Acquisition Breathes Life Into Emerging Digital Death Industry

This post originally appeared on Forbes.com.

Nathan Lustig and Jesse Davis are the cofounders of Entrustet, a company that helps you access, transfer and delete your digital assets when you die. The company was acquired by SecureSafe, a the market leader in secure online storage and digital inheritance. Entrustet is Lustig and Davis’ second company that has been acquired.

I caught up with them today to ask them a few questions about the deal and about their experiences starting a company.

Q. Where did the idea of Entrustet come from?

A. Jesse was reading The World is Flat by Thomas Friedman which explains the story of Justin Ellsworth, a US Marine who was killed in Iraq. His parents wanted more to remember him by, so they asked Yahoo for the contents of his email. Yahoo said no way, it’s against our terms of service.

A few months later, a Michigan judge ruled that Yahoo must turn over the contents of Justin’s account to his parents. We thought three things: 1) digital assets are real things that have economic and sentimental value, 2) you shouldn’t have to go to court to gain access to them, and 3) what if you have digital assets you don’t want anyone see?

We looked around and there weren’t any services to help solve the problem and decided to start. Our vision was to build a product that easily and painlessly let people decide what would become of their valuable online accounts and computer files after they pass away.

Q. You built the business in a place other than silicon valley and NYC? Please explain.

A. Entrustet has taken a long and winding path. We started the company in Madison, WI, which in our humble opinion is an up and coming startup hub in the Midwest. Our initial plan was to stay in Madison to save money during the bootstrap phase and build a great team, then move to NYC or Silicon Valley after we started to build some traction. Madison’s ridiculously cheap cost of living is one of its greatest attributes. Add that to a creative and helpful community of smart people and you’ve got a nice place to try to start something.

After a year, we had a product built, users and press, but not the massive scale traction we wanted. We saw an article in Forbes about a program called Startup Chile that was inviting startups to Chile and giving them $40,000 of free money. We wanted to extend our runway and we thought exchanging the brutal Wisconsin winter for Santiago summer.

After our 6 months in Chile, we came back tom Madison and continued to work until the acquisition.

Q. Did you raise money? How did you do that?

A. We raised a round of angel money from angels in the Midwest and East coast, plus a grant from Startup Chile. We built our prototype, launched it and then took it to potential future investors. Our biggest step towards fundraising was showing angels that we were serious. We had a prototype built, a full business plan, and showed tremendous support from the local business community.

Q. What is Startup Chile and how did it help?

A. Startup Chile is a program from the Chilean government to foster entrepreneurship in Chile. They give startups $40,000 of free money if you move to Chile for 6 months. It gave us a longer runway to help us perfect our business model and continue pivoting without having to give up equity. We met entrepreneurs from all over the world, including startups we ended up working with.

Q. How did you get clients?

A. Our main sources were via our blog and the press we generated, via attorneys recommending Entrustet to their clients. We also worked with websites to refer their users to Entrustet so that they could have a standardized policy for user deaths.

Q. How did the acquisition come about?

A. We’d been working in the market for three years and got to know the SecureSafe team very well. We strongly believe that the future successes in of digital estate planning are companies that help users equally while they are living and when they pass away.

SecureSafe passes both of these tests and we were very interested in figuring out how to work together. We also have most of our users in North and South America, while SecureSafe is concentrated in Europe. As our relationship developed, we realized that our visions were very well aligned and we decided it would be a classic win-win if we joined forces.

Q. What are your future plans?

A. Nathan is returning to Chile to work on a Chilean startup company called Welcu that was funded by 500 Startups and Tomorrow Ventures. Founded by Sebastian Gamboa and Nicolas Orellana, Nathan is helping them expand in Argentina, Colombia and Brazil. Jesse accepted a job with Buddy Media, a fast-growing late stage startup in its own right, based in NYC.

Connect with Dan Reich on Twitter – @danreich. (Disclosure: Dan is also a current employee at Buddy Media)

Badgers Building Startup Businesses in Madison, WI

Bird's-Eye View of Madison, Wisconsin, 1908
Image by Wisconsin Historical Images via Flickr

Madison, Wisconsin could very well be the next hub for startup businesses. When I was in school in Madison, I watched companies like Microsoft and Google open offices on campus in order to tap into the vast pool of engineering talent. The thing is, Madison goes beyond engineering and has very bright, motivated people looking to build the next “big thing.”

My friend Nathan is one of those people and he has had some nice success stories around building businesses. Moreover, he’s got a fresh outlook on what it takes to get things done, and more importantly, why he is doing what he is doing. This one will also be filed under “Student Profiles.”

Student Bio – Nathan Lustig
I’m the cofounder of Entrustet, a website that allows you to decide what you’d like to happen to your digital assets when you pass away. I graduated from the University of Wisconsin in 2009 with a degree in Political Science. While I was a student, I started a tickets and textbooks trading website and grew it to 150,000 users and sold it to my ad network.  I also love sports, traveling, cooking and eating good food.

Dan Reich: Why are you an entrepreneur?
Nathan Lustig: I’m an entrepreneur because I learned at a young age that I really didn’t like the structure of school and being forced to do things that I thought were boring or useless. I was really bored in school growing up and always looked for interesting things to do. When most of my friends got traditional jobs in high school, I started reffing soccer when I was 12, cut lawns and figured out ways to make money. I was always starting things or looking for ways to improve existing products and quickly realized that I would hate living and working in a cubicle.

