January 18, 2024 • 46 mins
Bill Cilluffo, Partner and Head of Early Stage Investments, sits down with Chris Dean, Treasury Prime's co-founder and CEO, to discuss how Treasury Prime is revolutionizing banking.
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Speaker 1 (00:08):
You're listening to the FinTech Thought Leaders
podcast from QED Investors.
You're deep dive into the worldof venture capital and
financial services with today'sdigital disruptors.
Qed is a global venture capitalfirm focused on investing in
FinTech companies all the wayfrom pre-seed to IPO.
Fintech Thought Leaders bringstogether the most talented
entrepreneurs tackling today'sbiggest problems.
(00:30):
If you're looking to learn moreabout what motivates our
founders and team members tosucceed, you're in the right
place.
Hello and welcome to theFinTech Thought Leaders podcast.
I'm Bill Salufo, head of earlystage investment security
investors.
Today on the podcast, I'mexcited to be joined by Chris
Dean, co-founder and CEO ofTreasury Prime.
Chris, welcome to the podcast.
Hi, welcome to the podcast,Thank you.
(00:52):
Later on in the podcast, we'regoing to get into a bunch of the
details on Treasury Prime, butas we kick things off, I wonder
if you can just give us a60-second commercial on what
Treasury Prime is and what thecompany does.
Speaker 2 (01:03):
Sure, treasury Prime is a software company.
We make banking as a servicesoftware for banks and tech
firms in the US.
So think of that like FinTech'san embedded banking.
We make an API that lets thetech firms open up bank accounts
and do any sort of depositoperation at a bank that the
bank allows.
We make software for the banks,we make software for the
(01:24):
FinTechs.
Everybody's happy.
We have a large network ofbanks.
Really, our success has beenbased that we have two factors
that no one else has.
We have a deep technology moatthat no one else does the way we
do it.
We have a large interactivenetwork of banks where the banks
actually work together with theFinTechs.
Speaker 1 (01:42):
Awesome.
I know we're going to explorethat a lot more, especially that
network of banks, which I knowhas been a big secret of your
success, so I look forward togetting into that later.
For the time being, I'd love todive a little bit into the
history, maybe starting with howyou entered the startup world.
I believe you took a job as oneof the first employees at a
machine learning startup as oneof your first forays into the
(02:03):
tech world.
Can you tell us about what ledyou to do that as a first entree
?
Sure?
Speaker 2 (02:09):
I was a machine learning researcher back in the
day at JPL, which is NASA, oneof NASA's national labs.
My advisor at school wasrunning the lab at that point
and he said you should take ajob here until you decide what
to go for at school, because Iwas having a lot of difficulty
deciding what to do.
And I did that for a while andthat was great fun.
(02:30):
And my wife at some point saidwe need to move to San Francisco
to take care of her parents,which seems like a great reason.
So we did that and we took careof her folks and I needed a job
and I was like I don't want towork down in Stanford because I
didn't.
So I got a job at a startup inSan Francisco.
I literally did not know whatthe word startup meant.
(02:51):
I went out into my network ofpeople and said hi, you all know
me.
I published this paper, thatpaper I'm looking for a job in
the commercial world.
And someone reached out and Iwas the first employee at that
startup and I didn't know thatthat was important and I just
was like OK, what do you need?
Let's get going.
They said can you find anoffice?
(03:12):
So I found an office.
Can you get furniture?
So I found furniture.
Can you build out the datacenter?
So I built out the data center.
I didn't know these were unusualbecause no one told me that
this wasn't normal.
So I did all those and that wasa terrible startup for
everything except my friends whoare there, who I'm still
friends with.
They were fantastic and I lovedthat.
But there's a lot of drama,like they're in startups.
(03:35):
The founders hated each other,they would throw chairs across
the room with each other andthere was court orders
preventing people from enteringthe building, security guard
making sure the wrong peopledidn't enter, and it was just
awful.
Actually, I really liked theparts that weren't the drama.
So I've been doing that eversince.
I found another startup who Ithought I could teach them how
(03:56):
to do it correctly.
I did.
I ended up founding a couple ofbusinesses with those people
from that company and we soldone of them for a good amount of
money.
And at some point my friend,dan Kimmerling, who you know too
, called me and said, hey, I'mhaving some issues with the
product and tech side of mycompany.
Will you help?
And I said, dan, I love you,but no way I'm retired.
(04:18):
And he's like no, just havecoffee with me.
And so I'm like, yeah, I'llhave coffee with you all day.
And we spent all day havingcoffee.
And he convinced me in the roomat the coffee shop, basically
to help them out.
And that was, I don't know,eight years ago or something.
Speaker 1 (04:33):
So that's quite the journey.
So there's a bunch of things Ineed to dive into which you just
said.
So when you said the startupwasn't very good, I did not
guess your next sentence wasgoing to be throwing chairs at
each other, restraining orderset cetera.
That had to be pretty crazy.
But then you also said a secondlater that you loved it at
least the drama free parts.
Can you talk about what was sogreat looking back in hindsight
(04:57):
and such a bizarre situation?
Speaker 2 (04:59):
Sure, the leadership was not great there, clearly,
and the problem chosen wasbleeding address.
I'm always reluctant to that.
Now that I know what I'm doing,hopefully that's a dangerous
startup problem.
Like basically, if you're goingto do your doctoral
dissertation during the startup,that's probably a bad idea
because it just takes too long,there's too many unknowns and we
(05:20):
had a bleeding edge problem wewere doing and we did okay at it
.
We solved it as much as wewanted to, but there wasn't
really a good product market fitthere.
That also was bad.
So if it was making a ton ofmoney hand over a fist, we might
have gotten through theproblems that we had, but it
wasn't.
It was struggling, but theproduct people I worked with I
really liked because it was.
(05:41):
Here's a brand new problem andthe measure of whether you're
solving the problem isn'twhether you publish it and the
right people say good job, it'swhether someone uses it or buys
it.
Cap One actually was an earlycustomer.
It was like a modeling for inthe Cap One's case.
Who do I send card promotionsto?
Basically, you should get theMichigan co-branded card and
(06:07):
there's a lot of Michigan people, so maybe that's a good idea.
You should do the Caltechco-branded card.
That's a terrible idea becausethere's hardly any Caltech
people and we would predict that.
And I love the product, I lovethe feedback.
Speaker 1 (06:18):
Well, I spent a lot of time working on that problem,
long before your company cameto exist, so I'm sure you helped
a lot 100%.
Speaker 2 (06:25):
It's not easy, right, but it's a machine learning
problem in many ways.
If you can get enough data, youcan predict this in aggregate,
and I liked that part of theproblem.
I liked that when we did a badjob, people said no, thank you,
and when we did a good job,people said sign me up.
I want to use this and that wasa great feedback loop and I
felt I could solve meaningfulproblems and know if they were
(06:45):
meaningful in the get-go.
My original plan was to be aprofessor at some kind of
mid-tier college somewhere and IThought I could make a better
impact and I was certainlyhaving a lot more fun at the
startup world, so that's why Istayed there.
My next startup, which Iusually I don't always say the
name to, was baby center, whichis a dot-com company.
(07:07):
Baby center, yeah, I figuredlike what is the opposite of
what I've been doing?
And that was baby center andthat was a great choice because
those guys were amazing.
Speaker 1 (07:16):
And what was?
Was that like a babies are ustype thing, or what did?
What did they do?
Speaker 2 (07:20):
It's like it's a content site for you know,
parents, new parents, like moms,like 80, 90 percent moms, and
it would be like, hey, you'repregnant and here's what your
baby looks on week 12 orwhatever.
Here's what's going on with thebaby.
You know the baby's now it'sborn, it's, you know, eight
weeks old.
Here's what's going on withbrain development, stuff like
that.
(07:41):
Just a content site and it waspersonalized very cleverly,
personalized on the age of thekid, on the baby and so like
expecting, you can like here'swhat's happened to your body
because happened to baby andafterwards for a couple years.
It's very predictable and thatwas useful and I built that.
And then I built a Commercesite, you know, attach to that,
which sold like strollers andstuff like that, and Selling
(08:05):
strollers is like not what I hadon my you know dance card that
I was gonna do, but I did, itworked and I liked the fact that
I Got to help people who werehaving kids, which I liked.
It was such a nice group ofpeople as you can imagine,
because who's attracted tohelping babies, right, like a
certain kind of person and likethat was great because that was
(08:27):
not the same kind of person asmy last my gig before that, the
machine learning company.
Speaker 1 (08:31):
So, from NASA to machine learning startup, to a
site focused on babies, anobvious next step would be
getting into banking as aService you can see the linear
trajectory there right.
Speaker 2 (08:43):
That's right.
Speaker 1 (08:43):
So talk to me about.
Talk to me about standardtreasury, kind of your first
foray into banking as a service.
You know how did that come tobe and you know that one was a
much more linear getting.
You know, getting to TreasuryPrime, I think it was.
Speaker 2 (08:55):
Dan and Zach Founders guy Dan Kimmelin, who we know
they just had this idea that theamount of technical innovation
that was gonna happen outside ofthe Traditional banks was large
and that that needed a way tobe managed.
That every tech firm doing thisindividually to every bank Was
probably not sustainable.
(09:15):
So they said we should make aplatform that we can sell to the
top 50, top 100 US banks and sothey can use our software,
which we built, to talk to techfirms.
Our first client was SiliconValley Bank but that was really
reluctant for anyone else tosign up.
You know, you go to a meeting,you go to City or Goldman or
something whatever, and they gothis is a great and idea, says
(09:37):
the innovation group.
And then you get to the riskgroup or the, you know, the
operations group and they'relike oh hell, no, I'm so busy
and I don't want to do this.
And at the time it was, youcould only sell to banks most
banks actually in the US as anon-premise Offering and they had
to install in their data centerand actually wasn't until,
(10:00):
really until cap one announcedthey were doing stuff in the
cloud that all the other bankssaid, oh, I guess that's okay,
because capital one knows whatthey're doing.
I'm like, yes, they absolutelydo.
You listen to them?
And I tell you that if cap oneand done that, treasure prime
will not exist, because that weare, we're all hosted sass
platform and that would neverWorked otherwise.
But we tried to sell that toall the banks and it was hard
(10:23):
and At some point there's arumor that Wells was gonna buy
us and we were like we shouldjust pivot.
And right then Silicon ValleyBank said no, no, no, don't
pivot will buy you.
And so they bought us and thesoftware we had worked.
It could open banking accounts,could do everything the bank in
the service players do now,basically, and SVB bought us.
I expected to stay there, youknow, three months, maybe to get
(10:46):
my folks settled, and it was a.
It was a very minor Acquisition, but it was enough for the, the
engineers, to buy houses.
So I'm like that's, that's agood exit, so that's worth it
and I'll stay there and makesure they're fine and then I'll
go and do something else.
