Taylor Liggett – ID.me’s Strategy for Adoption, Monetization, and Brand for 100 Million Wallets and Beyond

Full Transcript

Transcript lightly edited for clarity.

Riley Hughes: Welcome to The Future of Identity, a show that surfaces hard-earned insights needed to succeed in the fast-evolving world of digital identity. On The Future of Identity podcast, we skip the conceptual and theoretical conversations and dive right into the tactical lessons learned from people in the trenches taking a product to market. I’m Riley Hughes, co-founder of Trinsic, and we are a reusable identity infrastructure company powering dozens of amazing identity products. In today’s episode, I talk to Taylor Liggett, Chief Growth Officer of ID.me, which is the largest reusable ID network in the United States and maybe the largest private digital ID network in the world. With over 100 million user wallets and 150 million in revenue, ID.me has figured some things out about reusable ID adoption and monetization. So first, I ask Taylor to validate some of my assumptions that if a ubiquitous reusable identity existed, wouldn’t every relying party want it?

Riley Hughes: And my assumption that reusable identity reduces the friction required to undergo a verification enough that it will actually expand the market and therefore increase the number of verifications that are done. We cover a bunch of tactical topics as well, like the education process needed to onboard relying parties, how the go-to-market differs for reusable ID versus traditional transaction-based IDV, ID.me’s decision to prioritize web experiences over requiring a mobile wallet, and the business model that ID.me charges its customers. And now that ID.me is so prominent in the USA, I looked around online for objections that people tend to have, and I threw some of them Taylor’s way and gave him the opportunity to speak to them. He did a great job addressing ID.me’s tie-in with government, their strategy to build consumer trust in their brand after experiencing both good and bad press. And how they’re thinking about the evolution of interoperability in the digital identity world.

Riley Hughes: I had a lot of fun talking to Taylor, and I hope that there are insights here that help you build the future of identity. Now, to my episode with Taylor. Welcome, Taylor.

Taylor Liggett: Hey, Riley. Great to be with you.

Riley Hughes: I’ve been in the identity space now for over six years, and I started in the self-sovereign identity world. And with self-sovereign identity, I would always say, when it’s ubiquitous, nobody ever objects. Everybody agrees this is a good idea. The question is always how you get there. Well, ID.me has gotten awfully close, at least in the United States. I was reading some recent stats in preparation for this episode, and, you know, 120 million wallets, 50 million IAL2 verified wallets, which means you’ve done really thorough identity verification on that user. So in terms of American adults, you have a lot of adoption. So I’m wondering, is that original assumption true? When you have a ubiquitous identity network, is it true that everybody just wants it and that there’s virtually no objections?

Taylor Liggett: I wish my job would be a lot easier if that was the case. I think a couple of things I would say on ubiquity: it is really important to acknowledge the importance of being able to be ubiquitous. Not everyone has an iPhone, as an example. There are fundamental challenges that stand in the way of ubiquity with a number of different companies that are out there. Also, it certainly doesn’t mean lack of competition or choice. Visa is ubiquitous. Mastercard exists. We fundamentally believe that choice should exist, and I think that will be an important part of how this continues to play out.

Riley Hughes: I thought about just asking the question, Do you have the easiest job in the world or what? But truthfully, it may be worth digging in just a little bit here, because being a podcast about reusable identity, obviously it’s hard to win customers and relying parties. No matter who you are, even the best companies in an industry have to work hard to grow and win customers and all of that. But I guess, speaking of choice and optionality in the marketplace, why would a merchant choose other networks? What are the challenges that you see in adoption in terms of bringing relying parties into the network?

Taylor Liggett: Look, I think in a world where we were settled on reusable ID, certainly we have huge advantages. For folks like you and myself and many of our colleagues and stuff, we live within a world where we eat, sleep, and breathe identity, and we know all these things. But to enterprises out there, I think the vast majority of identity service are using what I consider antiquated solutions, especially when you look at the big users of digital identity. They have their own whole sort of set of vendors that they use. A lot of it is leaned into a model that is the complete opposite of what we endorse in terms of having consumer-permissioned data and individuals being involved who know that I’m going to share this set of information with this relying party. And I think that leaders such as yourself, what ID.me has done, others, like, have really started to move the needle in terms of awareness and in terms of understanding reusable ID. But to me, it’s not competing against Clear, Login.gov; it’s changing the way the entire market.

