#473 Everett Cook on Building A Modern Fintech

Everett Cook co-founded Rho Business Banking to fundamentally change the way businesses manage their finances. He also previously spent time as a macro hedge fund trader. In this conversation, we discuss the rise of fintechs, how Rho has navigated the pandemic, why they focus on high growth businesses, and what Everett is able to apply to entrepreneurship from his macro trading days. ======================= OKCoin.com is the leading crypto exchange for both beginners and experienced users. You can fund your account in under 2 minutes, and get access to the most advanced trading engine, all while paying the lowest trading fees in the industry (0.1%). Visit www.okcoin.com/pomp and open your account today. ======================= Own crypto in multiple exchanges and wallets? Sync them to CoinStats so you track and manage them from one place. Track 8000+ coins and 300+ exchanges all from the Coinstats platform. Try it for free or go to coinstats.app/pomp and get 40% off your premium subscription. ======================= Did you know only 1% of day traders actually turn a profit? So why are so many of us mistaking picking stocks for serious investing? You can’t control the markets, but you can control your risks. So how do billionaire investors control their risk? They invest in blue-chip art. If that sounds unusual to you, you’re not alone. But the ultra-wealthy have been investing in art for centuries. And since 2000, art has outperformed the S&P by an incredible 180%. Just a few years ago, a single work sold for $450 million! Imagine... Being able to invest in the very same paintings as millionaires and billionaires, at a fraction of the cost. Masterworks.io is an exclusive platform that makes it as easy as trading stocks online. And the best part is: you don’t need to know anything about art. Their experts will create a custom portfolio to meet your investment needs. With Masterworks.io you don’t have to choose between big risks and big returns. Sign up today, select PODCAST and you can skip the 70,000 waitlist to get first dibs. Just go to www.masterworks.io and select PODCAST.

• 0:02Speaker 00

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Everett Cook co-founded Rowe Business Banking to fundamentally change the way businesses manage their finances. He also previously spent time as a macro hedge fund trader. In this conversation, we discussed the rise of fintechs, how Rowe has navigated the pandemic, why they focus on high-growth businesses, and what Everett is able to apply to entrepreneurship from his macro trading days. I really enjoyed this conversation with Everett, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is OKCoin. There are a lot of crypto exchanges for us to choose from. Whether

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• 4:28Speaker 00

  Masterworks.io, use promo code POMP. All right, let's get into this episode with Everett. I hope you guys enjoy this one.

• 4:37Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 5:08Speaker 00

  All right, guys. Bang, bang. I've got a very special treat for you today. I've got Everett here with me. Thank you so much for doing this, sir. So let's jump into this and tell us kind of your background. How did you get into the finance world? And then we'll get into building growth.

• 5:22Speaker 02

  Yeah, totally. So I started out when I was in college. I was really interested in markets. I started a couple of companies when I was younger and then started trading stocks and loved like that world. Left college, went into investment banking. I didn't really know what, you know, the difference between investment banking or trading or, you know, anything was, but this, it was on Wall Street, literally. It was, I went to Deutsche Bank and spent about two years there doing, doing investment banking. During that period, I started in 2007. I left in 2000, in 2009. During that period, like the great, you know, the great financial crisis happened. And what was like really interesting to me or what was like really sort of surprising to me was how few people, you know, understood what was happening even while it was happening,

• 6:07Speaker 02

  even inside, you know, one of the largest investment banks in the world. And at that point, I was, I got really interested in global macro. And I started reading what, you know, what Peter Thiel was writing and, you know, and some of the other like luminaries in the space like Stan Druckenmiller and other people and, and felt like these were the people that really only got, the only people that really got it, that understood what was actually happening at the time, not even like in the future. And that's what I wanted to do. I realized that. And so I went to, I left Deutsche, I went to SAC Capital, worked for, actually for Dan Tapiero, who's on the show recently.

• 6:45Speaker 02

  And then spent a couple of other years at other hedge funds, leading and growing research and investing for, for, for kind of managers in that space.

• 6:53Speaker 00

  Got it. Dan is fantastic. He came on and gave me the hard pitch on the gold and Bitcoin both. So he definitely is great. So after you did that, you eventually end up teaming up with a partner and you start Rode. Tell us a little bit about just what the impetus for the idea was.