We go back to retirement and Istayed there two years just
because SVB people were verynice and that mattered to me and
(11:08):
Every week or two I would learnsomething about banking
operations that I did not know,and I was gobsmacked by how and
from my impression, how terribleit was.
Like Don't you realize you couldjust write a piece of software
to automate like these 20people's jobs and they could do
something interesting instead oflike move, shuffling you know
(11:28):
proverbial paper around, andthat was kind of the aha moment.
I did that for two years.
At some point I'm like okay,either I have to like take over
the bank or I have to leave,because I'm just all I'm doing
is like Playing whack-a-molehere with all these problems.
So I left at Gemini, startingto trip your prime.
Speaker 1 (11:45):
Did you start Treasure Prime right away, or
did you sort of based on whatyou learned at SVB or did you
think about sort of a bunch ofdifferent types of problems
again?
Speaker 2 (11:54):
No, we actually figured out the model for
Treasure Prime at SVB.
We couldn't come up with amodel for a long time.
We were there like maybe a yearin and I'm like the product
market fit on the banking as aservice stuff.
It's so good that any dummycould like launch something and
you'd have like amazing growththe next day.
And that's I'm a startup guy.
That's very unusual.
(12:14):
It's very hard.
I'm like we should do somethinghere, like we could Do
something interesting.
And first of all and Jim's avery good strategic thinker and
he's like let's think throughthis and like what's our actual
goal?
And so we came with our actualgoal, which is very touchy-feely
, you know, high concept, andThen we tried to figure out how
to accomplish that.
(12:35):
And it took us, I think, a goodSix or eight months to figure
out the business model, and it'sa business model we have now
and we can get into that.
But I tell you that took a longtime.
Jim and I didn't feelcomfortable discussing this in
the SVB office because it wouldjust like seem like, you know,
not kosher, not nice.
So we would always take theselong walks outside the office
(12:57):
like for lunch, and I havewalked many, many miles around
San Francisco trying to figurethis out.
Speaker 1 (13:04):
And I know how many hills San Francisco has, so that
must have burned a few calories.
Speaker 2 (13:09):
Yeah, it's like you want to go to charitone so far.
Speaker 1 (13:14):
So you, you saw, you know, with standard treasury you
kind of saw the power that lookif the banks could find a way
to talk to fintechs moreeffectively.
You know that would be useful.
Obviously, you added to that,given some of the knowledge you
learned at svb.
I'm going to go back tosomething you started with,
which is one of the key premisesof treasury prime, as this
notion of multiple banks Is.
(13:34):
Is that something that came outof this experience or is that
something that you guys came tolater?
Speaker 2 (13:39):
That was from a get-go, like we looked at it and
said, well, we could go to acouple banks, you know, a decent
size banks, like once again,like top 50, top 100, and we
probably couldn't get one ofthem.
We need two of them because,you know, we needed to be not
beholden too much.
We said, like we could be,pretend to be a bank, which is
(13:59):
what most of the folks wouldhave thought of since then and
during them, like if you look atsynapse and solid and unit,
that's what they do.
They pretend to be a bank andwe're like To do the right
amounts of volume.
You actually need a pretty bigbank.
And so I went and talked tothem when talked to them all and
everyone was like no, thank you.
You know, I talked to, I talkedto goldman and city and talked
(14:22):
to cap one and folks like that,and no one was really that
interested and which makes sense.
But all the small banks wereinterested and we, our basic
premise was Look, you actuallyneed to be a bank to do this
correctly.
You need to be a bank to managethe risk properly.
It's hard to outsource thecompliance when the regulators
show up, so we need a bank who'sreally on our side, and so we
(14:45):
need a big bank, or maybe twobig banks, and I couldn't do
that and Jim or I can't rememberwhich had the idea.
Well, you know, it's the sameas a couple big banks.
It's a lot of smaller banks.
So if we go to a lot ofcommunity banks, you know a
billion dollars or five billion,instead of you know 100 billion
.
Really, you only need 25billion dollar banks to equal
(15:06):
that one.
So that seems possible.
And when you start from thatpremise I think everything else
flows from that where you saylike, oh, if I have that many,
then it's really a marketplaceand it's really more about a
matching problem between thefintechs and the banks than it
is just about finding thefintechs.
And it's more about buildingsoftware so that the banks can
(15:27):
run the compliance portion, thegovernance portion, of the
fintech properly, and that willkeep the fintech safe.
And that's important, becausewhat you do not want under any
circumstance Is your best,biggest, largest customer to
churn and leave the platformbecause they can get a better
deal across the street orbecause you've they reach your
growth limit or, god forbid,there's some compliance issue.
(15:48):
They said we can do this if wehave lots of banks because we
can always find them a home.
We can split them up betweenbank a and bank b, so that three
or four different banks and itall flowed from that and that
was the business model we had,and then it was just a matter of
like, how do we get there?
You know, once we realize thedestination, figuring out the
path to get from where we are tothere was actually pretty easy.
It only took like a coupleweeks probably.
Speaker 1 (16:11):
So it sounds like you arrived on that model in part
out of necessity, right Then youstarted out trying to get one
of the the big dogs to play.
What if one of them knocked onyour door today?
Do you think that that's aninteresting model?
Or, given the path you've gone,have you learned?
Hey, this multiple marketplace,many different banks, is
actually the, the superioranswer anyways, have you?
Have you thought that through?
Speaker 2 (16:33):
Yeah, I think it's a superior answer.
Anyway, I think if you look ateven the big banks, they're only
going to do 10 or 20 deals peryear, like in my.
I always just say 10, sometimesa little more.
But Even a big bank, but ifyou're only do 10 or 20 year in
your goldman, while they'rebetter be pretty big, 10 or 20 a
year.
So what does that leave?
All the smaller folks you knowwho only have like you know
(16:55):
they're, they're too small forthat.
They still need a home.
And the wonderful thing aboutthe us Banking system there's
lots of terrible things, but thewonderful thing is it is a
highly competitive capitalistsystem.
There are many, many commercialbanks out there and they are
all interested in doing businessand you just need to find
(17:15):
enough when they are willing andhappy to work with your
customers, their customersreally.
And and that's easy to dobecause they're competitive the
smaller banks are competing witheach other.
The big banks eventually care.
We have a couple big banks,right, and the thing is they do
the same amount of work thelittle banks do, like our
biggest bank has maybe what fourfintechs, but they're all
(17:37):
gigantic right, and our smallestbank has maybe 20 fintechs, but
that's it.
I mean, there's not, it's not.
You know, one has a thousandand one has two.
You know they're.
They're really much closer thanthat.
Speaker 1 (17:50):
Yeah, that's pretty interesting.
Now, if you're out talking toclients, I mean, I know you have
competitors, as you mentioned.
Most of those competitors, touse your words, pretend to be a
bank.
You know what are the majoradvantages of the system that
you've built and, if any arethere, are there disadvantages
to the system you've built?
Speaker 2 (18:06):
Yeah, there's both those are true.
We compete against two reallykind of different entities,
which is irritating.
Surprising.
The main one we compete againstis actually other banks.
So, like the you know the greendots of the world, please, the
coastal.
When you make people like that,these are good, well-run banks.
They know what they're doing.
(18:26):
The common wisdom here is thatyou should have a direct
relationship with the bank ifyou're a fintech and I think
that's I agree with that.
However, we are also a directcontact with the bank, because
we're just a software company,we're not a bank, and if you
have a relationship with thebank directly, either with one
of our banks or you know Aregular bank, that's a big
(18:49):
competing force and those wecompete with all the time and I
don't think that's going to stopour strategy there is like to
try to get them on theirplatform.
Then, whatever, whenever theywin, we win.
The other ones we talk aboutare just our tech firms.
Right there.
The banking is a servicecompany.
It's like the synapses of theworld.
It's kind of the og player here.
And what?
When we compete against them,what we say is look, you're
(19:12):
essentially outsourcingcompliance to a third party that
has no regulatory oversight andeventually the regulators are
going to notice that and thereyou're going to have a
challenging day and you don'twant that also.
So maybe you don't want to bejust at one bank, like look at
the chaos of silicon valley bankthis year.
You probably want two or threebanks that you can flip between,
(19:34):
and that's a hard technologylift, unless you're with
treasury prime.
And then we have a largenetwork of banks and you can
switch between them whenever youwant.
It's a commercial deal.
You can have one more than onebank if you want.
And those are the argumentsthat like look, we're not a bank
.
You can have a directrelationship to bank which gives
you the economics incentivesyou want.
(19:55):
We're safe because you want,you have the economic incentives
.
And the one thing we have thatother banks don't is we have
lots of banks.
You're not just making a dealwith one, you can make a deal
with four or five if you want,which our customers do.
One of your portfolios and oneof my customers has, I think,
five banks.
It's a lot right.
Speaker 1 (20:13):
Well, let me, let me jump into that.
I mean you referenced it asecond ago, the crazy weekend
that SVB, you know, had someissues and not just SVB and no
one.
Number of others did as well.
I mean this was a situationthat probably we all thought
kind of went away in the era ofthe Great Depression, the old
run on the bank, and clearlythat did not go away.
I mean you had a complete frontrow seat to all of this.
(20:35):
I wonder if you can kind oftake us inside that weekend.
What did it do for you guys?
I know it was a crazy hecticweekend, but it was also a big
catalyst for you.
I wonder if you can just kindof take the listeners, you know,
a bit inside the ropes, so tospeak, for your front row seat
there.
Speaker 2 (20:52):
Yeah, it was chaotic, for sure, but chaos brings
opportunity.
And so, you know, we were luckyenough to be in the right
position there and have theright mindset.
I worked at SVB for a long time, for a couple of years, and I
knew something was happening,right just because a rumor mill.
And you know, silicon Valley isa small community and my office
(21:12):
is blocked from SVB's office.
You know, I just see people onthe street and you could tell
something was up.
And I remember I was at somedinner with our friend Nigel and
like a lot of other people, andI was like, oh, what's going on
?
I'm like, yeah, this isterrible, but I mean, it's a
well run bank, they're fine.
They did some stupid thing,they're fine.
(21:34):
The only thing that couldhappen.
Unless there's a run on thebank, that'll never occur.
And then that happened.
And as soon as that started, Iwas like, okay, let's have to
make sure we Treasury Prime issafe.
You know we had tens ofmillions of dollars at SVB that
we were like, well, let's makesure we're not.
You know, move some of ourcapital of the one of the backup
(21:58):
banks we have, because we havea lot and our first impression
was to move it to First Republicbecause that was our main
backup bank.
That was not a good backup.
So we ended up moving it to oneof our client banks and I had
to call the CEO and said look,I'm about to deposit a
significant number of capital inyour bank.
And they're like thank you,that's good.
Please don't move it for aquarter or I'm gonna look like
(22:19):
an idiot.
