Competition, Intensity & Building a $115 Billion Global Bank | Nik Storonsky, Revolut

Nik Storonsky is the co-founder and CEO of Revolut, a digital bank valued at $115 billion that is available in 38 countries. A former trader, he started Revolut with a card for spending abroad without bank fees and expanded it into a full-service bank with the goal of becoming number one in 100 countries. Nik explains why founders have an edge over professional CEOs, how he runs Revolut like a machine, and why he funds product bets algorithmically, doubling down on winners and cutting losers. He discusses hiring self-guided people over experienced executives, what Europe's regulatory constraints taught him, why he keeps VCs off his board, starting the Quantum Light fund, buying ads across Europe's airports, and how AI is changing the way Revolut is organized. Show notes: https://www.davidsenra.com/nik-storonsky Made possible by Ramp: https://ramp.com Deel: https://deel.com/senra AppLovin: https://applovin.com/senra Chapters (00:00:00) Coming for Jamie Dimon's dinner (00:02:04) Building the #1 bank in 100 countries (00:06:12) Why founders beat professional CEOs (00:08:45) Revolut's biggest mistake (00:12:47) Why legacy banks can't innovate (00:17:20) Running a company like a machine (00:20:28) Funding winners and cutting losers like a trader (00:23:31) How AI is changing Revolut's team structure (00:25:23) 50 direct reports and spreading innovation fast (00:29:59) Hiring self-guided missiles (00:33:31) Too much money makes founders weaker (00:37:38) What Europe's constraints taught Revolut (00:41:08) Why VCs are like football cheerleaders (00:49:28) Starting a fund to compete with VCs (00:54:28) From zero marketing to buying Europe's airports (01:00:21) Funding moonshots like a global tech company (01:03:58) Building an unstoppable machine Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02David Senra?

  All right, I had to tell them to start recording immediately because even the conversation we were just having, I was like, oh, we're gonna have a lot of fun today. I texted my partner, Rob, I was like, I think me and Nick are gonna do a masterpiece. Because I've been hearing about you from other founders for years about like, this guy's super competitive, he moves excessively fast, and he's a conqueror. Can you explain like, how you view competition and like, what you're trying to do in the world?

• 0:24Speaker 01

  I was extremely competitive since I was six years old, so it was always in a competitive spots or competitive Olympics as well. And for me, it was always a natural desire to be number one in whatever I choose to do, right? Like, if I choose to play a game, I need to be number one. And then I'm extremely pissed, pissed off if I'm number two. So I always had this character.

• 0:48David Senra?

  You think the competitive drive came from sports? What sports were you playing?

• 0:51Speaker 01

  I was doing a lot, I was doing kind of swimming, boxing, a lot of sports, yeah, in childhood. I think it's more like a character, genes combination that you get. You know, some people are extremely competitive, some people are not competitive at all.

• 1:04David Senra?

  So how do you look at the competition? I heard this, we were talking earlier, it was one of the most hilarious quotes where somebody asked you like, oh, you want to expand the bank into the United States, right? And are you coming for Jamie Dimon's lunch? And you go, I'm coming for his dinner.

• 1:21Speaker 01

  I mean, the idea was that, you know, lunch is always, you know, something small and dinner is usually in the US much larger than in Europe as well. So like, coming for dinner meant, you know, not only going for retail business, but also for enterprise as well, also potentially for investment banking. Because it's also possible to disrupt investment banks.

• 1:41David Senra?

  How so?

• 1:42Speaker 01

  I mean, it's still very manual, still very expensive. I mean, it's all possible to make it all much cheaper as well, why not?

• 1:51David Senra?

  Okay, so explain, because like, I think a lot of people that are gonna be listening to this, don't like, they don't, they're not gonna understand what Revolut is today and where you're trying to go. So like, explain what you're doing, like, the state of the business now, and then what you're trying to do moving forward.

• 2:04Speaker 01

  So maybe I started with, 12 years ago, with what we started. So I started with a simple cut, which allowed you to spend money abroad at interbank rates, avoiding effective banking fees and with good effects rates. And then at later stage, I expanded into other products into credit, wealth and trading, crypto, business accounts. We also build a lot of non-financial services business. So the result now, we are a large digital bank, providing all the services that banks provide, plus providing a lot of services on top of it. For example, you can book stays with us, you can buy e-seams and so on.

• 2:45Speaker 01

  And then the idea is to build a large global bank, which is number one in at least 100 countries. And that's what we are trying to do now. So right now, we're live in 38 countries. In majority of them, we have banking licenses. And then we are slowly expanding 10, 15 new markets every, I would say, one to two years.

• 3:08David Senra?

  Okay, so this goes back to, again, we just hit on how this conversation started, you're super competitive, you say these like little lines, right? That you're like, you just drop there, but like, you're just like, oh, I want to build the number one bank in 100 different countries.

• 3:21Speaker 01

  Yeah.

• 3:22David Senra?

  You understand, that's a wild, wild like thing to say and an ambition, and I don't think you say it casually, like, oh yeah, I just want to be 100, you know, top, number one in 100 countries. Like, you actually mean it. So like, go into like, how this, like, what is your inner monologue in terms of like, competition and how you view like, this game that you're playing?

• 3:42Speaker 01

  Yeah, basically, mentally for me, if I chosen to do this game, right? And as I said before, I need to be in number one in the issue. And right now, there is a huge opportunity in the world, where we have many countries, and then in each country, you have 10, 20, 30, 40, 50 banks, they're all very fragmented. Basically, there is a unique chance in the world to build a global bank, which provides much better services and products at a much better price in every single country. And then effectively to optimize, to compete with these banks, to drive prices on their products down, to improve customer experience, to save customers' time as well. Because you don't need all these physical branches for banks and so on.

• 4:23David Senra?

  Will you say more about this, like, this ambition or this like competitive drive that you have? So like, like, how does it manifest in your life every day? Like, you wake up with just like a burning desire to achieve mission success? Or you're looking at yourself in the mirror and you're just like, I'm not doing enough? Like, what is happening? Like, I'm interested in you, the entrepreneur, and then we'll talk about the business, but like, this is the fascinating part for me.

• 4:42Speaker 01

  Well, basically, it's a banking business and the way I view it, okay, if I chosen to be in this business, I need to be number one in the issue. And obviously, there are tens of thousands of banks in the world. And what it means to be number one, okay, it is to be number one in country, one, two, three, four, and so on, and say it's 100 countries. And then in terms of competition, how I look at competition, I mean, to be honest, I don't really look at competition, I look at kind of myself, right? And then, what would I do to beat up myself, right? To out-compete, to out-smart somehow? And the philosophy is very simple, so every day, you need to be like, almost 100% every day. And then even if you lose to competition, then you can't really blame yourself, because

• 5:27Speaker 01

  okay, every day you were at 100%, right? So I think, you know, that's the mentality that will help you win, most likely.

• 5:35David Senra?

  I love this. Have you spent any time with Toby Luque, the founder of Shopify?

• 5:39Speaker 01

  No, not yet.

• 5:40David Senra?

  Okay, so he was on the show, I'm actually recording with him in like, another like two weeks, but he says he likes to take the view that he's a corporate raider. That somebody now has bought Shopify, it's him, and he's like, what the hell was the previous management doing? How would I essentially improve every single element of what this previous management was, even though it also is him? So you said basically the same thing, it's like, well, okay, you can't really control what your competitors do, I can control what I do, let me analyze how I'm doing, and then how would I beat me, you know, from the outside?

• 6:10Speaker 01

  Yeah, that's part of the game as well.

• 6:12David Senra?