• 7:11Speaker 02

  Yeah, I mean, it was it was pretty simple at the time. It's gotten more complex, but it was really that, you know, that fintech had been going after the very bottom of the market for a very long time. Basically, since fintech had started. If you think about fintech kind of starting in 2010, you know, primarily on the consumer side, it was like companies like Chime that went after, you know, the lowest end of consumers. And on the business side, too, it was companies like, you know, all like the lending, the lending networks that that serve businesses were generally going after like very small kind of mom and pop type businesses. And I think there's just this assumption in the market that if a company is big, whether they've raised venture capital or they have a lot of people, they have some sort of operational complexity, that because

• 7:55Speaker 02

  they're a good client of the bank, they're generally happy. The bank is, you know, is taking care of them. And that was something that we thought was just fundamentally wrong. We thought that actually like the companies, the bigger they were, actually like the more problems they had, the more complexity they had, the harder it was to be like really good at servicing them, and the more technology that they needed to do better. That was sort of my top down, you know, 30,000 foot view. I came in from as a like investor type. And my partner Alex, who I teamed up with, was an operator. He was chief product officer at a company called List, which has, you know, a couple hundred people between New York and London, and it scaled a couple of other companies in the past. And he would hit these growing pains every time he came into a company and, you know, took it from 30 to, you know, 100, 200 people.

• 8:38Speaker 02

  So our perspective was that we can fix that and that this is like actually the best way to, you know, go into this market that's $120 billion market that is pretty commoditized. And but has like a lot of room for growth if you can like move past the basic product.

• 8:55Speaker 00

  Got it. And so talk a little bit about as you guys have started building the business, it seems like you've got a ton of different kind of product lines and have really built out a pretty compelling, you know, solution for these types of high-growth businesses. What does that look like in practice in terms of the various touchpoints you have with the customer?

• 9:11Speaker 02

  Yeah, I mean, so we started out just building the basic like banking sort of core infrastructure, right? Checking account, we have a treasury management product and a card product. These are kind of like the building blocks for everything else that came after that. And then we started going past. So like building, building a comprehensive like budgeting platform that allows companies to set, you know, quarterly, annual budgets for different lines and attribute all their expenses to those. You know, deeper syncing with accounting, that way everything kind of is live, real time, user management, accounts payable, like there's a, there's a lot in the product. You know, not every company uses everything and that's kind of the point. It's meant to be kind of continue to grow with you. But,

• 9:52Speaker 02

  you know, the, our perspective is always like that, that, that the financial services are, they need to be best in class, they need to be priced competitively. But fundamentally, like what, what matters is like the stuff that actually helps people get their job done every single day. And so that's where we invest all our time. And as we grow, like, you know, we think about what do we add that's adjacent to our product that, you know, CFOs and finance teams are using every single day that's interfacing with banking. And that's where we'll continue to grow. I mean, we just launched accounts payable, which again, it always blew my mind that that was like a separate product to begin with, that a company like, like Bill.com, for example, can be so big, performing such a, you know, discrete function. So that's, that's kind of where we're headed.

• 10:36Speaker 00

  Got it. And why the focus on those high-growth businesses? Like, there's tons of checking products, there's tons of treasury management products, but like, you're not only differentiating in some of the features and kind of the efficacy of the product, but you're also specifically focusing on a certain part of the market. So like, how do you think about that market?

• 10:58Speaker 02

  I mean, what we thought, we thought very early on was like, the market does not need another checking account, right? The market does not need another bank account. Yeah, you can do low fees and all that stuff. That's been done 100 times. Not to say that someone won't make money doing that, but that wasn't the game we wanted to play. You know, what the market did need was like, companies need help as they grow, and they need help from a personal level, and they need help from a technology level. And banks weren't automatically overnight going to become great at building technology and software. Like, they're not, right? Like, most of the software that you buy from a bank, or the software that you rent from a bank, I guess, is like FIS or Fiserv, right? It's built by like, one of the core companies, not even built by the bank. So, we're not really competing with them on that level at all. We don't feel like we really compete with anybody on the

• 11:43Speaker 02

  software level. We compete with banks on the, on the product level, but we're, you know, generally better priced than them to begin with. The, so, I mean, that's, that's sort of how we, you know, what we try to build in terms of like, thinking about high growth customers and, and why we go towards them. It's actually more that they come towards us. You know, we're, we're open to anybody. But, like, I would say, like, we're not the best option if you're a company that's just getting started and you need a basic checking account. Tons of people that can do that for you. As you start to get bigger and bigger, and have more people and more complexity, and need an all-in-one solution, like, that's where we're the best. And, and that's where we will stand against anybody in the market, and, and win. And so, that's sort of how we, how we got there. It's not, we don't have

• 12:27Speaker 02

  an industry-specific vertical. We're not like, banking for startups, or banking for econ, or banking for, you know, like, marketing, or banking for plumbers, like, whatever. You know, there's this big thesis out there that, like, there's going to be all these banking for companies. Like, I, I like, I strongly reject that. I think it's way too hard to build. I think it's really hard to be really excellent at this. And I don't think there's going to be 1,000 companies that are excellent at it.

