02:03:21 · Jordi Hays, Micky Malka, John Coogan
[02:03:21] S0: Well, I'm surprised you say that because it seems like you you have a bit of a you got a secret crystal ball or something if you were gonna [02:03:27] S8: Well, five years ago, we told our our our LPs, our investors in our one of our investor day meetings, that the rails of crypto and and financial services were actually starting to blend, and it was gonna be indifferent. And then companies that didn't do both were gonna be completely spaced out or lost the window of chance to build. So five years ago, we started to see it, but not it wasn't obvious before that because there were different geographies and all of that, but now they're competing globally to each other. So the way I think about it is the first decade of all of this momentum was the few companies that will have the right to win. And they've earned it by building brand, by building teams, by delivering on services, by getting licenses, by doing all these things that they need to do. So now we have a, call it, 30 or 40 players worldwide that we call the compounders, the one that will deliver and compound for the next decade. Now this second decade of those 40 names or 30 names is a decade where they steal market share from every single incumbent. [02:04:33] S1: Mhmm. [02:04:33] S8: Because so far, they haven't that much. [02:04:37] S1: Yeah.
02:04:37 · John Coogan, Micky Malka, Jordi Hays
[02:04:37] S1: Yeah. [02:04:37] S8: But this decade, with AI, with crypto, with the way they're building new products, with the way they're using their own brands, with the trust they have, with the government regulators leverage they have today versus five years ago, buckle up because what's coming is gonna be really fun if you're an incumbent and really tough if you're an incumbent. [02:04:58] S0: What lessons do you think the the company, the Coinbase's, the Robinhood's, etcetera of the world learned in 2020 during in 2021 during that sort of chaotic market cycle that it it feels good and that and that many of them learned various lessons. Was also told to ask you about [02:05:20] S1: Are you talking about COVID era [02:05:22] S0: or Yeah. Just the whole like, you know, the Like Robinhood that felt like You know, the Robinhood, GameStop, saga, those moments. It feels like there was a lot of hard ones, lessons. And then we've started this new cycle, this new bubble, whatever you wanna call it. And hopefully, lot of them have taken those taken learnings from that and are are implementing it, whether it's around risk management and things like that.
02:05:22 · Jordi Hays, Micky Malka, John Coogan
[02:05:22] S0: or Yeah. Just the whole like, you know, the Like Robinhood that felt like You know, the Robinhood, GameStop, saga, those moments. It feels like there was a lot of hard ones, lessons. And then we've started this new cycle, this new bubble, whatever you wanna call it. And hopefully, lot of them have taken those taken learnings from that and are are implementing it, whether it's around risk management and things like that. [02:05:46] S8: Yeah. So I think the lessons from that time was when COVID started, most of these companies were not ready to turbocharge. And what happened during COVID, if you look back, is that you probably fast track four, five years of customers and growth into twelve months. Yeah. And none of these teams were prepared for it. Being at home, not being able to do much more, it just supercharged all of these companies. And they overhire, and they were working remote, and they didn't have capital, you know, frameworks in place because the growth was unexpected. And we remember getting a bunch of calls during that time. In the beginning, like, this is amazing. And then, like, this is getting tough, and this is gonna be problematic. And and it it can crack here or there. And when we got the phone call at three, four, five in the morning from Robinhood saying the GameStop day and what needed to be done, And we funded them in four hours, almost [02:06:42] S0: half a [02:06:43] S8: billion dollars that we didn't have, that we asked a bank to lend us to do it. [02:06:48] S1: We've all [02:06:48] S0: Called it an old favor from an old friend?
02:06:48 · Jordi Hays, Micky Malka, John Coogan
[02:06:48] S0: Called it an old favor from an old friend? [02:06:51] S8: Yes. Literally, a favor from literally, a favor from an old friend. And that's what it takes to build relationships in banking. You need decades of that so you can call in that favor when it's needed. And that day and look at how long it took for the brand to regain the trust of the market. It was almost two and a half years [02:07:10] S1: Yeah. [02:07:10] S8: From that moment. And you gotta be a special leader and a special team to go through that turf and come back out of it. And now they're hitting their cylinders, but they got their story right. So you can see it in the Brian Armstrongs, in the Nikolay Storonsky, in the Vlad Tenevs, in the David Vales. They have that now. They went through that, and they're on the other side, and they're all between 38 and 40 to one. So they got the best decade of their life coming coming their way.
02:07:10 · Micky Malka, John Coogan
[02:07:10] S8: From that moment. And you gotta be a special leader and a special team to go through that turf and come back out of it. And now they're hitting their cylinders, but they got their story right. So you can see it in the Brian Armstrongs, in the Nikolay Storonsky, in the Vlad Tenevs, in the David Vales. They have that now. They went through that, and they're on the other side, and they're all between 38 and 40 to one. So they got the best decade of their life coming coming their way. [02:07:40] S1: Yeah. What does that mean for competition at the early stage? It feels like it's it was really it was in in in retrospect it seems like a no brainer to back disruptive technologies in this huge market finance. But now you have if you're starting a company that's gonna carve out a little slice of, oh, Robinhood's not touching this yet or Coinbase isn't touching this yet. It's like, well, those companies are incredibly well capitalized and they're run by founders who are not about to retire anytime soon. Seems kind of dangerous. So where are you seeing pockets of opportunity in the early stage? What are you seeing in the next generation of founders that might actually go and be able to carve out enough of a slice to grow into a generational company?
02:07:40 · John Coogan, Micky Malka, Jordi Hays
[02:07:40] S1: Yeah. What does that mean for competition at the early stage? It feels like it's it was really it was in in in retrospect it seems like a no brainer to back disruptive technologies in this huge market finance. But now you have if you're starting a company that's gonna carve out a little slice of, oh, Robinhood's not touching this yet or Coinbase isn't touching this yet. It's like, well, those companies are incredibly well capitalized and they're run by founders who are not about to retire anytime soon. Seems kind of dangerous. So where are you seeing pockets of opportunity in the early stage? What are you seeing in the next generation of founders that might actually go and be able to carve out enough of a slice to grow into a generational company? [02:08:23] S8: Yeah. I think what's coming for or the I'm more excited for what's coming this next decade than the last decade, if you ask me. The last decade was just a setup for this decade. And there will be a bunch of new teams and companies. And we have been spending time with the young generation, like kids who are between founders who are between 19 and 25 [02:08:44] S1: Yeah. [02:08:44] S8: And or 19 and 27, call it. Their brains are just faster. Their ways of thinking about how to build products is just different. They are they they spend the best years the the year of COVID learning [02:08:59] S0: Mhmm.