www.ProfitStackingSecrets.com. Go forth and use it to get free press and even a new client. On to my amazing guest and his incredible story.

A German native, he believed as a young man that sports was his ticket out of a mediocre future and hope to parlay his promising soccer talents onto a professional team. He did that. All of this came to a crashing end, no pun intended, as he collided with a fence while skiing and he broke his leg. Down for at least six months, he decided to swap soccer for golf and went out and soon became the Bavarian youth team leader and later winning five championship titles. He decided that it was time to get serious about business. Soccer and golf is fun, but it’s time to make some money. He moved to the US and enrolled at Stanford Business School to earn an MBA. As you know, not everybody can get into Stanford to earn an MBA. He must have been a smart guy.

After graduating from Stanford, he decided to start a business. His goal was to create a company that would be like the Amazon of used cars. That business started and was funded with $10 million in venture capital. www.Carvana.com, which I’m sure everybody’s heard of because they do radio and television, came along and bought his company, making his VCs and hopefully him happy. That became the starting point of his new business, which will revolutionize the car loan refinancing industry like he’s done before. He’s here to tell us all about it, starting a company, raising money, finding a buyer, and then doing it all over again. Welcome, Nicholas Hinrichsen, to the show.

Thank you, Mitch, for having me. I appreciate it.

It’s my pleasure. Nick, what an achievement to have gone through all of that and come out the other end with both a little bit of pocket change and a new company. Tell us how it all started.

In hindsight, it sounds straightforward and it was easy. Trust me, it wasn’t. Let’s start at the beginning. I was born and raised in Germany. I love playing soccer. My best friends and I played soccer and it was the sport I chose to hang out with friends and make new ones. I went skiing and I wasn’t careful. I raced away from the group and then when I noticed that they were going a different direction, it was too late because there was a fence between them and me. I hit that fence and I broke my leg. I had to be evacuated with a helicopter to go to the hospital. Luckily, I’ve recovered quickly but I wasn’t allowed to play soccer for half a year.

During the vacation, there was a golf course next to where we stayed. I started hitting golf balls and started enjoying that. What’s fun about golf is you have a handicap and every time you play a tournament you improve your handicap sets. It’s addictive. It’s like game theory upside down and played against you. That’s the real reason why it stuck to me. I enjoyed doing it and then I became better. I was lucky to be surrounded by good players. I ended up playing in the national team. 

I have to check in with you on something here. You’re making it sound a little bit like, “I became a champion soccer player. I got hurt. I then became a champion golfer.” You’re like a savant. How do you do this? How does somebody become good at a sport that they’re brought into a semi-pro team like you were? What did it take to do that? You dismissed it as if it were like, “My buddies and I were hanging out and I ended up in tournaments.”

The most important thing is to enjoy something. Click To Tweet

The most important thing is to enjoy something. I’m saying that because my brother played golf and soccer with me too. He didn’t get a kick out of it. He didn’t have as much fun as I had. While he got distracted and didn’t care as much and tried a bunch of different things, I got hooked. It was fun for me to play soccer with my friends and the same was true for golf. This is true for starting your business too. If you enjoy what you’re doing, give it 100%. If you give it 100%, you’ll end up doing well. I truly believe that’s the case.

I have to agree and disagree with you. I have experienced the same thing in my world as well, in certain areas, but I know a lot of people who would be saying, “That’s Nicholas, because I gave 100% and I ended up failing. I couldn’t accomplish my goals even though I gave 110%.” There’s another element to this. I’m going to propose that I have a clue. Here’s my clue. My belief is that you tapped into a power greater than yourself. My belief is that you are aligned with forces that are outside of your physical senses and conspire, if you will, to go forward and be the best that you possibly can be. Here’s the key. You have a knowing that you are not alone. You have a feeling that you are destined to be that and therefore you will. Is that all accurate?

I would have used different words to describe it but hearing it that way, it makes sense. I felt at home when I played golf. I knew as I was getting out that it was the right thing to do. There was nothing else that I enjoyed more at the time. There was no other place where I felt safer or less vulnerable than on the golf course. You’re right, you found your destiny a little bit. The other thing you said that I thought was interesting is there’s nothing wrong with failing. Phil Knight, the Founder of Nike, has this good saying that I like a lot, “There’s no downside or no risk of failing for as long as you succeed the last time you try.”

I’m going to steal that from you, Nicholas.

