fintech_devcon 2024 | Keynote | Lessons from CEOs of the top fintech B2B startups w/ Simon Taylor

0:03 hey thank you so much for being here I got to meet a couple people last

0:07 night this is their fourth year being here

0:10 which is pretty wild it's also my fourth

0:12 year which is exciting that we have that in common with one another um

0:16 but but the point of fintech Devcon was I

0:18 felt like there was this big void in financial

0:22 services where how payments worked how ledgers worked

0:25 uh how do you do cicd with an OCC

0:28 audit and pull that off in a compliant uh manner these are things that aren't

0:35 individually like the differentiator that our companies

0:37 and our brands are are bringing a service to Market

0:41 it's kind of like the the table Stakes or the building blocks for us to serve

0:46 this industry and and this industry we get

0:48 to serve is pretty incredible you know money

0:50 touches every single person in a very unique

0:53 and personal way and the tools and the products

0:57 that we get to build um affect actual

1:00 individuals Liv lives and so we're we're excited

1:03 about that um you know what do I want from you as an attendee uh while

1:08 you're here I want you to connect

1:11 with people so what's unique about this conference is

1:14 uh everyone's here to learn first and foremost

1:17 and so the people around you are are looking to to connect and learn from one

1:22 another and there's just as much learning happening

1:26 in in the you know having a beer with somebody or or a coffee as there is

1:31 listening to the speakers uh second thank

1:34 thank you to the speakers because uh we

1:37 had over 200 applications for 42 speaking spots

1:40 it's pretty amazing these are over 200 people

1:43 that are donating their time and energy in order

1:46 to put a presentation together to to try

1:49 and educate somebody uh pretty amazing so make

1:52 sure you thank them um by Design you can't see every single talk uh there's

1:57 this new website YouTube it's really cool and uh

2:00 every single video from the last three years and and this year is on there so

2:05 please you know check those things out

2:08 and make sure um you know subscribe I feel

2:10 like my kids right now subscribe and like

2:13 to our YouTube channel um but but make sure

2:16 you give feedback to those people and then you know my challenge to you is I

2:20 hope you leave here inspired I hope you leave here thinking um maybe I can make

2:25 this industry better maybe what I'm doing at at work uh can be more exciting um

2:31 and and hopefully you come out of this thinking

2:35 oh everybody here is is trying to figure

2:37 out just like me I I know I'm in that same boat and by having

2:41 a community of individuals that we can learn

2:44 from one another you know that's why we want

2:46 to be here and and that's the ethos that we're trying to kind of instill

2:50 in this conference is a unique place for you

2:52 to come uh connect with people get your education

2:55 on and hopefully leave inspired and so let's

2:59 get started with being inspired I'm really excited

3:01 to to welcome our first keynote speaker Simon

3:05 Taylor uh Simon Taylor uh owns fintech brain

3:09 food uh he's also the head of content

3:11 and strategy at sardine um interesting if you

3:16 get his email on Saturday morning uh it's

3:20 I think it's our brains that are getting fed

3:23 as food you know trying to keep up with this guy I have no clue how

3:28 he writes all this stuff every sing single

3:30 week and then does everything else he does

3:32 but I'm so excited to have a partner in crime and friend Simon Taylor kick us

3:38 off uh for this first keynote Simon welcome

3:42 up thank you everybody for being here for cutting

3:46 off your breakfast and for being up this early

3:48 to listen to some guy with a British accent that you might never have heard

3:52 of before uh I really appreciate you coming

3:55 out uh my name is Simon Taylor um I do work at sardine but I also

4:00 run in Tech brain food uh and I wanted to talk to you today about a recent

4:05 experiment I Ran So I spoke to the CEOs of ramp brex and Mercury not

4:12 the typical interviews not the typical podcast it

4:14 was much more what can I learn from them

4:18 as operators as product managers as Founders

4:21 as engineers and the reason I write a Weekly

4:27 Newsletter is I get fascinated when people tell

4:29 me something and it just makes me curious

4:31 it nourishes my mind that's why I called it brain food I can't help myself

4:36 I'm addicted I'm a nerd for this stuff I once describe the fact that people read

4:41 my newsletter as suddenly waking up and discovering

4:45 everybody was wildly into my um obsession with Dungeons

4:47 and Dragons as a kid but it just happened to be about finance and Tech it's

4:51 like really weird that people got into this stuff but I love it and thank you

4:55 so much for taking the time so as I said um I'm Simon I write fintech

5:01 brain food and I do content things

5:03 at sardine and sardine are really awesome you should

5:04 check them out uh right so why did ramp brecks and Mercury show up in the first

