your heart drops is this it is this the

moment the company dies

tom bloomfield entrepreneur investor and

founder of monzo

i've never actually talked about this

before after six months i just thought i

can't work with this person i just

really it's

really damaging to me and my mental

health and so i resigned and the

response to that resignation

she called nor house meeting and fired

the entire company

if i knew then what i knew now i would

never have done it really if i knew what

the amount of pain and heartache

that would be involved i would never

have started but i didn't know that i

cry quite a lot

you know i'm not ashamed of that for

about three or four seconds

i'd forgotten what my life was i was

calm and then

three or four seconds later all the

memories came back it was just like this

crushing weight

that really was the moment i sort of

knew this is this is no life

there were no other emotions in my life

really apart from just anxiety

i mean it was serious by the end we

would detect criminals and shut their

accounts down customs would turn up

sometimes with weapons

and they threatened to turn up with you

know a bottle of acid and throw it in

someone's face

that was tough

[Music]

tom bloomfield what a remarkable

entrepreneur

one of the uk's recent real success

stories and he

and his team managed to disrupt the

archaic

incumbent banking system at a time when

nobody thought it could be disrupted

but man his story is crazy

absolutely crazy and the reason why i

started the diary of a ceo

is demonstrated perfectly

in this podcast it has it all

controversy

drama business wars depression

anxiety resilience success

and failure and today you're going to

hear a particular business story

one that's never been heard before but

tom felt that today

and here was the place to share it if

you're an aspiring entrepreneur

and you want to get to the point in your

life where you're running a hundred

million or a billion pound company

today might be your warning because as

tom is going to tell

you all that glitters is in gold

and the true cost of entrepreneurship

the cost that nobody seems to talk about

is sometimes greater than the reward on

offer

this is one of the most emotional raw

honest vulnerable

brilliant gripping conversations i've

ever had on this podcast

and i can't thank tom enough for opening

up his diary

and allowing us to look inside

without further ado i'm stephen bartlett

and this is the dire ceo

i hope nobody's listening but if you are

then please keep this to yourself

tom why why entrepreneurship

i made a very bad employee

i've never been promoted and i've been

fired i would guess two or three times

depending on how you count

why were you fired so often um

my first ever job was a consulting firm

in london

i actually wasn't fired from this one i

was um but i wasn't promoted

and they said i was uh highly disruptive

and not in a good way

not in a sort of you know tech found

disrupts industry more in sort of

you know annoying junior analysts can't

follow instructions

so i think i'm much i'm much better

founder than i am an employee

what was it about you that was

disruptive though i want some specifics

um whenever i'm i see a problem i think

that this is in common with anyone who

starts a business i look at

the way something's done and immediately

start thinking of better ways to do it

rather than just doing what i'm told i

sort of scratch my head and think no

it just doesn't make sense to me why are

we doing it this way that we could do

this other way which is ten times faster

i mean i one of my first ever jobs was

to

uh with another analyst go and count all

of the jewelry

items on a like a massive jewelry

website it must be a thousand to do a

tally chart of the price range

and this guy i started doing by hand so

i scratched my head and wrote a little

excel script to script basically scrape

the website and just tally them up and

go

there's your results and but they didn't

want that because they were billing by

the hour and

that'd only taken an hour of my time

rather than 20 hours and so they could

only bill

me out for an hour like no no go back

and do it by hand so it

that kind of stuff just drove me crazy

and i was always just looking for

ways to automate ways to do things

better um i guess that's what led me

into entrepreneurship

have you heard about this idea of first

principle thinking absolutely yeah

my co-founder jonas at monzo was just i

think he would say first principal

thinking at least once a day

because that's that sounds to me like

first principle thinking you're looking

at

conventions way of doing things and

thinking well no this is there's a much

easier yeah absolutely you sort of start

from physics and build build up from

there really

how's that how's that voted for you in

your in your personal life though so

because life is personal life is full of

convention marriage school

follow this path do you know what i mean

yeah and i you know i

i'm not married but certainly when i was

younger i followed that conventional

path i i went to a grammar school i did

my exams i got a place at oxford

um i even did a master's at oxford so i

sort of i was following that

conventional path towards becoming a

lawyer i guess but

somewhere along the way i started

realizing it probably wasn't for me but

definitely

in the early years that was my path you

built this hyper fast growing business

which was you know funny that you used

the word disrupter which was known as

one of the uk's great disrupters

and still is known as one of the uk

great disruptors um

can you tell me why like because i when

i

when i speak to shaq do you know shaq

shaquille khan about

daniel eck and when i think about your

story

you both made the decision to take on

just

what what many entrepreneurs would

consider to be an immovable object you

took on the banking system

um danielek took on the in this massive

music industry that was seemed to be

immune to change i was talking to shaq

about this last week oh really he texted

me last night about um

about harry's new fund so he i think

that's why he's fresh of mine

what gave you the conviction and the

confidence that you could

take on such a mammoth industry with

monzo

um i mean arrogance for naivety and

arrogance i think in no small part

um i i'd already built a company called

gocardless which is a payment processor

so that sort of

taught me that you know three young guys

could get access to the payment system

and actually move money around

um and banking was a step up from there

it was it was more regulated more

complicated

but i had the background in payments and

i was an early natwest user

or rather when i was young and they were

very old i was a network user and i was

deeply deeply disappointed

and i think like any founder really a

huge

sort of dose of naivety you know you

look at a problem and think it's

probably

i think if i knew now what i knew if i

knew then what i knew now

i would never have done it really if i

knew what the amount of pain and

heartache

that would be involved i would never

have started but i didn't know that and

so i had a huge amount of

self-confidence huge amount of naivety

and just assumed that i could figure it

out and i think we got a really really

long way and i mean

the company's still doing fabulously so

i'm incredibly proud of

of what we built i find that point about

naivety so interesting

because it almost feels like founders

like yourself need to be

deluded on one end in terms of their own

confidence

yep right because if you look at the

stats and all the odds

they're clearly against you so founders

like yourself seem to be

i deleted sounds like a negative word

but it's like for me i'm saying in a

positive way

almost like deluded to the or naive to

the the stats and the probability of

this

success yeah totally but also self-aware

enough to

listen to feedback and to not be blinded

by

their hypotheses listen to some feedback

i mean a lot of the feedback i got in

the early days was this is impossible

you can never do it

you know go back to your day job um so i

think you do have to be incredibly

optimistic as well

but a little bit like investing i'm

doing a little bit of investing now

i think you if you have a lot of

experience the downside is you've seen

these ideas fail again and again and

again

and it's really hard to then leave that

baggage behind

and look at a company um i looked at one

yesterday it's like i i've seen that

model

fail four times not my you know i wasn't

running it others were running it but

to um have a fresh enough mind to think

okay maybe the timing's different maybe

the founding team's different maybe the

technology's changed

this can now work so i think actually

the benefit of being naive and

even being quite young in your career is

you don't have that baggage of knowing

how it failed the five times before

um which i i find super interesting when

you're looking at founders in your

investments now

from your own experience of being a

founder yeah what are the attributes

you're looking for

i mean the really simple one is being

technical being able to write code i

think is just a huge huge

leg up and all of the founders who

aren't technical and there are many

great ones

um i think the biggest problem the early

stage is finding a technical co-founder

so that's just a

an immediate benefit and if if i could

talk to my

um if i could talk to people in a sort

of if age 12 to 18 i would basically

just go and say

learn to code you're going to have a

really well paying career

for the rest of your life and it'll it's

a great step into entrepreneurship

are you technical yeah i learned to code

when i was 12 or 13.

