#149 - The Craziness of r/WallStreetBets, an $100k Bet, and Startup Ideas with Mercury Banks Founder

yeah i feel like i could rule where i know i could be what i want to put at all in it like a day's off on a goal travel never look came bag it's kind of you talking about the riverside thing how they were you know i don't know if they were listening or weren't but i have this fear with any startup product because i know that i don't know if we're just like we were just morally bankrupt but whatever we would build a new product the main you get the excitement you get it out there but you wanna see how are people liking it how are they using it is it working is it not working one way to do that is to have like some god mode version of your product where you can kind of like ceo oh there they you know let's say you're doing slack maybe if you were doing slack i bet you somebody at size slack could see oh this organization signed up they created a bunch of channels oh that's interesting they created a channel for like music room and so because i know that we did it i bet that every fucking startup up kinda does this where they look into the customer stuff in order to get feedback right good ten but it's still weird do you keep one of those slider things on your computer now dude i have a facebook portal like you know i've basically given z you know root access to my kitchen well it's funny with mercury we see all of this transactional data that's guy who owns a bank on the call and but we try to like avoid it and like have good things around it but you know when of good wire comes in like you can't not notice it right like that's and like we need to make sure yeah everything works successfully with it and like call compliance checks are done like so i was talking to someone who is like five hundred or one thousand employee at stripe so not early but kinda early but late enough that would think they would have rules and he said that any employee could log in and see anyone's transactions there's been a bunch of things like i remember uber there was a story where like people could basically just stock their you know boyfriend or ex girlfriend like their whereabouts because it's like oh they're requesting a ride here at nine pm why did they do that and like there was a story that broke i don't know all the details but it was like the journalists who are writing kinda like hit pieces on uber they were like like we know what you're doing you know that was really oh yeah yeah pan that's right there's completely legitimate reasons to do it right they need to like go debug someone's problem or like see if there's you know some other issues so then like having like layers of restrictions around that it is tricky we had it i remember for one day we so we built this little video messaging app like a video walkie talkie app i was kinda like a not like snapchat it's not meant to be super private necessarily but like it wasn't self des distracting or anything like that but these were video messages from like one friend to another and the day we launched i remember like one of the engineers just had his like debugging terminal open and the way his debugging terminal was working was like it would just refresh every three seconds and like the latest message would just show basically right there and he just wanted to see like he was just checking is their audio and video being transmitted but i saw it and i was like dude these are like people's video messages like we can't just have this we can't just beat the wire tapping you know every user of the platform so i made them delete it but for like five minutes we looked at it and we were like oh that's cool we had all these users in france using it and i we're like these you know these these children like in high school in france we're using our product and i didn't understand anything that they were saying but i remember feeling so dirty so evil in that moment for being able to even see it yeah in my previous company we ran like social network for like mobile gamers and we had like this dm feature in that it was a little bit of a sas or like we looked at it once when like wow these messages are like had out of control i won't tell you what the contents were like it was always savory stuff and maybe we would like we should never look at this i have a mercury bank account and we did a big injection of capital into the account and i literally wanted to email you being like hey you see what's going on over here the the bank accounts going up but i was like i i probably shouldn't assume that they're looking at my making all they are i was so excited i wanted to tell you i was like who could i share this with you know maybe the kinda yeah we have enough users now that it's not like i see all of these things coming we're gonna introduce you in a second so we'll do a quick one but i wanna ask i need to ask sean something my ahmad started a a couple cool companies told one for about forty five million dollars now i this a thing called mercury it's a banking startup we're gonna talk about the second he also has a prolific angel investor but first of all sean is like a twitter guy now apparently that's like a thing he's like gone from like eighteen thousand followers like seventy five thousand followers in like sixty days and now he's like i broke eighty k this morning okay sorry eighteen or twenty u four or something in like sixty ninety days you are now apparently like a stock guide apparently you're like the biggest troll ever you're tweeting out that like if something gets x likes you're gonna buy a billboard what is going on and what's going on with your trades so i'm just trying to build by twitter that's the base of it right and i was like okay so we talked about this i don't know you remember this but a few months ago two months ago maybe there was a little email thread between me you and jack butcher and it said you know let's do a twitter race like let's race to a hundred care like that and jack was already at like eighty so he's pretty far ahead you were at like forty or fifty and i was like falling behind at twenty and i was like oh yeah that's great let's it then we all kinda forgot about it didn't even do but more recently i got added into a little i imessage group with five other people and it's called the hundred k club and it was all of us race it was like the same idea as a different than of five people who was it really trying to do it so two of them have been guests on the pod and then there's you know all of them i i won't say everyone's name but you can kinda tell because we're all like just this last month ago real active on twitter and really shouting each other out really busy like really hey yeah it's a pump and dump scheme without the dump right we're just trying to pump each other's accounts and help each other and we're trying to share tactics like oh dude i know it's cheesy but at the end of your thread just right like hey follow me if you like stuff like this and i'm the wanna start doing that right you do i wasn't was it but like i'm just give an example of we're just sharing tiny little tactics of like hey look after you have one that starts to go viral this is the ratio you want of likes to impressions and re tweets to likes that tells you it's gonna go viral if it's gonna go viral then start doing this every hour that's like the best thing of the algorithms or we're all just like testing little mds it's mostly for shits giggles it's not really like any science to it that's the background so twitter following thanksgiving was that like i don't know twenty three thousand followers today eighty thousand followers i think by mother's day i'll be back at zero because i'll be canceled because i am taking some risks in order to grow the following right because the fastest way to grow is get lucky or say things that are controversial say things that are like a little out there and so i've been taking some risks along the way and i think that there's forty percent chance i