• 12:49Speaker 00

  Yeah. And help me understand, like, if I'm a startup founder, you know, I start out, there's two or three folks on my team, we start building, we hit this kind of inflection point, we start to scale, is it difficult to get folks to kind of transition from whatever their original banking service was to you? And kind of, how do you think about, you know, is a...

• 13:11Speaker 00

  Somebody who doesn't appear to be a competitor because they're just so far, you know, in a different part of the market, can they basically entrench themselves and make your job harder? Or how do you kind of convince people to basically, you know, abandon the solution they started with and really move to you guys?

• 13:27Speaker 02

  It's like, it's one of those things that it's actually not as hard as it sounds. People like, people do build it up. They're like, ah, like switching banks is such a pain. Like, and it's, you know, it's like, if you're big, it's like an hour of work. And if you're small, it's like 20 minutes. Like, it's, it's really not that bad. We have a team that is here to actually help them transition. So, you know, companies come to us and they want help moving all their stuff, we'll do it for them. But, but from, no, I mean, it's, it's a pretty open ecosystem. You know, banking is like, is, is very, is in a lot of ways, very low tech.

• 14:04Speaker 02

  And so from, it's not that bad, but it is like something that people overstate all the time.

• 14:13Speaker 00

  Got it. Having COVID-19 and the pandemic, the macro environment, like all this kind of craziness and uncertainty and chaos that happened in 2020, how did that affect your business? Did it accelerate? Was there some obstacles?

• 14:28Speaker 02

  It definitely accelerated. I mean, I think in two ways, both in terms of, you know, new customer growth and existing customer growth.

• 14:36Speaker 02

  Like, we saw the companies on our platform, some of which, you know, grew 200, 300% during the crisis because they were high-growth companies to begin with, or companies that understood technology. Again, whatever vertical you're in, you know, did pretty well through the crisis. And it was generally companies that were slower, attached more to the physical world, bricks and mortar, stuff like that, that, you know, unfortunately, like had a really tough time. So, yeah, you know, it definitely like helped our companies and our companies have, I think, you know, emerged stronger in the past year than where they were before.

• 15:06Speaker 00

  Got it. And then in terms of where you guys go from here, right? What is kind of the product roadmap look like? And how do you kind of see the business evolving?

• 15:17Speaker 02

  I mean, I don't want to give too much away in terms of product roadmap because I know our competitors watch everything we do these days.

• 15:23Speaker 00

  Tell us all the pieces, come on.

• 15:25Speaker 02

  But, you know, look, I mean, we're trying to just continue to make like the CFO's life simpler, the company's life, the employee's life simpler. And work better together with money. That's our mission statement. That's our ethos is helping people work better together with money. And, and so we will continue to build product, you know, where there's this fragmented, verticalized ecosystem where CFOs generally have to juggle between seven and 10 products. Like we want to make that ultimately one or two. And so we will just continue to move down that line at a measured base. And try to, again, just add value to our customers and bring the ecosystem together. You know, there's a, the Ben Horowitz or, or Rick Andreessen, I forget which one of them, quote, right?

• 16:05Speaker 02

  But that everything is either bundling or rebundling, unbundling or rebundling. We're very much in the rebundling business. And I believe that the time is now for that. You know, I think it's all, everything about startups and about, especially about that is about timing.

• 16:21Speaker 02

  And, and so, yeah, so we'll, we'll keep, we'll keep rebundling.

• 16:24Speaker 00

  Got it. You mentioned CFOs and it's interesting that you specifically target one person in the executive team of these companies. And you kind of know, hey, look, that's the person that we're trying to make their life easier. Talk a little bit about them as customers. Like what are some of the things that maybe you guys understand that would be surprising to people who don't spend all day thinking about, you know, making a CFO's life easier? Are there certain complexities or obstacles that they deal with that were surprising? Or maybe some, you know, anecdotes in terms of things that CFOs have said to you in the past that, you know, really kind of seared in your brain and you guys remember?

• 16:57Speaker 02

  Yeah. I mean, I think, you know, for us, like our customer is the whole company, like it is, you know, from the employee, the employees all the way up to the CEO. But the CFO is really the decision maker and the buyer for us. And he's the one that's, you know, that's evaluating all the service providers and choosing Ro versus others.

• 17:15Speaker 02

  I think it's, I think there's two things that really like that motivate, you know, that person when it comes to this particular space.