Riley Hughes: What does that education process look like generally if you’re talking to someone who maybe doesn’t know the term reusable identity in the process of bringing relying parties into the network?

Taylor Liggett: It’s a great question. It, of course, differs depending on who you’re speaking to and the applications, but generally, I just find that it often takes people several times of digesting it before it actually really sinks in. And so there’s a couple of layers I give to this. Education, really important, and will continue to be a core part of what we all do. There’s also, though, situations where incentives aren’t always aligned. And what I mean by that is, if you’re bringing a solution like reusable ID into an organization where there’s a giant fraud team and a person that oversees all of that, staffs people and has processes and so on, this would be very disruptive to that. Like, in many cases, when you change the model, you don’t need to have a big fraud team. So if you’re talking to the wrong person, there may be a threatening or just an ego thing. So there’s that whole element as well that I think particularly on the commercial side will continue to be an aspect of reusable ID.

Riley Hughes: Speaking of my assumptions from six years ago and thinking about the self-sovereign identity world, I wanted to run one more past you, and that is that my belief is that when reusable identity will reduce the friction required to obtain a high assurance verification on a user. So today, the market for verifications, so to speak, is what it is because the market for verifications today is a function of the friction required to get users to jump through the hoops to do the verifications. And if we can reduce the friction dramatically, then the market will grow and the volume will go up. One example I’ve heard from Blake, your CEO, is the Bloomin’ Onion example that he likes to tell, where when he started ID.me, veterans were needing to share their social security number with Outback Steakhouse to get a free Bloomin’ Onion on Veterans Day or whatever, and it just seems messed up. But realistically, like Outback Steakhouse is not going to do a document verification on somebody to get a Bloomin’ Onion because it’s just way too much friction.

Riley Hughes: It’s just not proportional to the impact of what they’re trying to do. So I’m wondering if you have examples of where reducing the friction dramatically to prove who you are has expanded the market for verifications into somewhere that historically use any of these other services that you’ve talked about.

Taylor Liggett: Yeah, 100%. So I’ll give you two examples. Prior to ID.me, I was the head of identity at Sterling. I had spent a good amount of time within and adjacent to that space, and I was always just, like, shocked that identity didn’t underpin a background check. It was just fundamentally rooted off of whatever information someone provides. Spend a lot of time talking about why that’s ridiculous, but it just wasn’t in pre-employment processes. When I really went to try to solve this problem, one of the biggest challenges was friction and what this would add to what’s already a challenging process: hire people and bring them in. I don’t want to add one more step, and so on. But when you can come and lop off 40, 50, 60%, depending on the demographic of the person, and it just clicks and sharing information, it completely changes the calculation. And so that was one where we were successful in taking what had previously been something that really did not exist and shifting the market, still in the early stages, but shifting the market into a new solution.

Taylor Liggett: And I think fundamentally, the way that the employment space is shaped, reusable identity is particularly well suited for that, to gain benefits and payroll and blah, blah, blah. Your example, which is a great story unto itself of the Outback Steakhouse, they don’t need IAL2. They don’t need really any friction that’s going to get in the way of someone purchasing goods and services. But at the same time, like, people doesn’t want 15% off a couple thousand dollar MacBook Pro willy-nilly, right? And so that’s really easy to streamline because we have relatively friction and the ability for the credentials we reuse.

Riley Hughes: I love the example in the employment space of how reusable identity, depending on the demographic, people can get through in fewer clicks. Do you have any numbers about, you know, impact that ends up having on the background check company or the business who’s hiring in terms of dollars saved, time to verify, or whatever else that the business might care about?