just get canceled can you do a tweet film about what happened with games stuff and isn't that wasn't that a huge was that that's the one i did yesterday so or two days ago i tweeted out this the games stop store i basically said hey if you're out of the loop like here's the hilarious story of the games thing and that one tweet alone has brought me thirty thousand followers so which is like kind of insane i've never had to tweet you that so yeah that one went viral okay and what happened with your trade so you also tweeted that you're gonna put a hundred thousand dollars in into games stuff that was the first week actually i i screenshot at a trade i'd had made on e train i put a hundred thousand dollars into games stuff i just sent it for buy market unopened right which is like you know just like a a total gamble and i was like okay cool this is fine and then i tweeted out this story about like why i'm doing this right like here's what's going on with games if you're out of the loop this is really funny thing where the editors have literally bankrupt a multi billion dollar hedge fund because the hedge fund was betting against games and these editors all started bidding in favor of game they started buying up all the stock and basically capitalizing on the greed of the hedge fund the hedge fund had had shorted more than the supply of the stock that was in existence right so that's what they recognize recognized was like holy shit these guys have taken such an over extended position maybe we make them pay for their over extension and so i was explaining what was going on and i bought i put the trade in and you know the next morning i happened to wake up before the market open i woke up in the middle and i and i was checking my twitter freed and the tweet had gone viral and so already i'm oh this is crazy i'm getting five thousand ten thousand followers really quickly and so i thought okay i kinda already got a lot of value out of this straight gambling to be buying games right now so was like maybe i don't need to do this one hundred thousand dollar gamble so i cancel the trade morning of that hundred thousand would currently be i think six hundred and seven hundred thousand dollars within you know forty eight hours of that trade and this is with no leverage right like if i had lever up like the way these guys do on wall street fence it could have been seven million dollars if i had actually like gun on wild like them but yeah i canceled the trade that's the short story i'm an idiot i got thirty thousand twitter followers and zero dollars out of it you pushed out man and then you i did the worst possible thing i chased the miss which is like if you're gonna like if you're gonna miss just miss and i chased the most and i bought bed bath and beyond which is like one of the other candidates of you know that they're trying to do yourself a hundred thousand dollars into that one and it's okay it's up like five grand or something but it didn't do the game stop i'd never buy stocks i've said this but it looked like you were having fun so i did like tang and am see and like i've got enough profit now i could buy like a sick used motorcycle i wanted to buy a billboard so i now have decided from this that's a it's very fun to day trade and so i'm just gonna set aside it's fun when you yeah it's fun today sean no but what i'm saying is i'm okay just if i lose the money i lose the money it's no problem right like i used to gamble i mean i to play poker like really seriously i was a semi fresh poker player but i stopped gambling for many years just because business became more fun but now i got that little rush again and i remember this familiar rush this is this old friend is back in town and so now i'm gonna set up a a every day i'm gonna make a single trade and i think i'm gonna let it run for either just twenty four hours or forty eight hours and i'm just gonna take this hundred grand i'm just gonna roll it into a new stock every day or every two days and i'm gonna see where i end up at the end of the year if it goes to zero goes to zero if it if it goes up it goes up but it is very entertaining to do this but and last thing you also i've been going hard on bitcoin are you up or down if you're down on bitcoin you're doing something wrong most people who are in bitcoin are i'm i'm bitcoin for sure alright just wanted an well head all i'm just like that one's the less interesting i think because like the drama of the games thing is like you have internet nerds versus like the wall street suits so that's like already interesting they actually have the best slogan on all time it's will stay retarded longer than you'll stay solvent yeah and they have like a very good sense to of humor maria we were talking about wall street bets a few months ago ever since you brought it up sam i've been i've been hanging out in there you know more than i should just because i find them to be a very funny community they're obviously like sort of sick and twisted but you know hey it's entertainment on reddit you know i who am i to judge and mod are you so how many startups have you invested in think above a hundred and eighty now those are definitely high risk are you playing in any of this craziness are you a degenerate like me or do you just do good investing i think there's something fundamental going on where like the us is just going way too far at like fiscal like stimulus and it's just like very broad based like it's not like needs space so i think twenty twenty one is gonna be crazy asset bubble across stocks and bitcoin and everything so like that's like a fundamental thing that i'm willing to bet four so i did like actually my wife got mad at me because i've moved like most of our cash into like stocks in bitcoin because i just think they're twenty twenty one like it's just gonna go up it's like there's just so many trillions going into the market these bets like i think they like kind of farm i actually also book bed bothered me on because i'm baby mean i'm not putting money that i'd don't mind like using and it's like tiny kind of things i think the market of to the the degenerate club my thinking is like look i can't lose right whether i win money or i lose money it's all just content for me and the content builds the audience the audience is what makes me money in the end so like you know i learned this from when we had mister beast manager on on the other day but right this guy's going and tipping ten thousand dollars at a coffee shop right because he understood pretty quickly that hey when i do these stunt these money stunt these acts of wild it generates a lot of attention it grows my audience and so i think that most of us in you know kinda silicon look at like of the more successful you get the more buttoned up you typically get i think what you see some people doing a cha month is doing a ton of this which elon does a ton of this which is when you're supposed to be buttoned up and then you act a little wild you get this disproportionate reward of attention because that community doesn't get a lot of that right if you're thirteen years old you're just watching youtube stars you're used to one person just one upping the other with ridiculous after ridiculous but if you're like a tech person or you're like you know you're an entrepreneur you're used to people saying the right thing and doing the right things or at least publicly doing that there's like a barbell nest to being cancel like if you're in the middle you can be canceled but if you're completely ridiculous are completely like buttoned up in new can't console so you put take man and anyone who's slogan is what it is what is their teachers they have a t shirt what's it say sean i forget their t shirt but they had one slogan that says will remain retarded longer than you'll remain solvent and then they have another thing i forget what is but anyway anyone who's mantra is that is on that one side of that barbell yeah oh it's what is it as if chan got an options account or