5:11 place hands up if you ever did expenses

5:15 without ramp bricks or Mercury okay so that's

5:19 only like half of the room so for the half of the room that's never done

5:25 this well for the half of you that had done expenses before I'm sorry you know

5:31 but so many in this room don't know how much this sucks oh my God if you've

5:41 ever worked in it the fact that you had to print out paper receipts you were

5:47 trying to fill in a spreadsheet you were trying to tap them into have you seen

5:52 that app look at it who ever allowed that to go out sap is a sap

5:57 the company that builds conquer is a 200

6:01 $124 billion market cap business now granted that's only

6:04 one of their product lines but it

6:06 is horrific enterprise software had been utterly horrific

6:12 and yet there are now a generation of Enterprise

6:16 scale companies that never used sap conquer you

6:20 might have heard of a company called door

6:22 Dash you might have heard of companies like

6:25 Twitter there are some really big I refuse to call it X there are some really

6:30 big companies at scale out there that have

6:32 never used these classic products that are really

6:34 really massive so B2B fintech fundamentally is serving

6:40 an entire different generation of companies that they've

6:42 grown up with that they were the default

6:45 supplier for and they're moving beyond oh

6:48 this is a really nice this category gets

6:50 called spend management but they're moving beyond spend management

6:54 and they're moving into everything Enterprise Erp ever

6:59 did but doing it with taste with quality

7:03 with Panache and that's what I wanted to unpack in this talk today so why do

7:07 they have so much momentum well I think

7:10 number one the regulatory burden is generally much

7:14 lower than consumer products if I'm in B2B

7:18 fintech I can just execute and I'm not worried

7:21 about the cfpb or consumer Regulators

7:24 or the OCC coming to scare The Living Daylights

7:27 out of me and I don't don't know if you noticed but there's some stuff going

7:31 on with Regulators at the moment so we'll

7:33 come more to that lately and historically like

7:37 these growth companies especially VC backed software companies would

7:43 receive $10 million series a check but they'd get

7:46 a checking account a commercial banking account

7:49 that looked like a m and pop store would get it it was just fundamental mismatch

7:55 in requirement versus product and of course then don't

7:59 forget our good interchange swipe fees on corporate

8:02 cards are typically higher than consumer cards so

8:04 you put all of that together my compliance

8:06 burden is lower I've got this massively undeserved uh

8:11 segment and also I make more money per

8:14 swipe why wouldn't everybody do this in fact

8:18 that's kind of exactly what the CEO of ramp Eric glyman said to me when he

8:23 was thinking about founding the company he worked

8:25 at Capital One he'd seen how hard consumer

8:28 business was and he said oh I can just go over there I can win much easier

8:33 smart man so meet the big three ramp brex and Mercury I spoke to the CEOs

8:38 of all um and they started in a slightly

8:40 different place so ramp starts with spend

8:44 management brex starts with spend management but where

8:46 they've expanded is a little bit different ramp

8:49 has gone into you know your bill pay

8:51 your invoice procurement and travel brex is going more

8:55 Enterprise it's going more procurement treasury accounts payable

8:59 but they're kind of getting into the same

9:02 place their Tech partner approach and I'll I'll

9:04 double click on these later on is fundamentally

9:07 different this is what makes them really really

9:10 interesting ramp is like partner on everything that doesn't

9:14 touch a customer brex is how much can

9:16 we vertically integrate and you see that play

9:19 out in their ideal customer profile and how

9:23 they're expanding their business and then Mercury is

9:26 sort of halfway between the two but they

9:28 started not with expenses but with this like

9:31 operating account that just works and then they're

9:35 layering on the spend management so they're all

9:37 speed running towards the same sort of sap

9:40 plus bank account end point but they're doing

9:43 it slightly different and they all think

9:45 that their differentiate is different their approach to shipping

9:48 is different and that impacts their Geo Focus I will go into more on all

9:52 of these but I just wanted to give you that summary so what's the same aside

9:58 from the fact that the all dudes each founder

10:04 has an appreciation for engineering there are very few

10:10 incumbents I can say that for possibly

10:14 Capital One Rich Fairbank is a different cat

10:18 but with that exception I can't think of many

10:20 that had a real deep appreciation for engineering

10:22 or were engineers they all consistently invest

10:26 in technology as their differentiator they all every single

10:29 one of of them told me how support

10:32 tickets were driving their road map again that is

10:35 probably a default for a lot of folks in this room but it's just really really

10:39 different from incumbents that every one of the CEOs

10:42 was obsessed with talking to customers and had

10:44 a deep understanding of their Tech and for what it's worth I liked all of them