I stole it from Phil. What I’m not telling you when I told you the story about playing soccer and golf, I’m sure there were a gazillion other things I’ve tried. I remember that my parents always wanted us to play tennis and I was surprisingly bad at it. I didn’t tell the other things that I tried that didn’t work. That’s why me telling you that I played soccer and golf sounds like, “You chose to become good at it.” I’m underestimating or not mentioning all the failures I went through in order to figure out what I enjoyed.

I’m glad you mentioned it because like you, I’ve been through many things that I’ve failed out. Also, like you, I never saw failure as an endpoint. To me, it was a pivot point. I would see failing at something and I’d say to myself, “I gave it 100%, it didn’t work. Now I move on to the next thing, even if I don’t know what that next thing is.”

That’s a much better description of how to go about things than trying to pick one thing and become good at it. You mentioned that I started this company, the Amazon for used cars. It started out differently. I moved to the US. I met Chris, my future cofounder. He’s a huge car enthusiast. He and I were thinking about starting a business in the car financing space. Funny enough, not closes the loop because years later, we did it. At the time, we thought about offering financing to underbanked people. We went out with a conviction that it should be possible and learned a lot and realized that it’s not a good business or not a business we’re particularly well qualified to do. You could argue that was a failure. It allowed us to have conversations with classmates about selling cars.

All of a sudden, everybody asked us to sell their cars. Through failing on what we wanted to do, we discovered and we were surprised by other things that we could help with. That’s how we ended up selling our classmates’ cars. We must have sold 50 to 100 or so. I realized it’s a painful experience. I realized we can build technology that makes it better and pitched to our investors, raised money, and then we’re off to the races with a different idea than the initial one. In everything we’re doing, we need to fail a couple of times until we stumble into something that works, if that makes sense.

FTC 221 | Giving It 100%
Giving It 100%: If you enjoy what you’re doing, give it 100%. If you give it 100%, you’ll end up doing well.


Are you familiar with the FedEx story and Fred Smith?

Was it at Harvard Business School? He wrote a paper and he got a D or something, a bad grade. The teacher said, “This is impossible.”

Yes, it was his Master’s thesis. It’s his idea and he called the company Federal Express. The idea of the company was to decrease the time it took for the check to clear. What that means in the traditional sense, when you deposit a check in the United States, it would need to travel to the issuing bank and from there, travel physically to the bank where it would be deposited. They allowed eight days for a check to clear. His idea was, “Why don’t we put all of the check clearing equipment and all of the uncleared checks on a plane? While in flight, do all of the clearing work so that when we land, we can distribute these checks to all the regional banks through a hub.” His professor said, “You moron. Did you figure out how much that equipment weighs and all the paper with that check? You won’t be able to get off the ground. It’s too heavy to fly.” The brilliance of his plan was the hub. That became what we now know as FedEx.

I thought he was pitching or writing a paper around shipping goods or packages. I didn’t realize it was about checks. That’s even better.

It evolved into shipping packages. It wasn’t that in the beginning. It’s quite the opposite. It was all about this Federal Express clearing of the federal check cashing process. It makes the story even better because it’s even that much dumber.

It’s a great example. You’re completely right.

What was the name of the company that you sold to Carvana?

It was Carlypso. We were thinking about a financing business for underbanked Americans. It turned into a peer-to-peer car selling platform where we’ll help you sell your car to somebody else. We then realized that this peer-to-peer thing doesn’t scale well because you’re dealing with two customers with opposing interests. If you make a deal happen, you disappoint both of the customers. We, later on, realized that we don’t need to take the inventory from private individuals. There are all these institutions, leasing companies, and rental fleets, who have thousands of cars and are rational around pricing. For them, this is metal and they go by numbers. The ultimate business that started working and we ended up selling to Carvana was a business where we sold cars that were owned by leasing and rental companies to individuals. It’s 100% online, not through the traditional dealership model. It was at least pivot number three that worked.

There's nothing wrong with failing. Click To Tweet

That’s what it takes. Nicholas, you’re such a great example of that. My intro made you sound like you skipped through life from success to success. When we get into the weeds here, it’s what real life is like. You try things, they fail. You try something else and it works a little bit. You try the next thing and it works great. Let’s talk about the experience of taking an enterprise that you built and not just raising money but finding a buyer. What did you go through with that?

These things always play out differently than you expect. Our business had three phases like the last version. The first phase is finding what we call product-market fit. This is the phase where you ask yourself, “What is the value that I want to provide the customers? What’s the business I want to scale?” People want it. For us, that meant finding this business of using the wholesale inventory and marketing it straight to consumers. Once we realize, “People want that. This works well.” We then entered the phase of scaling, where we needed to figure out how all these processes that we put together, hack together with duct tape, you name it, and how to scale those. Will it work well for the first ten customers? Will it work for the next 150 as well? That was the scaling phase. In that phase, you hire people.