something like that yeah four chan bloomberg yeah four had a bloomberg terminal there's a part of me that's like hey disclaimer like don't just do shit like make sure you know what you're doing or like you're working with some amount of money that you could afford to lose and also when i'm tweeting shit just tweeting shit okay that doesn't mean i am like doing these things i'm recommending you do them i'm just tweeting shit i feel like i should put that disclaimer out there i agree not you have an interesting perspective you own mercury or you're want their founder of mercury so you see a lot of banks or mercury basically startups come to you and they use you for banking so you're able to see like what's growing quickly you're also like you said invested in a hundred and eighty start so you clearly have some type of perspective what are you looking for now i mean what what interests you at the moment yeah i didn't think of like the startup game nowadays and like these two slightly different perspectives like number one is kinda what mercury is doing where you you see this like industry which is huge it's full of these incumbents that like everyone hates and i mean the crazy thing to me is there's so many of these industries right it's not just banking where it was very obvious everyone hates their bank you know they're not customer friendly they don't have good products all of that but it's the same thing in like a ton of different industries right like you try to get a mortgage or something it's the same thing like life is full of these like painful consumer and business experiences so i think that's like a whole class of startups that's really interesting and yeah i'm always investing in something like that what are some other ones besides thinking that come to mind that you've either seen people innovating in or you think somebody should go look at that old big s let me jump in real quick ahmad was asked that question but i do wanna answer it really quick so when you guys bought your houses sean were you a w two employee amount were you a w two employee yeah okay my wife was not for example and and i think you were not right technically a w two employee but if you own more than twenty five percent of a company they wanna see your business financials for like the trailing three years yeah and i didn't like that i thought that was weird i'm like why is that matter when a employee gets a mortgage they call their the boss or hr which had a small company it's me so i and i yeah yeah you know mallory works here she makes this much money we're not going out of business she's probably safe they get mortgages me personally because i own more than twenty five percent of a business i couldn't get a mortgage and if i in the mortgage that they did allow me to get it was like four and a half percent versus the two point nine that my wife got is that crazy yeah i mean all of these institutions around banking lending etcetera are like you know they're freaking like fifty hundred for institutions and they're not and there as conservative as it gets like they don't change quickly but that's why fintech exists right like we're kinda attacking these institutions from like all these vectors but braxton did the same thing right b yeah be was basically like oh you just raised a ten million dollar venture round and you can't go open a credit card because of stupid reasons for like all the traditional ones if you raise money like we will get you a credit card you know tomorrow we understand what credibility means in the startup world whereas these banks say what's show us your history and shows your revenue show us something and you're like well we're just two guys with you know some code like that's not necessarily they were used to looking for so brexit did it over there mercury is doing it in the banking space what else you got i always have these ideas that i'm like i wish someone did this kind of thing and something i would love for someone to do and i have lots of ways of doing it is the salesforce competitor that was actually good every time i say this like lots of people like it's not possible salesforce so like entrenched and i'll all this up which is you know quite similar to things that people were saying to me when i started mercury in two thousand seventeen but i think everyone hates using salesforce right like i think that's like there's a strong at point there and i just don't care what people say about like existing so so we use salesforce i thought that the our guys liked it because you like it i don't even use it i'm not a salesperson but i mean i log in i mean it's just like pretty robust it's relatively customizable but isn't there like pipe i'm with i'm with ama ahmad i've i've used it and it's pretty painful to use there's a few but none of them have done it like none of them have like threaten salesforce right and i think hubspot is a marketing too i don't think the crm is like that means so alright so this is how i've got like two or three methods of doing the salesforce thing i think one that i quite like nowadays i've been thinking about this idea for like four or five years i bought my own crm in my previous company sir and pretty opinion you know but one idea is to do an api first salesforce so the problem right now is like we it at mercury i think most companies see it as your customer data is just all over the place you've got some in your database you've got some and like this analytics software you got some in the marketing tool you got someone stripe in theory you can plug that all into salesforce but it's not like api first it's not like very easy i mean even to get a api license to it you have to pay like way more i think all your seats go up to like two hundred dollars a month or something like that but you i think there's an interesting approach to go data first and a developer first and make it a you've got basically like really become like the single source of trees for like customer data other ways to go like super snappy super nice like crm and none of these like new crm i mean to be fair i haven't tried all of them and they are like tons of them but none of them are like you know really like like the super of crm kinda thing with that really custom first and really great sounds very skeptical ninety percent of people should be skeptical skeptical i also think the super analogy is kinda dumb because i think and we had rahul the superhuman founder on here i think it's an awesome guy i think it's gonna be huge i think super humans aren't that cool i don't think it's that good i also have a horrible reaction whenever people particularly start up people which out all three of us are that do this they call it like a design first and they went to be slick but it fucking sucks like you know what's not slick is amazon amazon on slick and it's awesome craigslist isn't slick and it's awesome i challenge your and you didn't say slick but i challenge that opinion if that's what i think you mean yeah the these markets are like so huge that it doesn't matter if even if ninety percent of people don't want slick if the other ten percent of people are willing to make a decision based on slick it does like that's like probably the a monthly opinion know you like copper i copper they advertise all over the place isn't that called copper am i wrong guys cooper what does the do it's like a salesforce competitor and it's very designed first one of the interesting angles to do the salesforce or whatever it could be the banking thing right like what you guys did about brexit did is you go to a customer segment that is small but growing and is completely neglected or misunderstood by the incumbents and it's really not even worth their time to like make it a big priority to go understand this segment we see this happening with the creator economy people are building all the financial tools for the creator economy because they're like hey if you're a youtuber how do you get a mortgage right if you're a a twitch streamer how do