10:49 for different reasons they were they're quite affable

10:50 they were very very capable um at Being Human which I clearly am not um so

10:58 ramp is built different they're a generational company

11:02 and when I spoke to Eric he said

11:05 something that really stuck with me he described

11:08 the company equation what is the company equation

11:11 well uh famously Space X if you've heard

11:14 of uh that organization measures the dollars per

11:18 kilogram in space and then everything they do Works

11:22 back from that equation so ramp similarly measures

11:26 the number of hours they've saved their customers

11:29 in work or effort and they measure

11:31 the dollars they've saved in cost so today they

11:35 save companies on average 5% of cost and thousands

11:38 of hours but here's the thing in terms

11:40 of their internal kpis they don't necessarily set

11:43 just a pure Revenue Target because their revenue

11:46 is doing absolutely fine what they're setting

11:48 is targets around the inputs that create Revenue

11:51 as an output but more importantly they're setting targets

11:55 around the inputs that create hours saved and cost

11:58 saved because that is their company equation

12:01 and I was like that level of clarity is

12:05 incredibly difficult Wade said something very kind

12:08 to me yesterday Simon you're very good at simplifying

12:10 things I cannot turn a company into a company

12:12 equation that elegant that's E equals MC

12:15 squared level stuff that is really really hard

12:18 to do and yet it creates this really

12:20 interesting North Star so another thing that drives

12:24 them is velocity um there are Blitz scalers

12:29 there are people that take the more Apple approach how many of you been to days.

