Benevolent Disruptors
00:00:06 · Chris Corbishley, Jack Zhang
[00:00:06] S0: So there's a problem at the heart of the global financial system that not enough people talk about, And it's been innovated around over hundreds of years, if you go right back to the beginning. And it's all about moving money across borders. It's slow, and it still remains opaque and expensive. And it's almost as if it's by design. So our guest today has built a payment system in parallel to Swift that's fundamentally changed how money moves around the world. In 2015, he was sitting in a Melbourne coffee shop, one that he owned, in fact, watching as FX fees were eaten into every international order that went through the shop, and he decided to build an alternative. Ten years later, as you may have guessed it, the company Airwallex now processes more than $260,000,000,000 of annualized transaction volume across over 200,000 businesses in 200 countries. Today's guest is, of course, Jack Zhang, the co founder and CEO of Airwallex, and is living proof that the next generation of global financial infrastructure does not have to be built in London, New York, or San Francisco for that matter. So, Jack, a huge welcome. We're all here in Athens at the Panathena studio surrounded by people building the future, and there's no better person to kick off the festival than than yourself. So let's get into it. [00:01:24] S1: Thanks, Chris. Excited to have this conversation.
00:01:24 · Jack Zhang, Chris Corbishley
[00:01:24] S1: Thanks, Chris. Excited to have this conversation. [00:01:27] S0: So, Jack, what I wanted to take you back is maybe to, like, the pivotal most pivotal moment in the Airwallex story. You know, there's there's ones that we've we've obviously experienced. I mean, I've been fortunate enough to be an investor in the company and we've seen it go through multiple stages, but, you know, there's the billion dollar offer that gets talked about a lot by Patrick Collinson in the early days, you know, always, always kind of curious to know what kind of caused you to turn that down. Others probably, probably more nail bitingly are getting through the COVID pandemic and, you know, what was challenging for many businesses, but particularly for global cross border payments, Or maybe today, you know, innovating in the realm in the realms of these mega rounds and, you know, global payment infrastructure becoming even more competitive. I'd just love to know what's been the key moment for your journey in Airwallex?
00:02:18 · Jack Zhang
[00:02:18] S1: Yeah. I think obviously there's like a few important moment like what you said, you know, if we decide to sell the company to Stripe back in 2018 or we couldn't navigating that kind of disruption from COVID and the company wouldn't have existed today. But it's actually what fundamentally changed the company in the last decade is actually not those moments. It's actually something quite small, but have a profound impact to the trajectory of the company. It's how we're thinking about our recruitment, sort of talent strategy, and also how we're thinking about building our businesses. We kind of call it the path of max resistance. Doing the most difficult, but the correct things for kind of a compounding infrastructure and value creation over a very long period of time. I'll talk about the talent thing maybe first, that in about 2019, we hired our Chief Product Officer, Shannon Scott, who spent over a decade at Palantir. So he was the first international employee to hired outside of The US that he was a GM of Australia New Zealand business for Palantir. But then later on that he went to UK and Europe, built that European business for them, and then later on went back to New York and become a product leader of that foundry product, which is, you know, driving a majority of the revenue Palantir now. So, and a big chunk of Palantir revenue now. So I think that one thing he really brought to the table is, you know, how, you know, startups should think about talent and what sort of people we should bring on board. And in the early days, we hired a lot of people from Citibank, from JP Morgan, like people kind of have done global payments or kind of been building global payments infrastructure in traditional incumbent bank. And, you know, we constantly kind of getting clashed on like how I wanted to build the product and how they thinking the product should be done, just like how Citi was doing it. And it was never really put the piece together. It's just always feel struggle. And we have a very heavy sort of experience based recruitment framework that everything, every people we hire really focus on, if they have done this before, do they understand global payments? Later on, we figured out the complete wrong way of doing it, that we should hire people with a lot of agency, with a lot of grit.
00:04:57 · Jack Zhang
And then coming from first principle of everything, coming from engineering's sort of principles, design a product from the ground up, what the sort of the best global money movement payment network should be look like, what the future of global banking should be look like. And we basically, you know, Shannon sort of helped us to reshape our kind of recruitment framework from a experience based framework to a competency based framework. And that fundamental change, how we're looking at recruitment, we're looking at conversation, how we're looking at empowering employees and how we build a culture. So a lot of the folks that in the early days actually left the company and especially the senior people. And then we kind of had a brand new leadership that very focused on first principle thinking, very focused on sort of customer experiences, very focused on the kind of the outcome we deliver to the customer, but not only today, but also what it looks like in five, ten years, even kind of a long period of time, can we creating this component value. And that fundamentally changed how we basically build a company, what the culture today is very different to the culture that seven, eight years ago. And ultimately, that allowed us to build a pretty successful business to date.
00:06:25 · Chris Corbishley
[00:06:25] S0: And that may play into the next question, which is really around how, you know, a company that really was born in in Asia Pacific, I mean, in terms of its origin story, you know, I I wonder how I I often wonder how you came to sort of be able to compete on a global stage with the likes of Stripe, with PayPal, with global incumbents that that are so heavily set and and have always seemed to originate in in in in Yeah. In Europe.
00:06:47 · Jack Zhang
[00:06:47] S1: I mean, if you think about it, when we started the business in in Melbourne, Australia a decade ago, there was no unicorn in in Melbourne or in entire Victoria. And there's only one venture capital investor out of, you know, in the whole Australia, there's only three VC investors and and raising money is impossible. It's impossible to get mentorship, to understand how to build a company. So we made so many mistakes early on and we completely failed our product twice and have to pivot to, you know, the product today. If we were in Silicon Valley, we probably have already kind of died and then building something quite different to what people are building in The US. They really focus on product market fit, really focus on getting the product out to the customer as soon as we can. You know, I just talk about the Passive Max Resistance. You know, we went on a journey of getting licenses in over 70 markets around the world, with more than 80 banks around the world to, you know, and the central banks and local payment systems that one by one, country by country, doing the kind of the most difficult things and, you know, engaging in regulatory, legal, engaging compliance, rather than taking the pause of just getting the product out there to get product market fit initially without doing this really hardcore regulatory and financial infrastructure work. And we probably wouldn't have the time to do that in the valley either. But, you know, being outside of the valley, being in a small sort of startup ecosystem that gives us the time to really figuring out how to creating this business for the long term winning. And how do we thinking about programmatically building our business started with global money movement, they extended to, you know, payment to compete with Stripe, then later on also expanded to corporate card and spend management, competing with Ramp and other sort of spend management company. But also more important, our core business evolved into a global bank that we started building essentially the tech forward version of HSBC or Citibank. And now we're building that kind of AI layer on top of that to empower entrepreneurs and businesses who want to grow globally. And that kind of past and past experiences almost become a DNA or philosophy of how we're building the business.