• 17:23Speaker 02

  One is like, They understand that like new product is perfect and that like and that having like a level of support and a person behind that is incredibly valuable. There was a really dumb banker saying that like when I met with this like, you know, like $50 billion bank in the Midwest, we were like looking for our partner bank. They were like, yeah, see if it was just one neck to one neck to strangle. Just like a really off color, odd, I guess, you know, old school banking thing. I haven't been in the banking world for very long, but uh, but it's kind of true. You know, they, they want that person because it's never going to be perfect. They're always going to have questions or there's always edge cases. Banking is always a game of edge case. That's one.

• 18:07Speaker 02

  Two is like, you know, every company is a little bit different and being able to allow them to set up their integrations, the way they run their accounting, you know, the way that they do budgeting, like all that stuff. There's no, we start, you know, we kind of started out with a, this is the way it should be. And that's kind of like a great ethos from a product management perspective, right? Like, don't try to give the customer too many choices. That's not true in this world. You want as much flexibility as possible because every one of these customers looks a little bit different and we're not going to ask them to change the way that they operate.

• 18:38Speaker 00

  Got it. And are you able to do anything in terms of, once you have a business on as a customer, you pretty much have access to, you know, incredible data. You understand who's growing, who's not growing. But really what you have is you've got an ecosystem of customers. And do you guys do anything with, you know, kind of putting customers together or leveraging the growing customer base you have? Like, how do you think about the customers in a, in a kind of totality of the actual customer base? Is there anything there that you guys have done?

• 19:09Speaker 02

  Yeah, I mean, we try to, so we'll continue to like productize that more, but we try to put our, our customers in specific verticals together with, you know, the same account representatives.

• 19:20Speaker 02

  And he's able to connect them all the time and connect them, you know, if he's covering e-commerce or another one's covering specific areas in venture, being able to connect them with each other, connect with investors like that are also on our platform. So there's a, you know, similar to like, I guess what some of the more established banks will do, you know, for for some of their clients, we embrace that as well. And so that is, you know, that is where we are today. I think as we grow, yeah, like we'll look to add more technology around that and ultimately like formalize that. But but today it is, you know, it is an incredible collective of like, super high growth, super interesting companies that are doing, that are doing cool stuff. And they generally want to know each other. So we're happy to facilitate that.

• 20:04Speaker 00

  Got it. Makes sense. What's been the most surprising thing, you know, since you started the business?

• 20:10Speaker 02

  I think the most surprising thing has been like, I don't know, I guess, I mean, I guess, like, I guess the most surprising thing, or for me, coming from like a non-tech background, has been just like the the product development cycle. And the fact that like, you, you know, there's truly like no shortcut, like it is time times people. Add more people, you can do it faster, take the same amount of people, the, but that is it. And so you need to be like really disciplined and parsimonious in terms of your choices about what you're going to build. Thankfully, I have like an amazing product manager as a partner who, you know, has taught me that lesson over and over again. Otherwise, I would have, it would have been harder. But, uh, but yeah, that's been like, kind of the most, most interesting

• 20:54Speaker 02

  thing, I think, for me, coming from the other side of the universe.

• 20:57Speaker 00

  Got it. And then what's been the one thing that maybe you've really said, hey, you know, we want to accomplish X, but you guys haven't been able to do it yet, whether it's just, uh, we're not there yet in terms of building the product, uh, there's some other limitation, maybe even regulation or whatever it is. Is there something that sticks out in terms of you, you guys are almost chasing it, but haven't yet done it?

• 21:17Speaker 02

  I mean, there has honestly, there hasn't been much like we, you know, we've always like said, I guess what this is another thing that's been surprising is like that there's kind of nothing that you can't do. Like, we would always start with something like that and then work backwards and find a way to do it, whether it's through a partnership or on our own. You know, it's just more that you can't do everything all at once. But I haven't found anything that it's like, man, I wish we could do this thing that JP Morgan can do. You know, it really is just a function of time. I think for us, it's like, you know, we want to be, you know, we want to be a multi-billion dollar institution. We think we'll be there by the end of this year. And that is like what we're chasing today.

• 21:57Speaker 00

  Got it. It makes a ton of sense. Bitcoin, crypto, blockchain, kind of this whole decentralized digital world is now getting tons and tons of attention. You guys being in financial services is somewhat tangentially related. How do you think about that space? And are you guys doing anything there? Or, you know, will you do something in the future?

