00:36:47 · Joubin Mirzadegan
[00:36:47] S1: I started a company that we incubated here at Kleiner Perkins that I'm that I'm leading. And people, it's like 17 people now. People have been asking me like, how is it? Like, are you having fun? And I'm like, I wouldn't describe it as fun. Like, that's not the word that I would use to describe how I feel on the day to day. And they're like, why not? I'm like, well, let me just like give you my like lived reality on most days. I'm either negotiating with a lawyer or a VC or a candidate or a customer or somebody on my own team almost at all times. And no matter how many times I try and become not the bottleneck, and maybe this changes, maybe somehow I end up, it ends up coming back to me on these things. And I'm like, and they'll say, well, but Juven, you're good at those things. Like you're a good negotiator. And I'm like, maybe, but like, that doesn't mean I like it. Like that doesn't mean it's fun. And they're like, well, why are you doing it? And I'm like, because, you know, for the last six and a half years, I've been sitting across the table from people like you and sitting shoulder to shoulder with Kleiner Perkins founders, watching them do the hardest thing and talking to them like in intimate detail. I feel like I knew more than anybody. And I come from the startup world about what it actually means, like how hard it really is. And I still couldn't help myself. Still couldn't help myself. And so I think like at the end of the day, like it didn't really, it felt like I had to do it. If for no other reason than to prove to myself that I can do it. Otherwise, like I end up just becoming the talking head that gives like blanket advice, empty, empty words, and almost like is jealous of the people that are willing to do what it takes and sacrifice. Maybe it's not fun, but I just couldn't imagine a world where I lived with myself, not seeing like what my potential was. But I would not describe it as fun.
00:39:26 · Jack Zhang, Joubin Mirzadegan
[00:39:26] S0: No. I don't... That's why I don't describe, know, you ask me, are you happy or you're having fun, you're enjoying? I don't think I enjoy most of the work I do. I I do feel I... You know, as a as a as a as a professional athlete and team leader, I have the responsibility of the team, and I wanted to win. I wanted to keep competing, and I wanted to be the best in the world. Right? So that has continued to motivate me. And then when you actually see that you're supporting a greater mission and you're supporting millions of businesses around the world to able to transact and grow in the sort of... Without the restriction of the current financial infrastructure, that is very fulfilling, and then you feel that you have a higher order of happiness. Right? So that... I think that higher order of happiness, it's the ultimate motivation. [00:40:15] S1: How quickly did things start to grow?
00:40:19 · Jack Zhang
[00:40:19] S0: As in the business? Mhmm. The... We pivoted twice. Right? So the first idea we had is we we need to figure out how do we connect to the interbank market, but, you know, as a start up, that is very hard to connect to the interbank market on the FX side. On the payment side, need to get licenses. Right? So I was an engineer in the investment bank. Right? Why would a regulator give me a license? So I had to write a pitch letter to the commission of ASIC, which is the regulator in Australia, to pitch, you know, innovation in Australia that that for some reason, he actually read it and give give me that chance. So we... One of the two lawsuits they granted this... That year, you know, the ACID commission... Commissioner specially approved it, which is amazing as a regulator. I kind of remember that, you know, forever, and that is not how most regulator works. But we had the chance to do that, you know? We got a license as a small team of of less than 10 people, but one person does legal compliance and risk and everything. And, you know, we we got a license, and we started building the product, and we we need to figure out how to do FX at a interbank rate. And the the way we thought about is doing peer to peer. Right? If you have transaction happen from Australia to The US and you have the other way around, then you can net it off and then give you, like, a fair market value. But then we we build the algorithm, and we did a simulation. It just... We need, like, billions and billions of volume to do even, you know, a fraction of the netting. And then people need to wait for too long for, you know, the the the two sides of the transaction to be netted, and we just thought it's not gonna work. And I cold called one day Macquarie Bank at 07:45 a. M. The guy pick up the phone is a guy actually doing an overnight shift to cover, you know, the other hours in investment bank, and I pitched the idea that we raised this, you know, at that time, we raised $3,000,000, sold him the dream of of building one of the largest FX and money movement platform in the world, and he believed in it. He convinced his management to... Allowed us to have a fixed connectivity... Well, actually, fixed as a kind of protocol in FX trading into the into the Macquarie front office that allow us to connect to the interbank market.
