Wharton FinTech Podcast
00:03:55 · Yoonkee Sull
[00:03:55] S2: Yeah. I think one thing I'll start with is we've we've grown tremendously. The team was probably under 10 at Iconiq growth when I first joined. It's now... We're now closer to a 100 across three different three different cities as well and so it's it's grown a lot. But I think from the very beginning, there was a very unique focus on building and cultivating an incredible network, a deep focus on building community, and this core principle around, you know, what we like to call uncommon care with with... Which was, you know, really to focus on building long term relationships and partnerships. And so I think from there, the other thing that was really important to me was, you know, my partners had this exclusive focus on working with and partnering with founders and companies who we believed, you know, could become market defining category leaders in really strategic markets with great secular tailwinds and become their most strategic and long term partner as it relates to their journey. And so I think, you know, that really resonated with me. And then ultimately, you know, just in terms of our network and unique introductions that, you know, we've been able to facilitate built on years of relationships in addition to kind of the unique group of entrepreneurs that we have who have built some of the largest market leading companies globally. We've also built a number of teams outside of the investment team to help us better serve our portfolio companies across portfolio operations, across leadership advisory, analytics and data science, technical advisory, go to market advisory, and we're certainly not done, and our ambitions are only getting larger and larger. And I think the other thing I might add just from a team perspective is we've also had the fortune to add to our partnership a number of incredible operators, and I'll I'll kinda run through a couple just because I think it's emblematic of, you know, what we mean by long term relationships and partnership. But, you know, we had Amit Agarwal join us very recently who know, was formerly the president of Datadog, which was a company that we partnered with initially in 2015. We also brought on Rob Burstein, who was the former CEO of Coupa, one of the largest procurement software businesses, another business we actually partnered initially with in 2015. I think there's a theme in...
00:06:21 · Yoonkee Sull, Wesley Aster
Theme of 2015 for some reason, but lastly, we also brought on Cameron Zaki, who was the former COO of Adyen, a large global payments business, also a business we partnered with in 2015, and these are individuals that we've worked with across the table for north of more than a decade. And, you know, they've, of course, you know, chosen to work with us on, you know, on this side. And so I think it's just the representation of, you know, that is who kind of Iconiq Growth is and stands for. And I think that's that's what, you know, made me excited to join in the beginning even though at the time it was maybe a little bit closer to a vision than actuality, and then kind of seeing it evolve, you know, over the last decade plus has been has been just incredible. [00:07:08] S1: That's incredible. I'm curious, what do you think Iconiq did really well that allowed it to foster those long term relationships perhaps better than, you know, other investors?
00:07:08 · Wesley Aster, Yoonkee Sull
[00:07:08] S1: That's incredible. I'm curious, what do you think Iconiq did really well that allowed it to foster those long term relationships perhaps better than, you know, other investors? [00:07:19] S2: Yeah. You know, I think it it goes back to goes back to its, you know, very early roots. I think, you know, we've we've really been focused on, you know, relationship building is not transactional at the end of the day. You know, we really try to show up for community. We try to show up with, you know, incredible and deep care. We try to give more than we ever take. And over time, you know, these these relationships are built overnight, and so you do right by folks who go on to do incredible things. And I think that just pays dividends in ways that... And it just compounds in ways that are just very, very powerful. And I think this speaks to all sides of our business and our ability to just drive really unique value with unique access to a really unique network that we've built over time. [00:08:10] S1: And looking back at your journey from starting as an associate to your current role as a partner, what do you think are some of the biggest lessons you've learned about spotting high potential FinTech companies?
00:08:10 · Wesley Aster, Yoonkee Sull
[00:08:10] S1: And looking back at your journey from starting as an associate to your current role as a partner, what do you think are some of the biggest lessons you've learned about spotting high potential FinTech companies? [00:08:25] S2: I think I think the biggest maybe learning is we might start to explore a certain thesis or a certain trend because we have a viewpoint on it, but we... We've learned time and time again that we really need to maintain a pretty flexible mindset. What works for a particular region or a particular end market or a particular customer can vary greatly. All entrepreneurial journeys are incredibly unique, and while we might bring learnings we have at a global level and try to apply that where relevant, ultimately, we're partnering with founders who have a unique point of view on how to build the how to build the best business and the best products for the customers that they wanna serve and for their mission and vision. And so I think for us, it's just been, you know, keeping an open mind, keeping a learning mindset. If I reflect on all the investments that we've made across the FinTech portfolio, no story is the same. No entrepreneur is the same. You know, we talked a lot about pattern recognition, but, you know, I think the pattern recognition is to just, you know, work with incredible entrepreneurs who have a unique insight into the markets that they're building with just an obsession with the product that they build and the customer that they serve and really kind of follow that.
00:09:43 · Sabrina Fathi, Yoonkee Sull
[00:09:43] S0: Awesome. And shifting a bit more to the fintechs that you're investing in. So we had mentioned earlier you've invested in some of the the best fintechs out there like Chime and Wealthsimple, and these companies have successfully taken market share from traditional banks. What do you think are the biggest weaknesses of legacy financial institutions that startups can capitalize on? [00:10:03] S2: Yeah. You know, I think it's a combination of things. I think the first kind of words that come to mind are speed, transparency, low cost, convenience, simplicity, better UI. And over time, I think if you continue to deliver across all or some combination of these dimensions consistently to your customers with delightful products, you build really, really deep trust and ultimately a brand around that, and I think that sort of... That serves as the ultimate ultimate moat. And there are, of course, you know, economic advantages as well. Right? So, you know, the lack of overhead that technology businesses have more agile in using technology to drive operational efficiency, also better understanding the customer. It also feeds into an ability to drive accelerated product velocity and innovation. And oftentimes, you know, these companies are also bringing disruptive business models to the to the industry. And so I think I think it's a I think it's a think it's a combination of these things, and I don't think that's gonna change anytime soon.
00:10:03 · Yoonkee Sull, Sabrina Fathi
[00:10:03] S2: Yeah. You know, I think it's a combination of things. I think the first kind of words that come to mind are speed, transparency, low cost, convenience, simplicity, better UI. And over time, I think if you continue to deliver across all or some combination of these dimensions consistently to your customers with delightful products, you build really, really deep trust and ultimately a brand around that, and I think that sort of... That serves as the ultimate ultimate moat. And there are, of course, you know, economic advantages as well. Right? So, you know, the lack of overhead that technology businesses have more agile in using technology to drive operational efficiency, also better understanding the customer. It also feeds into an ability to drive accelerated product velocity and innovation. And oftentimes, you know, these companies are also bringing disruptive business models to the to the industry. And so I think I think it's a I think it's a think it's a combination of these things, and I don't think that's gonna change anytime soon. [00:11:20] S0: 100%. As these FinTech startups are evolving and thinking about differentiation, especially, we've seen the FinTech sector kind of mature over the last couple years as well. How can some of these new FinTechs compete with wealth funded incumbents and FinTechs that have already established themselves, and how can they think about differentiation as they're growing as well?