bit websites um i mean i was never

i studied law not computer science but i

can i can code i there's still code i

wrote probably in the monza code base

somewhere

i think it puts the emojis into the the

push notifications but um

yeah so being technical i think is just

the easy answer um

more fundamentally i think just being

really really determined and resilient

seeing as you said an immovable object

and either finding a way

sort of round it or over or under it or

just straight through it it is some

that um being indifferential basically i

think is

is the single biggest predictor of

success you um

you strike me as someone that has great

confidence and i imagine that's come

from

as you kind of alluded to with go

cardless you've built evidence over time

that you could do things so i i i

sometimes think of confidence as like a

self-reinforcing

cycle either upwards or downwards um i

think i was more confident when i was 28

than i am now for sure and i think that

comes with

experience um i think you

you take enough knocks that you start to

and you realize you don't know i think

at 27 28 i thought i knew everything and

now i realize

i you know i like to think i know a lot

about a lot of things but

i realize i don't um and so my i'm still

a confident person i'd guess but if you

put me in front of my 27 year old self

i think you would see two different

people

maybe less naivety maybe that would be

yeah exactly yeah i've seen the failures

a few times now

because i i was saying that because

there's a lot of um a lot of young

people in my

in my dms that are dreaming big dreams

like yours but they would just never

have the

confidence or conviction to pursue them

so i was wondering is that i'm trying to

get to i guess the crux of what made

you so starkly different from every all

of the young people that have

at least verbalized equally big dreams

i think i'm also just really impulsive

so i

i think quite self-confident but i was

um i've taken quite big life decisions

without very much reflection

um and that's worked out really well i'm

you know i'm hugely privileged i

um i've grown up in the uk which i think

is enormous privilege compared to a lot

you know

people in my position but growing up in

in rural africa are not going to have

the same opportunity i have great

education i had parents who supported me

and i knew i could take risk because if

that risk didn't pay off

i've have i have that safety net and so

um yes i was confident

i think yes i was impulsive but i that

was enabled from a place of huge

privilege because i could

take the risk and i actually think

people

in this country um with great supportive

families don't take enough risk in

general

i think people go into pretty safe

careers in

law or consulting or whatever and i

think they could

do more interesting things have more

impact make more money if that's what

drives you by taking more risk i just

don't think they do you know

i think i put myself on the risk-loving

end of the spectrum um and so i've quit

jobs and moved countries

you know with like hours notice um i

started go cardless

with matt hiroki because i quit my

consulting job to go to a bigger

consultancy and in that gardening leave

i just got bored i had three months off

and they said let's

start a website and i said yes and then

my combination said come out and

interview and we did and we got the

offer to do y combinator and their

investment about

three days before my mckinsey start date

so i just sort of said ah this sounds

fun i'll i'll do the startup thing

instead

you launched gocardless you take that to

i think a nine figure valuation

uh it's 970 million dollars at their

last round

i believe that's what was reported so

not quite a billion

um okay 10 figures

i mean that is a that is an achievement

that most people in their lifetimes

would

you know would never go near um in of

itself you you then

depart go cardless i left early um i we

were 35 people you know it was a

the valuation was in the region of 30 or

40 million at the time

hiroki my co-founder at time um

i took on the ceo role and it's done

just a phenomenal job

i'm just ten and a half years old now

it's and it's but it's been

that was not an overnight success story

that was ten and a half years of really

really hard work

and huge credit to him and matt also who

who stuck around a lot longer than me i

was there for the first three years i

think

i put something of myself into it but it

was i was there for

the beginning not the uh not the middle

and certainly not the end why did you

leave

i wasn't really pat i think it's a great

company but i wasn't really passionate

about

b2b direct debit software right it helps

you know um

lots of different uh suppliers collect

money from their customers

um in a sort of back-office way it

didn't have a big consumer brand it

wasn't

direct to consumer really and i didn't

b2b sales i found uh really difficult

and frustrating and not something i was

good at

and the tech kind of was built um and

that had been my role

so i sort of i went from there to join a

dating site which is like the polar

opposite

you know uh all about brand direct to

consumer

um really fun every day uh terrible

business model

that was one of the ones i got fired

from um i was head of growth that we

stopped growing

um it was bad you were head of growth

and you stopped

and the company stopped growing very

self-aware and honest for you to admit

that

um and in fact i saw the charts and it

looked like a rocket ship when i was

sort of interviewing there

for crazy 48 hour interview process i

flew out to new york they showed me some

of their growth charts really

sort of hockey stick metrics um and then

it all just started to plateau and i

kind of ignored that yeah i said okay