get a credit card if you're clear bank did this with e commerce they're like hey if you're a e commerce store that's only got you know seven months of data but you're every single month you're putting in a dollar into facebook ads and getting out three will lend you money we can just look at your facebook track record and no bank could ever lend you money based on your facebook ads manager but clear bank was like no we understand your business and therefore we'll lend against what we understand and so i think you have to go to like one of these groups that is misunderstood and underserved by the traditional infrastructure whether that's young people international people it's a new job category like creators it's a new company category it's crypto companies like i think that that's the entry point you kinda want because especially if that market's growing right if there's all of a sudden you look up and there's a million creators earning over fifty thousand dollars a year which i believe that there already is then you've you know you're actually in a big market that just looked like a small market when you started or from the outside yeah i mean that's why a lot of ideas right now are like these remote work ideas it's been happening for a while these nomads and like all of this kind movement but since the pandemic i think it's not most but a ton of people that can be remote will be remote and like yeah tons of interesting things can come from there like maybe we're gonna have like cities in the middle of freaking nowhere they're gonna be done like these kind of mat cities that people really enjoy having like tons of nature like that's pretty good connection there or something that and i've seen lots of ideas that are both touching the real world and evaporation and all online stuff that some of these are gonna be unicorns and like that's like a big friend you mentioned before you came on you said you know dr told me before i came on think of a bunch of ideas so i thought of have a bunch of ideas rattle a couple off and then if one is interesting like to give us the kind of quick two liner on them and then if we'll dive into whichever one sounds cool so the crm was one i thought about for a while another one that actually again was like a second or third best idea that i had instead of mercury but there's lots of like ways to do it it's kind of like i like someone's phrasing for this is like a club house for business so it doesn't make sense in like a tiny three or four person company but how do once your companies get bigger like how do you create like this serendipity where like people can have conversations there's not like you know meetings are like boring and they're annoying to set up like how do we create like this kinda interaction water cooler moment for offices and i've seen a few versions of this nothing is like quite hit it for me i make actually you an invest in side kick which is which i think is like super interesting and it's very close to my vision of it which they basically give you like a a tablet that sits next to you and then your colleagues also potentially have that tablet and you can like there's various settings but you can like do a happy hour and all this stuff and it's like almost like you're sitting next to someone kind of thing and i've seen like some online versions of that as well so i think there's something that like i really think if the future is gonna be remote we need to solve this problem of making a human connection with like colleagues and i don't feel like that's un sol i think like the combination the right software and hardware can do it i don't know what the phone factor is yet and that's the interesting thing about these kind of social behaviors you just like little things can turn it from like a bad idea to a good ideas it's very hard to like come up with it but be putting thousands of experiments so i think someone will come up with the right factor keep rattling off a few i just like hearing what you what you think about i think there's something like cool happening with subs stack right now i'm an invest in subs but like i feel like there is i guess like it goes back to your creative point but there's gonna be a whole economy of people that are like journalists basically and they have a direct audience and i think subs is like one part of that but i think there's other tools to be built around that i would love to pounce on that sean you wanna talk about this i like this one no good so subs i think is bad ass so writing a newsletter as sean can tell you as i can tell you running a newsletter consistently is significantly harder than probably any other medium well maybe not video but it's really hard and what i'm gonna be curious about is seeing if these people are willing to do it for two or three years because i think that will be important but i think what sub has done is really sick i like seeing subs completely kick mediums ass i think that there's a lot of interesting ways to monetize do you know what's going on sub right now with the advertising ahmad so the hustle i advertise on subs sec and they don't like it but they should allow that so in their mission if you go on their website in their mission they say we will never allow advertising or i don't know what the phrasing but it's basically says like no ads ever or something like that and the founders were interviewed in an article that i actually participated in and they said like no we don't want like because people are like hey can you help us monetize with ads and they're like nope we're not gonna do that ever and so the hustle we went direct to a couple guys a couple different people and we paid them x amount of dollars i don't even remember but collectively maybe six figures spread out and they monetize their email with advertisements and they actually made more from us than they did their subscription and in order to monetize an email with advertising you actually have to hire a full time sales it's so expensive and it's very very challenging it's easy once you got it but it's really hard a mod have you thought about monetizing have you been when you're thinking about monetizing has that been something you've been thinking about is advertising in email we're talking about like from text perspective right you are a creator but yeah i think subs has like a interesting kinda of line where they i think they will not facilitate the advertising i don't think they will make an ad notebook at least like they as you say they say it on their website and you know from like talking to them they are very against that for good reasons i think you know one thing you have to always worry criticizing them one thing that you have to worry about when you're doing a company and like i worry about this with mercury is like as you scale what stops you becoming the incumbent right like what stops your incentives aligning with like the thing that you were trying to solve and i think as soon as they're going into advertising the incentives like aligned to towards like clickbait and lack a privacy and like content that's like kinda churn and all of this kind of stuff whereas like subscription kinda aligns better to like long form content where like people are really giving you a bit of trust and you have to like keep it over time kind of thing so i think it makes sense i mean i would be very surprised if they do stop people from wanting advertising like there's gonna be some forms of like newsletter content that just not gonna monetize very well by subscription but we'll monetize very well via advertising and like yeah one thing that people don't get is like facebook makes a ton of money per user for a free product like they i think they make like four dollars per user on average or something per month that's insane right like i mean you're giving away a free product to like the whole world and you you're making like that much money for user so advertising if you've got the right kind of data and the right kind of audience is very