  Why do you think you have this opportunity to be number one? Like, what do you see that they're doing wrong that you think, think that you can do better?

• 6:18Speaker 01

  A lot of them, they're not founders, that's number one, right? So they're there only for three, four years at best, they just collect their bonuses and the issue, right? And then, they might, you know, optimize certain operating metrics, but I mean, they are not really 10x people, right? So they are, I mean, they're just there for their bonuses, effectively, for three, four years. As a result, they don't really do bold decisions, they always play in defense, they never play in offense. I have a different style, right? So, yes, of course, I play defense as well, but I always think, okay, what I can do more, right? Which industry I can go, like, which product can I launch, and so on. So it's like, you know, always pushing myself, pushing myself to do more.

• 7:00David Senra?

  Why do you think it's important that you're competing against non-founders?

• 7:03Speaker 01

  I mean, it's much easier to compete not against founders, right? If I would be competing with all the banks and they were all founder-led, as a road, we would all have, you know, much better products by now. That's not what's happening, right?

• 7:17David Senra?

  Say more about the difference between, in your perspective, between a founder and a professional CEO.

• 7:21Speaker 01

  Well, professional CEOs, ultimately, their goal is not to improve organization, right? Their ultimate goal is to protect their job. So they're with definition, they make suboptimal decisions for the company. Because they, they think about themselves and they think about the companies as two entities, right? I think about myself and as a company as a one entity, right? Like, I do everything what is good for the company, and I never kind of try to diverge myself, what is good for me. This should be different to what is good for the company, for me is the same. So I have like, 100% alignment with the company.

• 8:01David Senra?

  Yeah, I heard you say something like, your entire life is work, it's like 99.5% of your time is dedicated to your, to building your business, correct?

• 8:11Speaker 01

  Yeah, yeah. Also, when we speak with regulators, they're all are kind of, yeah, but you know, growth is not a good mentality and so on. And the mindset is very simple, every time when you think as a regulator that I'm excessive risk taker, it's completely wrong, right? Because I am the only one motivated for this company to succeed and to survive, right? And that means I'm actually not going to take stupid excessive risk compared to professional CEOs or professional boards.

• 8:39David Senra?

  Because there's no separate, this is what I hate, when I was like, oh, it's just business, it's not personal, it's like, no such thing with founders.

• 8:44Speaker 01

  Yeah, yeah.

• 8:45David Senra?

  So, this is another thing that surprised when I started reading about you, was originally, you set out to like, not be regulated. And there was something about you saying, this is like, the worst mistake you ever made. Can you talk about what happened and how you learned this lesson?

• 9:00Speaker 01

  Yeah, basically, when we got several million customers and then we applied for banking license.

• 9:06Speaker 01

  The entity with zero customers is less risky compared to an entity with millions of customers. And then in regulator eyes, they become much more risk averse to you, right? Because for them, it's much easier to give a license to a company with zero customers, because maybe they will have zero customers in three, four, five years' time, right? If you give a banking license to a company with 5, 10 million customers and something goes wrong, right, then the regulator will be to be blamed.

• 9:36David Senra?

  Why were you not regulated before? What was the state of the business? When you applied for the banking license? What were you doing before?

• 9:41Speaker 01

  Well, we simply got e-money license, payment licenses.

• 9:44David Senra?

  You were just moving money?

• 9:46Speaker 01

  Much lighter licenses, yes. And then the idea was banking license back then was three, four years to get, while e-money license you can get within one year. So obviously, as a founder, you want to do things faster. So that's why we went for e-money license. Then we got a lot of customers, and then we moved to banking license, and then it became almost impossible because we were very, very large. I think in the history of UK, it never happened before that a company with seven or eight million customers in UK applied for banking license.

• 10:18David Senra?

  So was that a difficult process? Like, what happened?

• 10:22Speaker 01

  It took us almost five years to get a banking license in UK, yeah.

• 10:26David Senra?

  Okay, so what would you do differently before? You would have tried it like, I think the way you put it is like, regulation, it's not a moat, that's not the right word to, but it's like, there's a huge benefit to actually getting yourself regulated. Is this correct? Is this the way you thought about it?

• 10:41Speaker 01

  It's like, there are pros and cons. To build a large business, it's a must, right? Because if you want to really compete with banks, you need to get trust from customers, they need to put salaries in, they need to put all of their wealth in their accounts, they need to start trading stocks with your ETFs and so on. So they need to trust you. And then in their minds, I mean, they trust banks.

• 11:06David Senra?

  What do you think the American fintech companies are doing wrong about this?

• 11:10Speaker 01

  To build a very large business, to capture large market share, it's just unavoidable. So I think in the US, a lot of companies started like Chime, Cash App. It was simple before, 10, 12 years ago. They all never went for banking license. I think it's a big mistake. So they could never become a large business.

• 11:28David Senra?

  Explain why they can't become a large business without it, though?

• 11:31Speaker 01

  Just because they are not a bank, right? They can target certain niche audience, certain cohorts of customers, I don't know, low income and so on, but they can never go to prime audience, right? And they can never become a prime bank account without a banking license.

• 11:48David Senra?

  But why do you think that relegates them to being a small company?

• 11:50Speaker 01

  Well, just because, yes, early adopters want 2% of population will try them. Maybe it will go from early adopters to the France family, and now like 20%, so 4% of population, where you want 40, 50, 60, 70%. For example, in Ireland, we have 80% mic penetration.

• 12:06David Senra?

  In Ireland?

• 12:07Speaker 01

  Yes, four out of five adults use regulated accounts.

• 12:10David Senra?

  Okay, how did that happen?

• 12:12Speaker 01

  Slowly, I think a combination of lack of competition, very bad banks, they have only four banks, which are bad, plus a very small country with a lot of people living outside of Ireland as well. So I think altogether, it led to us being 80% of the market. If you look at other markets, for example, in the UK, we're about 20% penetration, France is 20%, Spain, certain markets are 30, 40% penetration. So it is possible to go to 60, 70, 80, as Ireland shows, but for it, you need to be a banker.

• 12:47David Senra?

  So I'm very curious, like, when you're going into a new market, and you said, there's just bad banks, just like low competition here, like, what are you seeing that they're doing wrong?

• 12:56Speaker 01

  Well, they're stuck in limbo of professional management, who are extremely risk averse as a result, or is zero lack of, or zero intention to innovate. And then all the resources are spent on protecting what they have already, right? So for example, you can have a very old legacy third-party core banking system. Obviously, you need to change it to your own or to some new provider, but then banking management will never do it because it reduces risk, right? Because you need to migrate customers, you know, something might go wrong, and they never take a risk, right? So that's the problem.

• 13:38Speaker 01

  Plus, on top of it, because a lot of them, they are not technical, so they don't really understand how to do a lot of technical things. As a result for them, our default choice is to not do anything for regulators and then for legacy banks, because doing anything is risky in an industry where you lack certain skills, so certain technical skills. And banking is about, it's not only about like regulation, it's also about building tech. And I think all these people are very bad at building tech.

• 14:11David Senra?

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• 14:55David Senra?

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• 15:37David Senra?

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• 16:21David Senra?

  Learn how they can help your business by going to deal.com/cenra. That is deal.com/cenra. So one of your advantages, as you see it, is you're competing against non-founders, you're competing against professional CEOs, and these professional CEOs are not technical. So they actually can't invent technologies, so therefore they cannot innovate. And that's what you're attacking?