that's my job to come in it had

flattened out and i joined to kind of

reignite

and i didn't i wasn't able to reignite

it we sort of plateaued along for

about 10 months and then it fell off a

cliff revenue declined 70

um within about two to four weeks

without any kind of macroeconomic

this wasn't covered or something this

was back in 2014. the world was going

well

the dating site just was no longer cool

i think um so we rode this wave of

popularity and sort of zeitgeist um it

was called grouper it was it was

incredibly

sort of cool novel idea back in 2013-14

um and then people just got bored of it

i think

so the idea was um it was six of you

three three guys and three girls or

three guys and three guys if that's your

your preference um or three girls and

three girls

um but six of you you and two friends

would go and meet three other people

so you knew your friends and they knew

each other and it would put the group

together you need to kind of

go and have a wild night out um rather

than traditional dating

apps sort of one-on-one this was sort of

a group social experience

uh really really fun but um not a great

business model

you got fired uh yeah most the company

got laid off actually

yeah and then you took how long off

before you swung back into the next

thing

um so i uh

about two months but only

about two months um because it was the

u.s i

was on a weird visa this is not

interesting but basically i couldn't

take another job and i couldn't

as soon as i crossed the us border my

visa expired yes i've yeah

but whilst i was there i could stay

there for actually two years or

something

um so i just spent a summer in new york

chilling out and then came back to the

uk and i think

about 48 hours after arriving in the uk

i met up with

ann bowdan at starling and agreed to be

their cto within about

again 24 hours um and there's a lot

written about

how i mean how your relationship with

and transpired and your relationship

with

stalin more broadly transpired what's

what are what are the key highlights

from that from that journey

choose your co-founder really carefully

yeah uh i mean there were 14 of us at

starling

and 13 of us started monso it was that

stuck

wait say that again 14 people at

starling and 13 of you started monzo

13 of those 14 started 13 of those 14

started monday

okay including the chairman of the board

um the entire management team the office

manager everyone

so one one would say well you know tom

must have ripped them all away

[Laughter]

no no i just didn't want to work with

anne

like really i've never actually talked

about this before and there was there

has been a book i haven't read the book

uh the brief version is after six months

i got fired twice

in six months um i was never paid i

invested my own money which is i lost

um there was never any paperwork which

is my fault um

and after six months i just thought i

can't work with this person i just

really it's

really damaging to me and my mental

health and so i resigned

and the response to that resignation she

called an all hands meeting

and fired the entire company

because you resigned yep so i didn't i

didn't pull anyone away she fired the

entire company

that's not true two people happened to

not be in the office so they weren't at

the meeting where they got fired

so they had to work two weeks notice

because they weren't technically fired

but everyone else was fired so we all

went to this gin bar to kind of

it was called ask for janus on

smithfield market it's a great buy you

should go there

um we all went there to basically

commiserate just think this is crazy

what's just happened and literally it's

i think we were there for two days

basically in this gin bar playing we we

all played speed chess it was this very

nerdy kind of

four players we're playing lots and lots

of bhs uh just trying to figure out what

we're gonna do and eventually like we

can

um we think we can do this ourselves um

so

it wasn't a case of like you know me

leading a coo me pulling the company

away i quit

i was just like good luck to you i'm

just i'm going to sit on a beach for a

while

and in response she fired the entire

company which is just

i think a reflection of the way she she

operates

i can't quite wrap my head around the

idea of one person

resigning and then firing everybody as a

show of

i don't even know no it's not something

i would do

where did that leave starling though if

they only if they'd lost pretty much

everybody other than the two people that

didn't manage to make it into work that

day and they also resigned the day after

yeah to come and work with us

um she hired another management team

another oh really

okay and it turned out that we weren't

the first team there'd been a previous

team as well

oh wow that she'd fired wow

and then off so that's that's crazy so

you started essentially monzo was

founded in that gin bar yep yep asked

for janice

and it's still there we go back for some

of our reunions really

yeah yeah yeah and how did you feel so

you're fired

you know from starling you all convene

in this gin bar you spend a couple of

days there you end up

um deciding that you're gonna go again

together yep and

i guess you feel pretty fired up and

charged up to

not only disrupt the industry but also

to compete with starling though

um it was unavoidable that feeling of

[ __ ] them kind of but

we didn't i didn't really know that that

she you know and was going to rehire a

bunch of people

it was over right and there was a big

feeling of like we put quite a lot of

work into this actually and like we've

had to leave everything behind so we

came to

you know rewrite the code base redo all

our regulatory submissions really from

scratch which was kind of like a

oh i wish we didn't have to do this but

we did um

[Music]