Taylor Liggett: Here was the general thesis that we went. So a background check is ran on essentially your name, date of birth, social security number, and address. So then a background check company takes that information and they’ll go search court records and whatever type of original sources are coming from. And then let’s say there’s a court record that comes back, Riley Hughes, they will then have to match up these identifiers, like, is this actually the same Riley Hughes? And my hypothesis was like, if we can solve and make sure that It’s the right identity. So not even to mention, like, literal identity fraud that’s going into this, that we should see an increase in the results of the background check. I was thinking, like, this would be, I don’t know, 10%. The average was a 45% increase. What it showed is that there’s a combination of factors, I think. One is that there is fraud happening. People are not stupid, and the internet’s smart, and, like, people understand if I throw my middle name off or date of birth or SSN, like, I can pass a check. So that was a profound impact.

Riley Hughes: Yeah, I’m curious if you can cover 50% of the people with a reusable ID, do you have any insight on the differential between the 50% that got through with their reusable ID versus the 50% who needed to get verified from scratch, essentially, and the difference in user experience or impact to the business between those two cohorts?

Taylor Liggett: Even if you’re knocking it out of the park, let’s say you had a 95% success rate, employers are still like, What am I supposed to do with 5%? Like, what am I supposed to look at the IDs for the folks that were new to be verified? We had to construct a solution with a lot of waterfall. If this doesn’t work, go to this. And ID.me’s trusted referees and video chat and ultimately the in-person stuff, like, served in that capability. In terms of impact, like, it would take on average in the workflow we designed about 90 seconds for a new person versus 30 seconds. So it wasn’t like a huge impact more. And of course there was stuff on the margins. We had to go to video chat and stuff. It would take longer, but it wasn’t a huge impact more. So for the most part, like, conversion rates remained very strong among the employed base. Like, in some cases, if you have an incredibly transactional, like, gig worker stuff like that, like, it can have some impact. But for the most part, we saw folks went through it, folks went through it well, and it was a big success.

Riley Hughes: Great, thank you for validating some of those assumptions for me. I want to get into the ID.me product. We’ve talked a little bit about your success in terms of adoption, but we haven’t really spoken about the product very much. You know, in terms of reusable ID products, the majority, I would say, of these products are mobile app-based, including previous podcast guests like Mastercard and Microsoft, as well as most of the self-sovereign identity projects that are out there. And when I went through the ID.me process, I did it through web, but last night as I was preparing for this, I realized ID.me also has a mobile app. So I wonder if you could speak to the architecture and how do you think about this? How does ID.me approach the product surface area and sort of the why behind that?

Taylor Liggett: We really designed this with that premise of the identity layer of the internet and leaning into mobile web and desktop-based workflows, because that’s just where the majority of users sit, that’s where the majority of logins happen. And there’s also just a friction element that when you encounter this, you gotta go to an app, it just fundamentally changes the workflow. And also in my view, is like a hampered adoption and ease of use from the consumer side, at least in many different workflows. So we’ve really designed it around being able to essentially be a login-based experience. Now, of course, it’s still going to kick out to a phone in certain aspects of the workflow, but really it’s designed to be as broadly accessible as possible, with a lot of the application being around mobile web and desktop. Now, as we’ve evolved, there’s been a number of different things that have happened with that. We also have an API-based solution that some of our customers are using in conjunction. We do have an app. You’re right. I think it’s primarily centered around credentials right now.

Taylor Liggett: We also have a shop app, as an example. So like a lot of our community members that use ID.me for discounts and such can use the shop app for that. We also have an authenticator app that can be used, of course, like MFA processes. We’ll see how this all develops, but that’s currently how we’re constructed with most of the focus around mobile web.

Riley Hughes: At Trinsic, there was a period of time where we were pretty dogmatic about mobile app and self-sovereign, right? The user should own the data on the device. And when we released an API for creating cloud-based wallets, within a few months, the adoption of the cloud-based service was 20x that of the mobile-based solution. The market spoke loud and clear to us there. But I’ve always kept that in the back of my head. I wonder if there’s a journey there, because nobody knew the Trinsic app at the time, right? And we’re talking four years ago or whatever. But once consumers know the brand and have used it before and feel comfortable with it, do they switch to mobile because they’d rather have an app?