• 16:42Speaker 01

  Yeah, exactly. They just don't even think about building products, right? Because they just don't feel it, they don't use it, they don't, they don't know how to do it. They're just professional managers. I think it's very important for, to build a successful business, you need to obviously be a great manager, like very tough manager, be very in details, and be a very good product person as well, to know how to build and turn the product. Tech, regulation, compliance, people altogether, it's like a machine, right? So there are inputs, and then the whole machine should produce you right output, which is amazing product that people use.

• 17:19David Senra?

  Okay, explain how you're building this machine.

• 17:21Speaker 01

  I mean, you need to visualize in your head, kind of, you know, what are the inputs in this machine, and what do you want to achieve, what are the goals, right? And then inputs is obviously your organization, your structure, your people, how you build product, what do you want to build. And then you effectively observe, kind of, you know, the whole structure working, the whole product being built, and you always interfere, right? If something goes wrong, and then you kind of change certain parts of the machine. For example, when we started, it was a very small team, 10, 20, 30 people, we hit the bottleneck when kind of team grew, but then speed slowed down, machine stopped working. So what I did, I just ensured that we have, you know, a lot of very small independent

• 18:05Speaker 01

  teams who just work on the same platform, right? And then speed increased because people, people work was paralyzed. So they work on different products, different features, using the same tools, and they were all independent. But then again, we hit bottleneck with regulation compliance. Again, I build another muscle in the machine, which is reg affairs, government affairs, department, and so on. So they had to produce in a certain outcomes. And we hit again a bottleneck with hiring fast enough good people. Again, we build a lot of process for recruitment, targeting the best people. So it's kind of, you know, moves in circles, right? You build something, then you hit the bottleneck, right? You identify the problem, you solve the problem, you go again.

• 18:47David Senra?

  And so now you're adding another, essentially, like, skill to this machine that is your company. You were, before you started Revolut, you were doing, you were a trader, right?

• 18:56Speaker 01

  Yeah.

• 18:57David Senra?

  I heard about what you just described before, where it's like you have, I don't even know if you call them bets, like, you'll have like 20 different ideas or like small teams working on 20 different ideas, right? Explain how these teams are structured and like how your previous career as a trader influenced the way you're building and managing your company.

• 19:14Speaker 01

  I think what was useful as a trader was risk management and then quantifying everything. Because unfortunately, in banks or in all organizations, a lot of things are evaluated based on their people's intuition, which in a lot of cases is simply wrong, right? So in order to evaluate correctly what is done and what is not done, you need to have a metrics, you need to have KPIs.

• 19:43David Senra?

  Wait, are you saying dumb or done?

• 19:45Speaker 01

  Done, done.

• 19:46David Senra?

  Okay.

• 19:47Speaker 01

  Well, dumb as well, yeah.

• 19:51Speaker 01

  Metrics and KPIs that actually kills politics within an organization because look, everything is transparent, right? You as an individual contributor, you as a manager, do you achieve your metrics? Do you achieve your goal, right? Why you haven't achieved it? So it doesn't matter what you say, I mean, there are objective numbers. I think it's extremely important to have as a part of the machine. When I worked in the bank, they didn't really have it. So they had the professional CEO, then they had a lot of politics within the organization. And I think it's just simply wrong how people run general businesses.

• 20:28David Senra?

  Okay, so explain like setting these little bets up.

• 20:32Speaker 01

  I mean, to be honest, it's pretty simple because we were always high velocity product company when we released a lot of features, a lot of products. And then at certain point of time, I decided to install a discipline in building bets because we're building a lot of things, but we're not really tracking how they were performing. So we simply build a staging process where first there is kind of a decision to produce a bet. It can be bottom up or top down. Then there is a discussion, call it committee, whether it makes sense to produce the bet. And then if a decision is made, we fund the bet. So we separate a team of up to 10 people, front-end developers, back-end developers, designer, product owner, sometimes data scientist, operational manager. And then they build a new product within nine to 18 months.

• 21:17Speaker 01

  And then when they launch the product, we simply look at growth of the product in terms of gross profit. And because we've done it for the last 10 years, we already have launched, say, 50 bets. And then we know that our top 10 bets, they grow, say, 10%, 20% month on month, and they produce, I don't know, 1 million GP, 2 million GP, 3 million GP each month consecutively. And then if we release a bet and then we see that this bet is historically in cohort of the bottom 25% of all the bets, we simply sunset it. So we instill discipline when we're not really running businesses which are not growing very fast. And then bets which are growing very fast, we're actually doubling down, right?

• 22:02Speaker 01

  So we give them more teams, one team becomes second team, three teams, four teams, five teams, then it becomes department, then it becomes a major P and L lines. So I think this process is just very disciplined to always filter out things that don't work out. Even myself, I kind of, you know, I don't really trust my intuition in terms of which products to build, which products not to build, because historically I was wrong so many times. And I think only approach which like completely algorithmic, right? Top bets you've continued to fund, bottom bets you just cut, like within 18 months.

• 22:34David Senra?

  This is a traitor in you.

• 22:35Speaker 01

  Exactly.

• 22:36David Senra?

  There's a lot of what you're saying reminds me of Bezos. And the way he describes this, all these like, obviously, these disparate bets that he would place inside of Amazon when he was obviously building the company. And he has a great line where he's like, you need to pour gasoline on the promising sparks. So your whole thing is I'm going to cut the bottom, but then the top performing, do you have a percentage, is it 10% top?

• 22:54Speaker 01

  It's usually up to 25% of all bets.

• 22:56David Senra?

  Okay, and then you're just, now we know.

• 22:58Speaker 01

  You just scale it up.

• 22:59David Senra?

  Okay, and you're dedicating a lot more money and resources. Why is it important at the very beginning, before it's unproven, to cap the team size at 10?

• 23:06Speaker 01

  It's not necessarily 10, it can be a bit more. It just depends how complex is the product. But it should not be more, generally, it should not be more than 10 people. I guess as a rule of thumb, okay, you need probably two, three back-end developers. You need two, in our case, because we also produce mobile apps, you need to have two to four front-end developers, so three to four back-end developers, one owner, one designer, that gives you 10 people.

• 23:31David Senra?

  Is the way you're structuring these teams changing because of AI now?

• 23:34Speaker 01

  Yes, that's actually, I think now that I'm kind of, you know, trying to change because the last 10 years, I think I optimized a lot how you direct people, how you build organization around people, around their strengths and weaknesses. Like avoiding politics, putting KPIs and so on, that's actually avoiding people's weaknesses, right? With AI, structure needs to be rethought, to be honest with you. I think the team should not be 10 people anymore, it should be two people, three people at best, because one developer can do front-end, back-end, can even do, you know, data science as well. So it should be rethought.

• 24:13David Senra?

  Can you give me a download of your thoughts about how AI is changing the way that you're running your company?

• 24:18Speaker 01

  Well, many things, and I think we're just in the beginning. So we automated customer support, so 90% of all customer support team is automated now. We're doing the same. Before it used to be 5,000 people plus, now it's much less. Obviously, engineering is automated as well. We increased speed of engineers by 30%. Translation, cross-selling as well, done by LLMs now, a lot of things. But I think ultimate goal is, at least a bet for us now, is to be able to build like full-stack AI employee. I think it's completely doable with current technology.

• 24:59Speaker 01

  So it's not like a chat tool or another like interface where you tell what to do and then it produces something. No, it's more like AI employee, which can join calls with you, which have email, which have Slack account, which have access to all internal back office system, and can do work. So I think that's kind of the ultimate goal, that, I mean, soon or later, you know, majority of companies will come to.

• 25:22David Senra?