but in a way it actually led us we'd

made the mistakes once the first time so

actually that sort of rebuilding process

was nice because it was on fresh ground

but yeah it felt like a i mean initially

we tried to negotiate with that and say

why did you know

why did you step down why do like how

can we we don't want to throw away this

side

for some people they've been there 12

months why are we throwing away 12

months of work

and that was a sort of very convoluted

week or two um where we almost had a

deal a couple of times and it just

similar thing happened you know huge

blow up and we just walked away

um but no we never i think at monza we

never really thought about the

competition actually

it wasn't a you know we weren't looking

over our shoulder at revolut or styling

it was

uh if anything we were looking at the

big banks thinking how can we take

market share off them

co-founders when you started monzo you

started with was was paul

ripping your only co-founder no uh there

were f uh

and it was a it was sort of weird

actually because of 13 of us

like how do you pick which ones are you

all they were all literally there on day

one

um so in a sense that was the founding

team and they all got stock like not

options

actually full you know stock um but the

for

arbitrary reasons which i can't really

remember there were five of us so myself

paul um became deputy ceo and was the

chief risk officer

he became deputy ceo because the bank of

england looked at me and i think i was

29 or 30 or something i said you

have you ever worked in a bank no it's

like and you're applying to be ceo of

our newest bank

yes and they sort of scratch your head

for a bit and said how about this

sort of very experienced guy next to you

this co-founder of yours

how about they didn't say that they said

we'd like you to find a deputy ceo who's

actually run a bank before please

and i you know i said paul has won

several banks so he became deputy

a ceo gary was cfo um he'd been at

abn amro and mizuho bank i think

uh there's a guy called jason who is

sort of more customer marketing

and then jonas who is the only one left

now

was a cto really really talented

developer um

so he stepped into the cta how important

is that you talked

earlier about the importance of business

partners and that being one of your

big regrets but how critically important

is because you know

definitely one of the biggest mistakes i

made in my career was when i was very

young just hired anybody

because i thought you know like oh you

like i remember being in selfridges one

day

there was a guy selling prada bags so

like you can be a director you know what

i mean

because you don't know what you don't

know

i didn't do that i did i was thinking i

was like 18

so um but i

in hindsight i i know it's the most well

for me

that core team is the most important

thing yeah it's probably the single

biggest determining factor of successful

failure in my view

yeah so how important what was it for

you to assemble

um that skilled co-founding

team i mean it was it was luck at monzo

because that was the

group that was uh starting and it was

sort of like how do we keep this team

together and it really was

sort of it felt like everyone's going to

disappear into the wind um

there was a you know it really was a

debate are we going to

really try and do this again or you know

is this it we just go back to whatever

we were doing before and so

to keep everyone together i think it

wasn't a and so

i think we were really fortunate we had

such a great um different set of skills

um but it wasn't hugely uh sort of

planned

no i have a another example of this i

started a company

when i was at university through young

enterprise

and on day one they were like 14

co-found co-founders of this business

which is just a ridiculous way to start

a company and within about two

we had meetings meetings nothing ever

got done so within three months or so

three of us basically said look you 11.

you can have

right on your seat that's what you want

but you know you're not really

here to run a business the three of

actually are gonna like work all summer

um one of them uh quit his job to do

he just left to work at deutsche bank

and then three hours are actually going

to try and run a startup here

and so figuring out that core team i

think is is really really important to

get right and having a group of

14 is not the way to do it really when

you when you started monzo from that

i say from the gym but it wasn't really

from the gym bar but you see what i mean

that was the kind of

i guess the inception moment um what was

the driving force for you

to go on that journey was it money was

it

the chance of you know moving an

industry what was it

oh gosh uh insecurity i think for me it

was i was

much of the reason i started my business

was probably based on deep

childhood insecurities about wanting to

be rich and

yeah like all of that i think tied up

into a bunch of weird sort of

deep-rooted psychological problems um

wanting to prove myself wanting to win

or

wanting to be seen to be successful i

think

um that money played a part in it not

the driving part but certainly there was

a factor there

um a deep hatred for natwest bank

um why they're just incredibly

frustrating to use

just every everyone who came to work at

monto had

one of these horror stories about their

banks you know

matt one of our early developers went

10p overdrawn with a

a different bank and paid the 10p in

um and then closed it counts like i'm

done with this but

he'd incurred the chart he didn't know

they applied the charge at the end of

month so it's like a

five pound overdraft fee that month

which then the month after a month after

a month after should have rolled and

rolled and rolled and rolled and two up

you know two years later they came after

him for several thousand pounds

because he'd been 10p overdrawn for a

day um just

everyone's got those kind of stories and

so a big part of it was a frustration

that banking worked like that

and a sort of feeling that it didn't

have to be like that because we looked

at apps like spotify or

or uber and they felt magical you know

the i

the people who've grown up with that

technology it's sort of normal now but i

remember you know i downloaded nap stuff

for the first time i remember showing my

dad and my uncle

you know think of any song you want in

the world yeah type it in

and it starts playing and that's that is

magical

um but now it's so commonplace and

banking for years has just been

you want to change change your address

down i've downloaded a form filled in

the form assigned and had to post it off

this is for an online bank

um so we really just felt quite deeply

that it could be

the experience could be much much better

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you'll be behind the scenes as many of