lucrative i think it will be lucrative and actually this is a good startup up idea someone is probably gonna make like a pretty nice newsletter for newsletter at that work right like because sub not gonna do it but i don't think they can stop the creators is doing and wanting in i have a two kinda of interesting points did you guys see that twitter bought review yep yep yep yep yep i think if i'm subs stack here's worry number one which is twitter buys review which was a subs competitor essentially it was an easy way to publish a newsletter and have a pay for it wasn't done as well as subs took off so this becomes very interesting right like i was talking earlier about growing my twitter following like nobody who's in the game right now really wants to have a big twitter following that's a top of funnel to get you to own your audience on email which is something sam figured out like i don't know how many years ago seven years ago when he started the hustle and he was like and i remember back then being like dude you gotta be on snapchat you're gonna be on facebook he's like yeah we'll like we'll do that but like all i want is my own little pirate chip he kept calling he's like all my own pirate ship where we own our own we have email connections with our customers and we don't have to worry about facebook changing everything look can you see this this is how much i care about the pirate show i said the i guess his his inner thigh right now where he has a giant tattoo of a pirate chip and he used to say like some cheesy thing like every subscriber is a tough of wind in our sales or something but basically you know my point is you know anybody's growing their audience in somewhere they wanna own it if they can and i think if twitter integrates in the email like the ability for me to email my followers that's a fucking game changer that is a huge huge win if i could basically grab subscribers natively without them clicking out to go to some other app there's just a button to subscribe and if i could just auto email them that would be amazing the second thing i think is interesting is did you guys see what's going on with the everything bundle and you're are you familiar with this the everything bundle is a group of guys nathan bashar dan sc they got together they're like look let's create a media company on top of subs stack what they did was they created a bundle where if you subscribe to the bundle like twenty bucks a month or whatever it is you get to be a paid subscriber for like seven writers instead of just the one right because that's the problem is it sounds cool like oh yeah i can just charge a five dollars a month subscription but like if all of us do it now some reader who just wants to like follow all of us has like ten subscriptions for five dollars a month and it gets really expensive at the same time for us it's hard to get customers right so one cool way to do it is to join a bundle and like people talked about those before but most of businesses bundling or un bundling things and so whenever everybody gets a personal newsletter these guys came along with like screw it let's bundle together the personal newsletters and they have like jerry colon corona and they have like you know a bunch of interesting people who are part of the bundle the url is every dot t o every dot two dot t o and so this was like a side project that they were doing then they kinda started taking it more seriously and then yesterday they announced they raised around and now it's like a media company named every you know this some stack bundle that a few guys were doing like it's turned into like a real experiment like let's see what happens and it's pretty cool because if you join the bundle you get paid for every like an you're an affiliate basically so for every subscriber that joins the bundle through you you earn like the bulk of their subscription but any reader who a part of the bundle like so you get more reach because you're sharing audience with the other guys i think it's pretty interesting what they're doing i actually think that this model is it some ways like i think that you know people doing something like this can have a pretty good outcome if they focused on bootstrapping this business now they raise money is this ever gonna be a billion dollar thing no in my opinion but whatever i think if it's a cool it also solve sam's point a little bit more that it's hard to kinda you know make a newsletter interesting every single week for like two years whereas maybe you can make it interesting every month for two years or five years what's interesting is i just looked up the guy nathan who started every bundle he actually used to work at sub and now they're no longer using subs so that's kind of interesting but my issue with this is i actually went to their website it's awesome i'm gonna sign up the content and the product is pretty cool i'm excited for it i don't know what the truth is but it's positioned a little bit like a collective e type of thing where it's like we're all equal and anytime i see that i think oh well once you guys get remotely successful you're gonna imp and die yeah like when i talk to them i was like okay cool so how much do i have to share with the other people in this bundle and what if i wanna leave this bundle could i get so popular with that i'm like look i am the bundle right it's like when bill simmons leaves espn it's like i don't wanna be on this roster of journalists i i am the headline so why don't i just do my own thing or conor mcgregor in the u e like this happens the stars get so big that they the top two people will be worth more than the next two hundred people on the in the bundle what's gonna happen then is gonna be very interesting what else are be thinking about with subs sec am i be sorry we're kinda talking over you no it's alright you guys mo create is than i am so what we do we invite a guest on and then they say half a sentence and then we talk for thirty minutes and we're like thanks for coming that was awesome loved hearing ourselves talk let's tell us about yourself have the fuck up okay so oh let's say change subject to something that i probably know more than you i think there's ton of interesting things in fintech and like i have started at fintech in two thousand seventeen as like anu no where i didn't know anything whereas now like i'm just seeing so many interesting things there's this whole trend called embedded fintech i don't know if you're familiar with it but the idea is like let's say you run like a saas platform and you have like all this access to like business data maybe you're helping with payments and things like that what if you offered these people on your platform alone so there's a company that i just invested in i think they're public enough i can just say this it's called lend flow but basically that's like the thing they're going after and there's someone else doing this with like credit cards i'm also investor in but i don't think it's public but i think there's like there's something interesting here where yeah you can take a company and like it's built up an audience call of this data and what if you can provide like fintech products and that's historically being like very hard to impossible right but i think it's getting easier because of these like tools that are stitching it together and also you know banks are more willing to work with fintech companies and that's enabling this kind of so i make sure i understand so it's basically like when shopify launched shopify capital right it's like exactly they they launched the lending platform within their tool branded as themselves and maybe it's actually even run by others i don't know what shopify f fight did but like the idea would be you give a business that has many customers or users the ability to be to have financial services as one of their product offerings is one of their revenue lines and is that why people do it is it so they can earn that revenue of lending or what is the real reason