  Yeah, you keep mentioning over and over again, like, I don't know if you use the word bureaucracy, I don't think you did, but like you hate politics, you want to minimize that, you want like data, you're much more like, just, I don't care what you say, it's like, did we hit the numbers or not? And is this growing or not? What's your organizational structure? Do you just have a shitload of direct reports? Like Alexander Wang was sitting in that chair like two weeks ago, and he has some crazy shit, like 200 direct reports.

• 25:45Speaker 01

  Really?

• 25:46David Senra?

  Yeah. So like, what's your, how are you organized?

• 25:48Speaker 01

  So I have about 51, 52. Reality, I'm not even speak, well, I speak when my direct reports, but I always go deeper, right? I go down to individual contributor in bottom projects, so I can speak directly with designer, with product owner, with developer. Philosophy is very simple, right? So whenever you hire smart, self-guided people, you don't really need to manage them. So you just need to show them direction and then ensure that they are all synchronized. This is like an army, right? So you need to ensure that all people are using the same standardized equipment, right? That's what you need in the company as well. You don't need every single team or department to reinvent their own bicycles, right, or their own weapons.

• 26:32Speaker 01

  No, it has to be the same standard approach. And then if someone invents, you know, some additional kind of tool or additional instrument which allows us to move even faster, then we need to standardize it across all the teams and departments. And that's what I, what I do very well. I'm very good at supporting innovation in one team or one department and then actually spreading it across the whole company.

• 26:55David Senra?

  Can you give me an example of you spotting an innovation and spreading it through the other departments?

• 26:59Speaker 01

  For example, recently was we, for, for design, we always used Figma. Right now, I spotted that one team is actually producing designs much faster using LLMs. And then instead of actually designing in a certain interface of the product, they simply uploaded our design system on a code level to LLM. And then they prompt to produce certain flows based on our design system. As a result, the whole design is not really a frame in Figma, but it's like a live interface on your laptop or on your simulator. So you can click through things, it reacts and so on. But the most important thing, you can do it three, four times faster compared to doing

• 27:44Speaker 01

  frames in Figma or screens in Figma. And then I'm pushing the whole system to all designers now.

• 27:51David Senra?

  Have you spent any time like reading about like entrepreneurs like from the past at all?

• 27:56Speaker 01

  Yeah, of course, yeah.

• 27:57David Senra?

  Like anybody stick out that, that you admire, you studied?

• 28:00Speaker 01

  Yeah, of course, I read books about Henry Ford.

• 28:04David Senra?

  I'm glad you said Henry Ford. You're sitting there talking about like, you're building a machine, you're like observing these innovations in all different parts of your machine, and I need to make sure that it's spread throughout this entire machine. That's like Henry Ford, Andrew Carnegie, he would travel around the world. Now we, obviously, technology can proliferate, you know, somebody could tell you about it, you say it online or whatever. He'd have to like physically go and travel to the factories because they're building physical stuff. And like, oh wait, this idea in Britain, I take, I'm going to take back to America. And that's the way he, Carnegie, Ford did this too, but Carnegie specifically, sounds exactly like you, where he's just like, I don't care if it's a 5% improvement in 1% of our business. Like if there's a better way to do it, we are going to do that.

• 28:44David Senra?

  And he was moving against usually older competitors that would not invest in technology. And in fact, when they found out that he was spending so much resource on it, they thought he was fucking crazy and actually gave him, because he ran that company for 30 years, it actually gave him this compounding advantage that by the time, like his competitors could never catch up, he was like so far ahead. But it's like, you were thinking very similar to Carnegie in what you were just describing.

• 29:05Speaker 01

  I think it's super important, it's just building the machine which moves faster, which achieves the goals. And then if you spot innovation in certain part of the machine, you need to spread it as fast as possible.

• 29:15David Senra?

  Yeah, and so this idea that you, you kind of hate like managers that just pass along like what to do, correct? You've eliminated them from your company?

• 29:25Speaker 01

  Yeah, exactly. I've seen so many by now, last 10 years, just simply what they do, okay, they take information from their individual, from individual contributors and then they pass it to, I don't know, stakeholders, right? I mean, it's like, what's a value add, right? Did you change the direction of the team? No, I mean, they know what they're doing. Okay, did you bring any innovation? Did you identify their easiest way to achieve their roadmap, right? No, not really, but I mean, what's a joke, like, you know, just, you know, taking numbers from them, passing to myself, I just don't get it.

• 29:59David Senra?

  You prune your team, is what I've heard. And you're searching for, I think, what you call self-guided missiles?

• 30:04Speaker 01

  Yeah, self-guided people, yeah.

• 30:05David Senra?

  It's almost like a founder and employee forum, is what you're going after?

• 30:10Speaker 01

  I always joke that, you know, self-guided people are like self-guided missiles, right? So you've got brilliant people, you don't even need to tell them what the goal is, they self-identify the goal, and then they self-reach it, right? So they're like self-guided missile, which also identify the goals. Then. People who are good but not excellent, you need to tell them the goal. And then there, without any kind of iteration, they will reach the goal. Average people, you tell them the goal. And then you need to spend weekly iterations with them to direct them, to tell them what to do, and then they will reach the goal, right? So you spend management time. That's what I don't want. And then below average people, okay, you gave them the goal. You spend time on them,

• 30:54Speaker 01

  and then most likely, they will not hit the goal, right? So that's a problem. So in order for you to have as many direct reports as possible, you just need to minimize management time spent on each of them.

• 31:05David Senra?

  Let's just assume you've gotten rid of all your below-average people anyways. How do you identify the average people? And then do you just fire them as well?

• 31:13Speaker 01

  I do, yes. Like, a lot of people I know who are very good executives, they struggle with this.

• 31:20David Senra?

  Why do you think they struggle?

• 31:21Speaker 01

  I think it's just, you know, they much more care about being empathetic to other people rather than caring about winning. So I think if you're much more weighted in terms of winning, right, your empathy to other people is at second place, and then you will do right decisions, even if they are tough decisions. And then people who are kind of more empathetic and less attached to being a winner, then they might prioritize being number two or number three or number four rather than prioritize getting better people in their team.

• 31:56David Senra?

  Have you heard how Elon speaks about this?

• 31:58Speaker 01

  No.

• 31:58David Senra?

  So he would tell the people, like, the people managing the engineering team. He's like, if your engineers like you, you're not doing the right job. And his whole thing was exactly that. He's just like, we're here to win. We're here to achieve the goal. And then how people feel is like completely secondary to that.

• 32:13Speaker 01

  Yeah, exactly.

• 32:14David Senra?

  That's more how you think.

• 32:15Speaker 01

  I think it's very important, whatever, you hire an executive or you observe executives, like, people who are very likable by their direct reports, they might not be the right people. I think the best executives, they're very tough, right? Well, they might be likable, right? But then likable is not the goal for executives. The goal is always to achieve the goal, with the minimum number of resources spent. So they're the best.

• 32:43David Senra?

  Say more about this, because I've heard this. Like, you like small, you like large outcomes that come from small inputs. You just said something like that just now. Like, achieve the goal with the minimum amount of resources.

• 32:55Speaker 01

  Yeah.

• 32:55David Senra?

  So it's like, almost like an art to like, I know you don't think of yourself as an artist, for sure. But like, there is like an art. You're trying to like, it's not just you want to win. You also want to win like the right way. Where it's like, you could win, and you just expended way more resources than somebody else. It was like, no, I want to try to find the minimum input possible for large outcome.

• 33:13Speaker 01

  Yeah, exactly. If you think what founders, what entrepreneurs, what are like great executives do, okay, they have the goal. They need to reach end to end. So what it means, okay, they need to identify direction, where to go. And then they need to build something within this direction with a minimal number of resources spent.