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to meet you

and one of the other reasons you gave

there as a driving force was wanting to

be seen to win

yeah or can you explain that one

not to win i think that's probably the

wrong i i use that phrase but i

to be seen to be a success i think like

validation yeah kind of yeah you know

that's to my family and my friends and

my school

and teachers and um

you've already been a success though

with gocardless did you

yeah i had a bit but go kardas

circa 2014 2015 was

still relatively unknown it was doing

well but not it wasn't a breakout

success yet in the way it is today i

think um just on that feeling of

wanting that validation from friends

because we can all relate to that like

i'm i'm

playing devil's advocate but i know

exactly what you mean you're on a tv

show

exactly exactly and i'm doing a podcast

17 cameras right now

um but uh but just drilling down into

that in hindsight

was that a feeling that you think could

have ever

been attained um was it a mirage

i think i have attained it yeah oh

i know i don't mean i'm the world's big

success that's not what i mean i mean

that like

i've tasted what that feels like that's

mixing my metaphors there i felt what

that feel you know i've experienced

that thing that's sort of like being in

the newspapers and that sort of

um people using in monzo card and that

stuff

and it's

somewhat rewarding but it's not like i

and i don't feel anymore

i think what i'm trying to say is sort

of that need to prove myself has sort of

disappeared

actually um and so either i've realized

it was a stupid goal to start with or

like

i got far enough along that i sort of

like take that off the list and sort of

thought you know that sort of it was fun

but it's not my overriding purpose now

um and i'm not i'm your next question

what is your purpose

i'm not sure i have one it's sort of

more like living day to day and enjoying

life and i

i was never good at that i've really

really driven from a very very young age

so i

worked incredibly hard for my exams and

my you know

through oxford and starting companies um

and

very rarely paused to enjoy the journey

or the you know the

cliche the small things in life the you

know the

choose your cliche right like how your

coffee tastes in the morning or the sort

of

the tweeting of the birds in the in the

trees

and that stuff now i'm am spending more

time kind of being more i guess mindful

and kind of

living in the moment do you have to like

reprogram yourself to get there though

because i feel like society well for me

anyway

is um kind of conditions you to to

chase climb promote move up strive

and and you're kind of deferring your

happiness to towards some future

achievement accomplishment yeah so how

did you get to the point where you just

enjoy it what it you know life for what

it is in the moment

was it reprogramming yeah i guess like

you know like you

i i left my company i didn't um and that

was

really really hard and that was not a

that was

um you know deep deep anxiety and

bordering on depression and

uh like i i i wouldn't use the words

rock bottom

but like it was not a happy time and so

then recovering from that

uh and i took a year off and you know

travel around europe went kite surfing

and learned the language and all this

kind of you know cliches

um and that experience now

leads me uh whenever i i still get these

like urges like

sort of um they my local mp passed away

a few months ago and there was a

by-election i was like why did i why did

i stand for that seat and i could be

an mp and then maybe i could you know

maybe it could be the prime minister

and then i'm like but then what

crap yeah exactly and

you know i think like i could start a

company

and then you know what if it goes well

and then i end up running a big company

again

so uh yeah just like a couple of sort of

those brain cycles and i'm like

no what am i what am i thinking um i

quite quickly come back to like i'm

really enjoying my life at the moment

i'm lucky enough that i'm financially

sort of independent now i have a great

group of friends like

why um why do i want to go and make

myself miserable again

um where does that narrative that voice

come from so many people have that way

because

it's funny because you're saying right

i'm i'm a i'm at a stage of peace now

i wasn't before but you still have that

yearning or that voice that comes and

goes come on tom do it

um it's that it's that sort of i guess

disruptive kind of

um i see something that's not working

and it's incredibly frustrating and i

go i could i could make that work better

i'm um

i'm uh

reluctant i've talked about this before

i'm working in the in the i'm

volunteering the vaccination program and

it sounds like a sort of

i'm proud of doing it and it's like a

great feeling kind of being part of

a team that's uh

hopefully helping kind of the country

get out of this lockdown rubbish

but even there there are so many things

that just drive me absolutely nuts

um and i think that's probably nhs sort

of more broadly i think the smart use of

technology could really really improve

the way we deliver care to

everyone really medical care and so i

keep thinking i just want to like just

give me

you know experience um i just yeah why

can't i just come in and fix it for a

you know it's incredibly

you know i've struggled with a company

of 2000 people the nhs employees i think

a million and a half people or something

so

um probably not for me but there's

always that like

your question you know what what is that

drive it's the

looking at something that's like clearly

broken at least to my naive eyes

um and that feeling that i feel like

along with a

small group of smart people i could make

it better okay quick one

if you've listened to this podcast you

know i'm the biggest fan of fuel in the

world and

last week huel released hule's brand new

protein powders

and i have to tell you the salted

caramel huel protein powder which only

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and 20 grams of protein has become my

go-to drink and you can if you're

watching this on youtube you'll see i'm

going to open that

it's almost almost nearly done and i've

had it for a week

um but i've been looking for a source of

protein that is also low calories and

that tastes like heaven on earth

and i finally found it so if i was to

put my word

to you next to a product it would be

hewls

salted caramel new protein powders 20

grams of protein

26 of your vitamins and minerals in case

you're not nutritionally complete or

sort of

getting all of your vitamins and

minerals and that 105

calories in a serving and it tastes like

heaven on earth what were the the good

times at monzo the times you look back

most fondly

small team so sub 100

[Music]