Taylor Liggett: Consumer behavior is different depending on what you do. I think from a sort of— Login perspective, particularly like the prevalence of where ID.me is used in terms of powering sort of web-based logins and so on, it’s not intuitive right now for consumers to want to use an app for that. It’s more intuitive for them to want to use login credentials and MFA. And as to how things will evolve, we’ll see.

Riley Hughes: I want to transition to talking a little bit about business models. I get asked frequently, and I’ve thought a lot about who pays for reusable identity. There have been entire blockchains started to try to solve this sort of what is the business model of reusable ID problem, and we’ll see if any of those pan out. But I read, I think you’re over 150 million of revenue or something is what I read. Obviously, you’ve figured something out in terms of business model. And so, high level, how does ID.me charge its customers for reusable identity services?

Taylor Liggett: In our language, ID.me customers would be the relying parties that are using our services. Most solution in market charge on a transactional basis. We charge on a success basis, and there’s some nuance there. But generally speaking, a user comes in, upon successful verification and moving forward, we would charge that relying party, and so that’s our customer piece there. No different than how the market works today, just slightly different model we believe is more beneficial to them. Our members, like the individuals who use ID.me, they are never charged as part of this. What I think we’ve figured out is aligning the right incentives among numerous different parties, and in such a way where we don’t ever sell user data, we don’t ever disclose user data without their permission. It’s very unlike other services, particularly big tech. It’s just that because we’ve set this up to be reusable. When someone goes through this relying party transaction, they end up with essentially a tangible good.

Taylor Liggett: They can use this in different places; they’re not paying for it because the value exists with the relying party.

Riley Hughes: When I think about my understanding of ID.me, you have a number of offerings from SSO, MFA-type stuff to, I think you call it community verifications or associations, right, like veteran, first responder, nurse, et cetera. You have full-blown identity verification as well. You work with government, you work with merchants across the landscape. What has been surprising about what people have been willing to pay for or not willing to pay for or willing to pay more for or willing to, I don’t know, anything like that that is worth talking about?

Taylor Liggett: I don’t know if there’s been a ton of surprise, honestly, on the business model. I mean, the business model is relatively straightforward. It’s not really a surprise, but where it’s important for education is that you can’t compare, like, ID.me apples to, like, a Lexis. If you’re really looking at something like that, you have to peel back things like successful verification versus a transactional verification. You have to take into account the reduction in, say, help desk and account creation tickets that come from having a login-based solution where ID.me essentially handles all of that, on and on, right? So there’s, I would say, go-to-market differences from a business model and the explanation of that business model and the training of a sales force and so on that goes into this. But none of it’s, like, surprising. I’ll tell you generally that we have some incredible case studies that sort of get at some of the cost savings that can happen with the solution.

Taylor Liggett: So when we went into the IRS at that time, I believe there was about a 40% success rate that occurred with the identity provider that was in place at the time. We were able to effectively double that to about 80%, right?

Riley Hughes: And is that first income, like, user remembers their password, or what is success in this case?

Taylor Liggett: Success is if you’re using, say, like a knowledge-based. authentication or some other sort of process like that, you’re going to have significant falloff of people just that can’t get through. What I’m saying is by putting in place our solution that had multiple options and off-ramps and video chat and so on, we were able to successfully verify over double. I think we’re now at about 90% or so. What that did is that then reduced the cost of other channels. So now I don’t have to go in to see the IRS in person. And so there’s a lot of ways that when you’re talking about true reusable identity, that it just needs to be fundamentally understood from a business model or economics different than the sort of component or transactional solution.

Riley Hughes: Got it. Great. Thank you. I have a couple of questions here that at first blush might sound challenging or whatever, but really they’re just nuanced issues that, frankly, are really at the crux of reusable ID. So really excited to dig into some of these. The first one is around government. ID.me has spent considerable time and effort on government deals, and that’s been paying dividends, obviously. So congrats on everything there. But somebody like Google, for example, will make money from advertisers, which is ultimately who they’re accountable to, where they get their money. Is there ever a similar conflict that comes up between, for example, government contracts or something and users? Maybe not explicit conflicts, but I’m just interested in how you maybe think about balancing the competing priorities of different kinds of stakeholders and what issues come up there and how you manage them.