When I got to college, I bought and sold tickets my freshman year and realized that there was room for a well run website to organize the market. After being in business for a month, I knew there was no way I would be getting a “real” job anytime soon. I love the freedom, the new challenges every day and trying to create something that I know will help people in their day to day lives.

DR: What is entrustet all about?
NL: Entrustet is a free service that allows you to create a list of your digital assets (online accounts and computer files) and then decide if you’d like them transferred to heirs or deleted when you pass away. We came up for the idea after reading Thomas Friedman’s The World is Flat. He talks about a US marine who was killed in Iraq and his family wanted access to his Yahoo! account. Yahoo! said no and after a court battle, a judge ruled that Yahoo! had to turn the contents of the Marine’s email over to his parents.

We thought this was crazy. You shouldn’t have to go to court to gain access to a loved one’s digital assets. We also thought that there may be some assets that you’d rather keep private. The court case showed that your online accounts and computer files are real assets that should be dealt with during the estate planning process. Fast forward to 2010. Domain names, blogs, family photos, email, contacts, twitter and other digital assets dominate our daily lives.

We also work with attorneys to teach them how to add digital assets to wills and trusts. A few months back, my cofoudner Jesse Davis and I were the first people in North America to execute traditional wills with our digital assets included. It’s fairly easy for attorneys to add digital assets to estate plans, but most don’t because they don’t know how to do it. We teach attorneys and then certify that they know what they are doing.

The last piece of Entrustet deals with websites. Websites have no idea when their users pass away and don’t know what they wanted done with their accounts either. This leads to poor customer service, wasted resources and potential legal liability from identity theft, among other things. For example, three Facebook users die every single minute and Facebook has no idea who they are or what they wanted done with their profiles. We help websites by notifying them when their users pass away and what the user wanted done with their account.

Our goal is to help people deal with digital death so that they don’t lose valuable digital assets when they pass away.

DR: Why are you trying to start a business in Madison, WI, and more importantly what’s the deal with your relocation to Chile?
NL: I’ve lived in Madison for the past six years now and love it. It’s got a great University and high quality of life. While I was running my tickets/textbooks website, I’ve gotten to know pretty much everyone in town, so it was natural that we started our next business in Madison. Plus, it’s really cheap. I rent a 3 bedroom with a lake view for $1050 per month, total, for all three of us, utilities included. We rent awesome office space just off the Capitol Square for $250 per month. The money we raise goes MUCH farther here than in NYC or San Francisco.

The Chilean government wants Santiago to be South America’s startup hub, so they are offering foreign startups $40,000 and free office space to move there for up to six months. I applied after reading about the program in Forbes and applied on a lark. We got picked and after talking with our advisers, partners and investors, we decided to make the move. We think the Startup Chile program offers us some awesome networking opportunities, plus I’ve always wanted to live in a Spanish speaking country to get fluent in Spanish.

My partner Jesse and I do most of our work online or on the phone, so we don’t envision all that much changing. Chile is EST+1, so the time difference is minimal and we’re a direct flight away from NYC and 1 stop from San Francisco.

DR: What are you thoughts on Madison, WI as a technology or startup hub?
NL: Madison is already a technology hub, but for the past decade or so, it’s been in biotech. Over the past six years, it’s becoming an emerging IT startup hub as well. Madison was just named the 7th most innovative city in the US and I think it’s what Boulder was 6ish years ago and Austin 8ish years ago. In May 09, I started an entrepreneur meetup group called Capital Entrepreneurs. We had 10 web startups at our first meeting and now we have 65 in the group. Madison is starting to get on the map, with articles in TechCrunch and Read Write Web and Madison companies like JellyFish, Networked Insights, Alice, Brazen Careerist, PerBlue, Asthmapolis and other getting national play. Here’s some other Madison startup resources:

1. Capital Entrepreneurs – Founders meetup group
2. Merlin Mentors – Pairs up successful entrepreneurs with people who want to start businesses
3. Burrill Business Plan Competition – UW student business plan competition
4. Entrepreneur dorm – Dorm floor at UW for students who want to start businesses
5. High Tech Happy Hour – Meetup for high tech workers
6. Forward Technology Conference – Mini SXSW held in Madison

DR: Are there any past projects you worked on that were successful? Failures?


  • Facebook Foodcourt – Tried to create an online ordering website inside Facebook in 2007
  • Madison Independent Realty – Tried to create a website that would allow college students at UW to find houses not owned by the big property management companies. Failed because we couldn’t get the property managers to pay us anything to list in 2005.
  • Segway Sharing – Tried to do a shared segway system on UW campus in 2008, realized it would cost too much and people feel self conscious riding them.
  • Mobile Tickets – I wanted to build a mobile app that would show people buying and selling tickets in real time, in your area. The tech wasn’t there in 2006/7, but it is now. Someone please build this. It would be awesome.

I’m sure there’s more, but those are the ones that are coming to mind right now.

DR: Where do you see yourself in 5 years?
NL: I really have no idea. I’m sure I’ll be doing something entrepreneur related, but 5 years seems really far off. As you can see by the Chile move, I hardly know where I’ll be in 6 months, much less five years. I hope I’m doing something fun, interesting and useful. At some point I really want to work on something education related, but I’m not sure when.

Nathan blogs at http://www.nathanlustig.com/

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