The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:10:20 · Alan Chang, Harry Stebbings
[00:10:20] S0: I think we're off execution maybe every year. I think I think that mindset should be... I think you need to be best versions of yourself. So you always need to review, okay, in the past week, in the past month, what could I have done better? Maybe maybe a more extreme analogy. Right? Like, used to ask my team, right, at at Rev, if you have a gun pointed to your head today, would you have done more? If the answer is yes, that means you're not doing a good job. [00:10:43] S2: There will be people who say, I also have a family. I also have other parts of my life. And I get this a lot. You... I'm I'm sure you've probably seen because you're socially aware, but, like, nine nine six I've been chastised for, actually, including by some of your investors at Balderson, interesting, who would say it's not work life balance. And I could always say, yes. I could have done more, but I have other parts of my life. Mhmm. How do you respond to them? [00:11:06] S0: Don't join Fuse. That's okay. Like, I I I have total respect for people who want, you know, like, nine to five job. There's nothing wrong with wanting work life balance. But I think the only way to build a generational company is very, very strong work ethic. I just don't see any other way to do it. [00:11:22] S2: When you look back now, Revolut is known for its intense culture as well. That's why I think you've learned a lot of this. Where was the Revolut culture amazing that you've really taken from it? And where was it, actually, I'm glad that we left that behind and it wasn't helpful?
00:11:22 · Harry Stebbings, Alan Chang
[00:11:22] S2: When you look back now, Revolut is known for its intense culture as well. That's why I think you've learned a lot of this. Where was the Revolut culture amazing that you've really taken from it? And where was it, actually, I'm glad that we left that behind and it wasn't helpful? [00:11:39] S0: Yeah. I think culture have never settled, like, in terms of speed and quality is something I took over. Like, Revelot had a lot of cultural values, and and to be honest, like, I think it's a bit too many for me. I always forget all of them. [00:11:51] S2: How many does it have? [00:11:52] S0: From memory, it's six. [00:11:53] S2: How many should you have? [00:11:54] S0: I think one. [00:11:55] S2: What's your one cultural value? [00:11:57] S0: So never settle. It's the one that resonated with me the most. [00:12:01] S2: Do you apply that to all parts of life? And what I mean by that is, you know, one of the heads of a firm recently said to me, and it's one of the biggest firms in world, but I do wanna keep this one private because otherwise they'll fucking kill me. They said, how you do anything is how you do everything. Like, if we have mistakes in a memo, that says that we're not thinking clearly and we're not putting the work in. And I actually didn't really agree with that. I think you have to pick your battles and choose where to be all in. How do you think about that never settle? Because sometimes it's okay to settle on 80% for a junior account manager in whatever. Do you know what I mean?
00:12:01 · Harry Stebbings, Alan Chang
[00:12:01] S2: Do you apply that to all parts of life? And what I mean by that is, you know, one of the heads of a firm recently said to me, and it's one of the biggest firms in world, but I do wanna keep this one private because otherwise they'll fucking kill me. They said, how you do anything is how you do everything. Like, if we have mistakes in a memo, that says that we're not thinking clearly and we're not putting the work in. And I actually didn't really agree with that. I think you have to pick your battles and choose where to be all in. How do you think about that never settle? Because sometimes it's okay to settle on 80% for a junior account manager in whatever. Do you know what I mean? [00:12:33] S0: I I agree with that. Yeah. I think you have to pick your battles for sure. Ultimately, like you need to identify the most important roles in the company and never settle on those roles. But the roles that matter less, I think it's perfectly okay to settle. [00:12:45] S2: When you're building Revolut with Nick and the team, what was your biggest disagreement with Nick and and how did that play out? [00:12:51] S0: I'll say the overuse of KPIs. Because ultimately, there are things you should measure, you know, which tells you the health of that team, how well they're doing, and you should hunt and do that. But then once you start incentivizing against that, teams find ways to game it. Nick is a super numbers driven guy. Right? And I think that worked very well in in a large part. But I would say not everything should be the KPI.
00:12:51 · Alan Chang, Harry Stebbings
[00:12:51] S0: I'll say the overuse of KPIs. Because ultimately, there are things you should measure, you know, which tells you the health of that team, how well they're doing, and you should hunt and do that. But then once you start incentivizing against that, teams find ways to game it. Nick is a super numbers driven guy. Right? And I think that worked very well in in a large part. But I would say not everything should be the KPI. [00:13:14] S2: What shouldn't be a KPI? And what shouldn't? How do you determine that? [00:13:18] S0: Like, when you start incentivizing a metric, we need to think about, okay, what are the second order consequences? Right? Let's take a very simple example. Let's say, let's take a a recruiter. If you give a KPI to a recruiter, let's say on hires per month, what they might start to start to do, because their bonus depends on it, is trying to convince hiring managers to lower the talent bar. And I've seen that happen before. That's actually not what the company wants, right? What the company wants is actually keep the talent bar high. So instead, try, you know, some recruiters that really wanna chase their bonuses, they they try and negotiate with managers, try and convince them this is the best you're gonna find. You're find someone better, etcetera, etcetera.
00:13:18 · Alan Chang, Harry Stebbings
[00:13:18] S0: Like, when you start incentivizing a metric, we need to think about, okay, what are the second order consequences? Right? Let's take a very simple example. Let's say, let's take a a recruiter. If you give a KPI to a recruiter, let's say on hires per month, what they might start to start to do, because their bonus depends on it, is trying to convince hiring managers to lower the talent bar. And I've seen that happen before. That's actually not what the company wants, right? What the company wants is actually keep the talent bar high. So instead, try, you know, some recruiters that really wanna chase their bonuses, they they try and negotiate with managers, try and convince them this is the best you're gonna find. You're find someone better, etcetera, etcetera. [00:13:51] S2: When we look at outcomes, I think so much of Revolut's success has come from product diversification and the testing that you guys did internally. When I interviewed Nick, the thing that struck me was he said about the 26 product experiments are being run internally at the same time. That was a really interesting way to approach company building to me that no one had ever talked to me about before. What did you learn from that? What are your takeaways from seeing that you... That you've applied to Fuse?
00:13:51 · Harry Stebbings, Alan Chang
[00:13:51] S2: When we look at outcomes, I think so much of Revolut's success has come from product diversification and the testing that you guys did internally. When I interviewed Nick, the thing that struck me was he said about the 26 product experiments are being run internally at the same time. That was a really interesting way to approach company building to me that no one had ever talked to me about before. What did you learn from that? What are your takeaways from seeing that you... That you've applied to Fuse? [00:14:15] S0: Yeah. I think product diversification is so important. I mean, let me give you like one example of why that was so important. So during the COVID lockdowns, the interchange revenue, so, you know, revenue from people spending on cards, especially abroad, went basically near zero. However, there was a lot of stimulus checks, right, from from the COVID times, and the stock market was booming, right, and the crypto market was booming. So whilst the interchange revenue went down, the, you know, trading revenue went up. So it kind of offset each other. So that was a great example where diversification actually helped make the company's revenues much more resilient. [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.