being able to um

go from a kind of an idea or a customer

insight or something like a conversation

with a customer

about a problem to figuring out a kind

of product feature to

very quickly prototyping and building

that and launching it and then seeing

people

use it um and then tell their friends

about it that very quick iterative

product development cycle i love

um and a lot of the brand and marketing

stuff

uh i when i was at gocardless i didn't

believe in brand

uh which is a ridiculous thing to say um

and i you know

you has a marketing background that's

almost offensive i guess but

it's like no this is you know this

doesn't this doesn't exist really people

um and then the day when i worked at the

dating site that really opened my eyes

to the kind of

power of human psychology and brand and

and mission and values

and we really took a lot of that into

monsoon and that it it was just

astonishing

so we started out even before we had a

product talking a lot about our mission

and some of our values like transparency

and kind of community orientation

and that worked so incredibly well um

so yeah it was working with a small team

to build the brand build the product

get into users hands really quickly and

then see them enjoy it i've talked about

this a lot before that feeling of

um standing in line at a coffee shop and

seeing the person at the counter paying

with a the hot coral monzo card

and then having the bartender or the the

server say you know i've got one of

those as well

and then listening to that conversation

as sort of an anonymous bystander

that's just incredibly rewarding feeling

that you've had a hand in

in creating something that's that people

are enjoying so much

let's dig into the point about brand

then marketing because monzo really was

a uk stand-up brand i think everybody

knew it

um even if they didn't use it because of

its

disruptive values because of it it felt

unconventional in everything it did i

mean even the card

was completely unconventional

intentionally yeah tell me

tell me what the secret was to monzo's

branding success

um for authenticity i think

um it was

we had a couple of early marketing hires

who who didn't work out

um and they were very senior people from

very very big companies who came in

and they were a lot older and cayman is

sort of like you know

how the kids going to think about this

and we were like we are the kids

um so we had a very early community

manager called tristan thomas who was

there from almost

in the first few months uh he just very

recently left to start his own company

and he's now he was a vp of of um

marketing running a massive team with a

massive budget by the end

but he was a 23 year old when he started

you know 23 24 year old

um and i worked on it a lot hugo our

head of design worked on a lot and it

was

um it was just an authentic

representation of i think

who we were and what we believed more

than anything and we we did want to

be different from the big banks we

intentionally positioned ourselves as a

part

so the hot roll card every other bank

was you know blue or purple or

kind of a shade of black basically so

like how far come from that can we get

and the big banks were very impersonal

you know you you never felt like you

were talking to a human and so we

everything we did was human and

transparent

um we we shared a lot of internal

information that everyone you know we

published our product roadmap

this is what we're going to be working

on for the next two years which people

thought were with bonkers but it

that was a way of building trust and

humanity in opposition to these big sort

of faceless banks

um these all sound like first principles

yeah

i mean none of tristan had never worked

in marketing before

his previous job was at a refugee camp

in in the middle east

i'd never really worked in marketing i'd

spent nine months at a dating site but

we

yeah we um we came up we thought about

these principles

and it felt like the kind of company we

wanted to run and so

um we did and it worked really well um

yeah with without any experience it goes

to show the risk of reading marketing

books

no genuinely i've always thought this

because i've never studied marketing or

did any degree

you know our business was did really

well in in the marketing industry but i

think it did well because we hadn't

read those books and we hadn't been sort

of diluted or polluted by conventions

idea of how

yeah i think this today when i go when i

work and go into these family offices

and i'm

working on the marketing plan that the

ceo often

will want to hire someone who's done

marketing in that industry for 20 years

and you immediately feel that that's the

fastest route to not standing out at all

and not having any point of difference

yeah yeah it depends what you want to

achieve if you are a family office or if

you're managing the wealth of

you know generational rich families then

perhaps you do want to

look trustworthy in like everyone else

if you're a challenger bank appealing to

21 to 25 year olds maybe you want a

different approach i don't think there's

a right

answer but i think authenticity gets you

a really really long way

whoever your target demographic is i am

one of the things so we talked a little

bit there about the your best times at

monzo and i wasn't

surprised to hear that it was when the

company was small um because i've

heard that before but i also understand

the feeling um and your worst times

um least enjoyable times least enjoyable

uh i never liked fundraising we did that

a lot

i mean i and i had to i think monzo's

raised something like 600 million and

i probably did 400 of that um that was

always tough

uh and you only hear about the really

quick round though you know the ad

funding

yeah we hit a billion the round where we

hit a billion valuation was very very

fast

um and very competitive so it was that

easy but all the other rounds were real

slog so fundraising was never fun

we had a weird time with the press where

they spent the first three or four years

almost not idolizing us but certainly

building us up you know the new kind of

uh the the sort of next great hope

almost um

and we could almost do nothing wrong

which is not healthy and then we got big

enough and it flipped overnight and just

everything we did was we'd get like

vitriol for in a way that i i mean i can

understand it because it drives

readership right and it's um there's a

point in time where

the telegraph would put monzo in the

headline

at least every day even if it was a

story about one of our competitors it

would be

monzo competitor blah doing just like

what

why and i i eventually sort of called

out the journalists on this and

took him for a beer and it's like look

come on tell me what's going on and he's

like look

every time i put your name in the

headline or rather he's like look it's

my subs who do i

i write the article they choose the

headline um or my editor

but every time they do that we just get

way more subscribers

it's like you know sorry um but it

it was really the entire from the bbc to

the telegraph to everyone

it felt like a pile on in a way that

didn't seem

fair uh really and it's i'm not to say

that we never did anything wrong we

absolutely did but even the good stuff

we did

got um got negative headlines um and i

think that's a peculiarity of the

british press in particular sort of

building something up until it's like

big enough to tear down

and that was just so confusing um

yeah that was tough at one point we had

a bbc camera crew

outside our office um and this was when

we

we'd grown big enough we had um a small

a small minority

of people using monzo for financial

crime basically with money laundering

for

scams um and we'd have to freeze their

account and we

weren't allowed to tell them why we'd

froze in their account we'd sort of send

the money back to where

where wherever it had come from was a

very frustrating experience really and

it's

quite strict in the law that you have to

shut the account you can't tell a person

so it's

it's a really bad customer experience um

but watchdog were running

a program about this you know monzo

freezes accounts

and they brought us a series of accounts

that we'd frozen

um over a series of several weeks saying

you know this is

we've got you and we sort of brought the

editor of the program and said look here

is the

here's the criminal background of the

person whose account we've frozen

are you you're really going to run a

program about about this

it's like oh no okay okay okay this

happened 12 times

and every every one of the times we

showed we the evidence and like okay

you know and on the it was the 13th or

14th like

that was a 50 50. you know we block the

account we stand by it but

we don't have cast iron proofing like

great we've got you so bbc camera crew

turns up

and they'd commissioned a block of ice

an enormous ice sculpture with a frozen