12:33 ramp.com if you've not checked it out it's just a live

12:37 ticker of the number of seconds and days that they've

12:41 been in existence it's it's a really interesting Northstar they

12:45 hold it up in the background on all of their company

12:48 offsites it's like it feels really passive aggressive and yet

12:52 in every interaction with anybody from there it doesn't feel

12:55 like that weird like overly bro culture overly aggressive culture

12:59 they found that balance in quite an interesting way um

13:03 it's there's a lot of companies that I meet

13:06 that have that velocity shipping culture and I'm like I could

13:07 never work there this is I'm a dad I got

13:09 two kids I got stuff to do like duh not Sil

13:13 with ramp that was quite nice but it creates an interesting

13:17 problem though if you ship so fast it becomes very

13:19 hard to ever describe what you do so they they

13:23 tend to just start with a small piece and and kind

13:26 of build from there so by build our p partner

13:29 so Eric listed a few of his Partners but he

13:33 noted you know strip marqueta and countless others in the interview

13:36 but he said really what that allows him to do

13:39 is obsess over the front end like he is not

13:41 worried about the type of stuff that uh Wade really loves

13:44 and I really love he lets somebody else sort of deal

13:47 with that because he's really focused on on the front

13:50 end and he has to be able to trust

13:52 his Partners to do that and does occasionally change them over

13:54 and he the questions he's constantly asking is how could

13:58 this be faster how could this be more efficient what else could

14:01 we do what if it worked with slack should it

14:04 work with personal emails too what what if what if what

14:06 if what if and again that could be kind of intense

14:08 but it's an interesting model and way of thinking about

14:12 things so I asked as well how he does the engineering

14:15 structure and of course it it's not novel that somebody

14:19 has an infrastructure team and product teams like that's

14:21 a fairly well-known model um but what they're really doing is

14:26 bifa the two from the very Genesis of the company

14:29 I think a lot of people would like to go back

14:31 into their Tech stack and just start again but the fact

14:35 that they've got so many partners means that the partners

14:38 handle a lot of the issue and then what

14:40 the infrastructure team is doing is quite lightweight and really really

14:44 really focused so that is a model that works if

14:47 your goal is to serve an End customer and your differentiator

14:51 as user experience it is an objectively smart strategy

14:54 for them and what they're trying to do uh it's not

14:58 the right answer for everybody it's just a very interesting answer

15:01 for them and I think again having a CEO who thinks

15:05 in terms of the company equation it really does allow

15:08 their kpis throughout the organization to maintain an interesting hold

15:13 on it so some observations the obsession over speed bumps

15:18 I I made this slide originally because I I have like

15:21 a whole side hustle of taking screenshots of ramp and showing

15:26 it to Bankers whose Minds get blown of like oh

15:29 my my God I didn't know that was possible and I'm

15:31 like yes because you've never used the product um so

15:36 I once dm'd Eric and mentioned oh you know that feature

15:39 you've got uh you have the ability to forward E

15:44 receipts that come to somebody's personal email to receipts ramp.com

15:48 right um but it doesn't work for me I think it

15:52 was like less than 20 minutes later I get a response

15:56 oh yeah sorry about that your personal email was configured

15:59 against a business that's now fixed it will work now

16:01 from the CEO of a company now granted I'm some British

16:04 guy with a Blog maybe I got a faster response

16:07 but I don't think it's just that that name another

16:10 CEO that's truthful maybe soups soups is is built different

16:16 too um but it's it's that kind of thing that I

16:19 think actually has allowed them to differentiate another feature I

16:21 like is this make recurring button uh you might get

16:25 a chat GPT subscription or something along those lines and if

16:27 you don't want to fill in like a receipt memo every

16:31 week just hit that button it goes away little details

16:34 that are actually incredibly hard to execute as products underneath

16:39 the amount of work that will have gone into something

16:41 like that is phenomenal and don't don't think for a second

16:45 I don't know how hard this stuff is so it's

16:49 delivering results their total purchase volume is doubling every single yo

16:55 it's kind of nuts um I got this uh picture

16:59 from um py mccor not boring who does a great breakdown

17:02 of them they take 10 times more money home uh

17:07 they make 10 times more money than they did in March

17:10 2022 so that's what like 25 26 months unbelievable ramp

17:14 by name ramp by Nature it's is ridiculous so they

17:20 they've got the right product right time they've really hit

17:22 it right they are a generational company and I think they'll

17:25 do incredibly well however maybe it could go wrong you

17:31 know they are domestic only and Eric even said there's there's

17:33 just almost no incentive for them to go Global

17:36 or International that they just no so if ramp is stripe

17:41 and I think of stripe as being like really great

17:44 at the front end uh opinionated at the back end you

17:47 know you're not going to be able to configure it

17:50 the way you want and agin the other one it's like

17:55 we'll take you Global um we'll work with big Enterprises

17:58 we'll go everywhere where you want to go they've got more

18:00 of a global Co coverage ramp is going to be

18:05 stuck in the US not a bad place to be stuck

18:08 to be fair but maybe somebody else like brex could

18:11 win a bigger opportunity elsewhere what does Eric worry about most

18:16 Talent love it when somebody says that he wants to he

18:19 I asked him what do you worry about and he

18:21 said will this be the place everybody wants to work

18:23 in in the age of shiny new AI toys and ridiculous

18:28 VC funding for going to build an AI thing what's

18:30 interesting is how many company how many people have left

18:34 ramp to go found a thing that then comes back

18:37 into the organization with that as a feature it's almost like

18:39 weird R&D cycle they've got um and Eric's really I

18:44 like actually nice maybe I'm just naive but like I actually

18:48 like the guy um so brex brex is Led very

18:52 much by an engineer with opinions um but I I really

18:58 really liked p um if you listen to this interview

19:01 the first couple of minutes he's talking about his conversion

19:04 um from emac from Vim to emac he described running

19:07 the business as being much more Apple like he is

19:12 the Arbiter of the road map there is a delivery

19:16 once every three months he signs off every single feature release

19:22 himself and everything is built to those major releases and you

19:26 have to wonder why well go back to the history

19:30 of the organization when they were building brecks a lot

19:34 of the issuing stuff and a lot of the banking

19:36 of service stuff uh stripe issuing and all of that didn't

19:41 exist it it wasn't possible to do it look at when

19:43 they were founded they were just a little bit earlier

19:46 and they were the best answer at the time so they

19:49 had a first mover Advantage but also is it a disadvantage

19:54 they were sort of the default for companies of that generation

19:57 cuz all expenses sucked and was the best game

20:00 in town from a user experience remember founders of VCB companies

20:05 had to get a credit card on a personal credit

20:08 line even though they had 10 million sign in a bank

20:10 it was crazy so brex created this category but no

20:15 infrastructure existed so they had to build it in-house they had

20:18 to go vertically integrated and they vertical integration now is

20:23 actually giving them this interesting strategic positioning they might not win

