Steven Streit invented the prepaid debit card, but he knew next to nothing about finance just a few years ago. The longtime radio disc jockey, out of a job in the late 1990s, used his personal savings to launch a company that would sell credit card-like products so kids could shop online. Little did he know that the cards would catch on among unbanked individuals and his company would become the market leader in a $140 billion-a-year industry. When starting Green Dot Corp., though, Streit didn’t even know what venture capital was. So, he put his radio-honed talk skills to use and asked around to learn about investing, banking, payment processing and the like. The company brought him to the brink of financial collapse before he convinced the Rite Aid pharmacy chain to sell the cards. Now, thanks to Streit’s persistence, Green Dot’s cards can be found in major retailers across the country. That same persistence also helped him lose 140 pounds. Streit recently sat down with the Business Journal in his Monrovia office to discuss his radio days, the company’s early struggles and just where all that fat went.
Question: How did you get into radio?
Answer: I started in high school. I was a very heavyset kid, very awkward young man. I was the kind of guy everybody wanted to be friends with because he was funny and witty, but never had a girlfriend and nobody would have ever thought of inviting me to a party. In that context, I gravitated toward performance. There was a morning announcements (program at my high school). I was in the speech club and I presented the principal with an idea to do “NMAM,” which stood for “North Miami Morning.” It allowed me to take what was just the teachers reading the announcements and turn it into a show. My theme song was “In the Stone” by Earth, Wind and Fire.
You sure had some initiative.
It became a big hit and I won an award from the Miami Herald. It was a big school, so some people knew me but a lot of people didn’t, and I enjoyed both the anonymity and also near-celebrity in my mind.
Were you better able to cope with those awkward teen years?
On the microphone, you weren’t heavyset, you weren’t awkward. You could be a performer. I enjoyed that.
When did you get on the actual radio?
When I went to University of Florida, I did the morning show in college called WRUF-AM (850) and then later Rock 104, which was the same thing. I thought I was quite funny. In retrospect, maybe I was or wasn’t.
What kind of music did you specialize in?
It was basically either rock or top 40. I was your classic top-40 disc jockey circa 1985. I did that and was on the radio in small towns.
A lot of disc jockeys have silly names and sound effects. What was your shtick?
Over the years, I was Streiter with the Heater; I was your Ayatollah of Rock ’n’ Rolla, holding you hostage till 10 at night. You name it, I did it.
That sounds about right.
I was never any good at it.
Oh, come on. Didn’t you fill in for Casey Kasem?
Yeah, when I was here in L.A. I was running some radio stations and we ran Casey’s show. I did a pretty decent job filling in, but I’m sure it wasn’t great. I think Casey flat-out thought I sucked, but he tolerated it because he probably didn’t want to offend me. I did only eight shows or something like that, but it was a true honor.
Why did you leave radio?
I was promoted to VP of programming for a company called AMFM that then was purchased by Clear Channel. I left there in ’99 after we were bought.
What led you to the financial world?
I still had a lot of friends in the broadcast industry and met some guys at Disney who were working in the Internet. Disney had a website called Go.com, which was a very early foray into media. I said, “Do you make money off the site?” And the fellow who worked for Disney said, “No, we don’t make any money off of it because the only people who surf the Internet (are kids) and when they get to our page, there’s no commerce because young people don’t have credit cards.”
And a light bulb went on?
Driving home, I thought maybe I should come up with a way for people who don’t have credit cards to buy things online, primarily young people. That was the beginning of what is today known as the prepaid debit card industry.
Where did you get funding?
Luckily, I had private resources, my own money, that I could spend because I made some money from my radio career. So while I didn’t have a job, I wasn’t destitute and I was able to invest the money I made in radio into starting Green Dot.
Was it a big operation at the beginning?
The company was in my bedroom from the end of ’99 when we were incorporated probably until early 2001. It was just three or four employees and they would come during the day at different times.
Did you know it was going to become a big product?
At the time, we didn’t know what we had fallen into, but we invented the prepaid debit card, the method of selling them at a retail store, the term “prepaid.”
What do you mean?
At that time, they were called “host-based stored-value cards.” I knew no consumer would understand that, and in talking to friends, relatives and kids, when I would explain it, they’d say, “Oh, like a prepaid phone card,” because in those days prepaid phone cards were big. That’s where we came up with the name and it’s still the name that today everyone uses.
How did you get your first clients on board?
We were able to convince Rite Aid to sell the product even though when we called on them, we didn’t even have a product. We had a piece of artwork that I drew on PowerPoint or something.
They didn’t mind that you hadn’t even made the cards yet?
I don’t think they knew that we didn’t have a product. They knew that we weren’t very experienced. (But one executive) was just a young guy who thought it was a cool idea and thought what the hell, let’s take a chance.
Did you struggle in those first few years?
By the time I was eight months into it, I had spent almost all the money I had made from my exit out of radio. I had a wife who didn’t work and never did, I had two kids who were young – 9, 10, in that age range – and it became clear to me that I could no longer go back to radio because by that time I had been out of it for two years.
That must have been scary.
