The David Rubenstein Show
00:14:51 · David Rubenstein, Nik Storonsky
[00:14:51] S0: What did you raise money for it? I assume people gave you all the money you wanted, but did you just use your own money and your friends money? Did you have to go out and raise money? [00:14:58] S1: First fund was two hundred and fifty million, so I put around twenty five percent of my own money under. The rest was external LPCE and. [00:15:06] S0: What types of rates of return do you think you can get in that fund? [00:15:10] S1: So basically, when I had this idea, when we build a model and then we started back testing the model, it produces effectively forty to fifty percent a year on the year returns, long term returns. So when we started investing based on the model, I think now we are called top four or five percent of the funds the world in terms of returns. So it's usually thirty to forty returns. [00:15:35] S0: So you ever use your credit card and it gets turned down. In other words, you got to use a credit card at a restaurant or somewhere and they say your credits tonight? Is whatever happened to you? [00:15:45] S1: Initially? Yes, yeah, but it was more than a eight nine years ago when service wasn't that stable. Now we just don't have declines. [00:15:53] S0: But now that happened to you, did you tell people who you were? You didn't say, look, I'm the founder of the company. [00:15:58] S1: And was just coding engineers and trying to find out what happened. YI is declined. [00:16:03] S0: How many customers a rebel doold have? Now? [00:16:06] S1: So have seventy five million customers.
00:16:06 · Nik Storonsky, David Rubenstein
[00:16:06] S1: So have seventy five million customers. [00:16:09] S0: How big do you think you can take it? Do you think you can take it to one hundred million customers or more? [00:16:13] S1: Yeah, we can definitely take it to a hundred million customers. Our internal target is one hundred million daily active customers, and then one hundred million daily active customers will transfer about three hundred million monthly actives. [00:16:25] S0: It's said that companies, if they're really going to survive and prosper for over many period years at the time, they have to have a good culture. What is the culture you're trying to build in your company? [00:16:36] S1: So we have these five cultural values pretty well defined, starting with never settle, so never settlers, about being ambitious and setting up for big goals. Secondly, it's about dream team, so we prefer to work in a small team of extremely high intelligent people rather than in the lash teams for average people. Or third one is get things done. It's very important to be kind of you know, getting things done oriented. Then we have a cultural principle called deliverable. It's about almost perfection in everything what we do in terms of product. [00:17:15] S0: I suppose I say I have an account at a famous British bank, but I'm not happy with it, and I feel secure because I know they got all these buildings there and it seems like they have a lot of money behind them. You don't have any physical place for me to go right exactly.
00:17:15 · David Rubenstein, Nik Storonsky
[00:17:15] S0: I suppose I say I have an account at a famous British bank, but I'm not happy with it, and I feel secure because I know they got all these buildings there and it seems like they have a lot of money behind them. You don't have any physical place for me to go right exactly. [00:17:32] S1: So we are solving this trust issue through different methods. For example, yes, absolutely correct, it's important for people visually see a big building of massive columns and then feel as you know, there's in a lot of money behind the building. So we do differently as we build trust and reputation through brand. So for example, if you look at European airports, so majority of European airports we advertise on affectedly buy the whole airport and then advertise on the whole airport, on the bridge just and so on. So we would build a brand through a lot of advertising rather than having these massive buildings. [00:18:07] S0: Banks we're in the business hundreds of years ago principally to do two things. One have a place where people can park their money and also to borrow money. You borrow money from banks can I borrow money from you, it can borrow money for loss, right, So where do you get the money? [00:18:24] S1: Balance it right? [00:18:25] S0: The reason people like dealing with you rather than the big conventional bank is that you're less expensive. [00:18:31] S1: So well, not only saving the money, we're also saving that time everything is automated.
00:18:31 · Nik Storonsky, David Rubenstein
[00:18:31] S1: So well, not only saving the money, we're also saving that time everything is automated. [00:18:36] S0: If you look at the future of the financial service world, do you think that there's a future for large banks to keep having these big buildings or do you think ultimately five or ten or fifteen years from now, everybody's going to be online with everything in five times? [00:18:50] S1: Yes, then we'll see one and more consolidation and thing. We'll see more and more certain digital champions and the regions taking one and more banking shs regions. So maybe it will take ten years, maybe it'll take fifteen years, twenty years. But I do think that we'll see less and less legacy banks, or less and less legacy banks will make so much money. [00:19:14] S0: So are you enjoying doing all this? Are you enjoy running the bank, running the adventure fund and doing interviews with people like me? Are you having a good time or you're not that happy? [00:19:24] S1: I mean certain like certain things I like, certain things I don't like so I love building products. I love kind of solving problems. I don't like delays, which can be quite often in the regulatory business, because certain things can be outside of for kind of you know, your decision making and speed. [00:19:47] S0: What are the skill sets that you think are required to build a company like this and do you look for those same skill sets in the people you hire?
00:19:47 · David Rubenstein, Nik Storonsky
[00:19:47] S0: What are the skill sets that you think are required to build a company like this and do you look for those same skill sets in the people you hire? [00:19:55] S1: Well, you definitely do not need to be good at trading at all. For me, when I started, I knew nothing about banks because I was in a trader investment bank and has a very different organization compared to a retail bank and than payments company as well. So I learned everything from scratch and skills wise we're going to have. I think you're definitely have an ambitions and hunger plus as a character, plus in a lot of energy because it's pretty painful, you know, in a lot of ways with all the problems. Plus you always need to have a very strong logic, logical thinking, abstract thinking. You should be good with product as well, like you know, ability to build something nice and sleek. We're just looking for ultimately three things. First is high IQ or brains. I don't have certain ways how to understand whether person is smart or not, logical or not number one. Number two is a character, how ambitious they are, how hungry they are. And thirty is the skills. Right, if you hire a designer, they need to be good at design and so on. [00:21:13] S0: What new worlds do you want to conquer? You've built a big company, eventually you might take in public, You've got a great venture capital firm. What do you want to do next? [00:21:20] S1: Well, majority of time are edicated still to revolute. We're still scrashing the surface in terms of what is possible in building a first truly a global bank.
00:21:20 · Nik Storonsky, David Rubenstein
[00:21:20] S1: Well, majority of time are edicated still to revolute. We're still scrashing the surface in terms of what is possible in building a first truly a global bank. [00:21:30] S0: Are you worried that somebody who's ten years younger than you is going to come along and with a better mouse trap and beat what you're doing, or you're not worried about that so much? [00:21:39] S1: I mean, really, I think there are windows of opportunity in the world, and then when there are certain tools sort opportunities, and then usually what happens ten twenty people jump on these opportunities in this particular country to do this particular product on them, people compete. I think an opportunity for fintech I think in the majority of conscience is gone now because they already players and legacy banks. They kind of cut top as all of products. So this is very hard to build anything new in fintech, or at least I don't see opportunitia. But nonetheless, I mean maybe I don't see anything. Maybe there is you know, someone smart who can come up with a better product. [00:22:19] S0: So most of the bankers I know have hair that's like mine. It's shorter, yours is a little bit longer. Is that your trademark? Or if you want to get a banking license in the United States, you think you need to cut your hair or not? [00:22:30] S1: I think you're definitely into wears whatever. [00:22:33] S0: Do you have friends from high school that call you up and say, remember me, I was your friend in high school? [00:22:39] S1: Sometimes friends of friends.