20:28 the velocity game so why not go the other way

20:32 why not build in house bring processing inh house partner

20:38 more directly with banks and schemes that enables you if

20:40 you build it right to move into new markets faster like

20:45 door Dash they're live in 27 markets with their 16,000

20:50 staff because being like going National is hard going International

20:57 a whole different level of hard so where brex is going

21:00 is is fundamentally different they're going up Market to these Global

21:04 growth Enterprises with the cohort that they had and that's

21:08 not wrong it's just not ramp and that's really interesting because

21:13 everybody positions ramp versus brecks and oh who's going to who's

21:16 going to Duke it out doesn't matter they can both

21:20 win and one has this culture the other has another

21:23 and they've done pretty well like they hit what 319 million

21:27 in net annualization Revenue in 2023 that's that's a lot

21:33 of Revenue um and a big old increase but a lot

21:36 of this of course is driven by the 32% year

21:41 on-year growth of revenue from deposits Rising rates lifts all

21:48 fintech the banks have done really really well they're announcing

21:52 some of their best dividends ever but fintech companies are also

21:56 doing really well which people didn't expect but also what

22:01 if rates come down I think we we could still

22:04 be in a very interesting place in a couple of years

22:06 time if those rates do come down so Engineers aren't

22:10 always the best designers no events um you know

22:15 but I I do think there are uh there's a risk

22:20 of some of that customer churn um there there's not

22:22 the big massive customers churing out of brecks but um some

22:26 have uh some have gone to to ramp or to Mercury

22:30 and elsewhere especially the the the smaller end um really

22:34 interesting to me how bricks have lived long enough to see

22:38 themselves become the villain uh you know this the Social

22:41 Media stuff has become a bit angsty and I think

22:44 marketing and PR could be could be kind of one

22:47 of their interesting challenges they're not the cool kid anymore

22:49 and that means you're not winning the Growth Company but if

22:53 brecks is Ain and they're trying to go International and they're

22:57 trying to go Enterprise Jin's a great business it's not

23:00 a bad place to be uh and last last but not

23:05 least Mercury is led by the founders founder Imad is

23:11 obsessed with user experience for Founders he's just fundamentally that way