In the first phase, product-market fit, the founders do all the work. You need to figure out what people want. In the phase of scaling, you hire experts in each of the departments so they can run the departments, be it sales, operations, customer service, data science, and engineering. In the last phase of our business, this is not always true because not every business gets sold. If you end up selling your company, you need to figure out what is it that’s valuable that I am doing that other stakeholders of our transactions aren’t strong at? Would it make sense for them to own it? Carvana was a good example because they were set up differently than us. It’s a much more physically intensive business. In hindsight, that’s the right way to do it. They were building multiple businesses that were vertically integrated at once.

When you have venture funding, it’s hard to do that. Venture capitalists want you to be narrowly focused. Ernie Garcia and the family already had a lot of experience in the car space. Through vertical integration, they know they can create a unique experience. What that also means, however, is that you’ll spread yourself relatively thin. It takes you longer to become an expert in each of the problems that you need to solve. One problem that you need to solve when you sell used cars online is to become good at describing them. You need to go from a VIN number to knowing what packages, options, and equipment is in the car. At scale, there were 200,000 cars all at once. Since we were doing that, that’s the one thing we became good at. It turned out that the most valuable thing we had built was not our business of selling cars, but the software powering it. That’s what piqued Carvana’s interest and they said, “We want that. We were about to kick off a process of building something like that, but you’re already experts in this. Can we absorb your company and have you as the expert in that part?”

This is important. Whenever you build a business, unless it’s a little mom-and-pop service business that’s more like a job, the question you would ask yourself is, “Who am I building this business for? Who is going to buy my business? Who would the ideal buyer be when we are mature? When we do have clients and lead flow and cashflow and profits, who should be the ideal buyer in this business?” Did you ask yourself that question when you started?

When you raise venture capital, usually that doesn’t work. When you raise venture capital, you need to build such a big business that’s valuable and almost standalone. You can’t rely on another company acquiring you. In fact, you want it to be the other way around. If you want to be big that you create a moat or strengthen your core business by acquiring other businesses, that’s fine. Most of the companies that raise venture capital strive at going public eventually and then become a successful standalone. In our case, we didn’t get to that phase. We stumbled at some point. Our growth was not accelerating. If you raise venture capital, you need exponential growth. We weren’t seeing that. That’s why we decided to raise more money to at least talk to potential partners. Otherwise, we would have raised more money and continued on the journey that we were on.

It wasn’t your intention to sell the company. You didn’t necessarily build the software that runs your company to turn into a software product. You are hoping at some point to consolidate the entire used car industry.

That’s why it’s funny when you read out the bio. In hindsight, this sounds like, “This guy planned each of all these steps.” In reality, you could even argue that our own company was a little bit of a failure because we didn’t achieve our initial goal of becoming the Amazon for used cars. We became a good software business that powered what would, later on, become the Amazon for used cars.

FTC 221 | Giving It 100%
Giving It 100%: In everything you’re doing, you need to fail a couple of times until you stumble into something that works.


How would we describe the lesson here? What is the lesson that we want to communicate to our readers about what you said? Should we start with the idea that we are going to dominate an industry and own it all? Is that where you start?

You need to go even a step higher. You need to ask yourself, “What do you want your impact to be on humans?” Figure out if your business does that. In our case, we’re doing a better job with this company than we did with the previous one. Carvana is good at it. Carvana has these seven core values that they communicate publicly and one of them is to treat your next customer as if it was your mom. It does a good job of saying what you want to achieve. You want somebody who buys a car to have the perfect experience, the experience you would want your mom to have when she buys a car. If that’s the North Star, then you build a company with values, processes, vertical integration, and everything that’s necessary to deliver on that promise. If you do that and every customer is happy, dominating the industry becomes self-fulfilling all of a sudden. It’s a side effect of you doing the right thing to the customer.

In the new business, we’re doing a better job at that. Also, we’ve matured as founders and executives of these businesses. This time, our goal is to save Americans money in their car loans. Car loans can be as high as 29% interest rate, which is incredibly high. Even if you’re paying 20%, 15%, you spend so much time at the beginning of your car loan making payments that are interests. You’re barely paying off your principal, which means you’re not creating equity. You’re giving money to a lender. Whereas another person who doesn’t have such a high interest, that person pays less than interest can put more money aside and can build equity. All of a sudden, you have two people with completely different personal balance sheets. One has savings and the other one still has debt. We don’t want that to happen. We want people who are disciplined to make their payments to be rewarded for it so they can start building equity quicker and build wealth.