00:43:02 · Joubin Mirzadegan, Jack Zhang
[00:43:02] S1: And this is like the biggest bank in Australia? [00:43:04] S0: Yeah. The biggest investment bank in Australia. It's very rare. Because in the investment bank, when you trade on the interbank market, the minimum ticket size is, you know, like tens of millions, and sometimes you trade in a billions per ticket. Right? And, you know, we convinced the Macquarie Bank guys to change the the API to allow us to trade a minimum of $50,000 ticket. And it's amazing, like, how that can all happen. The guy who was doing overnight shift in a in a bank now is the head of FX distribution in in Macquarie Bank. So I kinda helped his career as well. [00:43:41] S1: That's amazing. [00:43:41] S0: And we become the largest customer of Macquarie Bank. [00:43:45] S1: That's amazing. On FX desk.
00:43:45 · Joubin Mirzadegan, Jack Zhang
[00:43:45] S1: That's amazing. On FX desk. [00:43:47] S0: How long into the business was that? This was the first year. So after the p two p idea failed, and we basically cold called Macquarie Bank, tried to connect to interbank market and pivot the business to SMB invoicing type of business, so that you can send invoice and... Or bills to pay overseas, right, or getting paid. Mhmm. And targeting SMB didn't quite work because we're running out of money, and SMB acquisition is very costly, and we couldn't raise more money with that idea. And we pivoted pivoted again to API sort of business that allow larger businesses to move money around the world, and that is the the... Basically, third idea, and that succeeded. By end of by early twenty seventeen, we started on that building that API, and then we signed up two very large customers who... And also end up being... One of them being investor, which is Mastercard, And we also signed up Shein, which is one of the largest ecommerce company in the world now. And we're able to ride with these these customers. Well, Mastercard promised, like, a billion dollar, but end up delivered almost nothing, and that's a different story, but but, you know, we had some very large customers that took off in between 2017 and 2018. So the the business is growing over a 100 x in 2018 from a transaction volume point of view. [00:45:13] S1: Before that, when you were pivoting, was Lucy freaking out? She's like, what have I done?
00:45:13 · Joubin Mirzadegan, Jack Zhang
[00:45:13] S1: Before that, when you were pivoting, was Lucy freaking out? She's like, what have I done? [00:45:21] S0: No. He was... At that time, he was... She was a CFO. Right? She's leading finance, and, you know, we raise... You know, when we when we try to pivot... When we, you know, try to pivot to the to the API idea, we already raised from, you know, Sequoia and and Mastercard and a few other famous VCs. Yeah. And that is... You know, obviously, that the brand kinda helped. The VC's brand helped, and we're able to build a better team, and and then we have the money to pivot to this APR first business. That's how the business took off. And then within, like, two years, by end of twenty eighteen, we got a, you know, $1,200,000,000 offer from Stripe to BIOS. Right? So that is a pretty insane two years' time. [00:46:08] S1: Damn. How big was the company when that offer happened, people wise? [00:46:14] S0: I'd say a 160, 170 people. [00:46:17] S1: So you grew from five to a 170 in two years? Yep. It's fast. That's fast. Yeah. [00:46:24] S0: Half my engineers, and [00:46:28] S1: and we [00:46:28] S0: made a lot of mistake in recruitment. Like what? We hired a bunch of people from Citibank, from, you know, big banks and [00:46:36] S1: Fancy pedigrees. [00:46:37] S0: Yeah. And they told us, you know, this is how it's supposed to work, and and, you know, they've they've been building swift systems and, you know, what you're doing is wrong, and you need to do this and that. And, yeah, we we pay a lot of price for that. [00:46:53] S1: Like what? [00:46:55] S0: Like, I