monzo card in the ice that they dumped

outside our office

and put a camera crew there for the day

uh to see if they could find anyone

walking past it or

you know to watch the thing melting

which was like

what's going on you know i was like i

started this company to try and sort of

build a better bank and somehow

the bbc is camped outside my office

trying to like

i don't know i don't know what they're

trying to do um drive

drive viewership um but that was deeply

annoying

this whole press thing is i've heard

this a million times and it terrifies

the [ __ ] out of me because

you know joining dragonstone you join i

was like oh my god amazing

and then someone told me i think it

might be one of the other dragons that's

been there for nearly two decades said

here's what's here's what here's what's

gonna happen is they're going to build

you up

to a point where you're interesting

enough to tear down again and

hearing you say the same thing terrifies

the life out of me and it happens in

everything tech startups um facebook

uh yeah i mean facebook's a great

example of it but it happens to sports

stars it happens to politicians it

happens to

you know singers yeah yeah what advice

would you give

someone that's don't read the good stuff

or the you know

just ignore it all basically i think

it's all yeah just ignore it all

the hype and yeah because when they're

good when they're writing good stuff

that's

that's overblown as well that's not real

life the bad stuff's also not true so

just

i just ignore it all and did that have

an impact on your mental health the

worst parts of the press coverage

it didn't help and i stopped reading it

you know i genuinely stopped reading it

and i'd have friends

sort of come and say it you know on a

saturday or sunday they'd read the

weekend papers and it's like are you all

right it's like i'm fine

what have i done that's the worst

because then you've got to justify to

people you care about

yeah and make them not care like i'm

fine

like okay just don't read the times this

weekend it's like yeah never read the

times

um that was annoying but i don't know

so yeah the um the press was not fun

um investment's not fun regulation got

really really tough

by the end because we were a bank and

ultimately if we fail

the government has to step in and refund

everyone their money so the rules there

were very very strict and because we got

so big

so early and weren't profitable that

that got quite tough

um and i'm going to go through a list of

the bad things now the f

i will stop on the final one which was

um just organizational politics when you

get to we were almost 2 000 people

and when you're 100 or 200 people you

can know everyone and you can

you develop a really close culture

really a sense of team spirit you know

everyone you can know everyone's names

um you get to 2000 people and you don't

and it

um you get subcultures so teams develop

their own sort of internal

narrative as to why they exist and what

they're for and

sometimes like we're saving the company

from this other team over there and it's

you know becomes

um really not collaborative actually and

you get

uh especially with some sort of quite

senior people

start building their little fifedems

and you get this just weird politics and

rivalries going on that

i'd never worked in the company for it's

like total it was totally uh

new to me um especially when you're this

is unfair not everyone

but sometimes when you hire people from

big banks they've grown up with that um

uh culture toxic culture frankly

um and they bring it to a place like

monzo and everyone's

like what that what's weird what's going

on here

but it definitely changed um and that

was

having to deal with that was was tricky

you talked about not being profitable

i've heard you talk about you know that

being one of the um

probably in hindsight one of the things

you should have thought about more in

the early days which was like the

commercial model or the business model

of the bank yep is that

fair yeah absolutely yeah um and we

thought about it for sure

i think what we didn't do was make the

hard decisions to

uh to turn the corner earlier like we

thought about it and it was this was not

it's not like we um blindly ran into

unprofitability we took a series of

actions we knew they were

loss making but we um did that in order

to

to acquire users without paying so

basically we

swapped marketing spec we had no

marketing spend but instead we ran

um uh like like operational losses

so we'd give away features to customers

that would cost us money to get more

customers

because it meant our marketing budget

was zero and we grew to five or six

million people

with we probably spent less than 10

million on marketing total

that's an average cost per customer of

one pound 50. great

right so um but that that's

that hides operational losses that's our

real marketing budget was giving away

things like

html withdrawals for free for example

and we just didn't take the hard

decisions to turn some of those things

off when we

um we got to a certain size and it cost

us way too much

free cards yeah expensive

with that it's like the long tail it's

you know it's the um

the very small number of people who are

ordering 20 or 30 cards a year

most people they order zero to one

that's fine but

some people just lose their card every

weekend and they get struggled no

problem just order another one it'll be

here tomorrow morning

uh and that's just annoying and costly

the other thing though

um so we should have paid more attention

to reducing costs and

taking a hard decision to drive revenues

earlier uh we consciously didn't

but part of it was avoiding those hard

decisions the other half of it though

is weird um

i've thought about it a lot it's

basically how you get

almost self-reinforcement from your

investors so you run a business a

certain way

you get to a certain scale and you

present it to a set of investors

and the ones who are more or less the

ones who agree with what you've done and

think it's the right approach we'll

invest

and the ones who think you're bonkers

will not invest and they'll go to

someone else

the problem is that becomes

self-reinforcing because they like what

you did before so like yeah just do more

of that

and it can become um a bit of an echo

chamber where you just get the group of

investors around the table who are all

big supporters who all really believe in

the model

and there's not really anyone being like

uh you know you're running

um you should really think about this

other stuff

and a really a really smart thing i've

heard

which i didn't do and i i hope i will

will have the humility to do in future

is to sort of

pick out the smartest investors you can

or smarter's advisors or other other

founders

and ask them why you think your business

will fail

and then really try to think deeply

about that rather than

i think the natural tendency is just

like ah you know whatever they don't

know what they're talking about i'll

just

the people who think i'm brilliant i'll

listen to them um

but that can become i don't think you

grow as much from that so

really finding the doubters even the not

so much the haters but the doubt is

certainly

and interrogating them about your

business and really trying to think

through how you can

solve those problems i think that would

have helped us a lot

hindsight's a wonderful thing yeah now

you have those

some of those answers in hindsight and

what were

what are those answers in hindsight that

you wish you'd um

you'd known sooner so one of them's

obviously you know getting to a

profitable business model sooner making

those transitions

profitable business model um cutting

costs driving revenue by taking hard

decisions to sort of limit some of the

free features and charges some of the

things we gave for free i think she'd

done that way way earlier

um that's the biggest any cultural

decisions i knew there was a

merging of the startup guys and the uh

banking

people which i guess that's necessary

right yeah

i struggled to get the banking license

without that and you've seen you can see

that at revolut

you look at all their recent senior

highs over the last year or two and it's

big wigs from the big banks because

they're trying to get a banking licence

so

i think that's sort of inevitable um and

you pay a cost for that you pay the

price

um customer service is always

one of big one of our uh investors who

shall name

remain nameless um was a bit of

contrarians basically said

the quality of your customer service is

too high

and it's costing you too much and it's

going to be the you know it's going to

be the weight around your neck for the

next

whatever 10 years until you can slash

and i'm not sure if he was right or not

actually

um that's when i still debate um i've

noticed revel

revolute's uh customer service has

declined

month almost month over month for the

last two years i've been a customer

