Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Why Founder Mode is Dangerous & Could Encourage Bad Behaviour | Why Fundraising is a Waste of Time & OKRs are BS | Why Angel Investing is Bad for Founders to Do and the VC Model is on it's Last Legs with Zach Perret @ Plaid About this episode Zach Perret is the CEO and Co-Founder of Plaid, a technology platform reshaping financial services. To date, Zach has raised over $734M for Plaid from the likes of NEA, Spark, GV, Coatue and a16z, to name a few. Today, thousands of companies including the largest fintechs, several of the Fortune 500, and many of the largest banks use Plaid. In addition, Zach is also a Co-Founder of Mischief, an early-stage venture fund in San Francisco. In Today’s Episode with Zach Perret We Discuss: 1. Founder Mode: Why “Founder Mode” will be the most dangerous blog post written in the last decade for founders? What is most misleading about it? What are “grinder problems”? Why does Zach believe that grinder problems are the best problems for startups to try and solve? Why does Zach believe that OKRs are BS and should be removed? What should be used instead? 2. Lessons from Raising $734M for Plaid: What is the worst advice that VCs give that most founders take? Why does Zach believe that angel investing is more distracting than helpful for founders to do? What are the pros of investing alongside running a company? Why does Zach encourage founders to raise money as infrequently as possible? What does this mean for the size and price of rounds Zach thinks we should see occur? 3. The $5BN Exit and the $13.4BN Round: Why did Zach turn down the $5BN exit to Visa? Was it the right choice? Does Zach regret raising at such a high price of $13.4BN when the exit did not happen? Would Zach sell the company today for $13.4BN if offered it? What did Zach not do that he wish he had done? What did he do that he wishes he had not done?
Transcript 12,092 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 I think it's going to be one of the blog posts that is the most misused and actually causes a lot of the worst behavior in startups for a long time. Okair is another one. Okair is we're built for manufacturing. We don't manufacture software. I think that raising money is like a big waste of time. So we try to raise money as infrequently as we possibly can within Plaid. Angel investing actually, I think, is very distracting to founders.
0:21 Harry Stebbings? Wow, this show packs a punch today and such a joy to welcome Zach Paray to the hot seat. Zach is the co-founder and CEO at Plaid, where he's raised over $734 million from the likes of NEA, Spark, GV, Co2, and Andreessen, to name a few. He's also a co-founder of Mischief, an early-stage seed fund in San Francisco. And you can watch this full live episode from the studio on YouTube by searching for 20VC, that's 2-0-V-C. But before we dive in, I'd like to introduce you to one of my favorite brands, Attio. Attio is the next generation of CRM. Setting up Attio takes less than a minute, and in seconds of syncing your email and calendar, you'll see all your relationships in one place, all enriched with valuable data. Attio also lets
1:04 Harry Stebbings? you build Zapier-style automations, gives you powerful reports, and works perfectly for any go-to-market motion from PLG to sales-led. Attio is designed for the next era of companies like yours, and companies like yours shouldn't have to deal with inflexible, one-size-fits-all CRMs. Join industry leaders like Eleven Labs, Replicate, Modal, and more to scale your startup beyond the next level. Head to attio.com/20vc and you'll get 15% off your first year. That's A-T-T-I-O dot com slash 20VC. And talking about incredible companies, I want to talk to you about a new venture fund making waves by taking a very different approach. It's a public venture fund anyone can invest in, not just institutions and accredited investors. The Fundrise Innovation
1:49 Harry Stebbings? Fund is democratizing venture capital, which could have big consequences for the industry. The fund is already off to a good start with $100 million into some of the largest, most in-demand AI and data infrastructure companies, companies like OpenAI, Anthropic, and Databricks. Check out the Innovation Fund's impressive list of investments for yourself by Visiting fundrise.com/20vc. Carefully consider the investment material before investing, including objectives, risks, charges and expenses. This and other information can be found in the Innovation Funds prospectus at fundrise.com/innovation. This is a paid sponsorship. And finally, let me tell you about UiPath. What do Henry Ford and AI have in common?
2:33 Harry Stebbings? Neither could change the world without automation. In the future, there will be two types of businesses, those that have automated and those that wish they had. UiPath's new AI agents don't just follow rules, they think, make decisions and work alongside the world's most powerful software robots, already trusted by over 10,000 businesses. If agentic automation sounds new, just think of UiPath as your more growth, not more overhead platform, or your happier customers, happier employees platform. Whatever you want AI to do for your business, agentic automation with UiPath will make it happen. Try UiPath's new AI agents for free at UiPath.com. The future of automation is both agentic and robotic. Don't get left behind.
3:15 Harry Stebbings? You have now arrived at your destination.
3:18 Harry Stebbings? Zach, I am so excited for this dude. For me to do this in person is such a joy, also the first time we've met in person, so thank you for joining me.
3:25 Speaker 00 Thank you so much for having me. I'm a huge fan of the podcast and amazing how long you've been doing it and how impressive all of the, all the episodes are. And kudos to you as an amazing interviewer.
3:34 Harry Stebbings? That is very, very kind of you. As I was saying, I did not start quite like this. I would love to start though on a little bit like the refounding moment because Plaid has had many iterations over, you know, the years. And in the last two to three years, it would seem like there's been like a refounding latest chapter. Can you just take me to that and how that's evolved?
3:52 Speaker 00 So for those that aren't aware, in 2020, we signed paperwork to sell the company to Visa. In the intervening period, the regulators in the US had investigated it to say that, to kind of ask the question, was Visa a monopolist? And was this a kind of monopoly creating transaction? And the amazing opportunity we had within the business was we'd grown quite massively from 2020 to 2021. Covid had been a huge tailwind for us and we had the opportunity to actually walk away at the end of that deal and so elected to do so. But no, we started working on the new product expansions before that acquisition.
4:22 Harry Stebbings? Was there a time when you were like?
4:24 Speaker 00 Shit, we're growing fast again and we're locked into this acquisition. I don't think that there was that specific question on my mind. The question that was always on my mind was, are we undershooting the long term opportunity by being part of another company? And for every founder that's ever thought about selling their company, like that's the key question that they're probably asking themselves. I don't think that most people like immediately orient on value for the acquisition. Like, sure, yeah, it reaches a threshold and the dollar value like starts to make sense. But I think when people really go through that agony around selling a company, it's much more about like, am I creating the long term impact? Am I fulfilling the mission? Am I achieving the vision that I've set out? And for me, it was always about that.
5:04 Speaker 00 You know, making the decision to sell the company to Visa, that was one of, if not actually the hardest decision that I've ever made. Do you remember the moment you made it? Oh, my gosh, yeah, yeah. It was my leadership team and I, it was right, we were doing this offsite because we didn't want to be in the office. And we were sitting in my living room and I'd had them all there. We were like, had this offer and we were going through like the pros and cons of it. And, you know, we went around, we talked about what people were thinking and then I kicked them all out. And I was like, like, I need to think like, I'm making this call like at the end of the day, like I've gotten all of your input and I just need to think. And it was like me sitting in my living room, you know, my wife is out of town and I'm just kind of alone sitting there. And ended up making what I think was a 5149 call to say like, it's the right answer to sell the business. It's for a variety of reasons at the time.