• 22:17Speaker 02

  Yeah, I mean, we started out building, building a lot of like a lot of decentralized tech on our ledger. We ended up like using parts of it, but not, not all of it. And went more, a more traditional approach at the beginning, but it's definitely something with myself, my co-founder, we're super enmeshed in at the start. In terms of, you know, in terms of like the space, yeah, like we're always looking at DeFi. And is there an opportunity to be able to, you know, bring our customers into that? I would say like, there's still like fundamental challenges that that make that like tough at the moment. But we expect that that will change as like, you know, as you have more of an ecosystem and you can basically borrow, borrow from those markets in a USD. Like you can't kind of, you know, you have an asset liability mismatch if you're borrowing crypto

• 23:02Speaker 02

  and your liabilities are in dollars. In terms of, in terms of other stuff, you know, in terms of Bitcoin, Yeah, I mean, I was, you know, I was a macro analyst and PM for for a long time and I was always the smarter guys that I that I worked for would always tell me to like focus on focus on the supply side of any of any market because it's the most predictable. Whether you're looking at oil, whether you're looking at like stocks, whether you're looking like you can actually like solve backwards from like supply and that will generally give you like a pretty good indication of like where markets going to go. So like in a lot of ways, like, I mean, crypto and like Bitcoin is like kind of like the perfect market. It's a perfect like, because like you do have like a fundamentally locked locked supply that's going to decline.

• 23:46Speaker 02

  You know, I remember looking at it and I'm I feel dumb for not buying more of it. You know, in 20 like 11 or 2013 and I was like, I was like, this is like the perfect bubble in a lot of ways because it is like literally I couldn't, you couldn't construct something that that would that would, you know, that would like, this is exactly what we've looked for, basically. This is exactly what I would look for as an analyst in a market like where's the market where supply is going down and where there's like, you know, there's inherent demand that's that's growing. And it's like, really that simple. So I think it's, you know, the market, it's super volatile. It'll move every day and, you know, it might go up or down 30%, you know. But, uh, but like it has, you know, the right characteristics.

• 24:30Speaker 00

  Absolutely. And it's pretty incredible. I think that it is that simple, right? It's just from a market structure standpoint, like the supply goes down, down, down. And there's a caps overall supply and then you get a increasing demand and like, if you took an economics 101 course, you know what happens next, right? And it's all quite good stuff. Like it's not rocket science.

• 24:50Speaker 02

  It's pretty simple. I mean, the other thing is like markets are made at the margin, right? So it doesn't take that much buying to move it. Like, I think, you know, yes, it's a what I don't know what it is right now, trillion dollar market cap or whatever it is. But, you know, how much is actually moving every day and settling at the end of the day, not just like trading in today. It's not just like any market. It doesn't take that much to move it.

• 25:10Speaker 00

  Absolutely. Talk a little bit about kind of the decentralized finance movement, right? So, you know, whether it's being built on Bitcoin or Ethereum or wherever, just this idea of like, let's build these decentralized applications that replace a lot of the same financial service or banking functions. Have you guys looked at that or kind of what are your thoughts there?

• 25:28Speaker 02

  Yeah, I mean, we've looked at it. I think, you know, I think there's a really bright future there. Again, I think our perspective on the space was that the ecosystem was like that the challenge is really building an audience. It is really building like, you know, a community of businesses and providing value. And I think that fundamentally as a borrower, which most of our businesses would be in this instance, you know, they shouldn't really care. Is it, you know, like they just, they need to be able to grow their business. That's what they care about. They're not, they're not there to make, you know, bets on crypto. They're not there to like, to do sort of stuff in DeFi. They just want a better product. And so our perspective has always been like, if it gives

• 26:11Speaker 02

  our customer a lower cost of interest, if it gives our customer a better borrowing experience, you know, we will embrace it. I would say today, like, it's still far off, but it's not, but it's moving very fast to the point where I think that there's, there's a real opportunity there. And like so much of, of credit and of, of, you know, of finances is, is so manual and is so old tool that, you know, I'm really excited about a lot of the development in that space because I think that they will accelerate, you know, the adoption credit and for a lot of these customers.

• 26:46Speaker 00

  Absolutely. That makes a ton of sense. What's the one big thing that you guys are looking forward to in 2021? You mentioned kind of trying to accomplish a multi-billion dollar kind of institutional evaluation or milestone. But what's the big thing that gets you guys there?

• 27:02Speaker 02

  Yeah, I mean, like, multi-billion in terms of like, like the assets of our clients on our platform, and I think we'll be there pretty fast. Like, what gets us there is like, just continuing to put our heads down and execute. Honestly, I mean, we spent two years, you know, with like, really no product. Sorry, with no market, focusing on product before we launched. You know, we think very firmly the best product in the market wins. We've done like, basically no marketing. Like, we really are, you know, focused on learning from our customers, growing around them, and building out that way. So, you know, there's a lot of other people that are, you know, doing a lot of hand-waving and putting billboards everywhere, whatever. We're not about that. Like, we're really just trying to focus and win.