I'm like no problem.
And so I did that there.
She was very nice about it andthat happened for us.
Meanwhile everyone else at SVBis panicking.
My phone's ringing off the hook, because everyone's like what
do we do?
What do we do?
And I'm like first of all, makesure your payroll is covered,
just make sure that.
And they said but what aboutall our clients?
(22:40):
We had someone I know who's aruns a payroll company or did
run a payroll company out of SVBand they're like we're doing
another payroll on Monday.
It's Thursday night, can I belive by Monday?
And I'm like you'll have towork all weekend.
I'm not guaranteeing I can finda bank, because it's not my
decision, because I'm not a bank, I'm just a software company.
(23:01):
But I'll call in all the favorsI have and we'll make it work.
And that happened half a dozentimes more and we worked all
weekend, all the next week andall the next weekend and we got
a lot of new business from that.
And what happened first wasthat everyone moved over.
And then there was a sigh ofrelief and everything was fine,
everyone's happy.
(23:21):
And then there was a beat andmaybe a month later everyone
called me again and said now Ineed another bank, because not
that I want to move banks, but Ijust want to back up because I
didn't have one before and Ifelt that pain.
So what do we got?
And we turned on a lot ofpeople using more than one bank,
and so that's, that's just a.
That's a very common occurrencefor anyone over even a modest
(23:42):
scale now.
Speaker 1 (23:43):
Yeah, and I would imagine that prior to that
weekend You're probably fightinga little bit of an uphill
battle.
Hey, come to this marketplacemodel because you don't want to
take compliance risk and youwant backups.
But it was all kind of somewhatesoteric, right, even though
your arguments make sense, Iwould imagine to clients this
weekend really helped.
That hit home on from a verypractical way why this is so
(24:04):
important.
I mean, did you find a notableincrease in the amount of your
sales message resonating?
Speaker 2 (24:11):
100%?
I mean no question, but was Iremember most of the tech?
The embedded banking folksespecially, are not really
sophisticated banking people.
They don't really understandthat banks are real businesses
that have people running them,that good things can happen to
and bad things can happen to.
They think, oh, it's a bank andthat's perfect and permanent,
right.
I'm like no, they're businesseslike any others.
(24:35):
They're generally well run, butnot always, and bad things can
happen.
And when SVB was a real example,that changed everyone's
attitude.
Before then we had what?
Three clients just three whouse their multiple bank product.
Because they were just big andthey were like we want our
deposit spread around.
(24:56):
They had some cannabis stuffthey were doing.
The only one bank would do thecannabis stuff and but they
yield on that bank was small, sothey only want to limit the
cannabis stuff and they spreadit around.
And others were like we have alot of deposits and we just want
to make sure that we don'toverwhelm the $2 billion
community bank with deposits, sowe want to spread that around.
And those people were fine andhappy and the product worked.
(25:18):
But post SVB it's completelydifferent.
Everyone I need a backup justfor safety.
And once they started usingmore than one bank, they
realized oh, actually this isreally beneficial to me.
We have our own private paymentrails between our banks so we
can move money around betweenour banks.
And pretty soon all the FinTechstart treating the banks as
(25:41):
kind of one large virtual bankand they move money between
accounts and they.
It just works for them, right?
They basically have differentcosts and different yields and
different kinds of customers.
They can onboard at differentbanks, but otherwise to them
it's the same.
It's the commercial terms whichare different, it's not the
operational and for them that'sa big deal and once they've
(26:03):
tried that, they never go back.
They never want to go back.
Speaker 1 (26:06):
You mentioned that some of your first adopters,
even before this weekend, werethe large companies that had a
sufficient number of deposits orcomplexity that it just makes
sense.
What's your advice to youngercompanies when they should start
thinking about this?
Is it literally hey, I justtook in $200,000 of angel money
or does somebody really need toget to a certain scale before
they really start to think aboutthis diversification?
Speaker 2 (26:30):
It's a scale issue.
So I always say to people andthis is very self-serving, but I
definitely believe it Don'tstart.
There's your first move to havetwo banks, but it's going to be
your second move.
So make sure you can make thatsecond move, because if you're
growing, you don't want to alsohave to switch banks.
You want to add a bank, notswitch banks, and you don't want
to have to get your engineeringstaff to integrate with two
(26:52):
separate banks because that'sjust a real big lift, because
that's like it's.
Basically.
My whole job is to do that workand we're very busy doing that.
So you, as some random fintech,don't want to have to do direct
integrations to multiple banks.
It's too expensive.
So don't start there, butrealize that's your next move.
So start with us at just onebank.
Make a deal, get to a certainscale, prove your product market
(27:15):
fit as you start to scale.
That's a good reason.
Do another round, do a C or anA, get a few million dollars in
the bank and then say now's thetime to add that.
Speaker 1 (27:26):
So switch gears a little bit less laser focused on
treasury prime for a second,but more broadly, you've got a
ton of experience and adventureacross a number of different
stages and number of differenttypes.
You know, amias Garity, one ofQED's partners and our lead
partner who works with treasuryprime, asked me that I had to
ask you a question here today,so let me let me just put it in
now.
Oh shoot, it's terrible.
(27:47):
No, this one isn't tooembarrassing.
Maybe there's some moreembarrassing stuff later.
But if you're a younger operatorand you've spent your whole
career really in venture in thelast 10 years or so, what is it
about the venture ecosystem?
You might not understand or youmay not get right, and I think
some of the context for that isyou know, we had, I don't know,
(28:07):
a 10 year.
I think Frank likes to call itsuper cycle.
You know where kind ofeverything was working in
venture.
We've now seen about a year anda half where that's not the
case, maybe two years wherethat's not the case, but having,
you know, seen a lot more thanyour typical new to the venture
ecosystem, what are some thingsthat they may kind of get wrong
or they may not understand ifthey've really only lived this
(28:28):
over the last 10 years or so.
Speaker 2 (28:30):
Yeah, I mean there's been.
I've been through multiplecycles of this.
Now you know I didn't found acompany then I found it right
after, but I was part of the dotcom companies that baby said
our company I mentioned was adot com.
We got purchased by a largercompany that went public and
that, face planted, I went frombeing worth a lot of money on
paper to worth no money on paperpretty quickly.
(28:52):
That was a good learningexperience.
And then, you know, the 2008crash was also indicative
because it was a time ofconstriction, and two things I
really noticed then.
One is that the companies thatstarted right around that after
that ended usually were greatcompanies and they were very
strong and did well.
(29:12):
I mean you can point to lotsand lots of examples there and I
always wondered why was that?
I thought it's because they hadto get their basic problem
right, because they couldn'tjust go and say I need a series
A, a series B, a series C, aseries whatever, at some
inflated price to like patch upany problems.
They actually had to have theirunit economics work out well,
(29:36):
their product market fit, theirability to serve their customers
right.
I mean there's lots of capitalthings that happen.
But really it's like you reallyneed to focus on making sure
that your unit economics arecorrect, because if they are not
correct, then no amount ofcapital is really going to fix
that and you can say like, well,I don't worry, I'm going to
(29:57):
make it up in volume.
Generally, that doesn't work.
It's true that you can spend alot of capital to grow quickly
once you know what you're doing.
So take the time to know whatyou're doing.
That's the thing I usually see.
That's wrong and the one thingI say to everyone and no one
really gets this but takingventure money from someone, be
careful who you take it from, becareful of the person, be
(30:19):
careful of the firm.
Like I, like a Myas.
You know the story, I don'tknow.
Myas and Frank were my firstchoice for us doing our series A
and I met a Myas and hepreempted the offer and I'm like
well, just say yes, even thoughthe offer was lower than I
wanted.
Right, and I guess when theright person comes along because
you're, you're marrying themand the firm, you can't really
(30:41):
divorce them.
They're on your board foreveruntil you have an exit and you
want someone you can trust overthe long good and bad times.
The capital matters less thanthe people and the support
you're going to get along theway.
You're going to face plant oneday Everybody does and you need
to make sure that there'ssomeone there can like, dust you
off and say you're doing fine,keep going.
(31:04):
Here's some advice you need,and I don't think most people in
the boom years cared about that.
They're just like sure.
Crypto money FTX seems fine.
Let's just take it.
I'm like dude, you're notgetting anything good from that,
so just stop.
Speaker 1 (31:19):
It is actually the single biggest surprising thing
for me as I look back over theyou know, 2020, 2021 boom, when
rounds started to take four dayslong and companies started to
get you know 10 different termsheets, why that was the result
right.
So, in some level, if you get10 different term sheets, why
not take the time to figure outwhich ones you like best?
Because you have them rollingin your place.
(31:39):
When the market got hot, it allcollapsed to speed.
That's sort of the one thing Inever quite internalize why that
was the equilibrium there, butanyways, that'll be a subject
for many PhD research papersprobably.
But look, so I appreciate thatadvice.
Let me switch a little bit tokind of leadership and kind of
culture within Treasury Primeand just personally.
So let me start with a bit of apersonal question how would you
(32:01):
describe your biggestsuperpower?
And, conversely, is there onething that if you could be
instantly better at, what wouldyou pick?
Speaker 2 (32:10):
Sure, I'm a very, very good engineer, very, very,
very good.
I know I'm not the bestengineer, because I met the best
engineers and they're betterthan me and it's like so this is
like sort of an answer, sort ofnot an answer.
It's like you've been a greatbaseball player a whole life and
all of a sudden you get intothe major leagues and you go oh
wait, there are other people whoare just as good.
(32:31):
And oh, that guy over there,they're way better.
Or change sports you want.
Well, it turns out MichaelJordan's a better basketball
player.
No, no, no, shocking, and Iknow people like that.
My superpower is really beingable to recognize talent.
I think that I'm good at that.
I'm good at recognizing whenpeople are good at their jobs
(32:53):
and that they are going to begood at it for a while, and
they're not too crazy.
You can be a little bit crazy,but not too crazy.
Hiring is very important to me.
I think that's kind of the onething that makes startups work
or not work.
There's like four or fivethings, but that's one of the
biggest ones and I'm good atthat, and so I use that all the
time.
My staff generally hates mebecause I'm like nope, this
(33:15):
person's terrible, kick them andthey're like but everyone else
loved him.
Well, everyone else is wrong,so you have to deal.
Ah.
And they'd say is that fair?
It's like if you said that tome, I would also say that's fine
.
So I'm saying it to you, so youhave to say it's fine.
The thing I could be better atI'm very impatient in a harsh
judge of situation and I wish Ihad more patience in my life
(33:39):
than I do.
Sometimes, if something doesn'twork out, I'm like nope, blow
it up and move on, and I thinkthat can be a good instinct, but
generally I wish I had morepatience in my life.
Speaker 1 (33:49):
No, it makes sense.
I mean, not everything worksout the first time right, so
sometimes things do take alittle bit of time to meditate.
