The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:17:30 · Nik Storonsky, S1
[00:17:30] S0: Yeah. Nothing is easy. [00:17:31] S1: Do you think the Revolut brand [00:17:33] S0: is strong in The US? Not yet, but we will get there as soon as we get bank license in The US, launch a bank there. It will take time, but I think, you know, we can get where we are now in Europe and The US. [00:17:43] S1: I saw your talk with Antoine, not Antoine, Martin, sorry, at Index, and you said about The US banking license. Is that now? How do you think about the staging of The US rollout and the banking license there? [00:17:54] S0: So basically, first, need to roll out our UK bank. So go through all its mobilization conditions and then put our UK customers on the bank. As soon as we get it done, it actually unlocks our ability to apply for license in The US. [00:18:08] S1: What will you do to win The US in a way that people who've tried before haven't won The US with? [00:18:14] S0: I mean, people in The US never tried their digital bank with a credit card, with all the functionalities that we have already. So one simple app where you have all the financial services that you need. Do you think Monza did? Monza still are not in US as far as I know. [00:18:29] S1: I mean, they expanded there. You're also in LATAM and crushing there. How do you feel about the LATAM market? What did you do that worked really well?
00:18:29 · S1, Nik Storonsky
[00:18:29] S1: I mean, they expanded there. You're also in LATAM and crushing there. How do you feel about the LATAM market? What did you do that worked really well? [00:18:38] S0: Now, what we've done, we we applied for license in Brazil, for banking license in Brazil. So we got a banking license in Mexico ahead of new bank. We... I think we applied already in Colombia for banking license. So we're working on Carousel, basically trying to capture top four, top five markets and launch [00:18:56] S1: Can we do North And South America at the same time? [00:18:58] S0: Yeah. You can paralyze. Yeah. I mean, it's hard, but, you know, almost anything is possible. [00:19:03] S1: When you look back at the products, what product [00:19:05] S0: introduction that you made has been the biggest needle mover? Good question. In reality, it changes when we launched our five years video business now. It's already, you know, went very well in terms of growth. But then recently, we launched also, I don't know, eSIMs growing super fast, RevPons growing super fast. Cause our scale is so much larger compared to five years ago. So whenever we launch product on the market with the right product market fit, it just scales super quickly. So you cannot really compare with also very successful product we launched five years ago. Because yes, five years ago it was super fast, but if you look at speed of growth, now it was very slow. [00:19:42] S1: What product did you think would be a mega hit that wasn't?
00:19:42 · S1, Nik Storonsky, Harry Stebbings
[00:19:42] S1: What product did you think would be a mega hit that wasn't? [00:19:46] S0: I'm actually pretty bad at this. Like, every time when I think on certain products that it will be a mega hit, it's not. And sometimes when I think [00:19:55] S1: it will not, it will. Which one, when you thought it would, did it not, most comes to mind? [00:20:02] S0: Well, for example, we launched Seller Events to compete with credit card. So the idea is there, the person just, well, receives salary in our account. And then halfway through the period for the seller, the passive button will receive half of your salary. So it's pretty cool. So it competes with credit cards and it competes with loans, much cheaper as well. But it didn't work for us because the whole conversion funnel was very bad. First, you need to sell to enterprise, and enterprise needs to sell to their employees. You also need to sell into payroll systems. So if you look at conversions, for for a lot of effort, we ended up having, I don't know, like, 100 plus people using cellular transport. So we decided to assess it. Well, this is the [00:20:43] S1: hard thing when you get to your scale, which is that it just has to be meaningful, there's opportunity cost to everything that you do. You know, I always chat to Anton. [00:20:49] S2: He's like, oh, man. It needs to be 10 x. It needs to be 10 x. How do you [00:20:53] S1: think about what is worthy of your time in terms of new products, in terms of size?
00:20:53 · S1, Nik Storonsky, Harry Stebbings
[00:20:53] S1: think about what is worthy of your time in terms of new products, in terms of size? [00:20:58] S0: So usually to launch a product, need to have a very small team of 10 people. They'll work on the product for, say, one to one and a half years. Cost will be probably, I don't know, £23,000,000. Because they're all independent. You can run a lot of bets independently. So the way we think about what to launch or what not to launch, we just have a committee of people who've done it before, who launched projects before, and they have our opinion. And so when everyone is positive, we'll launch things. When everyone is negative, we we don't launch. If there is a mixed opinion, we still launch. How many bets do you have running at a time? 20 plus in parallel. [00:21:36] S1: 20 plus bets. Yeah. [00:21:37] S0: If you look at the last two, three years, we launched, I think, 27 bets. Okay. So you have 20 plus bets running at once. And then what percent make it? So usually... So out of 27 bets that we launched last two and a half, three years, like, amazingly worked probably, let's say, five five, six didn't work at all. And the rest is just, you know, somewhere in the middle. But if you look at the whole portfolio, how much money it generates, it's just amazing. It's it's exponential. [00:22:04] S1: Okay. So with the five, six... The fives [00:22:07] S2: that work, you're like, great. Let's give them more money. [00:22:09] S0: Yeah. You kind of scale it up there. [00:22:11] S1: How much more money do you do you give
00:22:11 · S1, Nik Storonsky
[00:22:11] S1: How much more money do you do you give [00:22:12] S0: them all the same? Does it... The way it works, so we've got the team, then they launch it, and you you look at how much money they generate after they launch the product month one, month two, month three, month four. You compare it with other bets when they launched it. And then, say, top 30, 40%. If if you have no growth stick, you just allow them to hire additional team and additional team. So one team becomes two teams, three teams, and becomes a department. [00:22:37] S1: And so they're the five that work. The five, six in the middle are really hard because you don't wanna waste money. There's an opportunity cost to those people. What do you do with the ones where it's like... [00:22:46] S0: So you don't scale it. Right? So you still have only one team working on it. For those bets that are really scaling up, producing a lot of money, you you add more people to work on new features for this particular product. Which one of these bets today are you most excited about? I like it actually, eSIM. It worked pretty well for us. It's it's a very nice product. Think it's the best in the market. So super easy compared to all other kind of standalone apps out there. [00:23:11] S1: Are the winners obvious? Do they always just go up into the right, or does it take time for you to build conviction in what you like? [00:23:18] S0: Surprisingly, they... Like, on month one, month two, month three, they always, you know, go up. So you don't have doubts. [00:23:24] S1: Do they present to you 27 bets at one time?
00:23:24 · S1, Nik Storonsky
[00:23:24] S1: Do they present to you 27 bets at one time? [00:23:28] S0: How do you manage that hierarchy of information decision making? So we we just build a nice tracking system. Right? So we have Jira, obviously, tracking every single bed. Then everything feeds into dashboard as well. So you just open the dashboard, then you see the list of new beds, the list of beds that are being cooked, another 20. Which stage are they? Like, are they being developed? Are they at our kind of approval process? Then you see how much gross profit each bed generates, and so on [00:23:56] S1: and so forth. So it's it's pretty visual and, very clear. It's gonna sound so random, but Ben Affleck gave a speech the other day about AI in movies. And he said that art is knowing what to build, and craft is knowing when to stop, which I thought was a really nice description of the of simplicity. Do you worry that with so many bets, you lose simplicity