• 33:31David Senra?

  Do you see a lot of waste in the like, American entrepreneurial ecosystem, though?

• 33:35Speaker 01

  I think there is too much money, right? A lot of founders, they think money is free, which is probably almost free in California, because you can raise so much money at ridiculous valuations and then just spend. So I think there is a definite culture of trying to solve problems with money rather than with your brains.

• 33:55David Senra?

  Explain to younger entrepreneurs that are going down that path why that's not the right move.

• 34:00Speaker 01

  Well, for example, you're into B2B business, right? And then you kind of set up a company. You have your first sales, first, say, 1 million ARR. And then you decide to scale it. And then suddenly, you decide to hire expensive VP of Sales, who will hire, you know, like 50 salespeople to sell your product. You need to find a way to start selling your product cheaply, build a system. And then simply feed additional employees into the system. So you're always having a great payback. Starting big, hiring a very expensive VP of Sales, who will hire also a very expensive team, is a wrong decision.

• 34:41David Senra?

  Okay, so essentially, like, they remove the constraint from money. Therefore, they're not developing the skill set that constraints make you. If you're going to survive under this stuff of constraints, you actually have to be good. You actually have to be talented. You actually have to be resourceful. And they're essentially papering that with money. And it might work for the short term, but long term, they're going to get beaten by somebody like you.

• 34:59Speaker 01

  I mean, if we are in the same industry, then yes. But I mean, in many cases in US, it's not that competitive, right?

• 35:05David Senra?

  Wait, that's a wild statement. Why would you say in the US it's not that competitive? I feel other people would feel it's the most competitive environment. What do you see as a European?

• 35:13Speaker 01

  I mean, Europe is even less competitive.

• 35:15David Senra?

  Yeah, so you're saying it's not China?

• 35:16Speaker 01

  China is competitive, yeah. So China is 996, right? And then even if you are good in Europe or even if you are good in US, I mean, how can you outcompete the people who work nine to nine, six days a week, right? Plus, they have very good education, technical education. So it's very hard. When I started, I started in a working space with 140 companies. Within five years' time, only three companies survived. They all worked on the weekends. Within 10 years, only two companies survived, out of 140. So I think working on weekends is a must if you want to survive. Pure statistic.

• 35:54David Senra?

  Okay, so working seven days a week is one thing. But working nine to nine or 10 to 10, like, what is the actual culture?

• 36:00Speaker 01

  Well, I work like this, right?

• 36:02David Senra?

  You're the founder. I don't know a single founder that's like, no, I'm on PTO, like, I understand that. I'm talking about your...

• 36:09Speaker 01

  Yeah, my direct reports, like, absolute majority of them, they work like this, right? They might be like a bit less alignment in the, for direct reports or my direct reports. But still, I think out of all European companies, we're probably one of the hardest working. And I think we're also one of the hardest working companies, if you include US as well.

• 36:32David Senra?

  I want to know what you think, like, the people, the entrepreneurs that have this like California tech, like, culture and operating system, what do you think they're doing wrong? You said there's just too much money. They're not that competitive.

• 36:46Speaker 01

  No, everything else seems is there, right? There is an ecosystem. Talent is very good. You go to, you know, great universities. Plus, like, a lot of expats, you know, coming to study in these universities. People are rather hardworking. But the culture, when, you know, there is too much money, and then people spend, choose to spend a lot of money on the problems, I think it's wrong culture.

• 37:10David Senra?

  Because they're not actually solving the problem, the underlying problem?

• 37:13Speaker 01

  I think it's just a lot of waste, number one. And then you're not really developing yourself as an entrepreneur. It's so easy to kind of, you know, close the problem with the money. If you have unlimited number or unlimited amount of money, I mean, you just, you know, throw money here, here, here. But then you're not prepared for the future when, you know, for some reason, money can disappear.

• 37:33David Senra?

  That's a very interesting take. You're not developing yourself as an entrepreneur.

• 37:37Speaker 01

  Yeah.

• 37:38David Senra?

  Give me examples of how you developed yourself.

• 37:40Speaker 01

  Well, when we started, if you look at the unit economics of the business, we started with a negative gross margin. And the negative gross margin continued for next three, four, five years until we optimized it to up to 80% of positive gross margin. And then if you look at why is that, right? So in our business, if you look at Europe, everything is extremely kept and regulated compared to US. For example, interchanges, 20 basis points versus 100% in US. Credit card rates are kept in the majority of countries. Like, credit is very limited, right? You cannot really freely give credit to many people. It's very difficult to effectively set up a bank in Europe, going country by country. Because even if you have a banking license in Europe, you cannot be a primary bank,

• 38:24Speaker 01

  because with the regulation, it doesn't allow you to start issuing local accounts unless you set up a local branch of the bank.

• 38:32David Senra?

  You have to have a physical location.

• 38:34Speaker 01

  I mean, it's, you need to have an office. You need to have local connectivity, local regulation. And so also, you go country by country and it takes a lot of time, a lot of resources as well. So different languages as well.

• 38:45David Senra?

  And you had to do all of this?

• 38:46Speaker 01

  Yes, plus very tough employment laws in many countries. And US is very easy, right? I mean, it's like employment is will. In Europe, it's not like that. So you need to be very careful how you hire, who you hire. So all this together is actually produce environment which is not very profitable, right? And very difficult to build a company. And then even in that environment, we kind of succeeded, right? But then we succeeded because we spent a lot of time and a lot of energy and a lot of kind of, you know, brain power to optimize on every single problem. If I was to start the same business in Brazil or like in the US or maybe in other countries, in Mexico, certain aspects would be much easier. If you look at unit economics, credit is so much easier to give.

• 39:31Speaker 01

  Interchange is not kept. Technically, this difficult environment in Europe actually taught us how to build business in a very, kind of in a competitive landscape. You see what I mean?

• 39:45David Senra?

  Okay, so if you were surviving in this very difficult environment, now you have a skill set that people that did not have to go through that, and now you have to compete head to head with them in, let's say, like, America, they're going to be very hard to compete with. You're going to be very hard to compete with. Because they haven't developed the same skill sets and they didn't go through stuff you did. Okay, that makes perfect sense. I found one of my all-time favorite quotes when I was reading the book Zero to One. The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places. And they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their advertising platform. AppLovin connects you with over a billion potential new customers in mobile games. AppLovin allows you to capture undivided attention.

• 40:28David Senra?

  AppLovin ads are full-screen videos that are watched for an average of 35 seconds. That is retention that blows other ad platforms out of the water. And you can launch on AppLovin in minutes. You set the goal, and AppLovin achieves it. No complex setup, no expertise needed. And AppLovin scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. So you want to get started quickly before all of your competitors are on AppLovin. And you can do that by going to applovin.com. That's applovin.com. You've said some very interesting things about investors that I want to talk to you about because it's really important.

• 41:13David Senra?

  This show, the whole idea was just like, I think entrepreneurs are the most important people in the world. The idea that, you know, somebody has an idea, and it doesn't exist, and they, through determination, agency, you know, aggression, like, they make something that didn't exist, that started in their mind, real. And in your case, you have, you know, you're in 40 countries or whatever the case is, thousands of employees, how many customers? Tens of millions, like... From an idea that you had, you know, when you were, what, in your late twenties?

• 41:42Speaker 01

  Two to nine, yeah.

• 41:43David Senra?

  Yeah, it's absolutely incredible. I think that's a miracle to me. And yet, a lot of the discussion that takes place, that what founders say about investors in private, they do not say in public. And so, we were talking earlier, because I saw this clip of you, where you compared investors to football cheerleaders.