mean revenue is definitely part of it but the other thing is the stickiness right like if you if this platform is not just like something i use as a saas tool but it's something that's like really powering like the cash flow of my business now that's like ten x more sticky so i mean that's one of the fun things about these fintech products can you done this down even little a little bit more me so you're saying that if i am mailchimp i'll tell you for you for the hustle here here's the example for the hustle you have trends the the subscribers or trends i think most of them are you're going their own small business or there's a lot of small businesses that are subscribers to the hustle travis to trend today when they wanna go get a loan they have to go to another third party provider and say hey you know we would like a loan now let's say you had some data about these customers right you know that they use you in some way where you feel comfortable offering as an additional service instead of just giving you an email instead of just just giving you research reports you can also get a credit line through the hustle right we love to support businesses that's why we do what we do now you don't wanna build a credit line product emma mod investing in these companies that will just make it where you just plug it in and now the hustle can offer credit i think like household is not the best example you want ones where they have like unfair advantage in terms of data and right for example if it's like a dentist practice software right there are like two or three companies that like just do freaking dentist right dentists are great people to like lend to the great people to like give credit company but you're not you're not letting them money so they can buy your service at a no no this is josh for anything so like i'm setting up a new dental practice i need to expand it like i need to get you know whatever there's lots of these kind of situations that happen again like there's an underserved element right if you're new to any of these businesses almost impossible to get loans from i think he's saying is he's saying he's give there's companies giving i got it dental software provider a way to give it to the dentist yeah that's pretty cool is this so it's lend flow dot io o seems pretty neat what's the comparable for this it's been happening for a while right square has square capital and they use that data as stripe as stripe capital so it's just previously been like you need to be a forty billion dollar company or something or at least a five billion dollar company before you even think about it and all of those companies that have done it are like pure fintech place in the first place so they understand how to do it i don't know what is the compare i'll give you i'll give an example really existed before there are companies that basically go to games and they say hey don't you want your users to chat with each other but like you don't have to build chat like we give you chat that you give to your customers right as a additional feature in the game or video chat this is pretty common there's a bunch of companies that just they do the zoom type thing and they just let you put it into your app so you're building an education app cool now you can offer video calls or you build your intercom you offer customer support now you can offer video customer support intercom doesn't have to go build the video chat pro to do that they just use what is other providers i think it's cool it's pretty obvious that it's gonna at least be mildly successful right yeah i mean it's not just interesting in lending like i think this the concept of like embedded fintech is gonna happen across like almost every financial product like it's you know whether it's like lending or credit card or even like depository i think for the kinds of businesses we do like there's still want something like mercury which is like a fairly kinda deep and in that product but for like maybe simpler businesses maybe freelancers like you know you just wanna have like somewhere to store your money and like have a debit card there's no reason that can't be embedded in a subs for example like maybe subs just instead of making a payout to your bank account they make a payout to a sub stack account and you can just like spend that money straight away and yeah that has like some alex attached to it kind of thing that like where integrator which right now twitch has millions of creators on the platform we have i don't know i can't say the exact number but tens of thousands of partners who are you know under contract earn money every month and so they could roll out a debit card for example or a product like that that would help the creators while being a you know potentially a you know a revenue a small revenue driver as well per channel yeah and they could even you know maybe give you enough money to do that mortgage from your twitch revenues alright like it's right i think it can all like tie together potentially inside these platforms when you invested in these guys lend flow how early were they what made me invest so i've seen a you know being in fintech like i end up seeing like quite a few pitches like this and this guy just like i don't wanna like steal too much of a story but you basically like didn't not raise money and he got this thing to actually work which is really hard in fintech like normally you have to raise a bunch of money to like build something and he just like went out there he just built this like using his own kind of money like almost bootstrap it to like reasonable success like he was doing like quite significant revenues like again i don't wanna like give away too much like more like you know significant like a significant seed round kind of revenues it's very hard at fintech as i said like i've done a ton of like sea companies in fintech normally they're like just building the product right so i was really impressed that he did that and he had like a very thought through thesis about why this would work and how it monetize and and he was also not taking like i think a lot of the time lending companies don't work out because they have to use their own money to do the lending like he'd built up like a bunch of like partners that were doing the actual lending which makes it like much more of a scalable software play versus is like you know now i have to like worry about defaults and like underwriting and all of this kinda much more complicated stuff how many engineers and how much time did it take for you to get mercury of work so we started in august two thousand seventeen and the first alpha user was january two thousand nineteen so a year and three months before we had any alpha users and even then it was pretty crappy i would say when we launched in april two thousand nineteen which was basically year and a half from start that was when it was good for most of that time we had eight people working on it including me six engineers one designer and one kind of product and bd person you know it took a long time partly because we had like a overly ambitious thing that we wanted to like bank startups ups and be like a complete replacement for your bank account which meant that you know had to do all the things your bank account does like we had to do international wires also really wanted to support like foreign founders like immigrant founders because i'm an immigrant from the uk and i didn't wanna like make a bank that wouldn't like support like people like me so we had like probably like unusual levels of like requirement so it took a long time and then other side is doing the bank partner we ended up doing like two bank partnerships we actually integrated all the way into one bank partner which thank god we ended up switching away from because it's bb and they just like shut down all of their challenger banks so we missed that only just so that that was what the two why did they do that because i got a notice from as that was like hey our bank partner