5:45 Speaker 00 A year later, we had that same meeting, same group of people sitting in my living room, having the same, same style of conversation. And that was a like, you know, 991 decision. I was like pretty certain that the right answer was to walk away. I just wanted to make sure that everyone else was aligned. And what had changed in that intervening period is that our business had grown quite massively. We'd reached this escape velocity and the concept of digital finance had really taken hold as something that people couldn't really live without. Did we build products because of the acquisition? No. Now, the one thing that I did wrong there was we launched three new business areas at the same time. What should you have done? What would, in benefit of hindsight, how would you change it? One, then the next, as you would, as you would naturally imagine. With a year in between? I think it's hard to do all the things that we did simultaneously.
6:27 Speaker 00 So launch three new business areas, go from being a single product to a multi-product company. That is really hard, going from one to two products, one to two major product areas. Within the company, super, super hard because you have to figure out how do you sell? How do you balance your sales resources across the two? How do you change your brand? And how do you explain to your customer that you're now not just doing one thing? You're doing multiple things. Going from one to two would have been the right answer. And then maybe we could have done the next two at once. But going from one to four, it was super hard. I have this analogy that I use internally is like, it's gonna be a little gross. It's like a snake that eats an elephant. And you can see this elephant like slowly digesting through the snake. The correct answer is like a snake that eats three sheep. You eat one and then the next and then the next. But like doing one thing where you have a gigantic amount to digest digest within the company, super hard.
7:11 Harry Stebbings? What's the first thing that breaks?
7:13 Speaker 00 Go to market breaks first because
7:16 Harry Stebbings? How does it break?
7:17 Speaker 00 Every one of the new things that you're doing, the product team that's working on it wants the salespeople to sell their thing. And the salespeople are like getting internally lobbied like, hey, sell my thing, sell my thing, sell my thing. And like, they're disappointed when you don't sell their thing. And then they, the salespeople then have to go explain it to the customer. And all of a sudden, the salespeople are explaining the thing to the customer. They don't know how to sell. So they're like, all right, well, then I gotta like bring the product people to the sale. And so it becomes this like really complex go to market motion. And you have to like go from having a single sales team that like knows your products in and out to having, you know, specialist sales. Having like, you know, technical account managers that are coming to things, sales engineers that are coming to things. Like it starts to become this like much more complex model. So yeah, doing that all at once, I probably wouldn't have done.
8:02 Speaker 00 We also, by the way, went international and started to go up market with our sales all at the same time. So sequencing, sequencing is the, the feedback that I would give myself if I could.
8:12 Harry Stebbings? How did you think about resource allocation between the products? Were you like, hey, split investment across all three? One's a much bigger opportunity. Let's put 80% here and 10 and 10. How did you think about that as a? First off, actually, that's a shit question. Just do you believe that the best CEOs are the best resource allocators?
8:29 Speaker 00 In the long term, yes. It kind of depends on the horizon and scale of the business. Like in the short term, like if you're, if you're a founder and you're amazing at like, you know, finding product market fit. Like actually, no, that's, that's the best thing. Just go, go spend your time on product market fit. At the mid stages is about like, can you build an effective company? In the long term, like when you look at the CEOs that are like truly the best, like 10, 20 year public CEOs are the best resource allocators.
8:51 Harry Stebbings? So when you look at the three products, how did you approach the resource allocation problem?
8:55 Speaker 00 Well, in the early phase, it's very easy. So you build an atomic team as small as possible. You say, like, go off and figure out if there's something built here. And I've done that, by the way, with tons of other product areas, too.
9:06 Harry Stebbings? So an atomic team, what's an atomic team? Like a generalist team?
9:09 Speaker 00 Yeah, like a product manager, whatever the smallest version of a sufficient team is. So it's a product manager, an engineer, maybe a few engineers, maybe a designer if you need it, maybe a data scientist if you need it, depending on the type of product. And you just send them off into the ether. And as a founder, your job is like, you need to give them sufficient food to continue to exist, like sufficient resources and attention that they can continue to exist. Sufficient protection that they don't get killed by what I call the DDoS attack, where if we have a new product that we're working on, if we tell the whole company, we have a thousand people now, 950 people are going to reach out to the team saying, "I'm super excited, how can I help?" 950 messages saying, "I'm super excited, how can I help?" And actually, like, DDoS is the system and they're thus not able to move fast.
9:53 Speaker 00 Like, with this atomic team, you give them sufficient resources, you give them sufficient protection, which oftentimes means ignoring them or hiding them in some sense from the rest of the company. And then you help them figure out how to get to their, like, at least in our case, to get to their first design partner. So they need like one or two customers that are willing to go experiment with them. So we've done this a lot. This is like how we think about a lot of new product development.
10:14 Harry Stebbings? And then you do like milestone-based financing, which is like, "Hey, if we find sufficient product-market fit, we'll open up new resources." How do you think about the next stage post-atomic team?
10:23 Speaker 00 Yeah, if you try to over-processize that, then it doesn't really work. Like, a lot of people try to run like an internal VC-style model, which is like, you know, "We'll fund you for a million bucks for a year."
10:33 Harry Stebbings? And you would come back and pitch for a Series A-style internally.
10:36 Speaker 00 Yeah, and you can do that, but it becomes over-processed. And then everyone starts to like try to hack the process as opposed to like really finding the unique insight. I'd rather just like let people go run at a thing for a while. And like, usually they will, they'll come back and say, "Hey, this is not going to work." Or like, "Hey, there's something very real here." They might come back in a week and say, "Like, there's something very real here. And like, I have a customer that's like chomping at the bit to buy it. Like, I really need to fund it now." I don't want them to wait 18 months to come back and ask for more resourcing. On the flip side, no one inside the company wants to go like off on a foray for like three years finding nothing.
11:06 Harry Stebbings? In terms of the problems that they're pursuing, we chatted before and you said to me about a brilliant style of problem that you like called the grinder problem.
11:15 Harry Stebbings? But I just wanted to ask, what is a grinder problem? And why do you find them attractive to do as a company?
11:22 Speaker 00 Yeah, so the early history of Plaid was we needed to integrate with all the banks. And these integrations were not like, you know, flip a switch magically integrations on. It's like a lot of work to actually set up integration with the bank. In the early days, we had to actually build screen scrapers for the banks because the banks didn't have APIs. And like every screen scraper was different. And we had this realization, if we're able just to grind out all the integrations, we're going to be better than anyone else. We will build better technology, yes, for these integrations, but also no one else is going to do this thing that we're doing. Like, no one else is as crazy as we are to be willing to like go grind out, you know, 12,000 bank integrations and then like make them all scale. And like build all the software that you need to like self heal the integrations. It was just a mess. And anytime I find a problem like that, I'm like, yeah, that's it. Like, I get excited about it.