23:17 inclined so he's I think he's got 300 Angel Investments

23:20 he was an angel in air table substack Ry uh

23:24 and he said the worst thing about being a Founder was

23:27 dealing with the banking admin headaches and I can tell

23:30 you there somebody in the UK that doesn't have any

23:33 of these products with a little side hustle business oh it's

23:37 horrific so he just focused entirely on user experience with more

23:43 than 50% of customers being referrals and this is something

23:46 you see with ramp it's something you see with a lot

23:49 of neobanks that's not true if you get the ux

23:51 side of it right the referrals reduce your cost of acquisition

23:55 and how can you get that referral flywheel really really humming

23:59 for you it has to be really on the the shop

24:03 window and what's interesting about this is uh they

24:06 all have different approaches to how they manage their technology

24:10 stack but they all initially got their wedge customer

24:13 their first customers from user experience so if ramp is functional

24:19 and zero friction Mercury is focused on being just beautiful

24:23 every button every pixel everything is is is agonized over

24:30 in a way that is just rare uh the number

24:34 one requested feature by Mercury customers was personal accounts I think

24:38 there's this General perception that user experiences like are nice

24:43 to have and look and feel and d d d da

24:46 da and people really discount how much of a massive

24:49 massive differentiator it is how much of a difference it

24:51 makes to your business model how much it drives customer

24:56 acquisition customers love the product in a way you just don't

25:00 hear about for anything else people are like relieved by ramp

25:03 oh god it worked people love Mercury they love it

25:07 uh it's kind of a weird obsessive thing actually so

25:11 they mostly partner um you might have heard that they were

25:14 an early mover they partnered with a company called synapse

25:20 and evolve just going to leave that there Jason muler is

25:26 in the room that's all I'm going to say she's

25:28 going to back away from them today they've moved on today

25:33 they use lithic for issue of processing and multiple banks

25:36 that is what I learned from that conversation um and they

25:41 see themselves as the account becoming a platform to run

25:43 hundreds of other business workflows from I think ultimately all

25:48 of these companies are becoming a Bank Plus sap they

25:52 becoming the Erp in the bank they're going that way that's

25:57 really really interesting here here's another one all of their uis

26:02 for their support teams they built those in house that's

26:05 the only other company I can think of that's done

26:08 that is monzo so they would go to API providers

26:11 for infrastructure like fraud and compliance and customer service and then

26:17 they build their own uis over the top of it because

26:20 they want their customer support agents to have great user

26:23 experience they're obsessed and they've hit eight quarters of profit

26:27 they've more cash on their balance sheet than they've raised

26:31 they've 200,000 customers 640 staff but most of their revenue growth

26:37 has come from deposits so these businesses are having

26:42 a great time as are the consumer Neo Banks but once

26:45 the interest rates come down then what then what I think

26:49 that's a really interesting question so the be case is synapse

26:53 and evolve probably felt like a good idea to an engineer

26:56 that had never worked in fintech before like four

26:59 five years ago um but maybe not so much and partner

27:06 risk is non-trivial um imad's Vibe is like he's unbothered

27:09 he's moisturize he happy he's in his Lane flourishing but under

27:14 the hood like when I was trying to set up

27:17 this conversation you can tell there's like a ooh you

27:19 know this is this is difficult and that partner risk is

27:23 real and so the problem with selecting Partners is

27:27 that partner risk can really impact you in a high value

27:32 buyer segment uh but most of their customers remember we

27:35 live in an echo chamber most of their customers have no

27:39 idea this is happening most of their customers will never

27:42 see any of that stuff and so they're still growing they're

27:46 still doing absolutely fine but again what happens when rates

27:49 go down whose share what goes up will also come down

27:55 so will this category Al ultimately all of the things

28:00 will everybody be B2B fintech or is there actually some meaningful

28:05 threat to them some AI driven laser blams thing that's going

28:09 to come and wipe these companies out competitors in my day

28:17 ramp was cool uh younger competitors may become a threat

28:22 one day you wake up and you're the old guy

28:24 seriously have you used PayPal lately it's just what is

28:30 this so that's always a risk I think this is you

28:33 know Stripes risk and adin's risk from companies like move

28:37 like the payments moves in generations and I think consumer

28:42 and business Brands will move in Generations the old ones

28:44 don't die they just erode market share the younger ones come

28:50 up and take the new market so what happens if

28:53 incumbent Banks get their act together just going to leave

28:57 that the best thing incumbent Banks can do is partner um

29:00 and I think actually some have really started to do it

29:02 so I think Navan partnered with City JP Morgan's partnered

29:07 with gusto there's some smart Partnerships going on there and actually

29:11 that's non-trivial because the threat then becomes sort of that partnership

29:16 model can take meaningful market share and and and do

29:19 a different thing and serving Enterprise is really really really

29:22 hard once you get above sort of like serving that series

29:26 C company the the requirements the procurement everything gets 10

29:37 times harder I mean it's possible it it's entirely possible

29:43 that Regulators kill um banking as a service in non-bank

29:47 activity I don't think they're going to actually kill it

29:49 I don't think this is an existential threat uh these are

29:52 dream clients for the banks and there are a lot

29:55 of banks that are not in the headlines quietly moving

29:58 forward with embedded Finance especially some of the larger ones

30:01 the things that you don't hear about are the you hear

30:05 about the company's exiting some of the some of the sponsor

30:08 banks that are under consent orders and if they're under

30:10 a consent order they can't win new business but what

30:13 you don't hear so much about is the hundreds of small

30:16 Banks trying to get into embedded finance and the very

30:19 large ones waiting with open arms able to take their time

30:23 able to do their due diligence and cherry-pick the best

30:27 customers so this will all continue to exist it will

30:31 all be absolutely fine and these are dream clients like if

30:35 I'm work in um cash management or the transaction banking

30:40 division or the trade and working capital division of a big

30:43 bank and Mercury ramp wants to bring all of their volume

30:48 and all of their deposits to me that sounds

30:51 lovely I'll have that thank you very much so

30:53 these Brands will be absolutely fine they might get a slap

30:57 on the wrist from regulator that might be fine but there's

30:59 a real flight to Quality taking place so I think we

31:04 should kind of ignore the noise we need to get

31:07 out of this bubble a little bit of like all

31:11 of this stuff's happening because it is incredible how poorly some

31:16 of the early programs were configured from I was at dinner

31:20 last night and people were like this was always going

31:22 to go wrong but every generation has a bunch of people

31:25 you know WS lived through a couple of cycles

31:28 of f Tech i' I've seen a few myself um Sam

31:32 Maul was here with the Dinosaurs uh love you Sam

31:38 but it happens every generation technology person that doesn't know Finance

31:42 gets into it figures out regulation is hard gets better

31:45 that will happen here as well there's now this really interesting

31:50 crowd all of the people in this room who are

31:54 Engineers by default and fintech by default that really get Finance

31:58 really get compliance really get risk and that's really really

32:02 exciting I think all of these companies are going to be

32:06 worth 10 plus billion in the post fintech Bubble World

32:10 in like Darwin has returned to Tech valuations world they're

32:17 still massive Enterprises there's not an existential threat to these businesses