Well, let me come back to thispeople topic and the hiring.
I mean, I know that you andyour co-founder, jim, are
incredibly committed to this andthe comment that you made once
believe the best startups havethe best people.
That's probably something that90% of startups would say.
(34:10):
What is it about how you guysthink about things that really
differentiate you?
I know that you're a harshcritic at times, and so if
you're self-identifying thatthis hiring great talent is
truly the superpower, I'm quiteconfident that's true.
How do you really think aboutdistinguishing yourselves in
that type of environment when,if I asked most people what the
(34:32):
key to the business is, theywould probably say something
related to people?
Speaker 2 (34:35):
Yeah, I mean the things are you've got to get
product market fit right.
You've got to make sure it's amarket that you can serve and
make money at.
You've got to make sure youhave enough capital and you can
execute properly.
But really most of theexecuting properly is people.
You need to write people to dothat and I think everyone says
they want great people andmostly they don't have the
(34:57):
discipline to stick with it.
At a startup you're less than100 people.
I would confidently say weshould not fill that slot if we
can't find the right person likewe want a new engineer or a new
sales leader, something likethat.
You wait until you can find theright person and you just wait
and you keep looking and youlook harder, but you do not hire
(35:19):
someone because you have adesperate need for another
customer success person and thisone's okay but not great.
You say no and you wait tillyou find the great one, and I
think most people at the end ofthe day aren't willing to do
that.
When we grade people who areinterviewing candidates which we
(35:39):
do grade them the common thingwould be to grade them like one
to five or one to 10, and Idon't do that.
I say you get one to four,because there's no in the middle
.
You can't do two and a half,you have to do.
One is they're terrible, two isthey're not great, three is
they're okay and four is they'regreat.
One, two, three, four, that'sall you get, and I can tell you
(36:02):
we don't hire people unlessthere's mostly fours and that
means we mostly don't hirepeople and it just takes a long
time and that's what you gottado, and I think most people are
not willing to do that.
They feel the pressure of movingfaster than what hire someone
and they do that.
I can tell you that is ashort-term win and a long-term
lose.
It's like eating that cake Likeyou want that cake, so you eat
(36:25):
the whole cake and it takesgreat that day.
The next day you're gonna feelterrible, right?
So maybe don't do that.
Like you can hire this personand it'll be fine for three
months or six months and thenit'll be terrible, so don't do
that.
Speaker 1 (36:37):
Yeah, I mean what you described I think is such a
common thing that peoplestruggle with right People that
I know are unbelievablycommitted to really hiring the
best talent.
Yet you just see maycompromises because hey, I've
gotta get this thing done, andif I don't get this thing done
and I need this person, and soyou know that's.
You know what you're describing, I think, is one of the hardest
things to continue to do astime goes along.
(36:58):
So kudos to you guys for reallyliving up to that the flip
side's true, though.
Speaker 2 (37:03):
I mean like you need to hire people who are good at
hiring people.
Like one of our early hires wasa completely overqualified head
of people.
She's our chief people officer,think her title is.
She's fantastic.
I talked to her for 10 minutesand I was like, well, I don't
care what else I do this weekand we gotta close her.
I had a mys call her.
I had everybody talk to heruntil she said yes, and that was
(37:27):
one of the best decisions weever made at Treasure Prime.
Like the reason that we a goodcompany is because we have great
people.
The reason we have great peopleis because she's there making
sure that we only hire the bestpeople and the people we have,
we train them, and that hasplayed dividends over and over
again.
Speaker 1 (37:45):
Yeah, you know the next part of people.
I mean we talked about hiring,but you know creating a great
environment, creating a greatculture.
If you don't have that, thenthe people aren't gonna stay and
they're not gonna be productive.
What did you learn aboutbuilding a strong culture from
the various different startupsthat you've done and I know
you've arrived at a strong onewithin Treasure Prime and how
did that kind of serialentrepreneur nature help develop
(38:07):
your philosophy on creating agreat culture?
Speaker 2 (38:11):
Yeah, I had an office mate a long time ago who was a
Navy SEAL you know the, you knowthe commando guys and he talked
about this a decent amount andhe said this was true across
most of the military elitethings.
It says that what you think youwant is someone who is the best
soldier, that is or the bestsailor, I guess you call it that
(38:33):
you want someone who can runthe mile fast, can shoot, the
weapon, can do sneak around, cando all the things that you do.
It says that's true, but that'snot the most important thing.
The most important thing isthey can work with the team and
the team trust them.
It's about the trust.
So if you want to make sureyou're building the right
culture, you have to have greatpeople, and on a scale from best
(38:57):
to worst.
Do you want the best performers?
You absolutely do, but actuallymore important that is trust.
So you need to find people whoactually can work together, who
can trust and respect each other, and if you can do that and
provide the right model from theleadership side, the culture
that you want will create itselfin many ways, but it starts
(39:19):
from finding the right peoplewho are going to gel together
and that's what we do.
We care about the people wehire.
We make sure that we have acertain set of principles.
Here's a fun fact for you, bill, that what our first principle
is it's about focusing on theteam and that's the most
important thing, and it's theteam, the team, the team.
Because Jim went to Universityof Michigan and apparently that
is something that footballpeople from Michigan say.
Speaker 1 (39:41):
He is definitely a good man.
Quoting one Bo Schambekler,that's right.
Speaker 2 (39:46):
Team, the team, the team and we say it all the time
and that helps create theculture of cooperation and
dependency.
The team works hard becausethey want to support the rest of
the team.
They don't work hard because ofsome other reason.
They want to support each other.
They all believe in the mission, for sure, but it's about
supporting each other and that'sthe culture we want.
(40:08):
We want that culture around theteam.
Then we have other principleslike innovation and
trustworthiness and things likethat, but really it's about
helping each other.
Once a quarter we get togethervirtually.
Usually.
Once a year we get togetherphysically, so we fly everywhere
out somewhere because we're allremote.
We have weekly, all hands Zoomstaff meetings where everyone
talks and asks questions,hopefully ask questions, and I
(40:31):
see my executive team, my directreports once a month in person,
because they're all remote too,and that time we spend together
matters and that's how wedevelop the culture.
Speaker 1 (40:42):
That's wonderful.
I've got to ask one shockinglyspecific question here, because
I think you guys have a programthat I've not seen anywhere else
, that you have a reallyinteresting benefit, which is
you give everyone on your teamfinancial wellness education and
unlimited financial advisorsessions.
You know this is interesting.
This is something we have acouple portfolio companies that
(41:02):
are trying to make headway onfinancial education and
financial benefits, but it seemslike you have a commitment that
goes way beyond what mostcompanies do.
Can you just talk a little bitabout what led you to go down
that route for your employeesand why you're so passionate
about it?
Speaker 2 (41:16):
I think you know, I have too much education,
probably like YouTube.
Speaker 1 (41:21):
And.
Speaker 2 (41:22):
I noticed that.
Well, I mean, you and I havedifferent degrees but, like
mine's in, I study physics andnever once did anyone tell you
you know, this is how you shouldmanage your financial life.
Let's take a class on that, youknow, maybe the economics folks
did, but probably not.
Probably they're talking aboutbig picture things, and I made
(41:44):
dumb mistakes in my life and atsome point I realized I didn't
know what I was doing, so Ibetter learn, and it's some
specific way we want everyone inour company to be supported,
and that's a good benefit.
There's another, like moreMachiavellian view of this,
which is like why it's actuallya good business idea.
(42:05):
It's that our problem we haveis very complicated Learning
about how banks work andlearning about how fintechs work
.
There's not a lot of overlapbetween those two, frankly, and
so we need people who are goingto be we train and are in for a
long term, that have a longtenure, so it makes sense for us
to invest in their lives.
I don't want them stayingaround for six months, I want
(42:25):
them staying around for fiveyears or longer, and if you're
going to do that in the startupworld, you really have to invest
in people and we have to showpeople that like, look, we're
here for your whole journey, andpart of your journey is your
financial one and we're going toteach you how to do that,
because you don't know.
It didn't start out unlimited.
It became that when it wasobvious.
(42:45):
No one knew what they weredoing.
They're all as bad as I wasknowing what they were doing.
Speaker 1 (42:50):
No, I mean it definitely.
You know I've been involved ina couple of nonprofits over the
years really trying to teachmore personal finance to high
school kids, and it's stunninghow much of an uphill battle any
of those are.
And you could take that tocollege.
I probably did have a littlebit of an advantage taking
economics, but you're right,most of it is theoretical and
personal finance is only a verysmall piece of that.
So huge kudos to you, and Itotally get there's both the
(43:13):
kind of humanitarian side ofoffering it, because it's the
right side to do it.
But I think you're also makinga great connection to why it's a
good flat-out business decisionto make sure people are stable,
especially choosing to join astartup, which probably means
they're not maximizing theirshort-term earnings and instead
for a little bit riskier careerthat could pay off down the line
(43:33):
.
So that makes a lot of sense.
Speaker 2 (43:35):
A good portion of our staff could go work at Google
or wherever tomorrow.
Right, that's a good financiallife and they're choosing to do
this because they believe in theteam and the mission and it's
fun and all that stuff.
And I want to say, good, Iappreciate that and we're going
to make a lot of money together.
That's fine, but you're goingto need to wait a little while
(43:56):
for that money comes.
In the meantime, what can we doto support you?
That is more tractable thanpaying you a Google salary,
definitely.
Speaker 1 (44:03):
Well, Chris, I really appreciate you spending the
time with us here today.
I mean, it's a fascinatingstory.
I mean, Treasury Prime is acompany.
It's funny Amayas made the casewhen we invested and certainly
talked up the benefit of thisbank network in comparison to
what other companies did, and itwas always made sense on paper,
a little bit of a theoreticaladvantage.
(44:24):
And then all of a sudden in oneweekend we're like oh yeah,
that's one reason why it's rightand it just becomes so
blindingly obvious and we'rethrilled to be partnered with
you on this journey.
You too, Amayas, is the best.
So, chris, I'd love to end withjust one question.
I always ask it of everybody.
I've already asked you a littlebit longer version of this
(44:44):
question early on, but anyways,as we finish up I mean hopefully
we have a bunch of youngperspective entrepreneurs
listening to this podcast overtime Is there one tip if you
could just share, sort of onetip that a new entrepreneur
could take away, what would yousuggest?
Speaker 2 (44:58):
Just, one Be committed.
You're not going to do it in aweekend.
You've got to make sure you'rehere for multiple years before
you decide that it's not for you.
You have to commit.
I'll do it as a side hustle.
That won't work.
Speaker 1 (45:13):
So so true.
That's.
I think that's wonderful advice.
Well, look, thanks for joining,chris.
Really appreciate the time andto all you listeners, until next
time and take care.
And thanks for listening.
