00:29:37 · Henrique Dubugras, Nik Storonsky
[00:29:37] S1: How did you find that guy? [00:29:38] S0: Someone recommended me to him. And I called him and he said, no. Like, it's impossible to get done. I won't even charge you charge you for it. I said, okay, why don't you wait? Why don't I pay you, like, you know, for two days consulting? Just come to the office. You explain me how Mastercard works, Visa works, card processing works, and maybe we'll figure something out. So I sat down with the team and then... [00:30:01] S1: Why do you think it was impossible? [00:30:03] S0: Like why? Which is because no one ever done it before in The UK. And so we kind of sat down with the team and then we figure out how to get it done. We showed the scheme to him and he says, yeah, it might be possible. So that's. [00:30:15] S1: What was the first version of it? Like, how did you get it done early on? [00:30:19] S0: So basically all the... I think all the prepaid card providers, they were putting balances on the card. Right? So it was sitting with a processor. But as soon as you take it out, right, you create a ledger yourself. And then you just simply authorize based on the signals, then it is definitely possible. [00:30:35] S1: Got it. So what you do is like you basically, instead of using the balances from the prepaid card providers, you would like just use them as an authorization engine and then have the balances yourself and In [00:30:47] S0: the ledger.
00:30:47 · Nik Storonsky, Henrique Dubugras
[00:30:47] S0: the ledger. [00:30:47] S1: In the ledger. Yeah. You know, it's funny. It's not too dissimilar when we started Brex because everyone told us that doing a credit card was very hard in The US because, you know, banks and credit. So what we did is we we got a prepaid card and then we just prefund it, but have a ledger on credit on the back. And they would just like, you know, charge people and then like keep funding it, you know, for the for the amount of Fucking system. Yeah. Exactly. It was like similar, I guess, with what you guys did. So so the value proposition for the customer was I am traveling around and I don't wanna pay FX. Yeah. And, you know, I can just like spend in different countries for free. [00:31:24] S0: Yeah. I also wanted to to do transfers as well. So I wanted to to have an account with a card which would also allow me to send money abroad. Because I mean, it's just convenient. And then everyone was telling me, no, it's crazy. It's like, you know, two different products. Why would you put two different products in kind of, you know, one app? Like every single person told me, VCs told me, like founders in fintech told me. But I I just kept insisting. So I build the account with a button, transfer money abroad. And then with the card as well to spend from the same balance. [00:31:52] S1: Got it. So you would be... You're able to put like some balance there so you can like transfer that to the card as well? And that was impossible.
00:31:52 · Henrique Dubugras, Nik Storonsky
[00:31:52] S1: Got it. So you would be... You're able to put like some balance there so you can like transfer that to the card as well? And that was impossible. [00:31:58] S0: Well, a card was attached to the wallet. Right? So a card was simply authorization method. But then from this wallet, from this balance, you could also send money in different currencies to a different [00:32:08] S1: Well, that was probably hard to build too. Right? [00:32:10] S0: Was hard to build too. [00:32:11] S1: And like where did you get the insight of that people would want that? Like how did you build that intuition? [00:32:17] S0: Just because I want it in myself. And for me it was obvious if I save money that way plus it's slick to use, why wouldn't other people use it as well? [00:32:26] S1: So you're like, I travel and when I travel, I hate paying FX fees. [00:32:30] S0: Exactly. Yeah. [00:32:31] S1: And you know, if it's easy, why wouldn't? And were you doing some version of it yourself? Would you have multiple cards that you were kind of using yourself? [00:32:38] S0: Yeah. Before this product, I had multiple cards, multiple accounts. I was, know, transferring money from one account to another to the broker as well to exchange money. So... [00:32:45] S1: Gotcha. And like, I guess, have you always liked being optimum... Optimizing costs like that in your life?