Taylor Liggett: Honestly, I don’t see any competition amongst priorities. I believe that one just complements the other. These government users, they use identity solutions, they have to have identity solutions, they gate their logins with identity solutions. We offer a superior identity solution that, in some cases, we’re an option and in other cases, like the IRS, we’re the only option that comes in. But we are providing a service to these government users that they would need regardless. And for users that are coming in, they are the beneficiaries of not having to now go through multiple disparate identity verifications because they’re given one that can be broadly successful. The more success we’ve had within government, the better off the user population has been because I now don’t have to go through one thing at VA and one thing at SSA, and I now just have a credential that can use that. And then that feeds back into additional benefit for the government agencies themselves. I’m happy if you can expand, but I don’t see any.

Riley Hughes: Yeah, I mean, I guess I’m just thinking about scenarios that don’t exist today but that people may fear, right? So like a Canadian truckers situation or something like this, where government has an opinion or wants to impose some power over some segment of users. And if ID.me is the identity provider for those users, could there be ever a situation with competing interests?

Taylor Liggett: We are never going to compromise our solution or do anything because a customer, whether government or not, told us to do that. I think that there are times when government can get caught, and this, I think, can happen whether it’s government or not, but just can get caught in challenging positions that are unfortunate. As an example, there was a firestorm of kind of controversy and misinformation that happened among the early days of the ID.me biometric rollout. ID.me branded as facial recognition company and totally got caught up in this storm of kind of sensationalized journalism and misinformation. And ultimately, there was a real pressure for the IRS to not do biometric capture. Now, of course, we’re going to listen to our customers and pull the levers as needed to set up the solution they want. But there’s no question, that’s a positive part of a strong identity verification process.

Riley Hughes: That’s a really interesting point, and sort of dovetails into my next question about branding, because brand is so important in reusable identity for a user to be able to recognize a brand they associate with and that they know, that they trust, that they can use an identity with. And you mentioned sensationalism, right? ID.me’s definitely had good press. There’s been bad press or misinformation or misunderstandings or ignorance just about identity and identity verification itself, right? What is your strategy to build trust in the brand of ID.me?

Taylor Liggett: It’s a great question, and trust is everything. There’s been a number of things that we’ve tried to do: our privacy. Instead of having what typically companies do, where there’s a very long document, we’ve tried to, like, summarize five or six key points right up top in bold, like, We will never sell your information. Your information is only shared with your consent. You can delete your information at any time. So, like, trying to make even this bedrock privacy policy really digestible for the end user is one example. And then letting our customers speak for us is also important as well. So the IRS, the previous commissioner, did an op-ed recently that came out that really spoke to, look, here’s why we chose ID.me. They were in a league of their own because blah, blah, blah, blah, blah. Another thing, we’re very transparent. So if you go on ID.me, you can see everywhere you’ve logged in. You can see almost like financial-level information about that. So just from a user standpoint, we’ve tried to design a tool to where it’s, like, super clear and accessible.

Taylor Liggett: And then combined with the implicit trust that you see when 15 federal agencies and 40 state agencies and 600-plus commercial organizations use the tool, I think that’s been the primary way we’ve tried to go about consumer trust.

Riley Hughes: Great answer. Thank you. My last sort of nuanced question here is about ID.me’s perspective on interoperability and how that plays into the now and the sort of later of ID.me’s strategy. I know your answer to this because we’ve spoken about this before, Taylor, but I’ll just ask it for the audience’s sake. So do you intend to become simply the winner-take-all identity solution and own the entire world’s identity information?