12:05 Speaker 00 And everyone inside the company, like even though we talk about this concept, people inside the company are often like, ah, it's going to be so hard. It's going to be like, you know, it's going to be difficult. There's like a long path, it might not work, and so forth. I just believe that sometimes if you're willing to grind it out, you're going to have a unique product that no one else is willing to build or able to build sometimes. You know, those things that are not necessarily like, it's not about the intellectual brilliance of the strategy that you come up with. It's about your ability and desire to do the work. I love those kinds of challenges.
12:33 Harry Stebbings? So I was talking to actually one of my partners on the investing team yesterday. And they were saying, but there's, there's no defensibility in the company. And it's like a seed company, like two customers and 400K in revenue. There's no defensibility. I'm like, I don't really think any startup has defensibility on day one.
12:48 Speaker 00 Exactly right. On day one, that's the most important part of your statement, though.
12:51 Harry Stebbings? Are they if they're coming from 10 years with knowledge of the banking sector, they, do you see what I mean?
12:56 Speaker 00 Fine, maybe. But I guess my take is in general, you know, if you have two atomic teams, you throw them the same problem. If they have like roughly the same skills, they're going to start from roughly the same place. And one might move faster because they have this knowledge or background or whatever it is. That has been like one of the things that I've evolved my thinking on quite a lot over the years is like the importance of experience. I think a lot of people worry too much about defensibility in the immediate term and like at the start of a new project. And they worry far too little about defensibility in the late stages. So as long as the grinder problem, the The difficult, hard hustle problem that you're after has the ability to be meaningfully differentiated in the long term via network effects or brand or scale or whatever it is, then it's great. If it never has that ability to be differentiated, I mean, be careful with your time.
13:36 Harry Stebbings? On the experience side, are there areas where more experience is dangerous?
13:41 Speaker 00 Always. I love recruiting. I started out hating recruiting. And it was one of those things where I realized that if I didn't become good at it and if I didn't learn to love it, I would build a terrible company. Because you read any business book, we good do great, right? First is, do you have the right people on the bus? Second is, what the heck are you building? But first is, they get the people right. And I realized if I didn't start to enjoy recruiting, then that would be a challenge for me. And so I went deep and like, I figured out to kind of like convince myself, trick myself in all these different ways. To like, love, love, love recruiting. The key for me was, I'm super competitive, I like games, and recruiting is a win-loss game. Can I get this person to want to work at my company? Can I find the best person? And then pretty quickly, I will know, yes, they accepted an offer, they didn't accept the offer. So for me now, it's like this intense form of competition with myself.
14:25 Speaker 00 On can I find the person, like I love the hunt? And then can I convince them to join me?
14:30 Harry Stebbings? What about discoverability? And what I mean by that is like, I think recruiting is like a search for the truth. And that sounds like super lofty and like I've just swallowed a Jay Shetty book. But it's like, win-loss assumes you want them.
14:41 Speaker 00 Yeah, of course.
14:41 Harry Stebbings? And like, actually, for me, the challenge is determining true greatness.
14:46 Speaker 00 Yeah, I mean, that's a crucial part of it as well. Finding them, making sure that you're right, and then kind of winning.
14:51 Harry Stebbings? Okay, let's start on finding them. I heard you were amazing, actually, in terms of your outreach. If you find great talent, what've been your biggest lessons on how to do outreach well?
15:01 Speaker 00 Just be yourself and do it. One of the things that someone told me really early in my career is that the best thing that you can do is go learn from other people that are willing to talk to you. So I got really good early on at just sending cold emails to people saying like, "Hey, I love this thing that you do. I'm super, super impressed by it. Will you, will you talk to me on the phone for 15 minutes and tell me about it?" And people were shockingly willing to do that early in my career. And it applies the same way for recruiting. So by the way, exactly what I just said, you can do just to get people that you kind of want to recruit, but aren't recruitable. But in general, just saying like, "Hey, I'm Zach, I started this company, GoPlaid. I've been super impressed by, you know, whatever you're impressed by for that person." And just say, "Hey, we're hiring for this job. Are you willing to talk to me about it?" And, you know. They ignore you a bunch of times. They say no a bunch of times, but some people say yes. If you do it enough, then it starts to work.
15:45 Speaker 00 And like that, the same thing you can do over email, you do it over the phone, you get introductions. But like it's the same process of like, hey, I'm genuinely interested in you. And like, I have an opportunity that you might be interested in. Like, can we have a conversation?
15:53 Harry Stebbings? Yeah, I totally agree. I think short and succinct is really important.
15:56 Speaker 00 Totally.
15:57 Harry Stebbings? I get a ton while they're like four pages and that's long.
16:00 Speaker 00 I, this is related to recruiting, but, but sort of not. Earlier on in the company, I had a five sentence rule, which is if you write an email with more than five sentences, yeah, no one's ever going to read it. So write them with less than five sentences.
16:10 Harry Stebbings? Okay. So we get on the call or we get in a process with this person. In terms of talent assessment, how have you changed your approach, mindset, appreciation towards talent assessment?
16:22 Speaker 00 So we have a couple of these like core philosophies and one or two of them have evolved. One of them is hire for spikes. This one hasn't really changed. We look for people that are incredible at some things, even if they have like glaring weaknesses in other areas. So long as we have a team that can balance that out, we would rather have a spiky person. Because it turns out, you know, a well-rounded person that maybe doesn't have any really tall spikes. If you build a team of those, you'll have like, you know, one certain, you can imagine like a level or like a kind of a, if you were to chart this out, you can imagine like they're, they're only reach a certain max on the vertical axis. But if you have spikes and you like make the spikes all kind of work together, then like the, the level of the reach on the vertical axis is far higher. So hire for spikes is a big one for us. It also means that we like people that are weird, that have unique experiences, that are different, that have a different background or a different way of thinking about the world.
17:06 Speaker 00 So that's been a big one for us. One that I've changed was, there's a thing internally called the experience trap, where we basically thought that anyone that had been doing a certain thing for like more than 15 or 20 years, like kind of wasn't a fit for Plaid. We just had this bad assumption that people that have been doing a thing for that long, like weren't going to hustle. This was based on our own experience, meaning like we'd interviewed a bunch of people and like, kind of either seen friends or ourselves made some hires of people that had been really experienced, but like weren't willing to work that hard or, you know, really jaded in their thinking. So we kind of avoided that early on in the company. But also there was a time when experience didn't matter as much, like hustle mattered a lot more. Now that we're getting later into the company and as we're going to these more specialized fields, you know, finding someone that's been a machine learning fraud.
17:48 Speaker 00 fraud engineer for 20 years, they're going to make a huge difference on your fraud product. You just have to filter for mindset, right? You have to filter for hustle. You have to filter for like the values that we actually really think are important within the company. And so we've shifted our thoughts on experience quite a lot. We do still want this balance, though, like we want this like we're in financial services. We want a 70 30 split. 70% of people on our team should not have come from financial services. 30% should have. What has been the biggest hiring mistake that you've made and how have you changed as a result of it? Sometimes you get really annoyed with a search that's been going on for a long time and you're like, I just need to hire someone. And sometimes that's actually true and often that will lead you to make a mistake. But let's imagine I'm an early stage company. I can't find the right accountant, but I just need an accountant. At some point, you're actually right. Yeah, you actually do just need an accountant.
