The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:14:49 · Harry Stebbings, Alan Chang
[00:14:49] S2: Do you think you should have gone for the banking license earlier? Nick's publicly said that he thinks he should have done. But when you look there, I think your product diversification was enabled by your not having the banking license earlier when Monzo did. [00:15:00] S0: Actually, I think the product diversification could have happened even if Revler got the banking license earlier. I think Nick is totally right. The issue is, like, the bigger you get, the, I guess, more scared the regulators are of you. Because if you succeed, they have no upside. They don't get a bigger bonus. But if you fail, like, they might lose their jobs. So they're incentivized to be risk averse as opposed to risk neutral. Right? Whereas what's best for the economy is actually risk neutral regulators. [00:15:26] S2: When was the first time that you really felt incumbents and regulators were aware of how successful you were becoming? [00:15:33] S0: I still don't think they realized. I still don't think the the incumbents have woken up yet. [00:15:38] S2: Oh, dude, they have. They have? They have. I'm sorry. I spoke at one of the incumbents' events recently, and like pretty much the only thing that was discussed at their away day is Revolut. [00:15:48] S0: But what have they done about it?
00:15:48 · Alan Chang, Harry Stebbings, Harry Stebbings
[00:15:48] S0: But what have they done about it? [00:15:50] S2: Well, the trouble is they can't, and that's why you bet long on Revolut. Like... And I am trying to buy every fucking Revolut share I can at a good price because, honestly, the structures, the comp bans that they have, the policies that they have means they can't do it. It's it's almost like they know the challenge, but they are unable to fight against it. And no one has ownership. It's a 100 year old bank. As a hired CEO, he's been paid 5,000,000 a year for, you know, five years. He'd... Honestly, if he bounces, he'll go back to Marbella to the family home, it'll be fine. Yeah. [00:16:21] S0: Maybe. Talking about it and doing something about it is very different. [00:16:24] S1: Do you think it's important [00:16:25] S2: to have an enemy in a startup? Whether it's Revolut and banks, whether it's Fuse and, you know, traditional incumbents, is that important?
00:16:25 · Harry Stebbings, Alan Chang
[00:16:25] S2: to have an enemy in a startup? Whether it's Revolut and banks, whether it's Fuse and, you know, traditional incumbents, is that important? [00:16:32] S0: I think it's important to have a common goal. For example, at Fuse, our common goal is, like, no trade offs. You know, looking back, like, last twenty years. Right? This, like, green movement. Basically, telling people to use less. Right? So you you you had politicians that says, you shouldn't... You should drive less to work. You should turn heating on less often. You should fly less. You should do less of everything in order to save the environment. And then you have energy prices slowly creeping up over over the last twenty years as well. It's basically trade offs, I think that's completely wrong. It's actually moving in the complete opposite direction, right? It's we should be using more energy. There's actually a very strong correlation between how much energy you use per capita and quality of life. Right? And and if you look at the Americans, right, the Americans use, you know, almost eight times more energy than Europeans, and and look at the quality of life. [00:17:19] S2: But you're saying the American quality of life is better than ours?
00:17:19 · Harry Stebbings, Alan Chang
[00:17:19] S2: But you're saying the American quality of life is better than ours? [00:17:22] S0: For sure. Think about the average American home. Right? They have a large, detached house, big driveway, several cars, big backyard, maybe a swimming pool, maybe a sauna, and maybe a jacuzzi. And that's, like, you know, middle class. Like, we're not talking about, like, ultra wealthy Americans. Even if you look at, like, the wealthy Brits living in London. [00:17:40] S2: But, I mean, that... But that's bluntly built on a... An infrastructure of credit and borrowing that they are unable to afford, which you see in bluntly debt and borrowing levels in The US on the consumer side being higher than they've ever been. Whilst at the same time, respectfully, dude, their food supply chain is completely fucked, unless you're on either coast, and the quality of their food is shit and manufactured. [00:18:00] S0: That's that's also true. But if you look at the average cost of the American home, it's relatively affordable. [00:18:05] S2: So what do we take away from that? [00:18:06] S0: I think the takeaway is you can have it all three ways. You can have low cost energy, you can have more energy, and you can have lower carbon energy at the same time. [00:18:17] S2: People often talk about the energy crisis that we're in today, and energy is now one of the hottest topics. When people say, like, it's a quarter to midnight, it's a minute to midnight, how close are we to an energy crisis? Is it a minute to midnight? Are we far away? What does that look like?
00:18:17 · Harry Stebbings, Alan Chang
[00:18:17] S2: People often talk about the energy crisis that we're in today, and energy is now one of the hottest topics. When people say, like, it's a quarter to midnight, it's a minute to midnight, how close are we to an energy crisis? Is it a minute to midnight? Are we far away? What does that look like? [00:18:33] S0: I think we're in energy crisis already. In the whole developed economies, UK is in the deepest trouble. So if you look at energy consumption per capita in the last twenty five years, UK has dropped 25%. In US, it's been flat. In China, in the same period of time, it's gone up by 7x. 7x in the same period of time. And energy prices have gone up. Price volatility has gone up. Everything is trending in the wrong direction. [00:18:55] S2: And what's the cause of that? Can you just help me answer? You know, I was talking to one of the biggest kind of data infrastructure providers the other day, and they were like, listen. The reason we're not in The UK is because I... As a percentage of revenue, energy is 16% of our revenues in The UK, whereas comparatively elsewhere, it's three to 4%. Why is that? Why are we so bad?
00:19:13 · Alan Chang, Harry Stebbings
[00:19:13] S0: Two reasons. The first reason is overregulation. It's very hard to build anything in The UK, like physical otherwise. Let me give you an example, right? So we're trying to build a power plant in The UK, and one of the things the council have complete discretion over is planning, especially around environmental impact. So we had to do wintering bird surveys, right, over several winters. So how that works is you hire a guy with a clipboard, and they count number of birds in the winter. And until that survey is done, you can't build. So that's one example where it's so hard to build something physical in Britain. Right now, I can tell you, if you speak to any of the infra capital providers, they want to deploy a lot of capital to building infrastructure. So the problem is not capital. The problem is it's very, very hard to build. So that's the first reason. The second reason, I would say, is the quality of companies operating in this space is not very sophisticated. Like a lot of these energy, existing energy companies, they are not technology driven at all. They're very old school, still pen and paper, spreadsheet based companies that are incredibly inefficient. Now, there's not much I can do about regulation, but I think we can, for sure, build the best version of, you know, best energy company using the latest technology. [00:20:24] S2: Who is in charge of the regulation? Is this Ed Miliband and the energy [00:20:28] S0: Yeah. It's it's Ofgem. It's Desnez.