00:32:45 · Henrique Dubugras, Nik Storonsky
[00:32:45] S1: Gotcha. And like, I guess, have you always liked being optimum... Optimizing costs like that in your life? [00:32:51] S0: No. I mean, to be honest, you... Like I was all about revenues rather than cost. Of course, I I never cared. But for me, it was... I just don't like waste. You see what I mean? Yeah. So for me, it was waste. Right? It's it's... Okay. One type of money goes into another type of money and then it's less. I mean, it's waste. It's commodity. Right? [00:33:12] S1: So it's... You felt that like growing up, it's not that you're super focused on your costs. You would like spend money. No problem. [00:33:18] S0: Yeah. I was like completely... You don't like waste I didn't really care about costs. For me, was always okay. I need to make more money. And then then costs, I mean, doesn't matter. Right? Because, okay, you reduce costs by 10%, 20%. Revenues can grow a thousand percent. [00:33:31] S1: The waste is kind of what bothers you? [00:33:33] S0: Waste is always bothering me. Yeah. I want to be as efficient as possible. [00:33:36] S1: Oh, interesting. Interesting. Where do you think that came from? Like, is there anything that [00:33:42] S0: I don't know. I'm all... I was always, you know, perfectionist in what I do. Right? And for me to get something done well, I do not want to have waste. Yeah. For me it's like... [00:33:52] S1: Interesting. Okay. So then you're you're doing this first version and how long did it take you to... Did you code it yourself? Like how do you get the first people to code it? Did you
00:33:52 · Henrique Dubugras, Nik Storonsky
[00:33:52] S1: Interesting. Okay. So then you're you're doing this first version and how long did it take you to... Did you code it yourself? Like how do you get the first people to code it? Did you [00:33:59] S0: raise money? Basically... So I done first research myself. Like, you know, figure out that it's possible. And I got the contracts done with all the providers. [00:34:07] S1: And [00:34:07] S0: you had [00:34:07] S1: a little bit of money at this point yourself, right? Because you had made some bonuses and... [00:34:10] S0: I had quite a lot of money back then. [00:34:12] S1: Oh, you did? [00:34:13] S0: Yeah. Because of trading, right? And basically, so first, because I was very new to tech, right, into development, I hired a kind of outsourcer, like a team on outsourcing to build the product. Yeah. You like engineers? Engineers plus designer outsourcing and... [00:34:34] S1: And you paid up your shell out of your own pocket at this point? [00:34:37] S0: I just paid them, like, you know, transferred money to them. They were freelancers. [00:34:41] S1: But like it wasn't venture money. It was your own money.
00:34:41 · Henrique Dubugras, Nik Storonsky
[00:34:41] S1: But like it wasn't venture money. It was your own money. [00:34:43] S0: No, no, it was my own money. Yeah. And so basically we kind of, you know, build their... So we build something. I think back then it wasn't really working and it was like a very bad quality. So I very quickly realized that outsourcing doesn't work. So I kind of... No. Now I learned how to do like development, right? I know who to hire. I started hiring people in house myself. So I ended up hiring six or seven people, like engineers plus designing house. And then we continue building the product and we will build the product. [00:35:14] S1: And did you know how to code? [00:35:16] S0: Yeah, of course. [00:35:17] S1: Yeah. You did already? [00:35:18] S0: Because I learned it right plus in trading. Was also like, you know, doing in Python and MATLAB as well. Yeah. [00:35:24] S1: Oh, interesting. I didn't know that. So in trading, you had to code? [00:35:27] S0: No, not really, but I was always, you know, back testing different strategies. [00:35:32] S1: Got it. Got it. You knew how to interview engineers for someone good or bad at that point? [00:35:39] S0: No, I wasn't good at it. No, it's Got mostly, [00:35:42] S1: it. So you just hired people that you thought were smart? [00:35:44] S0: Yeah. I just hired first contractors. And then I brought the team in house. [00:35:50] S1: And this is all yourself. You're just building, you know, the prepaid card. And you need to get like a provider. Who was your first provider for prepaid card? Your first bank partnership or?