18:32 Speaker 00 And chances are that hire that you're going to make is not the right one. You have to like dig yourself out of that later. So like usually it's been the like, I really actually just need this job to get done for a little while. And I know I'm going to have to go back and fix it later, but that's okay. How do you feel about, obviously PG's essay went completely viral. How did you feel about it? I was surprised how viral it went and it clearly struck a nerve for a lot of people. So like, I think there's a lot of aspects of it that are really good. Why were you surprised by how viral it went? It's just, just the speed of it. Like every founder chat I'm in, we're talking about it. Like, you know, within the company, multiple people brought it to me. I brought it up to our exec team. Like it was just like this really fast set of conversations. Did you not find it obvious? I think it's going to be one of the blog posts that is the most misused and actually causes a lot of the worst behavior in startups for a long time.
19:16 Speaker 00 And I think for the people that truly get to get to the, get to the level of having all the context that he does, then, then it'll actually be a huge unlock for a lot of people. The reason I think it's going to be misused is a few fold. First is one way to read it is to like deeply undervalue great execs. And I think that that's totally wrong. The second way to read it is the founder should micromanage everything. And while I am a fan of micromanagement, or actually said differently, I'm a fan of like sweating the details, which is one of our core values in certain areas. And if you try to micromanage everything, it's never going to work. And I think he like, didn't hit the nail on the head of like, like the whole point is like delegate effectively. If you delegate something and it really matters, you gotta stay close to it. If you delegate something, it doesn't matter. You stay a little further away from it.
20:01 Speaker 00 Don't over delegate, because I think that that's the mode that it seems like a lot of people at companies that we're talking about a lot were in. And I've certainly seen that. We've certainly made mistakes with over delegation, but I do worry that it's going to be a little misinterpreted.
20:13 Harry Stebbings? I totally agree and it's used as a justification for a lot of bad behavior to happen. And you have people like a Ryan Peterson at Flight Sport, who is a phenomenal CEO and you who are phenomenal CEO, but not everyone is Ryan or Zach. And that doesn't mean they're bad CEOs, but it just means it's maybe not as applicable.
20:30 Speaker 00 Totally. I think people are going to see that there's Steve Jobs top 100 offsite that he did. People are going to see that and say, I should do a top 100 offset or top 50 offset, top 20 offset. That's actually like horrible in a lot of companies. Like he did it for a specific reason. And I don't know what the specific reason was, but they had a specific reason in mind and like the way that he applied it and used it was like incredible for Steve Jobs at Apple at the size that they were at the time that it was that thing. It doesn't mean that that practice is universally applicable. I also think that, you know, like building a philosophy off of Brian Chesky, who's like, you know, one of the most amazing leaders, like, yeah, everyone can learn a lot from Brian, but not all of us are Brian.
21:06 Harry Stebbings? I totally agree. I mean, Fred Wilson did this blog post on reserve utilization and the importance of reserves in early stage portfolios recently. He said, basically, everyone needs them and how you can use them to effectively to drive DPI. And it's like, yes, if you're a brilliant picker like Fred Wilson is, who is legitimately one of the best investors of the last two decades, but most people are not very good pickers and concentrate capital into the wrong companies. What other things are very common beliefs which many agree with in Silicon Valley echo circles that you're like, I don't agree with that?
21:37 Speaker 00 I do think that a lot of the advice given, quote unquote, is really applicable narrowly and not broadly. Every founder needs to, for the big important things, make a decision on their own of what really works and then like be willing to go back and remake those decisions time and time again. I will say like, I think that for 80% of the things in a company, you can literally just copy what's been done before. And 20% of the things, you need to be unique and spend all your effort in being really, really unique. But there are some of these things like, I'll take for example, sales. Like one of the most common early stage things that people will tell small companies is you need to go hire a VP of Sales. If you're an enterprise company, if you're able to do founder driven sales, like I think that's actually totally wrong. For me, I didn't want to hire a VP of Sales for a long time. I hired this group of these like
22:19 Speaker 00 amazing young people that would like just help me do sales. Like I was driving sales. Like they were around me like making it more efficient. They were ghostwriting my emails, all the stuff I was ever seeing it. And like that scale is for quite a long, like way longer than it should have. But in doing that, I learned way more about our customers and way more about how to build a great product for our customers. And then it could have been any other way. And so don't hire the VP of Sales early if you don't want to, like if you don't think that's right for you. OKR is another one. OKRs were built for manufacturing. We don't manufacture software. You know, we're not running an assembly line to create software. Goals are important, but like do it your own way. Don't just read the Andy Grove book and try to apply this thing that worked for Intel to your business if it doesn't actually fit to your business.
22:57 Harry Stebbings? Is speed the single most important thing for companies going from zero to one?
23:01 Speaker 00 No, being right is, and then speed.
23:04 Harry Stebbings? What does that mean? Like being strategically right on the problem that you're solving and then acting with extreme execution speed?
23:10 Speaker 00 Yeah. So one of our company values is move fast, but you have to be careful when to apply move fast. Like, once you've found product market fit, move fast. That's absolutely the right thing to do. Before you have product market fit, sure, maybe you should move quickly through ideas, but also like spending the time to think about what the right thing is, like gathering the signals, gathering the data, understanding what you need to do, like be right and then move fast.
23:33 Harry Stebbings? Ryan at Facebook told me very wisely, I think he said velocity is the most important thing is speed in a given direction. And I'm like, that's a, that's a good one.
23:40 Speaker 00 Well, velocity is correct, speed in the given direction. The direction also should be right, like it should be the correct direction.
23:46 Harry Stebbings? Do you feel like we've got in a manufacturing line on venture funding companies? And what I mean by that is like, it feels like so many founders get on this production line of I'm going to hit a million in ARR and then I'm going to raise my A and then I'm going to hit five million and raise my B. And then 20, and it just feels a little bit over manufactured. And almost forgetting the fact that we build products for customers who give us money.
24:12 Speaker 00 My take is great entrepreneurs are going to apply their unique lens to what they do. Like we have this weird philosophy. Like I think that raising money is like a big waste of time. So we try to raise money as infrequently as we possibly can with implied. So like, you know, we go like two and a half, three years between funding rounds. And in the early days, some people would call us and be like, oh, is the company dead? Because you haven't raised in the last 12 months. And we're like, no, like revenue is growing. Everything looks great. We just didn't want to raise money.
24:35 Harry Stebbings? How do you think about that though? Because if you want to raise money every three years, say, for example, you're going to have to raise a chunky round. You're going to have to either take a lot of dilution or you're going to have to have a really inflated price. How did you think about that?
24:47 Speaker 00 We kind of did what felt natural for the company and what felt right for us. My take is like money is a resource. When you need the resource, you should go get the resource and you should do it, yes, of course, in the most efficient way that you possibly can. But for a certain amount of time, we just didn't need the resource. You know, we weren't spending a ton or like our business was profitable in the early days, like not intentionally, it just happened to be. And so we were like, oh, well, we don't, we don't need the money resource. Like money is not the tool that we need to use in order to solve the next challenge. Then later it became the tool, so we wanted to raise more money.
25:13 Harry Stebbings? There's a brilliant statement, always be raising. Do you disagree with that?