32:22 great companies succeed with regulation

32:25 without regulation they're great businesses

32:26 they're going to be absolutely F and constraints happen talk

32:30 to any founder of any business and there's like aund constraints

32:34 every single day so this is I think the takeaway

32:38 for the audience there is no right way to execute there's

32:42 no right way to engineer a product there's just what

32:44 works for the founder and the company they build every

32:48 founder is built different so every company is built different

32:50 and they implant that DNA each has this mechanism to maintain

32:57 visibility an alignment across the company for Eric it's metrics

33:02 the company equation what are my inputs I can go he

33:06 can go have a conversation with the sales team about

33:09 like how many meetings were you able to book this week

33:11 did you get enough support to book those meetings because

33:15 he knows those are the inputs he needs to get

33:18 them to create Revenue he can talk to product teams

33:21 about how many speed bumps will we able to solve what

33:24 are your constraints how can I help you go faster

33:28 for p dra it's the road map are my clients talking

33:31 about these things okay can I deliver against these things

33:34 are we running to a drum beat he's like the metronome

33:37 he's much more that way and for Imad it's user

33:40 experience is it beautiful can I feel it can I touch

33:43 it they all have these these different signals how many

33:46 of you have worked in a bank okay so about 30%

33:52 of the room you will probably resonate with how wildly

33:58 different this all feels from how Banks ship products and that's

34:01 a competitive Advantage um only Imad mentioned a committee

34:05 and that was for design I think you can get your compliance

34:09 right without just filling up the world with committees I

34:12 think these businesses will get there we will need regulatory

34:16 Clarity for that but it is wildly different and I

34:18 think we can learn lessons on both sides the financial institutions

34:22 in the United States that are of a larger scale

34:25 have to go slow they have to come correct on compliance

34:28 but they could learn these execution lessons but they could

34:31 also help really package the compliance stuff in in a way

34:36 that's more thoughtful and more accessible to an engineering

34:39 or a design audience the fact that these companies are not

34:44 Banks is an advantage in the short term it helps

34:47 them deliver products faster but you've got to wonder how long

34:50 it will be before they take meaningful market share

34:53 from incumbents rather than just filling a hole left by SVP

34:57 so that was all had for the presentation I'm going

35:00 to point out some we do have some microphones and some

35:04 runners in the audience um so if you could show

35:07 your hands if you're available one at the back here

35:09 one in the middle back here uh if you have

35:11 any questions let me know um but thank you very much

35:16 for uh listening to my Ted [Applause] loving the jewal

35:37 walking microphones it looks like two walking statues of Liberty it's

35:41 phen yeah so Simon called me a dinosaur so can't

35:44 stand you sometimes I love you Simon um so you named

35:49 the the ones that you know ramp and brex and Mercury

35:52 want to name some you see up and coming yeah

35:56 so um I also spoke to a couple others um

36:00 meow was interesting um I think that's all I can say

36:07 really um uh the I I liked Arc actually um

36:12 Arc their opening was um we see compliance as a competitive

36:18 Advantage we take our time yes we're a series a company

36:20 trying to grow um but we think there's there's space

36:24 to be the people who get compliance right they're also

36:27 doing a lot of the harder products to do so they're

36:31 doing debt financing debt Capital markets they're doing a Marketplace

36:34 for that so they if you're familiar with Finley CMS so

36:38 if you were a lender for instance uh you need

36:41 to go get a supply of capital to be able

36:44 to lend it because you're not a bank uh Finley CMS

36:48 is a platform that enables you to to sort of do

36:50 that well Arc is moving into sort of that territory

36:53 where they'll help you meet with and match with private credit

36:57 funds with bank Banks to be able to fund your lending

37:01 business and your lending activity so they look a lot

37:04 more like The Sweet Spot of a cican Valley Bank

37:07 historically and you see Mercury starting to go there but it

37:11 that was an interesting strategy um it gets really nerdy

37:13 when you get into the finance side of the fin

37:16 fin fin bit of fintech but actually I think there's

37:20 space for people that really get engineering that get product

37:23 that get design but that also get like old school

37:28 wall Street finance and that's probably the the missing Gap

37:31 in the market as as of as of yet what

37:36 would be awesome the Statue of Liberty's back question over here

37:43 so the first one is why are there so few people

37:46 in the United States who share the name Simon um I

37:49 don't have an answer to that uh but most importantly

37:54 uh so you highlight brex Mercury and ramp and theyve all

37:58 done really well with self-issued cards for example you know

38:02 ramp does a lot of volume with marqueta in my estimation

38:05 at some point they saturate the available market for self-issued

38:08 cards and if they want to move up market and really

38:11 compete with concur what do they need to do

38:14 in order to find those businesses that have got the city

38:18 issue card or the JPM card and get them

38:20 on the platform the city issued card and the JPM card

38:25 is usually a cross cell or it's very rarely

38:28 the product you have by itself it's the product you get

38:33 as a bundled package with everything else and the everything

38:37 else is a really large credit line uh it's really good

38:41 deposits it's really good FX it's this it's this package offering

38:45 that a bank would give you um and so they can

38:48 be really competitive on pricing because they've got uh returns

38:51 to scale but also they've got that product depth but they'll

38:54 only give you that pricing if you take everything so

38:58 this comes back to like one of my very very

39:01 early slides which is I think they are I broke

39:03 it never mind I'll just leave you with that um

39:08 that they're speed running into accounts payable accounts receivable and then