We’re talking to the amazing Nicholas Hinrichsen. He is the Founder of WithClutch. Nicholas, you’re the CEO as well.


He is sharing with us what his journey has been and we’re about to learn a lot more. Nicholas, here’s the question I would ask you after referring me to Carvana’s code. I love their values code. What is your code? What was the goal of WithClutch, which is the name of your new company? What did you set out to do? What is the big journey that you want to take your clients on?

The anecdote I’m going to tell you will make you understand why I care about it. When I moved to the US, I had no credit history. I had never taken out a loan. In Germany, people don’t do that. People save money and don’t spend money they don’t have. In the US, it’s different. Having credit history is important because it tells other companies and lenders, even AT&T in my case, that I have a history of paying my bills so they can extend their services to me. I graduated from school. Chris discovered that FIAT was offering this incredible lease promotion for these little FIAT 500 cars. That was $89 a month. Chris said, “We should get this.” It’s more expensive not to have them. In fact, it’s cheaper than my iPhone.

We went to the dealership and Chris was done in five minutes, $89 a month. When I sat down, it took 45 minutes for the finance manager to bring something to me. With a happy face, he told me, “Congratulations, Nicholas. You’re approved. Your payment is $1,200 a month.” I’m like, “What are you talking about? I came here for $89.” He’s like, “I’m sorry but you don’t have credit. It’s not that you have bad credit, you just don’t have any credit. We need to start high and then you can build credit.” Chris ended up co-signing this lease so I ended up paying $89. After I made six payments, I submitted my own credit application again and I realized I would qualify for a loan of up to $100,000 for 1.99%.

If you raise venture capital, you need exponential growth. Click To Tweet

The reason I’m telling this story is that it’s important to make your payments because it improves your credit. It’s also important to then check, “Do I qualify for a lower rate? Can I refinance?” People don’t usually do that. They don’t do it because they don’t know it’s possible, it’s inconvenient. There’s no advocate out there in the car space that helps car owners make good financial decisions. Based on my personal experience and seeing what other car owners are going through over the years, that intrigued me and motivated me to have an impact and address a problem that I felt myself.

Some of the greatest businesses are built by people solving a problem that up until then had gone unsolvable, which is what you did. You might say you stumbled upon the solution, but this is a pain point for many people all over the world and let alone the United States. What did you do differently? For example, if the Nicholas of today showed up to your site without credit, would they still be able to get a loan at a reasonable rate?

Wouldn’t it be that Nicholas was lucky that he had a business partner who co-signed? It would have been the Nicholas who had to accept the $1,200 payment that who would, down the road, then show up and realize that he qualifies for a much lower rate. That person could have reduced his payment from $1,200 to $89.

What you can do is help people once they have had some amount of history with credit.

There are two reasons why people are overpaying on their car loans. Number one, 80% of the people who have a car loan get it at the dealership. The dealer doesn’t have your best interest in mind. He won’t give you the loan that pays you the lowest rates. Instead, he’ll give you the loan that pays him the highest referral fee. The second you drive off the lot, you’re already overpaying by a little bit on your car payments. However, the bigger impact is when you make your payments and you repair or build your credit. If your credit improves over 6, 9, 12, 18 months, you’re guaranteed to qualify for a much lower rate. That’s the point in time when our service is helpful because we will help you out of the old loan and put you into a better and low-interest loan and save you thousands of dollars.

The biggest problem I’m seeing in the story, and this is part of where education comes in, is that most people don’t know that they can refinance a car loan. Readers, if you have a car loan, you’d be crazy not to go over to www.WithClutch.com and see if you can get a better rate. How does this affect any other element of this person’s life? For example, does it mean that they have to go and change all their insurance documents? Do they have to go and re-register the vehicle? What does it take, in terms of convenience or lack of, going forward?

It goes back to the value we want to create. The value we want to create is similar to imagining your next customer as your mother. We wouldn’t want our mother to go through that. Part of the value we provide is to take care of all of that. In fact, we’ll go over and beyond. Once we save your money in your car payments, we’ll help you figure out whether or not you can save on your insurance as well.

That’s awesome. Let’s leave this behind for a moment. Let’s go up 20,000 or 30,000 feet and talk about the future, Nicholas. You’ve created WithClutch. It’s an operating entity. It’s funded. It’s running. You have people working there. Where do you want to go? Where do you see this going?