• 42:01Speaker 01

  Yeah.

• 42:03David Senra?

  Can you explain why you made that comparison?

• 42:05Speaker 01

  Well, basically, I gave you this history before. So, when I started the company, it was 12, 13 years ago. Back then, in Europe and in the UK, it was extremely difficult environment to raise money. Simply, there were not that many VCs around. And then, they were all more like private active guys, like extremely aggressive, extremely legalistic. So, to raise money, you had to sign a lot of bad conditions in your shareholder agreement, liquidation preferences, both seats, like, you know, reducing your voting rights as a founder, and so on. So, these people basically think that because of them, the company was kind of created because they gave money,

• 42:49Speaker 01

  and that they are entitled to less part of its success. So, that's the mentality of like, you know, quite a few investors, that invested very early on, like in my company, for example. I think it's kind of largely wrong, this mentality, because getting money from LPs is extremely easy.

• 43:11David Senra?

  Wait, getting money?

• 43:13Speaker 01

  Getting money from, because their business is very simple, right? Okay, they have LPs, they collect money from them, and then they invest in startups. And then, they have a business model of 220, right? So, it's so much easier compared to building a real operational business from scratch, because they never use their own money, right? They don't really need to work hard. I mean, there is competition, but competition is just, you know, for getting deals. So, I think their job is so much easier. That's number one. And then, number two is, back then, there was almost no competition compared to what is now in VC circles.

• 43:52Speaker 01

  And back then, there was basically this opinion that we, as VC, will help you run the company. The company will be successful, because we'll give you advice, you know, how to run the company. Reality, like, almost none of them, they ever build any company, right? So, they just raised money from LPs, they invested their money in many companies. And sometimes, they have both seats, sometimes they don't. But having a both seat doesn't teach you how to run a company at all, right? You're just observer. As a result, you have all these people with a lot of power, right? Because they give you money, they put some conditions in shareholder agreement. And then, they also have this mentality that they can't tell you what to do as a founder, right?

• 44:37Speaker 01

  And that's, in my experience, was very dangerous. And I had many cases in the past when certain VCs, I mean, the advice was simply wrong for the company. So, I think, you know, my advice to entrepreneurs would be, even if you raise money from VCs, try to pay a lot of attention to shareholder agreement, right? And then, to ensure that they're purely financial players, that they have no right, no voting right, no seat at the table at decision-making, super important. Because if something goes wrong, right, you effectively have cheerleaders, you know, who look at the match. And then, they try to play this match, you know, instead of professional players.

• 45:21Speaker 01

  And that's, you know, always disaster.

• 45:23David Senra?

  Why did you say some of the advice they gave you was dangerous?

• 45:26Speaker 01

  I mean, one of the advices was, okay, you know what, you need to hire experienced executives. You know, now it doesn't work. When I started, first five years, had probably 50-plus experienced executives. I kept only two, right? Within one year, it just doesn't work. Why is that? Why experienced executives, you know, almost now work out? It's the same as football players, right? They have their prime. Like, reality, I mean, there is a prime age. And like, it doesn't mean they became less good. I think they changed their priorities, right? Plus, probably they became less good, plus, things changed, times changed, competition changed.

• 46:07Speaker 01

  So, people who were good before, who had, you know, past track record of being good before, they might not be good in your company for the future, that's number one. Extremely naive to think so. And then, number two, there is also negative selection bias, right? If you think at people who are extremely good, like, for example, how I hire people. I look at their track record of achievement, and they need to be top 1% of, compared to their peers in terms of their career progression. And then, I try to pick up them when they are 25, 30 years old, so they continue on the same trajectory in Revolut. Whenever you're hiring experienced executives, reality, there is a negative selection bias,

• 46:50Speaker 01

  because people who are extremely good, they already made it, right? And they either probably running their own businesses, or they retired or something else. And then, people who ever have this extreme career progression, who you hire as experienced executive, they just seem to be definitionally less good compared to people with extremely fast career progression, who are already not in the market.

• 47:11David Senra?

  Okay, so you found, basically, the advice they gave you to be completely the opposite of what you should have been doing, based on what you just said?

• 47:16Speaker 01

  Yeah, exactly.

• 47:17David Senra?

  Okay.

• 47:18Speaker 01

  And then, yeah, a lot of advice, when, you know, they think that certain people in the company are good, because they're experienced. Well, I think I'm really opposite. And then, one of them, he's actually quite a good investor. He was forcing me to fire my best person, because he was too hardcore. So, a lot of...

• 47:40David Senra?

  Who did they take wins?

• 47:41Speaker 01

  Yeah.

• 47:43David Senra?

  This guy needs to work nine to five, okay? So, how did this, like, tell me more about this? Like, you obviously fought back, the guy didn't get fired, what happened?

• 47:50Speaker 01

  I mean, of course, of course, I didn't fire him. I said, no, that's it.

• 47:55David Senra?

  Okay, but that's it?

• 47:56Speaker 01

  You take it all in, yeah.

• 47:58David Senra?

  Did you have a fight with the investor? Like, what happened?

• 47:59Speaker 01

  Yeah, I had it, yeah.

• 48:00David Senra?

  Yeah. And so, how'd you settle it? You had all the power? Like, what happened?

• 48:04Speaker 01

  I fought it with him, and then, yeah, even though they had a collision of, you know, many investors, but, you know, they stepped back.

• 48:13David Senra?

  Okay, so how did you get them to step back?

• 48:14Speaker 01

  Well, I think, you know, pretty early on, I realized that, like, quite a few VCs, they are not very operational, and they can be extremely dangerous for the company if they have, you know, power. So, every single investment route, I just, you know, removed VCs. So, I took, you know, both seats. So, now, I don't have any VCs on the board. I think that's the best. You always need to have operators rather than VCs on the board, who are people who actually build businesses, who know how to do things.

• 48:45David Senra?

  Your mindset reminds me a lot about Travis Kalanick from Uber. He was on the show, and I think it was like, one of the clips that went, like, got millions and millions of views, was on this, where he just actually thinks that, like, just doing no harm is an excessively high bar for a VC. He said something like, over 90% of VCs, they can't even not fuck things up. Not much, he's like, not even be helpful, they just can't not fuck things up. And then, he said, like, 1% in his experience have been actually helpful. And his thing, which he would tell all entrepreneurs, I think he said on the show, is just like, tell them to give you the money and go away. That's how you think.

• 49:18Speaker 01

  I mean, that's the best, and yes, ensuring shareholders agreements, they just don't have any powers.

• 49:23David Senra?

  Yeah, I will make you richer, you just leave me alone, is basically...

• 49:27Speaker 01

  Yeah.

• 49:28David Senra?

  You also set up your own, I don't know if you call it a VC fund?

• 49:31Speaker 01

  Yes, it's a VC fund. So, basically...

• 49:34David Senra?

  What's it called, first of all?

• 49:35Speaker 01

  Quantum Light.

• 49:36David Senra?

  Okay. Explain what you're doing. This is funny. I just picked up on this now, because you were analyzing, like, the legacy banks. You're like, I'm not, like, look at all the obvious mistakes they're doing. Some of that came through experience, right? Hard fought experience. The way they're doing it doesn't make sense. I'm going to show you a different way to do it.

• 49:52Speaker 01

  Yeah, basically, the idea was in, I think it was 2022 or 2023, when I came out with this idea. And the idea came actually from my personal pain, from my fight with investors. It was actually one of very big names. They entered, or they invested in Revolut. It was, I think, just after COVID, during COVID, when all the stocks went up. They invested at 33 billion valuation. So, basically, they had legal right to, not to allow us changes in shareholder agreement, because they were like, you know, less investor, blah, blah.