Taylor Liggett: So no, there’s no realistic scenario. for a million different reasons. I’m going to ring-fence this a little bit to the U.S. because we could spend another 40 minutes if we expanded this globally. I’ll use the example of healthcare and what’s happening there because I think it’s a good proxy to how I believe this will develop in different ways. Healthcare is uniquely trying to move as a monolith here and sort of unifying from think tanks and thought leaders and states and governments and hospital systems. So I think that first, there within any framework to have interoperability, it’s got to rely on reuse ID, and there needs to be standards that are agreed upon. And once you have that sort of basis, I think using terminology there, there’s like credential service providers or CSPs. ID.me would be one of them. And so I think the way this plays out is that these CSPs will exist, they’ll continue to be established, and they’ll conform to these standards.

Taylor Liggett: And I think there’ll be some uniformity among the payloads that are delivered so that no matter who that credential’s coming from, that’s going to work within this interoperability system that is created. And look, ultimately the market will decide. The players in here will compete on their own merits for their own reasons, and I think that most likely there will be a few market-leading solutions that ultimately rise to the top. It’s hard for me to see a scenario where there’s 10, 20, like a whole bunch of these providers, but I think there’ll be a handful of market-leading solutions that kind of come together, conform to these standards.

Riley Hughes: Well, an interesting way that world of 10, 20 providers could exist is if the Market-leading thing that bubbles to the top is a standard data model or a standard transport mechanism, as opposed to a company bubbling to the top. One example where I feel like this pretty much happened was during COVID with the smart health cards around vaccine credentials, right? And logging into my ID.me, I have my smart health card in my ID.me app. It’s a type of verifiable credential. I could see potentially a world where that happened. I guess, do you see it the same way, or are there structural reasons why you feel like, you know, the identity verification world would not tend toward a standard in the same way?

Taylor Liggett: It depends on application. It depends on time horizon. Just look at mDLs being created. They can’t get out of their own way right now, and states are creating state-specific wallets, and, like, ultimately, solutions like that will end up being created. And so, in the near term, there are companies that successfully proven out reusable identity for which standards need to exist. I think that the long-term way this happens is that identity will largely become commoditized.

Riley Hughes: I think one day we may be able to dive deeper, but for now we’re out of time. Taylor, this has been an awesome conversation. I always like to end by asking, tell me what the future of identity looks like to you.

Taylor Liggett: Two things, I guess, that I would say. I think one is people are waking up. They don’t like their data being everywhere and not having control and secrecy and being sold and monetized. That, I believe, will really change, and I think that will fundamentally shift the market towards consumer-permissioned identity. So I think that’s the first big thing. And then the second is I just don’t see how face biometrics don’t just become a huge part of where we’re going. Already, you can see so much around what is happening within travel and what airlines themselves are starting to do now, stadiums are doing. So I think that biometrics will continue to play a really big part.

Riley Hughes: And I believe that, as you say, the world is changing, and I think it’s either going to be an increased centralization and data brokerage as the solution, or it will tend toward a more decentralized locus of control in the sense that it’s a user-controlled form of that, both in the biometrics front and in the data front. So, look forward to hopefully trying to make that reality accelerate a little faster alongside leaders like you. So thanks a lot, Taylor, for joining. Do you have anything to plug, or if people want to get in touch or learn more about ID.me or anything, partner with you somehow, where should they go?

Taylor Liggett: So ID.me. If you wanted to go there, my information, you can find me on LinkedIn or anywhere else to connect with me.

Riley Hughes: Awesome. Thanks a lot, Taylor.

Taylor Liggett: Thanks so much for listening.

Riley Hughes: If you enjoyed this content, please share it with others who will benefit from it. I’ve been getting some great feedback on the podcast recently, and since we don’t do a lot of self-promotion or ads or whatever, sharing the word really is the best way to signal to us that the content is valuable and that we should keep doing it. You can find us on YouTube, Apple, Spotify, and wherever else you listen to podcasts. Feel free to reach out to me directly on LinkedIn or X at Riley P. Hughes, and visit Trinsic if you’re interested in building the future of identity. You can also visit trinsic.id/podcast to subscribe to new shows and subscribe to the Future of Identity newsletter, where we’ll share the essential reusable identity news we rely on straight to your inbox.