25:17 Speaker 00 Yeah, that seems like I would have wasted a lot of time.
25:19 Harry Stebbings? What was the hardest funding round?
25:20 Speaker 00 Our seed round was horrible.
25:22 Harry Stebbings? Why?
25:22 Speaker 00 Oh my gosh, we have this crazy story. I haven't, I don't think I've told this publicly. We started out first building a consumer app. So this was kind of post 2008 financial crisis. There's this movement called Occupy Wall Street and it was like people like moved tents in and like lived in Wall Street and like the big takeaway from everyone was consumers are really frustrated with financial services. They don't think that the banks are building the products they want. So being like kind of 23 year old entrepreneurs, we set out and said, we're going to go build a better budgeting tool for consumers because that's going to help consumers live a better financial life. So, you know, we, we had this like whole story for a year. We like built a bunch of these, they all failed. And then we pivoted to like build this infrastructure piece, which was basically the backend to our previous product. And like, that was actually a really good idea. But when we were trying to raise from people, like everybody said no to us. We actually lined up this early funding round.
26:07 Speaker 00 It's 500K funding round at like a $2 million valuation. And the lead investor for this funding round like backed out and he was investing like a hundred thousand dollars or something like that. And then the rest of the funding round fell apart and we were out of money. We were basically dead as a company. And so we went to all the investors that had been planning to invest and we were like, hey, look, the lead has backed out. We'd still love to take your money, but the lead is gone and we just want to be transparent about it. We don't want to be a surprise. So we did it and everybody walked away from that, except for these three people, all named Justin. And they invested a collective 60K in the company, but like kept us alive. They invested like 60K at two, maybe two and a half million dollar valuation. That was the lifeline we needed to like sustain until we could like get to some customers that were actually using it. We had a late stage contract with Venmo.
26:51 Speaker 00 Then it was maybe like six or eight months later that we went back and raised a seed round. It was valued at 11 or 12 million dollars. So like an actual good step up.
27:00 Harry Stebbings? Did you think you were gonna die?
27:01 Speaker 00 Yeah, but I mean, you know, we hadn't paid ourselves in six months at that point. We were like, whatever. At some point, we're gonna like actually run out of money. My co-founder was living on a friend's couch. I'd moved in with my girlfriend because I couldn't pay rent anywhere. And I had like a moderate amount of credit card debt, which I don't advise to any other founders. But, you know, we thought we were gonna die, but we also, we had nothing to lose. So you just keep going.
27:23 Harry Stebbings? How did you think about secondaries and money as you progress through the company? Like, again, I don't want to speak as a one-sided journalist versus founder. Like, for me, making a little bit of money really enabled me to think differently. And I actually super pro secondaries for founders. How do you think about it? And did it change your mindset at all?
27:43 Speaker 00 When we did the sale to Visa that ultimately didn't go through, we raised a funding round afterwards. One of the most complex things to do in that funding round was I wanted to try to max the number of people that could participate in the secondary. We couldn't get to 100% of employees, but we got to like the large majority of employees that were able to participate in that secondary. And that was hugely meaningful to me, hugely meaningful to the team on the other side. Keep in mind, we'd said, hey, we're selling the company for $5 billion.
28:09 Harry Stebbings? The price was 13.
28:11 Speaker 00 Well, let me finish the whole story. First, it was like, we're selling company for $5 billion. Then we got to the end of a year and everyone was like, oh, okay, like, you know, people, people, they don't spend the money practically, but they spend the money in their head.
28:21 Harry Stebbings? They do. They've got that number.
28:24 Speaker 00 Exactly, exactly. And look, who am I to say that they shouldn't get mentally locked in on a thing? Like, we said we're gonna sell the company for this amount of money. Visa's a very legitimate buyer, like there was real cash coming in. And I told them there was risk, but you know, you spend the money in your head. And then we had to get to the end of the transaction and we walk away. And I was like, this is gonna be better for the company in the long term. But all of a sudden, they couldn't spend the money. Yeah, there's a very different aspect of liquidity that was, that was real for them. And then we said, look, we're gonna go raise money and we hope that we're gonna let you participate in a secondary. And like, that was like a pretty hard thing to say, but I also couldn't, I didn't want to guarantee anything because I couldn't. Then we got to the secondary, then we did.
29:00 Harry Stebbings? Did they respond badly to that?
29:02 Speaker 00 Some of them did, yeah, but not, not selfishly, just people planning to buy a house, for example. Then we do this, do the, do the. Next round, which was a big step up valuation. And we let people sell us because we wanted to create a rational amount of sale. We let them sell as much as we could rationally, but like it wasn't this full amount. Instead of buying, you know, a house, maybe you something larger than a car, but less than a house. But chunk of what they could sell wasn't the whole thing. That I think was like a hard thing for them. Good outcome like because they could see the light of the future and the growth of the plaid and so on and so forth. But definitely a hard whiplashy thing. But I think that was really great that we let our employees participate there. And, you know, as we're able to do more secondaries in the future, really focusing on the team is that that would be the goal.
29:47 Harry Stebbings? Are you pleased that you raised a $13.4 billion valuation?
29:52 Speaker 00 It's a good question.
29:55 Speaker 00 The true value of a private company is impossible to tell, right? The true value of a private company is what someone is willing to pay to buy an incremental share of that company. And that's why you see valuations being like all over the place with with private companies.
30:10 Speaker 00 You know, in a lot of instances, I wish we had a real time mark to market because that would make it much simpler to do things like compensating employees and, you know, doing acquisitions and so on and so forth. The reality is we raised money in the situation and in the environment that we were in at the time. Puzz valuation has gone down since then. Frankly, the valuation of every type of company has gone down since then.
30:29 Harry Stebbings? And by the way, as a founder, your job is to raise money and dilute in some cases as little as possible.
30:34 Speaker 00 Yeah, so there's a fiduciary thing that pushes you towards the raise at max valuation. And then, you know, the investors that invest be darned. My view is different, like I feel a deep responsibility to the investors that invest in Plaid. Like I want every one of them to make a lot of money on Plaid. And that means that my expectations for the company are really, really high. Because I know I have to get back to a high hurdle rate that we've had in the past. Now, I believe that we'll do it. I believe it'll take some time, but I believe that we'll do it. The underlying fundamentals of the business look way better now than they did when everyone invested. But the reality is that the multiples have changed. You know, we're on a long journey. I got work to do. We gotta, we gotta make sure that everyone makes a bunch of money on their investment where they invested. And if we're lucky enough that the investors continue to hold through that entire period, like I really believe they'll be able to do it. But that takes patience.
31:18 Harry Stebbings? Did it enable you to do things that you couldn't do alone? Because that's the only thing that is cool, like Instagram and Facebook. Everyone's like, oh, what a mistake.
31:25 Speaker 00 I can't comment on Instagram and Facebook. The structure that we set up with Visa was that we were running as an independent entity. We had access to all the tools internally. I was the CEO of the independent company and we could run as fast as we wanted to in the direction that we wanted to. And we got a boatload of funding to go do it. That's not the worst setup. No, I like the independent path better. No answer is.