This] has been the FinTechThought Leaders podcast your
window into the world of venturecapital and financial services
(45:35):
with today's digital disruptors.
Qed is proud to provide thebest FinTech advice you can get.
To learn more or to read thefull show notes from today's
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also follow QED on Twitter andLinkedIn at QEDInvestors.
Thanks for listening.
You're listening to the FinTech Thought Leaders
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(00:30):
If you're looking to learn moreabout what motivates our
founders and team members tosucceed, you're in the right
place.
Hello and welcome to theFinTech Thought Leaders podcast.
I'm Bill Salufo, head of earlystage investment security
investors.
Today on the podcast, I'mexcited to be joined by Chris
Dean, co-founder and CEO ofTreasury Prime.
Chris, welcome to the podcast.
Hi, welcome to the podcast,Thank you.
(00:52):
Later on in the podcast, we'regoing to get into a bunch of the
details on Treasury Prime, butas we kick things off, I wonder
if you can just give us a60-second commercial on what
Treasury Prime is and what thecompany does.
Speaker 2 (01:03):
Sure, treasury Prime is a software company.
We make banking as a servicesoftware for banks and tech
firms in the US.
So think of that like FinTech'san embedded banking.
We make an API that lets thetech firms open up bank accounts
and do any sort of depositoperation at a bank that the
bank allows.
We make software for the banks,we make software for the
(01:24):
FinTechs.
Everybody's happy.
We have a large network ofbanks.
Really, our success has beenbased that we have two factors
that no one else has.
We have a deep technology moatthat no one else does the way we
do it.
We have a large interactivenetwork of banks where the banks
actually work together with theFinTechs.
Speaker 1 (01:42):
Awesome.
I know we're going to explorethat a lot more, especially that
network of banks, which I knowhas been a big secret of your
success, so I look forward togetting into that later.
For the time being, I'd love todive a little bit into the
history, maybe starting with howyou entered the startup world.
I believe you took a job as oneof the first employees at a
machine learning startup as oneof your first forays into the
(02:03):
tech world.
Can you tell us about what ledyou to do that as a first entree
?
Sure?
Speaker 2 (02:09):
I was a machine learning researcher back in the
day at JPL, which is NASA, oneof NASA's national labs.
My advisor at school wasrunning the lab at that point
and he said you should take ajob here until you decide what
to go for at school, because Iwas having a lot of difficulty
deciding what to do.
And I did that for a while andthat was great fun.
(02:30):
And my wife at some point saidwe need to move to San Francisco
to take care of her parents,which seems like a great reason.
So we did that and we took careof her folks and I needed a job
and I was like I don't want towork down in Stanford because I
didn't.
So I got a job at a startup inSan Francisco.
I literally did not know whatthe word startup meant.
(02:51):
I went out into my network ofpeople and said hi, you all know
me.
I published this paper, thatpaper I'm looking for a job in
the commercial world.
And someone reached out and Iwas the first employee at that
startup and I didn't know thatthat was important and I just
was like OK, what do you need?
Let's get going.
They said can you find anoffice?
(03:12):
So I found an office.
Can you get furniture?
So I found furniture.
Can you build out the datacenter?
So I built out the data center.
I didn't know these were unusualbecause no one told me that
this wasn't normal.
So I did all those and that wasa terrible startup for
everything except my friends whoare there, who I'm still
friends with.
They were fantastic and I lovedthat.
But there's a lot of drama,like they're in startups.
(03:35):
The founders hated each other,they would throw chairs across
the room with each other andthere was court orders
preventing people from enteringthe building, security guard
making sure the wrong peopledidn't enter, and it was just
awful.
Actually, I really liked theparts that weren't the drama.
So I've been doing that eversince.
I found another startup who Ithought I could teach them how
(03:56):
to do it correctly.
I did.
I ended up founding a couple ofbusinesses with those people
from that company and we soldone of them for a good amount of
money.
And at some point my friend,dan Kimmerling, who you know too
, called me and said, hey, I'mhaving some issues with the
product and tech side of mycompany.
Will you help?
And I said, dan, I love you,but no way I'm retired.
(04:18):
And he's like no, just havecoffee with me.
And so I'm like, yeah, I'llhave coffee with you all day.
And we spent all day havingcoffee.
And he convinced me in the roomat the coffee shop, basically
to help them out.
And that was, I don't know,eight years ago or something.
Speaker 1 (04:33):
So that's quite the journey.
So there's a bunch of things Ineed to dive into which you just
said.
So when you said the startupwasn't very good, I did not
guess your next sentence wasgoing to be throwing chairs at
each other, restraining orderset cetera.
That had to be pretty crazy.
But then you also said a secondlater that you loved it at
least the drama free parts.
Can you talk about what was sogreat looking back in hindsight
(04:57):
and such a bizarre situation?
Speaker 2 (04:59):
Sure, the leadership was not great there, clearly,
and the problem chosen wasbleeding address.
I'm always reluctant to that.
Now that I know what I'm doing,hopefully that's a dangerous
startup problem.
Like basically, if you're goingto do your doctoral
dissertation during the startup,that's probably a bad idea
because it just takes too long,there's too many unknowns and we
(05:20):
had a bleeding edge problem wewere doing and we did okay at it
.
We solved it as much as wewanted to, but there wasn't
really a good product market fitthere.
That also was bad.
So if it was making a ton ofmoney hand over a fist, we might
have gotten through theproblems that we had, but it
wasn't.
It was struggling, but theproduct people I worked with I
really liked because it was.
(05:41):
Here's a brand new problem andthe measure of whether you're
solving the problem isn'twhether you publish it and the
right people say good job, it'swhether someone uses it or buys
it.
Cap One actually was an earlycustomer.
It was like a modeling for inthe Cap One's case.
Who do I send card promotionsto?
Basically, you should get theMichigan co-branded card and
(06:07):
there's a lot of Michigan people, so maybe that's a good idea.
You should do the Caltechco-branded card.
That's a terrible idea becausethere's hardly any Caltech
people and we would predict that.
And I love the product, I lovethe feedback.
Speaker 1 (06:18):
Well, I spent a lot of time working on that problem,
long before your company cameto exist, so I'm sure you helped
a lot 100%.
Speaker 2 (06:25):
It's not easy, right, but it's a machine learning
problem in many ways.
If you can get enough data, youcan predict this in aggregate,
and I liked that part of theproblem.
I liked that when we did a badjob, people said no, thank you,
and when we did a good job,people said sign me up.
I want to use this and that wasa great feedback loop and I
felt I could solve meaningfulproblems and know if they were
(06:45):
meaningful in the get-go.
My original plan was to be aprofessor at some kind of
mid-tier college somewhere and IThought I could make a better
impact and I was certainlyhaving a lot more fun at the
startup world, so that's why Istayed there.
My next startup, which Iusually I don't always say the
name to, was baby center, whichis a dot-com company.
(07:07):
Baby center, yeah, I figuredlike what is the opposite of
what I've been doing?
And that was baby center andthat was a great choice because
those guys were amazing.
Speaker 1 (07:16):
And what was?
Was that like a babies are ustype thing, or what did?
What did they do?
Speaker 2 (07:20):
It's like it's a content site for you know,
parents, new parents, like moms,like 80, 90 percent moms, and
it would be like, hey, you'repregnant and here's what your
baby looks on week 12 orwhatever.
Here's what's going on with thebaby.
You know the baby's now it'sborn, it's, you know, eight
weeks old.
Here's what's going on withbrain development, stuff like
that.
(07:41):
Just a content site and it waspersonalized very cleverly,
personalized on the age of thekid, on the baby and so like
expecting, you can like here'swhat's happened to your body
because happened to baby andafterwards for a couple years.
It's very predictable and thatwas useful and I built that.
And then I built a Commercesite, you know, attach to that,
which sold like strollers andstuff like that, and Selling
(08:05):
strollers is like not what I hadon my you know dance card that
I was gonna do, but I did, itworked and I liked the fact that
I Got to help people who werehaving kids, which I liked.
It was such a nice group ofpeople as you can imagine,
because who's attracted tohelping babies, right, like a
certain kind of person and likethat was great because that was
(08:27):
not the same kind of person asmy last my gig before that, the
machine learning company.
Speaker 1 (08:31):
So, from NASA to machine learning startup, to a
site focused on babies, anobvious next step would be
getting into banking as aService you can see the linear
trajectory there right.
Speaker 2 (08:43):
That's right.
Speaker 1 (08:43):
So talk to me about.
Talk to me about standardtreasury, kind of your first
foray into banking as a service.
You know how did that come tobe and you know that one was a
much more linear getting.
You know, getting to TreasuryPrime, I think it was.
Speaker 2 (08:55):
Dan and Zach Founders guy Dan Kimmelin, who we know
they just had this idea that theamount of technical innovation
that was gonna happen outside ofthe Traditional banks was large
and that that needed a way tobe managed.
That every tech firm doing thisindividually to every bank Was
probably not sustainable.
(09:15):
So they said we should make aplatform that we can sell to the
top 50, top 100 US banks and sothey can use our software,
which we built, to talk to techfirms.
Our first client was SiliconValley Bank but that was really
reluctant for anyone else tosign up.
You know, you go to a meeting,you go to City or Goldman or
something whatever, and they gothis is a great and idea, says
(09:37):
the innovation group.
And then you get to the riskgroup or the, you know, the
operations group and they'relike oh hell, no, I'm so busy
and I don't want to do this.
And at the time it was, youcould only sell to banks most
banks actually in the US as anon-premise Offering and they had
to install in their data centerand actually wasn't until,
(10:00):
really until cap one announcedthey were doing stuff in the
cloud that all the other bankssaid, oh, I guess that's okay,
because capital one knows whatthey're doing.
I'm like, yes, they absolutelydo.
You listen to them?
And I tell you that if cap oneand done that, treasure prime
will not exist, because that weare, we're all hosted sass
platform and that would neverWorked otherwise.
But we tried to sell that toall the banks and it was hard
(10:23):
and At some point there's arumor that Wells was gonna buy
us and we were like we shouldjust pivot.
And right then Silicon ValleyBank said no, no, no, don't
pivot will buy you.
And so they bought us and thesoftware we had worked.
It could open banking accounts,could do everything the bank in
the service players do now,basically, and SVB bought us.
I expected to stay there, youknow, three months, maybe to get
(10:46):
my folks settled, and it was a.
It was a very minor Acquisition, but it was enough for the, the
engineers, to buy houses.
So I'm like that's, that's agood exit, so that's worth it
and I'll stay there and makesure they're fine and then I'll
go and do something else.
We go back to retirement and Istayed there two years just
because SVB people were verynice and that mattered to me and
(11:08):
Every week or two I would learnsomething about banking
operations that I did not know,and I was gobsmacked by how and
from my impression, how terribleit was.
