00:16:19 · David Senra, Nik Storonsky
Deal is trusted by over 40,000 companies and growing fast. Learn how they can help your business by going to deal.com/senra. That is deal.com/senra. So one of your advantages as you see it is you're competing against non founders, you're competing against professional CEOs, and these professional CEOs are not technical. So they actually can't invent technology, so therefore they cannot innovate. And that's what you're attacking. [00:16:42] S1: Yeah, exactly. They just don't even think about building products. Right? Because they they just don't feel it. They don't use it. They don't they don't know how to do it. They're just professional managers. I think it's very important for... To build successful business, you need to obviously be a great manager, like a very tough manager, be very in details, and be very good product person as well. To know how to build and turn the product, tech regulation compliance people altogether. It's it's like a machine. Right? So there are inputs and then the whole machine should produce you right output, which is amazing product that people use. [00:17:19] S0: Okay. Explain how you're building this machine.
00:17:21 · Nik Storonsky
[00:17:21] S1: I mean, you need to visualize in your head or kind of, you know, what are the inputs in this machine and what do you want to achieve? What are the goals? Right? And then inputs is obviously your organization, your structure, your people, how you build product, what do you want to build. And then you effectively observe kind of, you know, the whole structure working, the whole product being built, you always interfere. Right? If something goes wrong, and then you kind of change certain parts of the machine. For example, when we started, it was a very small team, 10, 20, 30 people. We hit the bottleneck when kind of team team grow, but then speed slowed down. Machine stopped working. So what I did, I I I just ensured that we have, you know, there... A lot of very small independent team who just work on the same platform. Right? And then speed increased because people people work was paralyzed. So they work on different products, different features using the same tools, and they were all independent. But then again, we hit bottleneck with regulation compliance. Again, I build another muscle in the machine, is the reg affairs, government affairs department, and so on. So they they had to produce certain outcomes. And we hit again the bottleneck with hiring fast enough good people. Again, we build a lot of process for recruitment, targeting the best people. And so on. So it's kind of, you know, moves in circles, right? You build something, then you hit the bottleneck. Right? You identify the problem, you solve the problem, you go again.
00:18:47 · David Senra, Nik Storonsky
[00:18:47] S0: So now you're adding another, essentially, skill to this machine that is your company. Before you started Revolut, you were a trader, right? [00:18:57] S1: Yeah. [00:18:57] S0: I heard about what you just described before, it's like you have I don't even know if you call them bets. You'll have 20 different ideas or small teams working on 20 different ideas at the time. Explain how these teams are structured and how your previous career as a trader influenced the way you're building and managing your company. [00:19:15] S1: I think what was useful as a trader was risk management and then quantifying everything. Because unfortunately, banks or in other organizations, a lot of things are evaluated based on their people's intuition, which in a lot of cases is simply wrong. Right? So in order to evaluate correctly what is done and what is not done, need to [00:19:42] S0: have a metrics and have KPIs. Wait. Are you saying dumb or done?
00:19:42 · David Senra, Nik Storonsky
[00:19:42] S0: have a metrics and have KPIs. Wait. Are you saying dumb or done? [00:19:45] S1: Done. Done. Okay. Dumb. What are the grammars? Dumb as well. Yeah. Metrics and KPIs that actually kills politics within an organization because, look. Everything is transparent. Right? You as a individual contributor, you as a manager. Do you achieve your metrics? Do you achieve your goal? Right? Why you haven't achieved it? So it doesn't matter what you say. I mean, there are objective numbers. I think it's extremely important to to have as a part of the machine. When I worked in the bank, they didn't really have it. So they had the professional COO and they had a lot of politics within an organization. And I think it's it's just simply wrong how how people are on general businesses. [00:20:28] S0: Okay. So explain, like, setting these little bets up. I mean, to
00:20:28 · David Senra, Nik Storonsky
[00:20:28] S0: Okay. So explain, like, setting these little bets up. I mean, to [00:20:33] S1: be honest, it's pretty simple because we were always high velocity for the company when we released a lot of features, a lot of products. And then at certain point of time, I decided to install discipline in building bets because we were building a lot of things, but we were not really tracking how they were performing. So we simply build a staging process when first there is a kind of, you know, decision to produce a bet. It can be bottom up or top down. Then there is a discussion called committee, whether it makes sense to produce the bet. And then if if decision is made, we fund the bet. So we separate a team of up to 10 people. Front end developers, back end developers, designer, product owner, sometimes data scientist, operation manager. And then they build a new product within nine to eighteen months. And then when they launch the product, we simply look at growth of the product in terms of gross profit. And because we've done it for the last ten years, we already have launched, say, 50 beds. And then we know that our top 10 beds, they grow, say, 10, 20% month on month and produce, I don't know, [00:21:37] S0: 1,000,000 GP, 2,000,000 GP, 3,000,000 GP
00:21:37 · David Senra, Nik Storonsky
[00:21:37] S0: 1,000,000 GP, 2,000,000 GP, 3,000,000 GP [00:21:40] S1: each month consecutively. And then if we release a bet and then we see that this bet is historically in cohort of bottom 25% of all the bets, we simply sunset it. So we instill discipline when we're not really running businesses which are not growing very fast. And then bets which are growing very fast, we're actually doubling down. Right? So we knew the more teams, one team becomes second team, three teams, four teams, five teams, and becomes department, and becomes a major pin and alliance. So I think this process is just very disciplined to always filter out things that don't work out. Even myself, kind of, you know, I don't really trust my intuition in terms of which products to build, which products not to build, because historically, I was wrong so many times. And I think only approach which, like, completely algorithmic. Right? Top bets, you've continued to fund. Bottom bets, you just cut, like, within eighteen months. [00:22:34] S0: This is the trader in you. [00:22:35] S1: Exactly. [00:22:36] S0: There's lot of what you're saying reminds me of Bezos. And the way he describes this, these, like, obviously, these disparate bets that he would place inside of Amazon when he was obviously building the company. And he has a great line where he's like, you need to pour gasoline on the promising sparks. So your whole is I'm going to cut the bottom, but then the top performing, do you have a percentage? Is it 10%? Top? It's usually up to 25% [00:22:56] S1: of all of this.