decided to turn us off and there was just like that's it end of the business like it is like stopped and there was like there wasn't even a you know normally they're like here's what's gonna happen to your account there was nothing they just put up the memo that was like unfortunately bb has shut us down so why did bb do that and do you think others are gonna do that or what what why did that so there's a so as and simple we're wholly owned subsidiaries of bb us so these are not like startups that were independent that could like switch you to another partner bank like mercury creek or whatever they were like it was a feature about that it's just part of like this big thing that was happening basically p and c bought bb usa i think for twenty billion or something definitely more than ten million between ten and twenty and as part of that they just didn't more worry about these kind of digital banks like even though they're growing the reason like all of these stranger banks exist is because banks don't care about deposit customers like that's like the fundamental issue in banking where like they think of deposit is as like cost center because a cost them a lot of money to like have someone walk into a branch like sign up for a bank and then like worry about all this stuff like where they make money is is lending so they think of lending is their revenue and deposit is as a cost center so when they look at like as low or simple like all they see is costs like they don't see potential like i think the future is like challenger banks are just gonna completely dominate these incumbents but they don't understand that and if they did like we wouldn't be able to win so what's the way you guys think about it if they think about it that way how do you think about i think there's two things that we think differently number one you know how do we get the cost of servicing customers like near zero right to me it's a software problem right we're moving bets around if the product's good enough there's no reason they should contact us and there's no reason we can't like give a great product without having a massive cost of flex servicing so that's one aspect the second aspect is we think about it a little bit more like a freemium thing right like we have thousands of customers that don't really use it too much to have a few thousand in the account maybe we don't make some money on it but we also have like hundreds of customers that have more than a million dollars in their bank account because we're servicing startups ups we make get a ton of money on those bigger guys and if they can subsidize like thousands of the small guys you know that's the easy maps like you can do the maths it works out whereas banks don't think like that they're trying to monetize a hundred percent of their customers which isn't in the right mindset so that's one aspect it i think the other thing which is like something banks are missing is historically there's not really been a reason to switch bank accounts right they all kinda of sucks so like switching from bank of america chase there's not big reason i mean maybe they'll give you some rewards to some small percentage of people to switch i think the reality is that i think the challenger banks are like such a better experience that there is i mean it's already happening like we're wearing exponentially china's is growing exponentially eventually that's gonna be like all of this like depository base that they thought was like very safe is gonna be now sitting in challenger banks and at that point like you basically got like this long term relationship you go you know all of this data you can lend against and really like that's the touch point for business customers especially that's a touch point that people touch like every week so you can build the rest of a bank quite easily from that starting point much harder to go other the way where you're just like a loan provider and you try to build like a long term relationship because loans are like commodity you know at the end of the day you wanna get the cheapest learn whereas the bank is like something you use every day we wanna have the best product i think we only have a few more minutes but what else is in seeing you at the moment get to some of your radical ideas either in fintech or not because you're i know you you're pretty like creative guy and i know that you also have been in silicon valley for a little while now you have a very good network of interesting people like i bet if you just look at your friends from seven eight where did you boot silicon valley like eight years ago ten years ago something fifteen eighteen years ago fifteen years ago so if you just look over that time scale i bet you've just seen people like try fail try fail try and now like home run you know talk a little bit about like kind of like what you've seen in that time from like just your batch of friends and like where are they and where are the smart people looking and thinking about what the future looks like yeah i mean one thing that's interesting is like the longer you go at it i feel like the harder problems people tackle and i think something that i'm yeah it's happening for a while now but you know i'm seeing like people raise like eight million dollars ten million dollars on like an idea which i think is crazy but it does mean that people can tackle like much more ambitious problems right and that's fun right like i think there's a ton of things that are gonna happen in space like i think space is gonna be super interesting you know we've got spacex kinda like dropping the cost of like getting one kilogram to space to it's like ten dollars so that's gonna open up a bunch of use cases and i think that's really interesting i'm an interested in momentous space which kinda like moves things between like different orbits and it's like doing back right now so that that's gonna work out pretty nicely how big is momentous momentous space like in terms of people or after they do this back it's gonna be a two point it's not finished yet and the market is crazy so two point two billion or so if it goes off the car one starting a company that puts stuff into space how does that even start i mean is the founder of kind of a big shot already and they just go to investors from the get go because like that's not even remotely bootstrap yeah that's what i'm saying like you need there is a level of like ambition right now where people are willing to give ten million dollars to people who aren't not revenue and they're not gonna make revenue for a while like i mean i'm also this an investor so momentum space is just finished that off like invested in two thousand eighteen and it's like stacking now and raising two hundred million so it's and i invested it at like seat stage you know and they've made some revenue but it's like the goals are way further than like you know where they are today but it's like that level of ambition is like an exciting right so i'm mean also interested in this other company so yeah i would say like there is like some recycling of talent going on right like there's people who work at spacex who wanna do something new there's people work at blue origin that i want to do something new i don't think you can be like and maybe someone will pull it off but you can't be like a college kid that's like hey i i have this space idea i think that's like hard to do you need to really learn and deeply understand that space and then you can like launch something so this momentous space guy has like this crazy story where he was in russia he was doing a space company there and had to like leave because of like putin and my guess i he's got this like crazy story and the depth of experience that he got from there before he started momentous yeah i just think that's so interesting because i see there's a lot of interesting stuff going on like with that some of these trucking companies some of the space companies and it kinda bog my mind because with everything that we do