• 27:42Speaker 00

  Got it. We didn't talk about the name. Where did ROE come from?

• 27:48Speaker 02

  So ROE is like the DVO one of an option, right? It's like, if interest rates go up by X percent, what is my option worth? And it's kind of a metaphor for like, what we, how we try to help our customers, right? It's like, we're going to improve your trajectory a little bit. Not a ton, like, that's up to you, but, you know, enough. And so that's sort of where it came from.

• 28:09Speaker 00

  I love that.

• 28:13Speaker 00

  In terms of the fintech space in general, it seems like everyone is spacking, going public, raising monster rounds, like, just the interest from the public markets and large late-stage growth investors is off the charts. Is that something that's kind of a bubble or frothy and like, yeah, there's a point in time where this all is fun and games, but like, it's getting out of hand? Or do you guys feel like, no, you know, investors have it right and kind of digital, you know, businesses that focus on the finance industry are really just getting started? And I'm cheating because asking somebody who's building a company in this space is probably a little biased.

• 28:54Speaker 02

  I mean, I am for sure, I'm a little biased because I made that, you know, this is the bet that I made with with my career.

• 29:01Speaker 02

  I had the same conversation two years ago with my with our investors. They're like, ah, this is a bubble, you know, so, you know, valuation should be here, blah, blah, blah. And I was like, no, it's it's a new asset class. It's not a bubble like venture, you know, at the time was 500 million, 500 billion dollars versus like P, which was like 2 billion. Now it's like a billion versus 2 billion.

• 29:21Speaker 02

  But I absolutely, I'm sorry, trillion versus 2 trillion. I absolutely don't think it's a bubble. I think that there's two things that are happening. One, interest rates are zero, right? Real rates are negative. That means future value equals present value for all intents and purposes. So find something that's going to grow, like it should be worth a lot today, even if they're not making that much money today. If interest rates go back up, which is like a very big if, like, that will change a bit. But like, that is appropriately priced for where we are today in the cycle, and investors should understand that. I think the second thing is that it has never been possible in history, at least as far as I know, to to build companies from the ground up that, you know, can compete with,

• 30:05Speaker 02

  you know, 50, 100 billion dollar companies that exist in public markets today. And as an investor, you know, would I rather put a billion dollars into Stripe or whatever the new Stripe is? Or like, you know, TSYS or, you know, one of these like, like Worldpay or someone like that, right? Like, I would much, I can, I can guarantee you, it's going to be more valuable in an earlier stage company that can replicate, you know, what is what exists today in public markets than what exists in public markets. And private markets are only about 6% of public markets overall, right? If you think about total market cap globally. So, no, I think it's a new reality. And I think that it is like, you know, comparisons to the previous bubble are pretty misplaced. It's a new asset class.

• 30:50Speaker 00

  Yeah, I tend to agree with you and I think also the thing that people are underestimating and maybe, you know, kind of just completely missing is the global nature of this. And also just how much more efficient, how much more profitable, how much more scalable the digital versions are, right? Or kind of these like new age technologies. And some of it's literally like you're a digital business and the competitor you have is a digital business, but you're using technologies that are far superior and therefore more scalable, more efficient, you know, kind of more valuable to the customer. And in some cases, literally, you're going up against a bank that sells a tax machine. Right? Like, like it really is all over the place, but it seems like you guys really have an advantage from the position you're coming from.

• 31:34Speaker 02

  Yeah, I mean, I just think that there's so much, there's opportunity everywhere, you know, not just in the space we're doing and consumer and like all over fintech. Like, I don't think, you know, the, the top five banks have been the top five banks for the past 30 years, literally. I think the next 20 years, like that would not be the case. Like it will be someone like us, someone like China. That will be, that will be up there.

• 31:55Speaker 00

  Yeah, I love that. Before I finish up, I was asking everyone the same three questions and you'll get to ask me one to finish up. The first one is more serious. What's the most important book that you've ever read?

• 32:07Speaker 02

  That's a good question. I think the most impactful book I ever read was a book called The Inner Game of Tennis.

• 32:15Speaker 00

  What is that?

• 32:16Speaker 02

  So it was written in, I think, like 1979 or something like that. And it was, but it's about a, about a hundred page book. It's pretty short.

