The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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
00:23:56 · S1, Nik Storonsky
[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 [00:24:20] S0: and you get overcrowding? You need to solve this problem through interface. So interface should be super simple. Right? So you need to show the right product at the right time. If you look at the car, right, car has, you know, a lot of functionality. Well, then it's it's pretty simple. Right? And then on top of it, we've got electric cars, like screens. I mean, if you think about functionality of the car, there's a lot of... Yeah, right? But then it's it's very simply built. So you just drive where you want, you play music when you want, and so on. So the same with banking product. And ultimately, people need a lot of products. But then if you position everything in a very simple way, there is no problem. Which product would you most like today that you haven't done? Private bank. I think it was cool to build a private bank. [00:25:04] S1: Agreed. Why haven't you done it? [00:25:06] S0: I think it was too early. Now we have a lot of customers, and then a lot of customers actually have a lot of balances with us. Some of them have, you know, millions on our accounts. So I think it's time to build the private banking for people with a lot of liquid assets.
00:25:06 · Nik Storonsky, S1
[00:25:06] S0: I think it was too early. Now we have a lot of customers, and then a lot of customers actually have a lot of balances with us. Some of them have, you know, millions on our accounts. So I think it's time to build the private banking for people with a lot of liquid assets. [00:25:21] S1: So we have Revolut today. What does Revolut look like in three years' time, both from a product and from a business perspective? Three years. [00:25:29] S0: So in three years' time, we would love to be probably alive in 50 markets to be [00:25:35] S1: Where are we staying? How many are we live in? [00:25:37] S0: 39 now. So we want to be number one in, say, 90% for these markets in terms of growth. How many [00:25:44] S1: are we number one in today?
00:25:44 · S1, Nik Storonsky
[00:25:44] S1: are we number one in today? [00:25:46] S0: I think we are number one in 19 or 20. 19, 20. Basically fully localized as a bank in say 40 markets. So providing local accounts, local credit cards, local payment methods, loans, and so on. So you just be as competitive as local banks or even even more competitive. So that's the goal. And then hopefully to have, I will say, 30 to 40,000,000 directive people. So now we have around 10,000,000 directive people. So we have that in three years. Which market is the most important that you win? I think in three years it'll be too early for US to win. So, yeah, maybe if we win every single large market in Europe. So top top 10 markets in Europe, yeah. And then right now we have our penetration of market share. We'll say it depends from 5% to sometimes 70%. On average, would say 10%. So if we manage to go from 10% to 30, 40% market share in our top 10 markets, so there will be already, probably four x business compared to what it [00:26:48] S1: is now. Do you think the market makeup of banking will fundamentally shift in the next generation? And what I mean by that is I saw actually you again talk with Martin, and you said about the huge fragmentation in the banking market. [00:26:59] S0: Yeah. [00:27:00] S1: Do you think that will continue, or do you think we will see, certainly, a lot more concentration with fewer, bigger players?
00:27:00 · S1, Nik Storonsky
[00:27:00] S1: Do you think that will continue, or do you think we will see, certainly, a lot more concentration with fewer, bigger players? [00:27:06] S0: Yeah. I think because of different regulations, different markets, all the banks are very local. Right? Because it's very hard to kind of, you know, build a bank in one country and then scale it outside without, proper tech. So I think we have, as a company, we have a unique opportunity to actually scale and build our global bank across many, many markets purely because tech allows us to do it. And actually, if you think about it, a similar similar picture was in venture business. Right? So when the venture business started, you have a lot of VC funds focused on The US, some VC funds focused on Europe, a lot VC funds focused on Asia, and so on. So they are very similar to banking as well. [00:27:47] S1: And so we move into a world of globalized banking players who own, bluntly, much larger portfolios. [00:27:52] S0: Yeah. I think what time? In five years' time, you'll you'll see much less number of banks, and there are a few global players. Nik, what needs to change [00:28:01] S1: in the business before you go public? [00:28:03] S0: I mean, already, we already run the business as a public company. We're just not public company. So we we run everything because we're a bank, so we need to have even stronger controls compared to public companies.