• 50:30David Senra?

  So, you had a bunch of these bad experiences with VCs. You're going to start your own VC fund. Explain how your fund is different.

• 50:36Speaker 01

  Yeah, VC fund, so basically, I had this fight, and then, you know, I was extremely pissed off. And I thought, you know what, I also need to compete with VCs in their business, because they're so bad. And out of my frustration, I started the fund as well. And then, the idea was, basically, to invest not based on a human judgment, but based on their science, and based on their machine learning models. Statistical investment, that's number one. Number two, actually help founders with operational advice, playbooks that we developed, how to hire people, how to do performance management, how to do product expansions, and then, finally, help them sell their product as well. Because we are a large enterprise, we are buying, you know, from a lot of vendors.

• 51:17Speaker 01

  Having us as a client helps to sell into other enterprises, or potentially sell to our...

• 51:24Speaker 01

  Our customers as well, our Revolut customers. So I think overall, plus my personal advice, obviously. So I thought overall, the package was so much better compared to purely financial players, VCs.

• 51:37David Senra?

  You just said your personal advice as well. So like, are you just making concentrated bets? Is this like another thing where you're doing 20 or 50 at a time? Or you're just like concentrating money behind a handful?

• 51:47Speaker 01

  It's again, it's statistical investment, right? It's based on machine learning models. So the way it works, a model selects 30, 40 companies to invest over two, three years. And then puts equal amount of money in each, in each startup. So we started with a fund, a series B fund. So it's close, it's fully invested. It produced now like 56% IRA.

• 52:10David Senra?

  And you started like 250 million or something, right?

• 52:13Speaker 01

  We started 250 million, yes. For the first fund, so now it's like 56% IRA. We started investing second fund now, which is 500 million. So it's series C now, companies, again, based on the model, also very high return. I think it's top 5% of funds in the world now in terms of returns. We'll probably do a large fund as well for late.

• 52:34David Senra?

  Where's the money coming from?

• 52:35Speaker 01

  It's different LPs. So initially I started 20% was my own money. So I put 20% of it or 25% of it. And then the rest came from other founders. Second fund, we already got quite a few institutional players as well.

• 52:49David Senra?

  I've never heard somebody building a bank compare themselves to like Meta. So I'm going to get into that in one second. But you don't do anything like fucking half-assed or like small, right? You're just like, okay, I started 250. Now you're just going to see how far you can take this. This is going to be like a, you know, giant like Renaissance technologies kind of thing?

• 53:06Speaker 01

  Well, obviously, the goal is to build something large like BlackRock, but in private markets. Again, we'll see if we, if we get there. But I think idea and approach makes sense because like you now have a lot of data on startups. And then you can apply all these machine learning models to identify the best ones. And then models pretty sophisticated. So for example, one of their signals we look at, we look at who invested in the company? Who is investing? And we look, we look not only in the fund performance, who invested in the company, but down to the partner level. And then we'll also look at the age of the partner.

• 53:47Speaker 01

  And then there are very interesting things when you look at this variables as age of the partner. And then you'd rather not invest in companies where partners who are investing are older than 40 years old. So the best cohorts are 30 to 40 years old of young partners who are investing. They're, they're, they're the best at identifying good companies. Same, same as with executives as well. Yeah. So there's certain prime age, what you need to look at. Again, there are many variables, right? Age is not only one thing, right? But statistically speaking, that's what you need to look at.

• 54:23David Senra?

  And is this a separate company from Revolut?

• 54:24Speaker 01

  Yes, completely separate.

• 54:25David Senra?

  Okay, so completely separate. And you have somebody else running it?

• 54:27Speaker 01

  Yeah.

• 54:28David Senra?

  Okay. You said something about helping them sell their product as well. Talk about like the, the early days of like marketing. I heard you spent nothing on marketing for the first like five or seven years.

• 54:39Speaker 01

  Yes, first seven years, it was completely organic. Plus COVID also hit and 2021, I remember a company was six, seven years old. COVID hit and like our revenues went down, I think 70%. And back then, we were not in banking business. We were still kind of, you know, e-money with a travel card. So it was very heavily related to, related with travel business. And then as COVID hit, travel business completely gone. So we had to survive or somehow we kind of optimized a lot during that time.

• 55:17David Senra?

  Okay, but explain you, you, why you decided to start spending money on marketing? Cause like, I go to Europe and it's like, I feel like I'm blanketed with your ads. I see your stuff everywhere. Now it makes perfect sense after talking to you. It's not like, oh yeah, I'm going to do like a little bit here, a little bit there. It's just like, once I find something works, I just, you know, essentially go scorched earth on it.

• 55:36Speaker 01

  Yeah, basically, the way I think about marketing, so I haven't done it for six years, seven years. I just didn't have time, plus we didn't have enough resources. But then when I started doing it, I, I went really, really deep. So basically I started with who we need to hire to run a proper marketing machine. Not like here and there, but scientifically, right? Where we need to invest money in marketing with a proper return. And then my idea was very simple. Who are the companies with the largest marketing spend? And who are extremely cautious with their marketing spend? Where is, you know, very low margin of error? And back then it was gaming companies, right? Gaming companies had a lot of marketing spend, performance ads. Or certain, certain companies were also doing a lot of above the line campaigns.

• 56:21David Senra?

  The gaming companies doing well or not?

• 56:22Speaker 01

  Gaming companies were the largest spending companies in the world on marketing. So if you look at their budgets, it could easily be, you know, one billion plus.

• 56:33David Senra?

  I know a lot of them are going to AppLovin.

• 56:37Speaker 01

  Yeah.

• 56:39David Senra?

  Where AppLovin is going to print like six billion in profit this year.

• 56:42Speaker 01

  Yeah, it's like amazing, yeah, yeah, yeah. So I ended up, you know, hiring, you know, extremely good person who, who started running marketing at Revolut. And then we also then went very deep.

• 56:53David Senra?

  Before I let you go on, like, am I understanding you're, so you're studying how gaming companies are advertising? Or you just wanted to know what they were spending?

• 57:00Speaker 01

  The idea was who are the best professionals? Who know how to spend money in marketing, right? And then the idea is that these professionals will work in gaming companies because they have the largest budgets.

• 57:12David Senra?

  Got it.

• 57:12Speaker 01

  So that's how I got my first, well, actually second, first one. I fired, he wasn't for big gaming.

• 57:18David Senra?

  Probably VC's cousin asked you to hire him or something.

• 57:21Speaker 01

  And anyway, we went very deep into, you know, performance marketing, LTVs, payback. And then recently we also started doing, because we, we got a banking license. And then what we realized, or what I realized quite early on is all about trust, right? If you're a digital bank, you don't have branches, people don't see you physically. They trust you less by definition compared to HSBC, Lloyds, JP Morgan Chase and so on. And then, okay, how you build trust? How you arbitrage effectively performance marketing spend? Because in performance marketing spend, you pay per impression. And then there are a lot of spaces in the physical world, which you can buy, which will also produce impression.

• 58:01Speaker 01

  But at much cheaper price compared to the digital world. So for example, we bought probably now 50% of all airports in, in Europe, right? Like in, almost 50% of airports in Europe will now have ads, right? Again, because of simple math. How many times a year people travel, right? How many times a year they're in the airport? How many impressions we produce? How much will it cost us, right? And there is arbitrage to performance marketing. And then similar ideas to, to other places in physical world. For example, we, we started now doing equivalent of legacy branches. What we call a cold rev store, right? Rev experience. So we set up first, first shop in Barcelona.