I was running out of money fast and that’s when the real panic set in. I thought, oh, my God, you’re going to lose this house in Pasadena; you’re going to move in with your wife’s parents in Hollywood, Fla.; you’re going to have to pull your kids out of school, and this is not going to have a happy ending. Those were not fun years. It wasn’t romantic or sexy or exciting; it was downright horrific. I was still a heavy overeater and by that time truly morbidly obese, well over 300 pounds, working 18-, 19-hour days in my bedroom, not sleeping, waking up in the middle of the night in cold sweats realizing that I have no business. I’m running out of money and my life savings, and I’m going to lose my house and a marriage that began to suffer from the stress of it all.
Whoa, hold on – 300 pounds? Where did it go?
I lost the weight in 2005. I did it initially through gastric bypass. It came out of realizing that I was killing myself. It was part of that whole process that began really during my divorce and realizing that I needed to get a grip. So I lost the weight, but I was still weak. After that, I began working out slowly. I literally couldn’t do one pushup. I would vomit because I was so winded from one pushup or one crunch. Now I can do 100 crunches without even getting winded.
How long did this whole process take?
It was really a three-year process. I went through round after round of skin surgery because when you lose 140 pounds, which is what I lost, you can’t exercise skin.
The company also got healthier, too.
Once we got to Rite Aid and had a real product that was really for sale in a real store, you hire a few more people, hire a few more people. Before you know it, you’ve got a company of 20 people and you’re for sale at two retailers. When we got into CVS, which was our third retailer, we now had some fairly serious distribution. We weren’t profitable, but you couldn’t say it wasn’t a real company.
What made you think you could run a financial firm?
I don’t think I thought I could. I had no business background. The entertainment industry is not business and I was on the performance side. I was a programming director, meaning that my days were spent with talent, talent unions, agents, managers, record labels, artists. It was not accountants, finance, financiers, venture capital. I actually knew nothing about that. I didn’t even know what VC was. I thought it was the Viet Cong.
How did you function in this industry?
You just ask people questions. I didn’t know anything about credit cards, but what I did know was how to talk with people. When you ask questions, people answer them honestly. One fellow who is still on our board today, Tim Greenleaf, we had children in Cub Scouts together and I said, “Tim, I’m doing something but I don’t know anything about this; do you know anything about business?” He said, “Well, yeah, I run an investment house.” Tim would come over to my house and explain how it works.
The company was originally called Next Estate Communications. Why abandon the name?
People thought we sold real estate, they thought we did wills or sold funeral plots or something. So it became clear that as a consumer brand that was a loser.
Where did Green Dot come from?
Green means go; the dot marks a spot; green means money; green means advancement. It just seemed to be a cool name. What I also liked about it is … there was something about the name that just seemed to be familiar. And how hard is it to come up with a logo for Green Dot? It’s a damn green dot.
Do you use Green Dot’s products?
I use my prepaid debit card.
Is it your primary method of payment?
No. My lifestyle wouldn’t be fully supported on that. But it is the card I use for my kids; it is the card that I use for my daily purchases – Starbucks and shopping and that kind of thing. But if I’m doing international travel or booking a business trip, it would not be as conducive.
Green Dot is the market leader among prepaid debit card providers, but some big banks are expected to enter the market. Are you worried about that?
No, because their platform is (different). In order to buy a product that is made by a large bank, you would already have to be a customer of that large bank. People who today don’t have a bank account … it isn’t like they’re browsing in a lobby of Chase or something. Their platform only is what it is; my platform is the nation’s retailers, where 96 percent of all Americans shop every week.
Do your kids have any interest in working for the company?
I’m not sure they know specifically what I do for a living. I don’t talk about business hardly ever at home.
How many do you have?
Six, ages 18 through 24.
Wow, you were busy for a while.
It sounds compressed because they’re not all biologically mine. My two boys are biological. The four girls, I was a court-appointed legal guardian. They’re all sisters, but no relation to me. We think of each other as father and kids, but they didn’t come into my life till later.
How did that come about?
Oh, gosh, long story. I knew the paternal grandfather – he was a friend when I lived in Washington, D.C. The family just had a lot of tragedies. At some point, the grandfather asked me if I’d step in and adopt the girls, and bring them out of Virginia into a safer environment, and I did that.
With the kids out of the house, you must have a lot more free time. How do you keep busy?
Well, I’m single, and have been single for a while now – seven years. I like to date. One day I’d like to get married again and you can’t do that by working 12 hours a day and going home and watching “House Hunters International” on HGTV. So I try to go out on at least one date a week, maybe two if I’m lucky. Also, I work out regularly.
Since the surgery, you’re probably more motivated to keep the weight off.
I’ll never not take care of myself because once you’ve been there and you recover from it, you know what it’s like not to be in good health and you value that. I’ll be 50 in February of next year, so I’m not a kid anymore. I feel like I’m 20, but I’m not, so I’m ever more conscious of working out heavily and making sure that my body’s always in good shape to deal with the travel and deal with the rigors. It keeps me busy.
TITLE: Chief Executive
COMPANY: Green Dot Corp.
BORN: North Miami; 1962.
EDUCATION: University of Florida; left before receiving degree.
CAREER TURNING POINT: Attending a Wal-Mart manager’s meeting, which shaped his retail strategy.
MOST INFLUENTIAL PEOPLE: Green Dot Directors Mike Moritz and Ken Aldrich.
PERSONAL: Lives in Pasadena.
ACTIVITIES: Working out, dating.
For reprint and licensing requests for this article, CLICK HERE.