Like Don't you realize you couldjust write a piece of software
to automate like these 20people's jobs and they could do
something interesting instead oflike move, shuffling you know
(11:28):
proverbial paper around, andthat was kind of the aha moment.
I did that for two years.
At some point I'm like okay,either I have to like take over
the bank or I have to leave,because I'm just all I'm doing
is like Playing whack-a-molehere with all these problems.
So I left at Gemini, startingto trip your prime.
Speaker 1 (11:45):
Did you start Treasure Prime right away, or
did you sort of based on whatyou learned at SVB or did you
think about sort of a bunch ofdifferent types of problems
again?
Speaker 2 (11:54):
No, we actually figured out the model for
Treasure Prime at SVB.
We couldn't come up with amodel for a long time.
We were there like maybe a yearin and I'm like the product
market fit on the banking as aservice stuff.
It's so good that any dummycould like launch something and
you'd have like amazing growththe next day.
And that's I'm a startup guy.
That's very unusual.
(12:14):
It's very hard.
I'm like we should do somethinghere, like we could Do
something interesting.
And first of all and Jim's avery good strategic thinker and
he's like let's think throughthis and like what's our actual
goal?
And so we came with our actualgoal, which is very touchy-feely
, you know, high concept, andThen we tried to figure out how
to accomplish that.
(12:35):
And it took us, I think, a goodSix or eight months to figure
out the business model, and it'sa business model we have now
and we can get into that.
But I tell you that took a longtime.
Jim and I didn't feelcomfortable discussing this in
the SVB office because it wouldjust like seem like, you know,
not kosher, not nice.
So we would always take theselong walks outside the office
(12:57):
like for lunch, and I havewalked many, many miles around
San Francisco trying to figurethis out.
Speaker 1 (13:04):
And I know how many hills San Francisco has, so that
must have burned a few calories.
Speaker 2 (13:09):
Yeah, it's like you want to go to charitone so far.
Speaker 1 (13:14):
So you, you saw, you know, with standard treasury you
kind of saw the power that lookif the banks could find a way
to talk to fintechs moreeffectively.
You know that would be useful.
Obviously, you added to that,given some of the knowledge you
learned at svb.
I'm going to go back tosomething you started with,
which is one of the key premisesof treasury prime, as this
notion of multiple banks Is.
(13:34):
Is that something that came outof this experience or is that
something that you guys came tolater?
Speaker 2 (13:39):
That was from a get-go, like we looked at it and
said, well, we could go to acouple banks, you know, a decent
size banks, like once again,like top 50, top 100, and we
probably couldn't get one ofthem.
We need two of them because,you know, we needed to be not
beholden too much.
We said, like we could be,pretend to be a bank, which is
(13:59):
what most of the folks wouldhave thought of since then and
during them, like if you look atsynapse and solid and unit,
that's what they do.
They pretend to be a bank andwe're like To do the right
amounts of volume.
You actually need a pretty bigbank.
And so I went and talked tothem when talked to them all and
everyone was like no, thank you.
You know, I talked to, I talkedto goldman and city and talked
(14:22):
to cap one and folks like that,and no one was really that
interested and which makes sense.
But all the small banks wereinterested and we, our basic
premise was Look, you actuallyneed to be a bank to do this
correctly.
You need to be a bank to managethe risk properly.
It's hard to outsource thecompliance when the regulators
show up, so we need a bank who'sreally on our side, and so we
(14:45):
need a big bank, or maybe twobig banks, and I couldn't do
that and Jim or I can't rememberwhich had the idea.
Well, you know, it's the sameas a couple big banks.
It's a lot of smaller banks.
So if we go to a lot ofcommunity banks, you know a
billion dollars or five billion,instead of you know 100 billion
.
Really, you only need 25billion dollar banks to equal
(15:06):
that one.
So that seems possible.
And when you start from thatpremise I think everything else
flows from that where you saylike, oh, if I have that many,
then it's really a marketplaceand it's really more about a
matching problem between thefintechs and the banks than it
is just about finding thefintechs.
And it's more about buildingsoftware so that the banks can
(15:27):
run the compliance portion, thegovernance portion, of the
fintech properly, and that willkeep the fintech safe.
And that's important, becausewhat you do not want under any
circumstance Is your best,biggest, largest customer to
churn and leave the platformbecause they can get a better
deal across the street orbecause you've they reach your
growth limit or, god forbid,there's some compliance issue.
(15:48):
They said we can do this if wehave lots of banks because we
can always find them a home.
We can split them up betweenbank a and bank b, so that three
or four different banks and itall flowed from that and that
was the business model we had,and then it was just a matter of
like, how do we get there?
You know, once we realize thedestination, figuring out the
path to get from where we are tothere was actually pretty easy.
It only took like a coupleweeks probably.
Speaker 1 (16:11):
So it sounds like you arrived on that model in part
out of necessity, right Then youstarted out trying to get one
of the the big dogs to play.
What if one of them knocked onyour door today?
Do you think that that's aninteresting model?
Or, given the path you've gone,have you learned?
Hey, this multiple marketplace,many different banks, is
actually the, the superioranswer anyways, have you?
Have you thought that through?
Speaker 2 (16:33):
Yeah, I think it's a superior answer.
Anyway, I think if you look ateven the big banks, they're only
going to do 10 or 20 deals peryear, like in my.
I always just say 10, sometimesa little more.
But Even a big bank, but ifyou're only do 10 or 20 year in
your goldman, while they'rebetter be pretty big, 10 or 20 a
year.
So what does that leave?
All the smaller folks you knowwho only have like you know
(16:55):
they're, they're too small forthat.
They still need a home.
And the wonderful thing aboutthe us Banking system there's
lots of terrible things, but thewonderful thing is it is a
highly competitive capitalistsystem.
There are many, many commercialbanks out there and they are
all interested in doing businessand you just need to find
(17:15):
enough when they are willing andhappy to work with your
customers, their customersreally.
And and that's easy to dobecause they're competitive the
smaller banks are competing witheach other.
The big banks eventually care.
We have a couple big banks,right, and the thing is they do
the same amount of work thelittle banks do, like our
biggest bank has maybe what fourfintechs, but they're all
(17:37):
gigantic right, and our smallestbank has maybe 20 fintechs, but
that's it.
I mean, there's not, it's not.
You know, one has a thousandand one has two.
You know they're.
They're really much closer thanthat.
Speaker 1 (17:50):
Yeah, that's pretty interesting.
Now, if you're out talking toclients, I mean, I know you have
competitors, as you mentioned.
Most of those competitors, touse your words, pretend to be a
bank.
You know what are the majoradvantages of the system that
you've built and, if any arethere, are there disadvantages
to the system you've built?
Speaker 2 (18:06):
Yeah, there's both those are true.
We compete against two reallykind of different entities,
which is irritating.
Surprising.
The main one we compete againstis actually other banks.
So, like the you know the greendots of the world, please, the
coastal.
When you make people like that,these are good, well-run banks.
They know what they're doing.
(18:26):
The common wisdom here is thatyou should have a direct
relationship with the bank ifyou're a fintech and I think
that's I agree with that.
However, we are also a directcontact with the bank, because
we're just a software company,we're not a bank, and if you
have a relationship with thebank directly, either with one
of our banks or you know Aregular bank, that's a big
(18:49):
competing force and those wecompete with all the time and I
don't think that's going to stopour strategy there is like to
try to get them on theirplatform.
Then, whatever, whenever theywin, we win.
The other ones we talk aboutare just our tech firms.
Right there.
The banking is a servicecompany.
It's like the synapses of theworld.
It's kind of the og player here.
And what?
When we compete against them,what we say is look, you're
(19:12):
essentially outsourcingcompliance to a third party that
has no regulatory oversight andeventually the regulators are
going to notice that and thereyou're going to have a
challenging day and you don'twant that also.
So maybe you don't want to bejust at one bank, like look at
the chaos of silicon valley bankthis year.
You probably want two or threebanks that you can flip between,
(19:34):
and that's a hard technologylift, unless you're with
treasury prime.
And then we have a largenetwork of banks and you can
switch between them whenever youwant.
It's a commercial deal.
You can have one more than onebank if you want.
And those are the argumentsthat like look, we're not a bank
.
You can have a directrelationship to bank which gives
you the economics incentivesyou want.
(19:55):
We're safe because you want,you have the economic incentives
.
And the one thing we have thatother banks don't is we have
lots of banks.
You're not just making a dealwith one, you can make a deal
with four or five if you want,which our customers do.
One of your portfolios and oneof my customers has, I think,
five banks.
It's a lot right.
Speaker 1 (20:13):
Well, let me, let me jump into that.
I mean you referenced it asecond ago, the crazy weekend
that SVB, you know, had someissues and not just SVB and no
one.
Number of others did as well.
I mean this was a situationthat probably we all thought
kind of went away in the era ofthe Great Depression, the old
run on the bank, and clearlythat did not go away.
I mean you had a complete frontrow seat to all of this.
(20:35):
I wonder if you can kind oftake us inside that weekend.
What did it do for you guys?
I know it was a crazy hecticweekend, but it was also a big
catalyst for you.
I wonder if you can just kindof take the listeners, you know,
a bit inside the ropes, so tospeak, for your front row seat
there.
Speaker 2 (20:52):
Yeah, it was chaotic, for sure, but chaos brings
opportunity.
And so, you know, we were luckyenough to be in the right
position there and have theright mindset.
I worked at SVB for a long time, for a couple of years, and I
knew something was happening,right just because a rumor mill.
And you know, silicon Valley isa small community and my office
(21:12):
is blocked from SVB's office.
You know, I just see people onthe street and you could tell
something was up.
And I remember I was at somedinner with our friend Nigel and
like a lot of other people, andI was like, oh, what's going on
?
I'm like, yeah, this isterrible, but I mean, it's a
well run bank, they're fine.
They did some stupid thing,they're fine.
(21:34):
The only thing that couldhappen.
Unless there's a run on thebank, that'll never occur.
And then that happened.
And as soon as that started, Iwas like, okay, let's have to
make sure we Treasury Prime issafe.
You know we had tens ofmillions of dollars at SVB that
we were like, well, let's makesure we're not.
You know, move some of ourcapital of the one of the backup
(21:58):
banks we have, because we havea lot and our first impression
was to move it to First Republicbecause that was our main
backup bank.
That was not a good backup.
So we ended up moving it to oneof our client banks and I had
to call the CEO and said look,I'm about to deposit a
significant number of capital inyour bank.
And they're like thank you,that's good.
Please don't move it for aquarter or I'm gonna look like
(22:19):
an idiot.
I'm like no problem.
And so I did that there.
She was very nice about it andthat happened for us.
Meanwhile everyone else at SVBis panicking.
My phone's ringing off the hook, because everyone's like what
do we do?
What do we do?
And I'm like first of all, makesure your payroll is covered,
just make sure that.
And they said but what aboutall our clients?