• 32:25Speaker 02

  And it's really about like embracing a performance mindset. I was given to me when I like started trading from another PM and

• 32:37Speaker 02

  it was, it's a great book. It's, it's a great book for no matter what you're doing, but especially if you're in a performance driven job. Where you really have to, you know, learn how to like focus on your

• 32:49Speaker 02

  on your insights and instincts and sort of quiet, it's quiet, like the sort of part of your mind that is, that is fighting that. Because that's where like, you know, if you're playing tennis, okay, like you just, you just have to go flow. And but if you're doing anything else, right? If you're running a portfolio, like you have insights that other people don't see and those are hard to kind of get at. Like your brain is constantly telling you, you know, no, like, and you have to unlock that a little bit. And or if you're building a company, same thing, like so. I thought that was a really good one. I've read it about four times. I should probably read it again. But, uh, but yeah.

• 33:24Speaker 00

  I love that. I've never heard of that book, so I'll definitely check it out. Next one's a little bit more personal, and this is a question sponsored by Eight Sleep, which has got this kind of cooled mattress. Mateo, the CEO, got on me and said, hey, man, you gotta start sleeping more. Use this thing. And all of a sudden, now I feel like I'm sleeping on an ice block, but I get deeper REM sleep. And it pretty much changed the way that I sleep during the day. How do you sleep? Are you a four or five hour person? Are you a 10 hour person? What's kind of your sleep routine?

• 33:56Speaker 02

  I, uh, I have a two-year-old daughter, so my sleep routine has changed a lot in the past couple of years. I'm a, let's see, I'm basically, my sleep revolves around her, basically. So when she goes to bed, I try to get to bed and then she wakes up earlier than me and it's like hitting me on the head, you know, whatever, 6:00 AM.

• 34:13Speaker 00

  I, uh, I recently started asking this question, and so I don't have a ton of data points, but every single person with a kid under the age of three years old makes sure that that is a known part of the, uh, the change in the sleep routine.

• 34:25Speaker 02

  It's a big change.

• 34:26Speaker 00

  The young child is, uh, is now the boss, it seems like.

• 34:30Speaker 02

  Totally.

• 34:31Speaker 00

  Absolutely. Uh, and then, uh, my final question before you get to ask me one is more fun, which is aliens. Are you a believer or a non-believer?

• 34:42Speaker 02

  Can I be in the middle? Like, I, I wouldn't, I think there's like a decent chance, uh, but I, you know, it's not a belief or non-belief thing, it's a probability. I think it's, it's a non-zero probability.

• 34:51Speaker 00

  Okay. And, uh, if you're in the middle, I'm gonna assume you're similar to me of like, yes, there, it's highly probable that just given how big the universe is, uh, it, you know, there's some form of intelligent life, but they're not little green men that visited Earth type thing, right?

• 35:07Speaker 02

  Yeah, yeah, I think that's right. The universe is pretty big. Uh, so there's probably some, something out there, most likely mathematically. But, uh, you know, they probably haven't been here. You probably haven't been there, but I don't know. It's a lot. Yeah, you gotta ask smarter people, that, that one. That's, uh, that's over my pay grade.

• 35:22Speaker 00

  There's a guy in, uh, I think he's from Israel. He was like, uh, in charge of, you know, extraterrestrial search in Israel or whatever. And, uh, now he's come out, he's older and he's claiming that there's like a galactic federation and, uh, all the planets are all part of it.

• 35:36Speaker 02

  Really?

• 35:38Speaker 00

  I was like, you might have stared in telescopes for too long or something.

• 35:42Speaker 02

  I mean, yeah, I don't know. I don't know. You gotta get Elon Musk on the show and ask him that.

• 35:47Speaker 00

  Absolutely. You could ask me one question to finish up. What do you got for me?

• 35:52Speaker 02

  All right. Well, what do you think? I mean, look, you know, it's been a crazy world for crypto. Like, are we, you know, are we overhyped at this point? Is this just the beginning of, of, you know, the next, the next wave?

• 36:06Speaker 02

  You know, where do you think, how do you think we, we shape out here?

• 36:09Speaker 00

  Yeah. So I think that I have three separate thoughts that are all related. One is we are at the start of what I'll call it, the institutional bull market. So kind of last two or three bull markets have really been retail driven. This is the first institutional bull market. So it's got room to run from like a price standpoint. How high it goes, how long it lasts, you know, that again, people much smarter than me will, will figure that out. But just like, hey, the institutions are now here, they're buying Bitcoin, they're starting to look at the space. Like they're taking this much more seriously than they ever have. And I think that only gets more pervasive and more significant over time.