31:44 Harry Stebbings? It was a hard question. When we look at M and A more broadly, you know, I'm an investor. We think about liquidity now or never. And there is no fucking liquidity. There's no liquidity for LPs that choked up to their neck with lack of liquidity. And I look at M and A first and it's just completely shut. Is that a fair representation? And do you think M and A is completely shut one? What do you think will lead to an opening?
32:10 Speaker 00 So far as I can tell, I think the large M and A transactions are mostly getting deeply investigated and often them's blocked by the regulators. That political environment will change eventually. We did see some of these like odd like aqua hire, like large AI acquisitions, which have been fascinating. But I don't think that works with a company that has tons of contracts that they actually want to transfer over to the acquired company. Can't predict the future, but I do think that it's pretty hard to do large M and A right now.
32:35 Harry Stebbings? On IPOs, another form of liquidity. How do you think about IPO markets today? It's something again that as a late stage founder, you always have to be alert and awake to. How do you think about IPO markets today?
32:45 Speaker 00 The viability and the excitingness and the value of an IPO changes a lot for, for a lot of founders. Look, in the long term, we said this before, in the long arc, we would like to be a public company. We're not in any specific rush to do so. And generally, I think of an IPO as a meaningful, important milestone and a fundraising event. When you need the capital, when you need the milestone, when being public is, is really useful to the company, then you should go do it.
33:08 Harry Stebbings? But now would be inherently unattractive time for you to go public.
33:11 Speaker 00 Yeah, it would be for, for a variety of reasons. I'm sure that'll change in the next, I don't know how long.
33:16 Harry Stebbings? Like your Bill Gurley's of the world would say, companies, and he hasn't said this, but like companies of your profile should go public, should take the hit on valuation. And they will grow into great companies in public markets.
33:26 Speaker 00 Well, I definitely believe that we'll grow into great, into a great company if, if we're not there already. And I would love to have that increased rigor that being a public company brings. Like, I think that's. Actually, probably a really useful thing for companies. Certainly, all the public CEOs that I've talked to, or many of the public CEOs, I shouldn't say all because that's not true. But many of the public CEOs that I've talked to said, like, you know, the rigor is a really good thing. It's helpful, so on and so forth. But on the flip side, you know, it is a milestone and is a very useful tool for for us to do at some point in the future, but that day is not today. And that day will hopefully be in the next couple of years.
33:56 Harry Stebbings? Someone said a great statement to me the other day. They said, um, the heaviest things in life are not iron or gold, but unmade decisions. What unmade decision weighs on your mind most?
34:07 Speaker 00 Philosophically, like, I have a very hypothesis-driven decision-making model, which is you ask me a question, I have an answer. It's not a deeply held answer always, but I always start with a starting point. Within the company, we push this really hard. So if there's a decision to be made, there's always a straw man of what the decision is. I'm not sure I have, like, a specific unmade decision.
34:24 Harry Stebbings? Does that not get you in trouble with your wife?
34:26 Speaker 00 All the time.
34:27 Harry Stebbings? Yeah.
34:27 Speaker 00 Yeah, gets me in trouble with my wife because she's like, why are you so confident in this thing that you've never thought about? I'm like, I'm not confident. And I think you were planning to ask this question later, which is like, what's the question that no one ever asked you that they really should? For me, the question that no one ever asked me is how confident are you and how much do you care? So if you ask me, hey, what's is the answer red or blue? Red. How confident are you? Zero percent confident. How much do you care? Not at all. Like, those three need to go strongly together.
34:50 Harry Stebbings? Okay, so I'm exactly the same as you, but someone said to me wisely the other day, what you forget, Harry, is the weight of your words. And you said that with real confidence and the team just went with it because of that. And I'm like, oh, shit. And so do you worry that actually your words carry a lot of weight? And because you do say things with great confidence, it's like, shit, Zach said that. I mean, fuck, let's do that.
35:10 Speaker 00 Yeah, I do. I do worry about that. That's why I wish people would ask me the question, how confident are you and how much do you care?
35:15 Harry Stebbings? What's your biggest flaw as a CEO?
35:17 Speaker 00 One of my biggest flaws as a leader is I'm not great at recognition of progress if the outcome is not excellence. Let's say we have some problem with the company and currently we're operating at a two out of 10. Going from a two out of 10 to a four out of 10, you've just made something twice as good. My CEO tells me this all the time. He's like, you gotta celebrate that. That is good progress. And yes, you can say there's another horizon that we gotta go to, but you gotta celebrate going from a two to a four out of 10. Sometimes that matters quite a lot. Personally, I am like never, never okay celebrating that because my answer is like that's a four out of 10. It's like we're still horrible. And objectively, that is the correct answer if we stay a four out of 10. But oftentimes, the trajectory is you go from two out of 10 to a four out of 10 to a six out of 10 to an eight out of 10.
36:02 Speaker 00 And then eventually you get to a 10 out of 10. Like finding a way to celebrate those like interim milestones that are not yet perfect. It's been really hard and it definitely discourages people within the company. Giving the internal praise of, hey, like you made progress there. Like let me cheer you on and like be the cheerleader to help you go from a four out of 10 to a six out of 10 to an eight out of 10. That's really hard. I do feel strongly that you should never celebrate something that just factually isn't good. Something if we're delivering something at a four out of 10, that is factually bad. And we should not be celebrating that we're delivering a four out of 10, but we should celebrate the progress that we're making and the trajectory that we're on. And so finding a way to like support the team through that terrible to good to great process.
36:42 Harry Stebbings? I do think in the early days, people don't talk about kind of manufacturing wins, which is like often there's just not much to celebrate. It just doesn't look that great. And I think your job as a CEO is to kind of manufacture almost fake or small wins and to alleviate them into bigger wins. Just to carry teams through a bit stagnant times.
37:00 Speaker 00 You know, I was talking to an entrepreneur friend of mine who I deeply respect and they said, you know, we set a big hairy audacious goal. And then within that, we asked the team, what's the first thing you can celebrate? Because it means that you're on track to achieve the big hairy audacious goal. The big hairy audacious goal I've always done, the what's the first thing you can celebrate question I've never done and I love it. It's a huge unlock. So now you can ask the team, what's the first milestone that you can achieve and prove that you're going in that direction? And then actually doing a celebration around it.
37:27 Harry Stebbings? I used to run marathons when I was, you know, young and I had good knees. But always you always break down by five miles, just the next five miles, just that if you look at.
37:36 Speaker 00 But do you celebrate the five miles when you get to them?
37:37 Harry Stebbings? Absolutely. I would have a jelly bean.
37:40 Speaker 00 That's great.
37:41 Harry Stebbings? Or whatever that is.
37:42 Speaker 00 You, I need to learn that from you. Jelly beans.
37:43 Harry Stebbings? Jelly bean, just get.
37:44 Speaker 00 Jelly bean in my pocket.
37:45 Harry Stebbings? Or just, and I'd actually vary it up with a Lucozade on mile 10 or whatever that is. But I think that's really important. What trait do you have that you're a little bit ashamed of, but it's also contributed to your success?