• 58:44Speaker 01

  Again, arbitraging impressions of in physical world versus the digital world. Because how many people pass every year our shop?

• 58:54David Senra?

  What is the job though?

• 58:55Speaker 01

  I mean, it's more like Revolut experience. It's not a real banking legacy branch. You come in and then you experience all our products. It's all done in a very modern way, like Apple type of store, but for, for, for Revolut. And then the idea is that we just generate impressions for people, which pass the street who come, come over as well.

• 59:15David Senra?

  Like a lot of companies advertise in airports and it's just like, oh, it's like, it's up on the screen maybe for 30 seconds or whatever. It might be one billboard. It's like, you walk, I'm walking for like two minutes and it's still, I'm like enclosed. There's like a huge, like I'm in a cocoon of Revolut ads. How did you come up with that idea too, though?

• 59:31Speaker 01

  Just buying for airport.

• 59:33David Senra?

  I can't think of another company that I've seen do this. And I think like, it's actually a really smart move. More people should do that. It's like, I'm, there's, it's, I may not use your services, but like, I definitely know you exist and what you do. Like you essentially are aiming for ubiquity is the way like, I was thinking about that when I was walking through the airport.

• 59:48Speaker 01

  Yeah, in my mind, we're just in our paying for impressions much cheaper compared to in physical world, compared to digital.

• 59:53David Senra?

  It's not just like paying for impressions though, because like, you know.

• 59:56Speaker 01

  I mean, building trust as well.

• 59:57David Senra?

  I hear the trust thing was actually one of the most interesting insights. And you said a lot of interesting shit today. But like, I think there's something about the ubiquity of it. It's not just one sign saying, you know, this is Revolut and this is what we do. It's like entire hallways, like you're just walking and I'm being surrounded by this. It's like, I'm telling you, I can't think of another company. This is before I even thought of having you on the show. It's like, this, this is actually a really good idea. I'm not going to walk past this and not know this company exists. One of the last things I want to talk to you about goes back to this like grandiose like ambition you have. I think people that may have not known you before this, pick up on your like super competitive. I mean, I love the fact that you were like, kind of got pissed off of VCs, like, all right, well now I have to compete with you because you made me so mad. But I've never heard anybody else building a, a bank.

• 1:00:42David Senra?

  One, you said there's really no true global bank and you want to be the first one. So I like the level of ambition. But then you compare just like, we want to be a global technology company. And I think you may have mentioned a few companies, but the one I remember was like a global technology company like Meta. Explain that, the connection between what you're building, which made people think, oh, maybe like even a boring, you know, business has been around for, banks have been around for a long time. But that's not the way you're, you're viewing what you're building.

• 1:01:10Speaker 01

  Yeah, basically, our idea and the goal is to generate enough cash flow from this business to be able to fund like really big bets, which can consume a lot of capital, right? Like for example, I would love to go into LLMs as well to build our own models. And we, we in fact, you know, build our own transactional model called Pragma. So it's LLM, but all transformer based on transactions rather than words. But I would love even to go deeper, right? To, to kind of build our own data centers, to train our own model, all the models to kind of, you know, to do a lot deeper tech compared to what we do now.

• 1:01:53Speaker 01

  But then, you know, it, it requires a lot of investments, right? And a lot of cash flow. So basically to build a large business so that it produce so much cash flow, that it is possible to fund some kind of, you know, moonshot bets, which might not necessarily produce P and L in the next, you know, three, four, five years.

• 1:02:15David Senra?

  To like financial services?

• 1:02:17Speaker 01

  Yeah, most likely, yeah. Because I mean, in financial service, I mean, what else can we do? I mean, almost everything is invented already. So we just like ultimately, we're just rewriting legacy products, right? So we're building the same financial products, but we're building them much cheaper and much nicer compared to old ones. Plus, we're putting them under one umbrella in one app. So it's all very convenient. Plus, we also innovate on top. So they are all kind of interconnected with each other, talk to each other. But ultimately, it's the same old banking, but done in a new way, right? So what I really love to do is to to to go out of it and then do something that was never done before.

• 1:03:00David Senra?

  Inside the industry?

• 1:03:01Speaker 01

  In all industries, yeah.

• 1:03:03David Senra?

  All industries?

• 1:03:04Speaker 01

  More like in tech industry.

• 1:03:06David Senra?

  Have you like shared publicly like some of these like moonshot ideas? Or you're like keeping it inside the company like?

• 1:03:11Speaker 01

  For now, all these ideas I just have in my head. And then I just know that we don't have enough resources and time to to to build them. But I hope in three, four, five years' time, we might have enough resources to to build them. Pragma is a it's a foundational model trained on our transactional data. As such, we have 30 million transactions every day. So we have billions and billions of transactions. And then it is possible effectively to train a transformer-based model on transactions. And then use it in like almost any aspect of our financial services. It can be anti-fraud model. It can be a credit model.

• 1:03:55Speaker 01

  Partition can be investment model and so on.

• 1:03:58David Senra?

  When you launch here, why would I want to use your bank as opposed to like JP Morgan?

• 1:04:04Speaker 01

  So JP Morgan is very local, gives you US bank account plus US-based products. If you ever have exposure outside of US, we're a banking partner because we do everything what JP Morgan does for you in the US. Plus, on top of it, we provide all the global assets. You can have global accounts with us. So being in the US, you can open an account in Europe, Australia. You can send money instantly between all countries and so on and so forth. So instead of giving you local-based financial products, local-based benefits with points, we give you effectively global exposure. So that's our proposition. Plus, on top of it, it's much nicer in terms of interface, plus much cheaper compared to JP Morgan.

• 1:04:48David Senra?

  What's the difference where that you make money compared to the way they make money?

• 1:04:52Speaker 01

  They are much more credit focused compared to us. We are much more substitution focused, plus transactional business, plus commission focused.

• 1:05:00David Senra?

  What are you doing on the credit side? Are you just selling all that off?

• 1:05:03Speaker 01

  Credit, they just send the products, create cards and loans. Selling them off or not yet now?

• 1:05:07David Senra?

  Okay.

• 1:05:07Speaker 01

  Because it's still a very small portion of our balance sheet.

• 1:05:10David Senra?

  So you think your advantage relative to the legacy banks is you're more of a technology company?

• 1:05:14Speaker 01

  Our advantage is tech. And then if you think about banks in the past, whenever they expanded country to country, they just bought other banks. As a result, they have many systems in many countries. They don't really control anything to produce any report. Takes months to extract data from from different systems. Our advantage is that we have just standardized one system, one ledger across many countries. As we go from one country to another country, we do not need to write things from scratch. We just adjust configuration of our software. And then, for example, onboarding UK, we adjust selling configs to change onboarding to US or to change onboarding to Mexico and so on. So it becomes in a one product, which is highly configurable.

• 1:05:58Speaker 01

  We do not need to build another bank in another country from from from scratch. As you do it, you obviously need much less people to maintain it compared to 10 banks in 10 countries. As a result, there is an economy of scale. So we can sell products much cheaper compared to to other banks. Plus, the whole institutional knowledge, how you build product, how you do marketing and so on. So you apply the same knowledge in in any new country. And I think over time, it can become like an unstoppable machine, right? Because it provides much better products and services at a much better price compared to local banks.

• 1:06:33David Senra?

  Over time, I'm building an unstoppable machine. That's a great place to end. Thanks, Nick, for the time.

• 1:06:37Speaker 01

  Thank you.

• 1:06:38David Senra?

  It was awesome. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.