(22:40):
We had someone I know who's aruns a payroll company or did
run a payroll company out of SVBand they're like we're doing
another payroll on Monday.
It's Thursday night, can I belive by Monday?
And I'm like you'll have towork all weekend.
I'm not guaranteeing I can finda bank, because it's not my
decision, because I'm not a bank, I'm just a software company.
(23:01):
But I'll call in all the favorsI have and we'll make it work.
And that happened half a dozentimes more and we worked all
weekend, all the next week andall the next weekend and we got
a lot of new business from that.
And what happened first wasthat everyone moved over.
And then there was a sigh ofrelief and everything was fine,
everyone's happy.
(23:21):
And then there was a beat andmaybe a month later everyone
called me again and said now Ineed another bank, because not
that I want to move banks, but Ijust want to back up because I
didn't have one before and Ifelt that pain.
So what do we got?
And we turned on a lot ofpeople using more than one bank,
and so that's, that's just a.
That's a very common occurrencefor anyone over even a modest
(23:42):
scale now.
Speaker 1 (23:43):
Yeah, and I would imagine that prior to that
weekend You're probably fightinga little bit of an uphill
battle.
Hey, come to this marketplacemodel because you don't want to
take compliance risk and youwant backups.
But it was all kind of somewhatesoteric, right, even though
your arguments make sense, Iwould imagine to clients this
weekend really helped.
That hit home on from a verypractical way why this is so
(24:04):
important.
I mean, did you find a notableincrease in the amount of your
sales message resonating?
Speaker 2 (24:11):
100%?
I mean no question, but was Iremember most of the tech?
The embedded banking folksespecially, are not really
sophisticated banking people.
They don't really understandthat banks are real businesses
that have people running them,that good things can happen to
and bad things can happen to.
They think, oh, it's a bank andthat's perfect and permanent,
right.
I'm like no, they're businesseslike any others.
(24:35):
They're generally well run, butnot always, and bad things can
happen.
And when SVB was a real example,that changed everyone's
attitude.
Before then we had what?
Three clients just three whouse their multiple bank product.
Because they were just big andthey were like we want our
deposit spread around.
(24:56):
They had some cannabis stuffthey were doing.
The only one bank would do thecannabis stuff and but they
yield on that bank was small, sothey only want to limit the
cannabis stuff and they spreadit around.
And others were like we have alot of deposits and we just want
to make sure that we don'toverwhelm the $2 billion
community bank with deposits, sowe want to spread that around.
And those people were fine andhappy and the product worked.
(25:18):
But post SVB it's completelydifferent.
Everyone I need a backup justfor safety.
And once they started usingmore than one bank, they
realized oh, actually this isreally beneficial to me.
We have our own private paymentrails between our banks so we
can move money around betweenour banks.
And pretty soon all the FinTechstart treating the banks as
(25:41):
kind of one large virtual bankand they move money between
accounts and they.
It just works for them, right?
They basically have differentcosts and different yields and
different kinds of customers.
They can onboard at differentbanks, but otherwise to them
it's the same.
It's the commercial terms whichare different, it's not the
operational and for them that'sa big deal and once they've
(26:03):
tried that, they never go back.
They never want to go back.
Speaker 1 (26:06):
You mentioned that some of your first adopters,
even before this weekend, werethe large companies that had a
sufficient number of deposits orcomplexity that it just makes
sense.
What's your advice to youngercompanies when they should start
thinking about this?
Is it literally hey, I justtook in $200,000 of angel money
or does somebody really need toget to a certain scale before
they really start to think aboutthis diversification?
Speaker 2 (26:30):
It's a scale issue.
So I always say to people andthis is very self-serving, but I
definitely believe it Don'tstart.
There's your first move to havetwo banks, but it's going to be
your second move.
So make sure you can make thatsecond move, because if you're
growing, you don't want to alsohave to switch banks.
You want to add a bank, notswitch banks, and you don't want
to have to get your engineeringstaff to integrate with two
(26:52):
separate banks because that'sjust a real big lift, because
that's like it's.
Basically.
My whole job is to do that workand we're very busy doing that.
So you, as some random fintech,don't want to have to do direct
integrations to multiple banks.
It's too expensive.
So don't start there, butrealize that's your next move.
So start with us at just onebank.
Make a deal, get to a certainscale, prove your product market
(27:15):
fit as you start to scale.
That's a good reason.
Do another round, do a C or anA, get a few million dollars in
the bank and then say now's thetime to add that.
Speaker 1 (27:26):
So switch gears a little bit less laser focused on
treasury prime for a second,but more broadly, you've got a
ton of experience and adventureacross a number of different
stages and number of differenttypes.
You know, amias Garity, one ofQED's partners and our lead
partner who works with treasuryprime, asked me that I had to
ask you a question here today,so let me let me just put it in
now.
Oh shoot, it's terrible.
(27:47):
No, this one isn't tooembarrassing.
Maybe there's some moreembarrassing stuff later.
But if you're a younger operatorand you've spent your whole
career really in venture in thelast 10 years or so, what is it
about the venture ecosystem?
You might not understand or youmay not get right, and I think
some of the context for that isyou know, we had, I don't know,
(28:07):
a 10 year.
I think Frank likes to call itsuper cycle.
You know where kind ofeverything was working in
venture.
We've now seen about a year anda half where that's not the
case, maybe two years wherethat's not the case, but having,
you know, seen a lot more thanyour typical new to the venture
ecosystem, what are some thingsthat they may kind of get wrong
or they may not understand ifthey've really only lived this
(28:28):
over the last 10 years or so.
Speaker 2 (28:30):
Yeah, I mean there's been.
I've been through multiplecycles of this.
Now you know I didn't found acompany then I found it right
after, but I was part of the dotcom companies that baby said
our company I mentioned was adot com.
We got purchased by a largercompany that went public and
that, face planted, I went frombeing worth a lot of money on
paper to worth no money on paperpretty quickly.
(28:52):
That was a good learningexperience.
And then, you know, the 2008crash was also indicative
because it was a time ofconstriction, and two things I
really noticed then.
One is that the companies thatstarted right around that after
that ended usually were greatcompanies and they were very
strong and did well.
(29:12):
I mean you can point to lotsand lots of examples there and I
always wondered why was that?
I thought it's because they hadto get their basic problem
right, because they couldn'tjust go and say I need a series
A, a series B, a series C, aseries whatever, at some
inflated price to like patch upany problems.
They actually had to have theirunit economics work out well,
(29:36):
their product market fit, theirability to serve their customers
right.
I mean there's lots of capitalthings that happen.
But really it's like you reallyneed to focus on making sure
that your unit economics arecorrect, because if they are not
correct, then no amount ofcapital is really going to fix
that and you can say like, well,I don't worry, I'm going to
(29:57):
make it up in volume.
Generally, that doesn't work.
It's true that you can spend alot of capital to grow quickly
once you know what you're doing.
So take the time to know whatyou're doing.
That's the thing I usually see.
That's wrong and the one thingI say to everyone and no one
really gets this but takingventure money from someone, be
careful who you take it from, becareful of the person, be
(30:19):
careful of the firm.
Like I, like a Myas.
You know the story, I don'tknow.
Myas and Frank were my firstchoice for us doing our series A
and I met a Myas and hepreempted the offer and I'm like
well, just say yes, even thoughthe offer was lower than I
wanted.
Right, and I guess when theright person comes along because
you're, you're marrying themand the firm, you can't really
(30:41):
divorce them.
They're on your board foreveruntil you have an exit and you
want someone you can trust overthe long good and bad times.
The capital matters less thanthe people and the support
you're going to get along theway.
You're going to face plant oneday Everybody does and you need
to make sure that there'ssomeone there can like, dust you
off and say you're doing fine,keep going.
(31:04):
Here's some advice you need,and I don't think most people in
the boom years cared about that.
They're just like sure.
Crypto money FTX seems fine.
Let's just take it.
I'm like dude, you're notgetting anything good from that,
so just stop.
Speaker 1 (31:19):
It is actually the single biggest surprising thing
for me as I look back over theyou know, 2020, 2021 boom, when
rounds started to take four dayslong and companies started to
get you know 10 different termsheets, why that was the result
right.
So, in some level, if you get10 different term sheets, why
not take the time to figure outwhich ones you like best?
Because you have them rollingin your place.
(31:39):
When the market got hot, it allcollapsed to speed.
That's sort of the one thing Inever quite internalize why that
was the equilibrium there, butanyways, that'll be a subject
for many PhD research papersprobably.
But look, so I appreciate thatadvice.
Let me switch a little bit tokind of leadership and kind of
culture within Treasury Primeand just personally.
So let me start with a bit of apersonal question how would you
(32:01):
describe your biggestsuperpower?
And, conversely, is there onething that if you could be
instantly better at, what wouldyou pick?
Speaker 2 (32:10):
Sure, I'm a very, very good engineer, very, very,
very good.
I know I'm not the bestengineer, because I met the best
engineers and they're betterthan me and it's like so this is
like sort of an answer, sort ofnot an answer.
It's like you've been a greatbaseball player a whole life and
all of a sudden you get intothe major leagues and you go oh
wait, there are other people whoare just as good.
(32:31):
And oh, that guy over there,they're way better.
Or change sports you want.
Well, it turns out MichaelJordan's a better basketball
player.
No, no, no, shocking, and Iknow people like that.
My superpower is really beingable to recognize talent.
I think that I'm good at that.
I'm good at recognizing whenpeople are good at their jobs
(32:53):
and that they are going to begood at it for a while, and
they're not too crazy.
You can be a little bit crazy,but not too crazy.
Hiring is very important to me.
I think that's kind of the onething that makes startups work
or not work.
There's like four or fivethings, but that's one of the
biggest ones and I'm good atthat, and so I use that all the
time.
My staff generally hates mebecause I'm like nope, this
(33:15):
person's terrible, kick them andthey're like but everyone else
loved him.
Well, everyone else is wrong,so you have to deal.
Ah.
And they'd say is that fair?
It's like if you said that tome, I would also say that's fine
.
So I'm saying it to you, so youhave to say it's fine.
The thing I could be better atI'm very impatient in a harsh
judge of situation and I wish Ihad more patience in my life
(33:39):
than I do.
Sometimes, if something doesn'twork out, I'm like nope, blow
it up and move on, and I thinkthat can be a good instinct, but
generally I wish I had morepatience in my life.
Speaker 1 (33:49):
No, it makes sense.
I mean, not everything worksout the first time right, so
sometimes things do take alittle bit of time to meditate.
Well, let me come back to thispeople topic and the hiring.
I mean, I know that you andyour co-founder, jim, are
incredibly committed to this andthe comment that you made once
believe the best startups havethe best people.
That's probably something that90% of startups would say.
(34:10):
What is it about how you guysthink about things that really
differentiate you?