37:56 Speaker 00 I'm very independent, like very self-sufficient. The downside of this is it comes from a childhood of a bunch of weirdness that I won't go into now. But people find it very hard to get to know me. They find it very hard to read me in the company. So I try to be more, I try to tell people what I'm thinking. I try to like, you know, let my face be expressive, which not isn't naturally. Usually I just smile no matter what I'm thinking. But people find it very hard to get to know me, very hard to read me, very hard to like empathize with me. On the flip side of that, it allows me to like live in my own universe for decision-making or like big thinking. So like my favorite times are sitting on an airplane. No one needs to talk to me. I can just sit there and think I put my headphones on. I don't play anything.
38:39 Speaker 00 Sometimes I play static and I just sit there and think and I have a notebook and I write stuff down. And like this, like it could have self-sufficiency isolation. I find it gives me clarity in a place that otherwise I might not have.
38:50 Harry Stebbings? Do you enjoy your own comfort, your own like company?
38:53 Speaker 00 Oh yeah, of course.
38:54 Harry Stebbings? Not many do.
38:55 Speaker 00 I feel very fortunate then.
38:57 Harry Stebbings? Okay, final one before we do a quick fire. Becoming a father is an incredibly seismic moment in one's life. How did becoming a father change you as a person? One and as a leader, two?
39:08 Speaker 00 It's a good question. Everybody says that having a kid teaches you time management, teaches you prioritization and teaches you coaching. I believe that all that stuff is really true. For me, the biggest change was personal, like it just increases your capacity to love and recognize other people. My favorite thing about having a daughter is yes, getting to love her and love the snuggles and all of the things that she does. But it was actually seeing my wife become a mother and seeing the change that brought about in her and seeing her capacity change. And that recognition of someone, you know, who you've known for so long, you think you know super well. And then you just see this totally new aspect. You know, it made me think differently about, you know, what are the underlying aspects that other people in my life might have? And how might they change over time and being more open and accepting of that?
39:48 Harry Stebbings? What is success to you today?
39:50 Speaker 00 That's a very hard question. I think we all land in the bigger, faster, more, like the relentless pursuit of doing more and so forth. I fall into that trap absolutely as well.
40:02 Harry Stebbings? For me, it's like excellence, which is like, it doesn't have to be bigger. It doesn't have to be faster even, but it's like, whatever we do, it has to be great. I care about the craft of interviewing. We have to do more shows, all that show, but they have to be really good shows. And whatever we produce, it has to be great.
40:17 Speaker 00 Is it internally driven or is it externally driven? Do you have a threshold? That was a good one. That was not a good one. Or if you found a better interviewer than you, if everybody in the world was a better interviewer than you, even though you were still objectively really good, would that be okay?
40:29 Harry Stebbings? No.
40:30 Speaker 00 Yeah, exactly.
40:31 Harry Stebbings? So much of mine is driven through external.
40:33 Speaker 00 Competitive.
40:34 Harry Stebbings? Yeah. What's the right way to approach competition?
40:36 Speaker 00 I don't know. I love it though. It's like drives me in.
40:39 Harry Stebbings? But it will ruin my day when I see a competitor do something that I think we should have done.
40:44 Speaker 00 I think self-competition is the answer to that, at least for me. At some point, like now, I care very little about what our competitors do. If we're not as good as we could be, that starts to become a real challenge for me.
40:54 Harry Stebbings? Can I actually just ask one on, on the investing side?
40:56 Speaker 00 Sure.
40:57 Harry Stebbings? Which is like, you, you have the fun now, mischief, right?
41:00 Speaker 00 Yes.
41:00 Harry Stebbings? Yeah. So this might be spice, but like you raise money for Plaid and you are a brilliant CEO in that respect. And then you decide I'm going to invest. I'm like, if you're angel investing, game on. You do whatever you want. It's your money. Go, go for it. But if you're raising money from other people and then spending time investing their money, to me, I'm like, is that not a distraction to the core? And to the investors that you've had invest in Plaid. And actually that's, that's not how it should be. How would you respond to people who believe that?
41:33 Speaker 00 So that's a good framing and I appreciate the spice. Going back to like one of the themes that we've had throughout this conversation, like you have to examine the specific rationale and reason. For me, as Plaid got bigger, I got sucked later in later stage. I was spending time with the gigantic banks. I was spending time with the gigantic companies. And I found that Plaid was like, in some sense, losing some of the founder mentality. It was like losing some of like the fine-grained attention that I needed to play. To the early stage market. In call it like 2016, I started angel investing just because I wanted like a reason to go talk to these companies. And I did a bunch of it, like, you know, had reasons to go talk to founders, had reasons to engage with them deeply. It kept me fresh. It built a great network. I learned things that I brought into how we we develop products at Plaid.
42:16 Speaker 00 I met amazing people who we ended up hiring and it's created this like really virtuous cycle. Angel investing actually, I think, is very distracting to founders. The reason for it is it's personally on you. People want to talk to you all the time. You don't have a system for it. You haven't built infrastructure. You have no leverage. And so for me, a good friend and I sat down and she said, hey, I'm going to go be a full time VC, but I really want to start a fund. I said, this angel investing stuff is interesting because I learn a lot, but it doesn't have that much meaning and it takes too much of my time. And so we decided to partner together and she kind of decided to go raise a fund. We partnered, we did it together. And that became the first mischief fund. Since then, there are two other amazing entrepreneurs. And we've created this fund structure that I have max leverage.
42:59 Speaker 00 They run it full time, three full time people and me who does it a few hours a week. But I get to spend time talking to entrepreneurs, helping them through sticky situations. And the amazing thing for me is like, I said, I talked about sending emails and people responding like the wisdom and the value of Silicon Valley, and I say Silicon Valley in like air quotes here because it's not about being in the place. That enabled me to be an entrepreneur. That taught me everything that I know. And I think there's a value in paying it forward. And so what oftentimes happens is, you know, we have these WhatsApp threads with the founders and lots of questions. And we hear a question enough, I'll go down and write a blog post. And the blog post that I write will oftentimes be something I'll just distribute with them plaid. Like, hey, how do we think like I have a blog post on atomic teams, like, how do we think about atomic teams? Why do they matter? Like, why are they useful? How do we think about applying them in new product innovation?
43:44 Speaker 00 And so I'll share that with them plaid. I'll share that with all the founders. And like, sometimes we'll even do a Q and A, which we'll record and then we'll have this artifact. And so for me, it makes me a better entrepreneur to go deep on these like key topics that I've recognized. It prompts me to actually teach things to the company in an important way. And then it creates this like amazing kind of pay it forward mentality with the founders that we interact. So I think like the average returns have to come down because like the amount of capital is going up and the amount of amazing companies is not necessarily going up at the same pace.
44:10 Harry Stebbings? I agree completely, but we've moved from like a boutique industry, as Doug Leoni calls it, to like a commoditized asset class.
44:17 Speaker 00 Yeah. So to the question, is the VC product kind of played out? I think it's kind of played out. Yeah.
44:21 Harry Stebbings? Do you think VCs add value?
44:23 Speaker 00 A few.
44:24 Harry Stebbings? In what way has a VC moved the needle for Plaid?