39:14 from there they're getting into Venture debt and from there they're

39:17 getting into working capital uh Revenue based financing so

39:20 they're bringing in that sort of stuff and those sorts

39:22 of capabilities they're enabling deposits the competitive side on the Bank

39:27 really makes sense but if they can get those workflows

39:31 from the accounts receivable and the accounts payable for the CFO

39:35 stack and they can make those Enterprise grade that's where

39:38 the international where the brecks really comes in because once I

39:42 go International now I've got a corporate structure and a corporate

39:46 hierarchy where I've got 25 26 different entities in every

39:50 different country and I need to do transfer pricing between each

39:54 of these entities and not only that it needs to all

39:58 add up at the end of the day and I

40:00 need to maybe report that on a quarterly basis

40:02 as a publicly traded company and so the the reason somebody buys

40:07 sap is because it can do all of those things

40:09 it does them ugly but it can do all of them

40:12 and these guys can't do all of them so they

40:15 have to go up from the sort of product depth

40:18 and expansion into the workflows does that make sense right

40:22 I think I got time for one more and then I'm

40:26 out of your way the one at the back there

40:29 Statue of Liberty is running I like this hello what do

40:37 you think are the top three challenges or concerns

40:41 in the fintech space top three challenges or concerns in the finex

40:47 space so if we set aside um the challenges

40:51 and concerns of every growth business for a second which is

40:55 just normal uh I think the number one is uh

40:59 kind of the the funding market and the market headwinds

41:02 and Tailwinds right um fintech went from one in five

41:05 VC dollars to less than 5% of funding um the amount

41:11 of bad news in boardrooms is phenomenal uh there is

41:15 existential risk there are companies on fire sale uh and what

41:19 I'm really seeing and I'm sure a lot of you

41:20 are seeing this too is this um Power law of fintech

41:24 companies there are those like ramp that are doing extremely well

41:27 thanks where I work is is one of those and then

41:30 there's sort of this long tale of companies doing quite

41:34 well and then who a lot of things that got

41:37 funded in 2021 that are really really struggling so what

41:39 are all of those people going to do that work

41:41 at all of those companies I think that's an opportunity

41:44 for incumbents and I am starting to see a lot

41:47 of very talented people go work at an FIS go

41:49 work at a Jack Henry go work at a I think

41:52 that's that's one thing we'll see so what happens

41:55 with the talent is my biggest concern and it's always the thing

41:58 I think of first I think the second biggest thing

42:02 is what happens after the election uh honestly because depending which

42:07 color you get after the election you might have two

42:09 very different regulatory environments for fintech

42:12 to Democrats fintech just sounds

42:15 like Risk and to Republicans who knows um I don't

42:19 want to get too political but that's kind of I think

42:21 a fork in the road like I think it could

42:24 go kind of either way uh and then the third thing

42:28 is is why wouldn't everybody else be embedding Finance so

42:32 the um a lot of the consumer Neo Banks a lot

42:36 of the B2B fex they sort of live inside of Shopify

42:39 they live inside of everything else like where's that go

42:43 so if you got a market where fintech is not

42:46 perceived as Ai and unless you attach AI to it

42:48 you can't raise a fund for it you can't get

42:51 it near next round funded oh it must be ugly it

42:55 must be horrendous you've also got a regulatory question mark

42:59 where's this thing going to go what's going to happen you

43:02 know it is headline news of the stuff Jason writes

43:05 about he was doing it before it was headline news

43:08 but it's headline news and that's a negative PR

43:11 for the entire industry and then lastly on the talent side what's

43:15 going to happen with the talent I think it's choppy

43:17 Waters right now I really really do but from these things

43:22 great companies are built and from rooms like this from great

43:26 talent the fact that you come to a developer conference

43:30 about Finance means that you're going to build something special

43:34 and I fundamentally believe that as Wade was saying money touches

43:37 everything like I think it was a lot of money

43:39 to make this stage but somebody had to make a payment

43:41 for it there a lot of money for the chair

43:44 the desk everything the everything that you touch around you

43:48 some money moved and there is an enormous friction

43:51 in that Financial Services is the world's largest profit pool by far

43:55 it's also one of the most INE efficient industries by far

43:59 it is crying out for great Engineers to build great

44:03 products and so I hope that's what happens it will

44:06 be difficult but great things are made in harder times if

44:10 you look at the companies that are have the highest

44:13 valuations in tech stocks in public markets and when they were

44:16 founded it was usually during the time when that sector

44:20 was down so that's my Call to Arms go build great