there on

monday but revolut they've made a real

significant

it feels like effort to either cut back

on customer service costs or

just because they've got more users

they're struggling yeah but i've from

when i joined revolu it was just

amazing yep and two years almost three

years on

it's just awful yeah and i think monzo's

hopefully it's not awful but i think it

was amazing

at the start and i think it's now

variable

i think sometimes it's really really

great but sometimes you end up waiting a

little too long

sometimes it's a little too hard to talk

to a customer service agent arguably

i think i still think it's pretty good

but in the early days it was spectacular

it was the number one thing our

customers talked about was the service

by far you'd look on social media

whatever it was just

and if we'd have the revenue to support

that i think we could have continued

it's not

it's not very expensive it cost us about

12 or 13 pounds per customer per year to

provide that

and i think the benchmark that

everyone's aiming for is less than that

clearly

and so the drive is always to automate

more to put you know

chatbots in to do whatever there comes a

point in your journey with monzo where

you realize that

you're no longer enjoying it for me in

my business

it was kind of like a there wasn't a

point it wasn't a day when i woke up it

was kind of a

compounding of several issues that

slowly wore me down

yes uh uh yes it was that plus covered

and covered it was like knockout punch

but yeah it was

four or five four five six issues that

meant for the last

year or two i wasn't having a good time

really and i talked to my board about it

i talked to investors about i think

hiring really good senior leaders

was part of the potential solution and

we

didn't do that fast enough um we've got

some great great senior leaders in now

um and i sort of wonder what would have

happened if we could have got those

people in a year or two earlier

um possibly they wouldn't we wouldn't

pay them enough they wouldn't have

joined

um i did talk about this a ts our new

ceos like

if you'd have come five years ago i

would have joined five years ago i was

like

go back in time um uh but yeah it was

four five six issues and then covered

and that was just

i mean for so many people in the world

that was horrific for us our revenue

declined at least 50 percent

within about a week or so uh the cost

base was the same revenue goes down 50

we were already lost making so now it's

sort of

we had a funding we had 100 million

funding round lined up

to close on the monday and on friday

before london went to lockdown and all

the terms she's got pulled

so again retrospects uh hindsight is

2020.

um everything has bounced back

even like the in the investment market

private investment and public

investments

are stronger than it was pre-covet and

so people just take these really

short-term decisions in a

kind of in a shock in a crisis destroy a

ton of value for themselves

um and you know six nine 12 months later

everything's bounced back even harder i

just don't understand it

um but anyway covid was definitely the

straw that broke the camel's back

and about six weeks into that six to

eight weeks which is like i'm

i'm working seven days a week i'm not

sleeping here this is just

you know i need sort of throw the towel

in almost you know i need to i need to

be subbed out

had you been thinking about that

conversation for some time before you

got to the point where you

you approached the board with the

decisiveness that this has been done

i'm not even thinking about i've been

talking to them about it for a year or

two yeah

not the whole board but yeah two members

our chairman and uh

one of our lead investors absolutely

we'd we'd had multiple conversations

about

me not enjoying the role as it was then

configured and the answer was like okay

let's reconfigure a role let's

bring people around you let's because

because we're growing so quickly and the

way that senior hiring works

by the time you realize you've got a gap

it's 12 to 18 months

before you can actually fill that gap

and you know muggins here ends up

doing to be fair all of my senior team

were doing

more than one job trying to fill the

gaps but um

that was the biggest problem for me that

we didn't have

the right senior leadership in place so

i was working several jobs

uh and so the conversation was always

okay well we'll fill these roles we'll

fill these roles

but by the time you filled that role

this other role over there the person

who's doing really well at 200

you're now 2000 people and the person's

burnt out or

you know not doing well and you have to

replace them and so

it was like whack-a-mole

[Music]

and i think that was the biggest

contributing factor but those are

conversations i very regularly had with

um board members and investors do you

think those conversations were treated

with

with urgency no from from

either yourself or the board no

absolutely not

it was always like oh yeah oh yeah we'll

just hire you know we'll hire the person

it'll

be fine or i'll just stick it out for

another couple of years

and it'll all be fine and eventually

it's like no i've got a couple of weeks

yeah i think a lot of them did

a huge amount i mean eileen the one of

our investors from passion

personally put in so much time to

support the company and support me and

i'm

really really grateful for that

but ultimately um yeah we just didn't

hire

see great senior people fast enough that

if i can find one root cause it was that

do you think if you'd gone to the board

with more urgency and decisiveness

yourself

though you would have been taken more

seriously

if you said listen i'm going to go next

week

if these issues aren't fixed because i

i'm asking these questions

from same reasons as uh i said before i

went through the same thing where i

approached the board i said i've got

some problems here

these are the issues can we fix them and

it was probably a little bit of lip

service

yeah until the day that i resigned yeah

i don't know i think a lot of people put

a lot of effort into fixing it

ultimately was like on me to fix

no one else is going to come in and hire

a really top senior team for me it's

that's sort of

my job um

[Music]

so i don't know i also i do wonder

whether you really could have got those

great senior people in at a

earlier stage the analogy's sort of like

a football team you're starting in the

i don't know what the fourth division

now is cool but you know you're there

and you get promoted

and you want to hire someone for the

third division but everyone's like oh go

and hire ronald it's like ronaldo is not

coming to play

for a third division team you know so

it's a constant process of upgra like

gradually upgrading until you get into

premiership

um and even then you know you're you're

charleston athletic or something

uh so i just think it's tough i don't i

don't

think there's a magic bullet actually a

quick one since leaving social chain a

couple years ago as you probably know

i've kept my options open

i've worked in a series of companies as

a consultant as a creative director as

an advisor

as an investor but i've kept my options

open and that is about to change because

i'm about to embark on my next chapter

building my next company and i'm going

to tell you guys about it first but i

wanted to talk about something related

to that

when i'm building this new company as i

have been over the last three months

we need everything from websites to

logos to

editing work done to some sort of admin

stuff done

and it's crazy that even me even though

i have

a lot of financial resources i still

turn to fiverr.comfiveerr.com

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me it is a godsend

if you're scaling your business if

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try fiverr.com if you go to f i v

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pick a service try it and then send me a

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i'm gonna be paying for five people to

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so go to that website now links in the

bio and let me know what you think

you said you weren't sleeping working

seven days a week talk me

through those moments when you when

things were

have you experienced that i've oh

definitely experienced

um anxiety and not sleeping well

and an issue usually like payroll or

some kind of investor issue

plaguing me for days and days and then

getting sick yeah and

why have i got a cold i never get it

cold and then yeah oh of course because

there's no [ __ ] money in the bank or

something

yeah um similar things uh

we talked about a little earlier sort of

that depletion of emotional energy so

that you

have a you know there's a sort of a

problem there you need to make a

decision about maybe it's like one of

your senior teams not working out you

know you have to