44:26 Speaker 00 There have been a few. One of them was transformational where a VC came in and said, we'd around those falling apart for very unrelated reasons. They came in and said, look, we're gonna, we're gonna stand behind this. We're actually gonna give you more money at a higher valuation. And it's gonna like meaningfully change the trajectory of the company because there was some, some risk on the round that, that, that kind of came up mid-round. And they were like, no, we believe so, so deeply in the company. And so like that decision to invest at the right time, like made a huge difference.
44:50 Harry Stebbings? Who was that?
44:52 Speaker 00 That was NEA. Like they, I think the world of them and like the way that they handle that situation was truly incredible.
44:57 Harry Stebbings? That's awesome. Don't mind. They'll love that. That's good promotion. This is not like who walked away. So they'll be thrilled.
45:03 Speaker 00 Rick Yang, amazing. Ravi Viswanathan.
45:05 Harry Stebbings? I spoke to him before, actually. Yeah. He said, you're a dick.
45:10 Speaker 00 I don't think he's ever said that word in his life.
45:11 Harry Stebbings? Yeah, no, he's way too nice. That was just me. But we'll cut out that last sentence from me and then he'll just be pissed. Listen, I want to do a quick fire. So I say a short statement. You give me your immediate thoughts. Sound okay?
45:21 Speaker 00 Yep.
45:22 Harry Stebbings? What book written before 1965 would you most recommend?
45:26 Speaker 00 Ah, man, too many. The Wealth of Nations.
45:29 Harry Stebbings? What's the most contrarian or unorthodox advice for founders listening?
45:33 Speaker 00 Most of the stuff that the VCs tell you, don't do it. That's not to say like totally ignore them or like tell them they're wrong.
45:38 Harry Stebbings? What's the most dangerous trope that VCs often say?
45:40 Speaker 00 The OKR stuff, like putting OKRs in a business way too early is totally wrong. Putting revenue metrics on a company before they've achieved product market fit, totally wrong. Like encouraging founders to like, I mean, this was addressed in the, the founder mode post that we talked about. And encouraging people to like higher grade execs and then like let them have space, totally wrong. Don't like micromanage them too much, but like stay close. You need to stay in the details. You need to understand what's going on.
46:03 Harry Stebbings? What have you changed your mind on most in the last 12 months?
46:06 Speaker 00 So many things. We were talking about experience. Like I've just, like it's been proven time and time again that hiring for experience in certain pockets where like deep industry expertise matters is really, really important. And so that's been like just really in my face a couple of times.
46:19 Harry Stebbings? What technology or advancement is most underrated?
46:22 Speaker 00 The last time I had this like, oh my gosh, the internet, this is the way that technology is going to go. And like there have been a few of them recently, like trying the meta ray bands. It's like, oh my gosh, like this, this is a thing that's gonna happen. Like I'm dealing with some of the AI stuff. It's been fascinating. Like one of the first ones I had was like shock. Pay where I showed up to this website and it had all my information and just clicked buy. And it was like, ah, that's how the internet's supposed to work. And I think that that innovation is underrated. Everyone's like cloned it now and like, you know, PayPal's done it and Stripe's done it. Everyone's like built the same thing. But the first time I saw that, like they had this just this incredible advantage relative to the rest of the market. So it was very cool.
46:56 Harry Stebbings? If I ask you in five years' time, where would you be exceptional for Plaid to be? And where would be a fail? What would the answer be?
47:04 Speaker 00 If anyone can get credit, great access to credit based on the data that they have with them in their head, your transaction history, so on and so forth, you have the ability to link that based on the data you have in your head. That would be a huge unlock. Like, I think if financial fraud, which right now, at least in the US, is like growing at an increasing rate, if we can have it either flat or at least like growing at a decreasing rate minimally, ideally like declining, that would be huge. And I think we can, we can very realistically do that. And I think if it's a, you know, a one tap experience to apply for a loan, like that's, that's the threshold that we have. That's the target that we have. It's like, I want to apply for a loan, click apply, do a face ID. Great. Your application's submitted. That's the goal.
47:46 Harry Stebbings? Zach, thank you so much for putting up with my variations and moving around schedules. You've been fantastic and I've so enjoyed this man.
47:53 Speaker 00 Yeah, it's been super fun. Thank you for having me.
48:01 Harry Stebbings? I have to say, that was such a special one for me to do. We first did our first episode together seven years ago. So to have the chance to do that in person was just fantastic. If you want to watch the full episode, you can find it on YouTube by searching for 20VC. That's two zero VC. But before we leave you today, I'd like to introduce you to one of my favorite brands, Atio. Atio is the next generation of CRM. Setting up Atio takes less than a minute. And in seconds of syncing your email and calendar, you'll see all your relationships in one place, all enriched with valuable data. Atio also lets you build Zapier-style automations, gives you powerful reports and works perfectly for any go-to-market motion from PLG to sales-led. Atio is designed for the next era of companies like yours. And companies like yours shouldn't have to deal with inflexible, one-size-fits-
48:46 Harry Stebbings? CRM's. Join industry leaders like Eleven Labs, Replicate, Modal and more to scale your startup beyond the next level. Head to attio.com/20vc and you'll get 15% off your first year. That's A T T I O dot com slash 20 VC. And talking about incredible companies, I want to talk to you about a new venture fund making waves by taking a very different approach. It's a public venture fund anyone can invest in, not just institutions and accredited investors. The Fundrise Innovation Fund is democratizing venture capital, which could have big consequences for the industry. The fund is already off to a good start with $100 million into some of the largest, most in-demand AI and data infrastructure companies.
49:29 Harry Stebbings? Companies like OpenAI, Anthropic and Databricks. Check out the Innovation Fund's impressive list of investments for yourself by visiting fundrise.com/20vc. Carefully consider the investment material before investing, including objectives, risks, charges and expenses. This and other information can be found in the Innovation Fund's prospectus at fundrise.com/innovation. This is a paid sponsorship. And finally, let me tell you about UiPath. What do Henry Ford and AI have in common? Neither could change the world without automation. In the future, there will be two types of businesses, those that have automated and those that wish they had.
50:08 Harry Stebbings? UiPath's new AI agents don't just follow rules, they think, make decisions and work alongside the world's most powerful software robots. Already trusted by over 10,000 businesses. If agentic automation sounds new, just think of UiPath as your more growth, not more overhead platform. Or your happier customers, happier employees platform. Whatever you want AI to do for your business, agentic automation with UiPath will make it happen. Try UiPath's new AI agents for free at UiPath.com. The future of automation is both agentic and robotic. Don't get left behind.
50:43 Harry Stebbings? As always, I so appreciate your tuning into the show and stay tuned for an incredible 20 growth on Friday with Antoine Linnell, Head of Growth at Revolut.
Previous 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective Next 20Growth: Revolut's Chief Growth Officer on The Growth Playbook Revolut Used to Scale to $2.2BN in Revenue | How Revolut Launch and Grow Products | Why the Best PMs Don't Need A/B Tests & Why CAC is a BS Metric with Antoine Le Nel Page updated October 26, 2026 · transcript and summary are machine-generated