you can just do it with a laptop and one person can make a little bit of a difference but with that stuff i mean it's all in and years and hundreds of millions of dollars until who results and i find it to be incredibly bold and fascinating and it's kind of interesting to see how that actually comes to fruition yeah i mean these moonshot are hard to invest in like haven't done too many of them like maybe ten but it takes years you know i've been investing since twenty sixteen i mean the whole fact thing is like changing it a little bit where you can especially like these moonshot back so like there is this appetite kinda these retail investors to have like access to these relatively ambitious early stage companies i don't know whether that is a good thing in the long term because you know some of these are gonna die so maybe that's good like it's like when every mobile app was just getting bought by yahoo and you're like oh great this is this window of time where you actually didn't need to be successful in order to get like a pretty nice exit and that's what's happening with the specs right now is this like a lot of it is oh cool this this rhymes with tesla or spacex great i will in this you know on the off chance this is just like those i'm gonna go ahead and buy him right and then there's like this self fulfilling prophecy because right now all this facts are up right the specs have crushed it over the last year so now somebody's like oh somebody's back something i'm made baby i like specs you can't lose when you have this kind of irrational exuberance and like sometimes good things come from it right like if we can get a few of these space companies to become like come on yeah you know maybe there'll be a trillion dollar company there somewhere and that'd be nice that retail investors get access to like these like very early stage kind companies like it's it's a little unfair that like seed investors gonna see this in the private sector but like return investors don't see the upside yeah yeah for sure thing you said about the ambition is is a hundred percent correct and that's in one company that's like a self driving car literally building these mini self driving cars like one person vehicle when you talking about the guy we met at our meetup up yeah and i like the guy and they've been working so hard but like my excitement about the company you know when i heard about it and heard division it's like when you talk to the founders that are doing these really hard ambitions business things you're like take all my money should i just drop what i'm i'm gonna come work for you i'm gonna come be your employee because here this is so inspiring like the world's gonna change i can't wait wins the demo is it next month and then like six months go by twelve months ago by eighteen months go goodbye and you're like fuck this is hard just reading his updates i'm like fuck this is hard and i'm like this is a terrible investment like i invested in some random ass like saas hr tool that's like you know i don't even wanna hear the update because i'm like i can't stand i don't wanna hear about the space it's like a drain on me but you know those are just better businesses and you know most of the time because they're not trying to like make science fiction turn into reality and build a great business at the same time and i remember when i introduced and went to like five of like much more experience investors in the and i like hey i found this stuff company i it's really great here's this guy's background it's a crazy story and they're like four out of the five were like yeah i've been burned so many times by this like i just don't do hard tech anymore it's just too hard right and like kind some people are getting rewarded handsome when it does work it just feels amazing you've you're investing in a company that's like worth talking about it's worth backing it's worth believing in it's worth doing and then you make a ton of money and they're like i think nine times out of ten you're like god this is so hard i can't believe i mean my best in this yeah know one of the reasons i invest is to like broaden my kinda experience horizons and learn things you get that more from these like hard tech companies than you do from like a pure software play but you wanna just right like a lot of personally i'm like as you can tell by my freaking hundred and eighty investments i'm a big believer in seat stage diversification because like really what you really want as a seed stage investor is a hundred billion dollar company and i don't care how good you are as a c stage investor you can't tell when it's a ten million dollar company if it's gonna be a hundred billion dollar company but if you can hit one of those like you can have a thousand investments fail with like one hundred billion dollar company and you're gonna be like do you have any better that you would think are going its way yeah you know my portfolio is mostly from two thousand sixteen so it's just early to get that big i think i'm like super bullish on air table i don't know when it'll be a hundred billion dollar company but if for keep getting i think there could be i'm a fairly big ish seed investor in rap which is like a combination of post mates insta card and pharmacy on demand delivery for lat and they've grown like incredibly so maybe they could do it and i know who knows it's maybe could do it maybe chap house could do it you just don't know until you kinda have to let them ride for like ten years us ten years maybe mercury will be there as well then other things are the investments that really well we appreciate you doing this saunders is there anything else you wanna you wanna go over you should plug your stuff where it could be finds you where check out mercury i literally right before this actually i had one minute before the pod was about to start and had to pay a supplier and literally just like it gonna sound like a commercial but it was so good i opened up my phone face id like you know whatever just like instantly logged into this to my bank account hit the pay someone button paid someone with my left hand not even my right hand and then we did the podcast one in the later and i was like the perfect set up for this podcast and i'm like that's how banking should work and then like i've had so many headaches over the last few months with wells fargo and other stuff that you know thank you for actually building something that's good i they're so so rare to actually find tools that like it's like a pleasure to use versus like a pain yeah thanks for saying that you so if you if anyone has a business they want a much better bank than whatever they're using go to mercury dot com it's all online easy to sign up hopefully you can get it done in like ten minutes and then we've thought a lot about like all of these experiences like how do we make payments like three clicks and really smooth how do we make like you know you can get a virtual card in there you can set up your bookkeeper as a separate user with restricted permissions so there's a ton of like small things that suck at banks that entrepreneurs have to deal with every day and we just spend a lot time to make those smooth and then we have like some advanced features especially for startups so we have an api that if you wanna plug in kinda your bank details or based someone automatically you can kinda integrate that we have a treasury product now where you if you raised five million dollars and you wanna put four million of it into money market funds like fully integrated and easy to use so yeah check that out and if you wanna follow me on twitter i'm just mod i and you know i try to say interesting things about helping kinda entrepreneurs succeed and i you get in on this hundred thousand twitter follow thing that sean's good so don't worry bro i don't close the door behind me when i get there i open that door and i hold it for anybody else who wants to run in with me nice alright i you and we'll see everyone next week