I know that you're a harshcritic at times, and so if
you're self-identifying thatthis hiring great talent is
truly the superpower, I'm quiteconfident that's true.
How do you really think aboutdistinguishing yourselves in
that type of environment when,if I asked most people what the
(34:32):
key to the business is, theywould probably say something
related to people?
Speaker 2 (34:35):
Yeah, I mean the things are you've got to get
product market fit right.
You've got to make sure it's amarket that you can serve and
make money at.
You've got to make sure youhave enough capital and you can
execute properly.
But really most of theexecuting properly is people.
You need to write people to dothat and I think everyone says
they want great people andmostly they don't have the
(34:57):
discipline to stick with it.
At a startup you're less than100 people.
I would confidently say weshould not fill that slot if we
can't find the right person likewe want a new engineer or a new
sales leader, something likethat.
You wait until you can find theright person and you just wait
and you keep looking and youlook harder, but you do not hire
(35:19):
someone because you have adesperate need for another
customer success person and thisone's okay but not great.
You say no and you wait tillyou find the great one, and I
think most people at the end ofthe day aren't willing to do
that.
When we grade people who areinterviewing candidates which we
(35:39):
do grade them the common thingwould be to grade them like one
to five or one to 10, and Idon't do that.
I say you get one to four,because there's no in the middle
.
You can't do two and a half,you have to do.
One is they're terrible, two isthey're not great, three is
they're okay and four is they'regreat.
One, two, three, four, that'sall you get, and I can tell you
(36:02):
we don't hire people unlessthere's mostly fours and that
means we mostly don't hirepeople and it just takes a long
time and that's what you gottado, and I think most people are
not willing to do that.
They feel the pressure of movingfaster than what hire someone
and they do that.
I can tell you that is ashort-term win and a long-term
lose.
It's like eating that cake Likeyou want that cake, so you eat
(36:25):
the whole cake and it takesgreat that day.
The next day you're gonna feelterrible, right?
So maybe don't do that.
Like you can hire this personand it'll be fine for three
months or six months and thenit'll be terrible, so don't do
that.
Speaker 1 (36:37):
Yeah, I mean what you described I think is such a
common thing that peoplestruggle with right People that
I know are unbelievablycommitted to really hiring the
best talent.
Yet you just see maycompromises because hey, I've
gotta get this thing done, andif I don't get this thing done
and I need this person, and soyou know that's.
You know what you're describing, I think, is one of the hardest
things to continue to do astime goes along.
(36:58):
So kudos to you guys for reallyliving up to that the flip
side's true, though.
Speaker 2 (37:03):
I mean like you need to hire people who are good at
hiring people.
Like one of our early hires wasa completely overqualified head
of people.
She's our chief people officer,think her title is.
She's fantastic.
I talked to her for 10 minutesand I was like, well, I don't
care what else I do this weekand we gotta close her.
I had a mys call her.
I had everybody talk to heruntil she said yes, and that was
(37:27):
one of the best decisions weever made at Treasure Prime.
Like the reason that we a goodcompany is because we have great
people.
The reason we have great peopleis because she's there making
sure that we only hire the bestpeople and the people we have,
we train them, and that hasplayed dividends over and over
again.
Speaker 1 (37:45):
Yeah, you know the next part of people.
I mean we talked about hiring,but you know creating a great
environment, creating a greatculture.
If you don't have that, thenthe people aren't gonna stay and
they're not gonna be productive.
What did you learn aboutbuilding a strong culture from
the various different startupsthat you've done and I know
you've arrived at a strong onewithin Treasure Prime and how
did that kind of serialentrepreneur nature help develop
(38:07):
your philosophy on creating agreat culture?
Speaker 2 (38:11):
Yeah, I had an office mate a long time ago who was a
Navy SEAL you know the, you knowthe commando guys and he talked
about this a decent amount andhe said this was true across
most of the military elitethings.
It says that what you think youwant is someone who is the best
soldier, that is or the bestsailor, I guess you call it that
(38:33):
you want someone who can runthe mile fast, can shoot, the
weapon, can do sneak around, cando all the things that you do.
It says that's true, but that'snot the most important thing.
The most important thing isthey can work with the team and
the team trust them.
It's about the trust.
So if you want to make sureyou're building the right
culture, you have to have greatpeople, and on a scale from best
(38:57):
to worst.
Do you want the best performers?
You absolutely do, but actuallymore important that is trust.
So you need to find people whoactually can work together, who
can trust and respect each other, and if you can do that and
provide the right model from theleadership side, the culture
that you want will create itselfin many ways, but it starts
(39:19):
from finding the right peoplewho are going to gel together
and that's what we do.
We care about the people wehire.
We make sure that we have acertain set of principles.
Here's a fun fact for you, bill, that what our first principle
is it's about focusing on theteam and that's the most
important thing, and it's theteam, the team, the team.
Because Jim went to Universityof Michigan and apparently that
is something that footballpeople from Michigan say.
Speaker 1 (39:41):
He is definitely a good man.
Quoting one Bo Schambekler,that's right.
Speaker 2 (39:46):
Team, the team, the team and we say it all the time
and that helps create theculture of cooperation and
dependency.
The team works hard becausethey want to support the rest of
the team.
They don't work hard because ofsome other reason.
They want to support each other.
They all believe in the mission, for sure, but it's about
supporting each other and that'sthe culture we want.
(40:08):
We want that culture around theteam.
Then we have other principleslike innovation and
trustworthiness and things likethat, but really it's about
helping each other.
Once a quarter we get togethervirtually.
Usually.
Once a year we get togetherphysically, so we fly everywhere
out somewhere because we're allremote.
We have weekly, all hands Zoomstaff meetings where everyone
talks and asks questions,hopefully ask questions, and I
(40:31):
see my executive team, my directreports once a month in person,
because they're all remote too,and that time we spend together
matters and that's how wedevelop the culture.
Speaker 1 (40:42):
That's wonderful.
I've got to ask one shockinglyspecific question here, because
I think you guys have a programthat I've not seen anywhere else
, that you have a reallyinteresting benefit, which is
you give everyone on your teamfinancial wellness education and
unlimited financial advisorsessions.
You know this is interesting.
This is something we have acouple portfolio companies that
(41:02):
are trying to make headway onfinancial education and
financial benefits, but it seemslike you have a commitment that
goes way beyond what mostcompanies do.
Can you just talk a little bitabout what led you to go down
that route for your employeesand why you're so passionate
about it?
Speaker 2 (41:16):
I think you know, I have too much education,
probably like YouTube.
Speaker 1 (41:21):
And.
Speaker 2 (41:22):
I noticed that.
Well, I mean, you and I havedifferent degrees but, like
mine's in, I study physics andnever once did anyone tell you
you know, this is how you shouldmanage your financial life.
Let's take a class on that, youknow, maybe the economics folks
did, but probably not.
Probably they're talking aboutbig picture things, and I made
(41:44):
dumb mistakes in my life and atsome point I realized I didn't
know what I was doing, so Ibetter learn, and it's some
specific way we want everyone inour company to be supported,
and that's a good benefit.
There's another, like moreMachiavellian view of this,
which is like why it's actuallya good business idea.
(42:05):
It's that our problem we haveis very complicated Learning
about how banks work andlearning about how fintechs work
.
There's not a lot of overlapbetween those two, frankly, and
so we need people who are goingto be we train and are in for a
long term, that have a longtenure, so it makes sense for us
to invest in their lives.
I don't want them stayingaround for six months, I want
(42:25):
them staying around for fiveyears or longer, and if you're
going to do that in the startupworld, you really have to invest
in people and we have to showpeople that like, look, we're
here for your whole journey, andpart of your journey is your
financial one and we're going toteach you how to do that,
because you don't know.
It didn't start out unlimited.
It became that when it wasobvious.
(42:45):
No one knew what they weredoing.
They're all as bad as I wasknowing what they were doing.
Speaker 1 (42:50):
No, I mean it definitely.
You know I've been involved ina couple of nonprofits over the
years really trying to teachmore personal finance to high
school kids, and it's stunninghow much of an uphill battle any
of those are.
And you could take that tocollege.
I probably did have a littlebit of an advantage taking
economics, but you're right,most of it is theoretical and
personal finance is only a verysmall piece of that.
So huge kudos to you, and Itotally get there's both the
(43:13):
kind of humanitarian side ofoffering it, because it's the
right side to do it.
But I think you're also makinga great connection to why it's a
good flat-out business decisionto make sure people are stable,
especially choosing to join astartup, which probably means
they're not maximizing theirshort-term earnings and instead
for a little bit riskier careerthat could pay off down the line
(43:33):
.
So that makes a lot of sense.
Speaker 2 (43:35):
A good portion of our staff could go work at Google
or wherever tomorrow.
Right, that's a good financiallife and they're choosing to do
this because they believe in theteam and the mission and it's
fun and all that stuff.
And I want to say, good, Iappreciate that and we're going
to make a lot of money together.
That's fine, but you're goingto need to wait a little while
(43:56):
for that money comes.
In the meantime, what can we doto support you?
That is more tractable thanpaying you a Google salary,
definitely.
Speaker 1 (44:03):
Well, Chris, I really appreciate you spending the
time with us here today.
I mean, it's a fascinatingstory.
I mean, Treasury Prime is acompany.
It's funny Amayas made the casewhen we invested and certainly
talked up the benefit of thisbank network in comparison to
what other companies did, and itwas always made sense on paper,
a little bit of a theoreticaladvantage.
(44:24):
And then all of a sudden in oneweekend we're like oh yeah,
that's one reason why it's rightand it just becomes so
blindingly obvious and we'rethrilled to be partnered with
you on this journey.
You too, Amayas, is the best.
So, chris, I'd love to end withjust one question.
I always ask it of everybody.
I've already asked you a littlebit longer version of this
(44:44):
question early on, but anyways,as we finish up I mean hopefully
we have a bunch of youngperspective entrepreneurs
listening to this podcast overtime Is there one tip if you
could just share, sort of onetip that a new entrepreneur
could take away, what would yousuggest?
Speaker 2 (44:58):
Just, one Be committed.
You're not going to do it in aweekend.
You've got to make sure you'rehere for multiple years before
you decide that it's not for you.
You have to commit.
I'll do it as a side hustle.
That won't work.
Speaker 1 (45:13):
So so true.
That's.
I think that's wonderful advice.
Well, look, thanks for joining,chris.
Really appreciate the time andto all you listeners, until next
time and take care.
And thanks for listening.
This] has been the FinTechThought Leaders podcast your
window into the world of venturecapital and financial services
(45:35):
with today's digital disruptors.
Qed is proud to provide thebest FinTech advice you can get.
To learn more or to read thefull show notes from today's
episode, check outQEDInvestorscom and be sure to
also follow QED on Twitter andLinkedIn at QEDInvestors.
Thanks for listening.
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