FTC 221 | Giving It 100%
Giving It 100%: If your credit improves over months, you’re guaranteed to qualify for a much lower loan rate.


Thankfully and/or sadly, the market is huge. There are 100 million Americans in the car loan. The outstanding car loan debt is $1.3 trillion. It’s huge. It’s hard to put in numbers. Twenty percent of all the car loans based on our best estimates are car owners who are overpaying in their car loans. I wouldn’t want to stop until those 20% save money and lower their payments.

Let’s also make it clear that you would operate or help people before they buy that car, to begin with. Is it only refinancing? Can you help somebody get a loan to buy a car?

I can help with advice. Believe it or not, people will either not even care about my advice or not even think about the necessity of getting a loan. People don’t shop for loans. They shop for cars. By the time you go to the dealership, it’s too late for me to help. Otherwise, we would have addressed it earlier. Even if I tell you, “Mitch, here’s the perfect loan for you.” You go to the car dealership. You fall in love with the car. You negotiate. At the end, the car dealer will say, “You can only have this car for these terms if you finance through one of our lenders.” The dealer will push me if I’m giving you a loan out of the deal at the last minute. That’s why there’s no way to help you before you buy a car. You also need to make payments first to improve your credit. The best time is probably six months after you bought your car.

This has been incredible, Nicholas, sharing this whole business model and helping people understand something that most of us didn’t understand at all. We’re going to transition to a little bit more about you. We have several questions. This first question is helping readers get to know you a little bit better. It’s a question about maybe something you’ve never thought about before. Here it is. Who, in all of space and time, would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with?

I thought about that question. Usually, people answer, “I want to meet the president or the former president.” My answer changes based on where I am in life and what I’m working on. I’d love to meet and spend an hour, if he was willing to give me his time, with a gentleman called Archie Williams. Every now and then when I go to bed, I watch America’s Got Talent. He showed up on an episode and sang a beautiful song. He disclosed that he had spent 37 years of his life wrongly incarcerated. He was in jail for a crime he didn’t commit. He got out because the Innocence Project helped him. Our generation and my friends and the people I met, we’re lucky in life, going from good jobs to Stanford Business School and having all these opportunities. Still, sometimes you’re not satisfied or you always want more. I want to hear how life feels or sounds for somebody who felt like the door was shut forever. I feel like that would be an interesting conversation. It would level perspectives and remove some level of entitlement. He sounds like a friendly guy. I would be curious to hear his story firsthand.

It certainly would be a fascinating story. It would be a story of humanity. It’s not a business story. It’s a great choice. I’m glad you said that. It reminds people that we live in a world where not everything is black and white and not everything should be taken at face value, even car loans. A great person, I’m glad you chose him. Here’s the grand finale, the change the world question. What is it that you are doing or would like to do that truly has the potential to change the world?

A lot of things. I’m hopeful that what we’re doing at least makes a little dent and has an impact. What’s been impressive to observe is how Bill Gates developed over his career. He went from being admittedly capitalist, being smart around the products he builds but especially about the distribution channels and how he created a moat so nobody could remove his products. To then taking a step back and joining the Melinda Gates Foundation. I personally think that he will be the one to at least fund the research necessary for the vaccine for Coronavirus. For as long as the problems are not solved, he will be ambitious and would want to have them solved. When he takes a step back and realizes the impact he has, that must feel good. If I could do something like that, even at a smaller scale, that would feel good.

Nicholas, I have faith in you. You can do it. Let’s get started. If anybody would like to join you in your mission to change the world, you can get a hold of Nicholas by going to www.WithClutch.com. Is there something special that you have for my readers? Everyone loves these little gifts that we give away at the end of the show. Tell me what you’ve got.

It's important to make your payments because it improves your credit. Click To Tweet

The easiest thing to do is go to www.WithClutch.com, enter your phone number, three clicks from credit offer and then we can see how much we can save you. Since I’m on your side anyway, I don’t exactly know how to help more other than providing a good experience. What I could give away, if somebody wants to connect with me personally, either go through the website or find me on LinkedIn. If you have thoughts, ideas, feedback on your business or potentially help raising money, I’d love to be helpful.

Thank you for that offer. Nicholas, it’s been great. This is a terrific story. I love the path you’re on. I appreciate that you’re going to be saving people, thousands or maybe hundreds of thousands and maybe millions of dollars collectively. Thank you, Nicholas.


Thanks for being with me. I look forward to the next time we get a chance to talk again.

Thank you for having me.

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