• 36:45Speaker 00

  Two is everyone is probably drastically underestimating how important and big just this general move is. So I basically think of it in two different frameworks. So one is like, the digital version of all of these businesses is going to be way bigger than the current iteration. And if you really think like, I think a lot of people compare digital to analog. I always talk about, there's almost this like middle step where it was like analog that went to really electronic, like with electronic Qsips. And so there were some, you know, computer enabled type transactions. But if you look at like the technology you're using versus some of these legacy banks, like you guys are really digital. Those banks are more kind of electronic Qsip.

• 37:26Speaker 00

  And so it's better than analog, but like there was still some bureaucracy and, and some pain points and middlemen and all that that you guys are removing. So I think that like digital will be bigger than kind of electronic or analog. The other thing is that I think that the decentralized protocols will be bigger than their centralized counterports. Some of that will be like protocol versus companies. Some of that will just be decentralized protocols. Versatile product, whatever it ends up being, um, I think it's a ways out, like maybe, you know, four or five years or so from now, people are being, uh, you know, kind of pervasive. Uh, and so if you really start to look at that as like, okay, I want to be in digital finance and I eventually want to be in digital decentralized finance.

• 38:07Speaker 00

  Bitcoin's probably the only thing that really kind of hits that spot right now. It's had this incredible fun. Um, but like, when you look at how big is that market, like, most people are talking about like, you know, this Bitcoin go to a hundred cat. I'm thinking like Bitcoin's a hundred trillion dollar market cap at some point in the future. And again, I don't know if that's fifty years from now, right, or twenty. Right. But it's not tomorrow, right? You know what I mean? Like, like it's pretty far away. And so then you get into this world of like, well, okay, if that's just like the core unit of account, well, then like, what's all the other value that gets created? Like the decentralized infrastructure, decentralized lending, like all of that's going to happen. Um, it's just hard to tell like who builds it and how long it takes.

• 38:47Speaker 00

  And then the last thing I think is, uh, it's not a straight line. So you kind of have like, yes, we're an institutional bull market. Two, we're all underestimating how big this is going to be, but three is like, you know, put your seatbelt on because this is going to be super volatile along the way, right? I mean, you know, you kind of look at this as you guys have built, there's days where you probably feel euphoric and it's like, we're going to, you know, be the next, uh, top five bank. And then there's days where you're like, oh my God, like, you know, the house is on fire, right? And sometimes that may happen in the morning and afternoon in the same day, just given like, you know, the challenges of building a food. So I think that, uh, people just have to remember like, you know, there's going to be price corrections along the way. There's going to be protocols that, you know, uh, fail and, and kind of all of that type of stuff.

• 39:30Speaker 00

  And so it's, you can be bullish on a really long time horizon, but also be, you know, somewhat patient in the short to medium term and understand like all great things just take time to build. So I think that's, you know, how I look at it, doesn't necessarily give us answers. It's like where people should go put their money. But I think it's a framework that kind of, you know, rationally explains like where we go.

• 39:51Speaker 02

  That's awesome. That is, uh, thank you.

• 39:54Speaker 00

  Yeah, absolutely. Uh, where can we send people to find you on the internet or find out more about RHO?

• 39:59Speaker 02

  Yeah, uh, so you can come see us at RHO, R-H-O, dot co. Um, and, uh, and if you're a company or you're CFO or, um, just want to learn more, you can book an appointment with, with one of our team members. And, uh, you can find me on Twitter at Everett Cook NY. Uh, I'm not very active though. Uh, we're also at RHO Business Banking. Uh, sorry, RHO Business on Twitter.

• 40:21Speaker 00

  We, we gotta get you on Twitter and, uh, and tweet, man.

• 40:24Speaker 02

  I've been following you for a while, actually. I, uh, you know, I, yeah.

• 40:30Speaker 00

  I, I'm, uh, I'm expecting now for you to just start with a couple of hot takes after we do this podcast.

• 40:35Speaker 02

  All right, you got it.

• 40:39Speaker 02

  You can retweet if I say anything smart.

• 40:41Speaker 00

  Yeah, they, I'll retweet it. My two-year-old keeps me awake at night and you'll, uh, you'll be the most popular guy.

• 40:46Speaker 02

  That's right.

• 40:47Speaker 00

  Cause every young man will, uh, will agree. Awesome, man. Listen, thank you so much, Everett. I really appreciate this and, uh, I think that, uh, people will, uh, one, uh, have learned a lot, but also two, I think you just sitting at a really interesting intersection between a bunch of different disciplines. And, uh, obviously business is fantastic. So I'd suggest people go check it out, roe.co, uh, or, or go find you on Twitter.

• 41:11Speaker 02

  Awesome.