Nik Storonsky: The most uncompromising banking CEO

Do you want to go head-to-head with Amex, Platinum, and Chase Sapphire? Yeah. How will you compete? Nick Stronski is the co-founder and CEO of Revolute, one of the world's leading neobanks. They started with foreign exchange, but now do everything from bank accounts to business services to mobile plans, and they're expanding to the United States. Cheers. Cheers. So as you look back on it, how did Revolute get to scale? Like, what worked and caused growth? I mean, to be honest here, I was never kind of optimizing to get scale quickly. I was just working on the product and then solving problems end-to-end. And then initially, when I started, we had probably 1 to 10 customers per day. Then it went to 100 customers, then to 500, and then 2,000. Now we have about 100,000 customers joining every day. So I was never kind of trying to optimize to get as many customers as possible. I was more focused on building products, gaining licenses, and so on. But you presumably thought a lot about distribution dynamics and how to get customers to refer other customers and things like that, like kind of the growth, consumer growth side of things. Yeah, we actually started doing growth, I think, 2022. First time where we started having like serious budgets on growth. But you didn't for the first seven years of... No, we didn't. It was like purely organic, yes. And that's when we built, you know, all the models and the paybacks for TVs to be customer, and then also build referral marketing products as well. But the first seven years was just organic, building financial products you thought were good. Yeah. But how did people discover them? Word of mouth, plus we've done, obviously, PR as well. What were the best products from an acquisition point of view? Well, the best product was initially the first product that we launched. It was a multi-currency card with zero FX fees. It's interesting that both you and Wyze were able to get to scale based on consumers' frustrations with FX fees. Like, the frustration with the incumbents in that product was so high that it has birthed multiple successful fintechs. Probably. I mean, if you look at banks, majority of products are actually very bad, right? So it's not only kind of multi-currency transfers, but also credit, business credit, business products. Almost every single product is really bad. I mean, acquiring used to be a bank, right? So I think it wasn't about multi-currency transfers or cards. It was more that we picked up a certain product and we made it so much better. It could have been acquiring that you've done. It could have been maybe credit as well. Wealth and trading, Robin Hood done it. So you think there's nothing special about starting with multi-currency cards? You think you could have, in another universe, started with checking accounts? Yeah, I think as soon as you build a much better product compared to banks, which is also much cheaper, then it's pretty easy. What was the second product that worked? When did you prove to yourself that this wasn't a fluke and that you could repeatedly build a financial product? Well, business accounts. We built business accounts. And offering wasn't about multi-currency cards anymore. It was a digital bank account. And without any marketing, we first started probably with 10 business customers a day. Now we're onboarding maybe 1,500 business customers a day. And then only, I would say, 30% of it is paid marketing. The rest is still organic. One of the things that looking at Silicon Valley successful product companies tells you is there are many, many paths to heaven. You know, there are many ways to build a successful product organization. And you have Apple that famously doesn't do any kind of focus group testing, and they just build the products that they know in their heart of hearts are right in this very functional organization. And then you have, you know, other Google or Facebook developed products in totally different ways. What is the revolute system for building products? So we just separate a small team of 10 people, who are smart people, smart for the owner, good designer, good developers. We just build what makes sense from first principles point of view. So it can be either replicating existing product, but building it so much better, or trying new products which we think make sense. But to be honest, everything new is forgotten old, right? We haven't built any product which worked, which wasn't an old product, which was built badly by other organizations. We have internally a new bets process when everyone in the company can raise an idea, and then it goes through validation. And then if idea is validated, then it goes to, well, called committee of people who've done it before, and then they decide whether to fund the idea or not. What's validation? Well, first, I think it goes to team which validates, like, you know, unit economics, financials, and so on, whether it makes sense. In the majority of cases, it makes sense, because cost of the team is pretty low compared to if idea is useful for customers, they pay for it. You can generate, like, tens of millions of dollars, right, compared to cost of the team, which is small. And then it goes to people who built new bets before, and then general managers, and then they also validate it from, again, purely common sense perspective. And then if everything is approved, then we separate a small team. We hire people there, additional people there. Then they build a product within nine to 18 months. And then we look at the growth of the product. So if there is a lot of growth, then we scale up the team. So one team becomes two teams, three teams, four teams, department, and so on. And then for the bets which don't grow, we sunset them. And then for bets that grow but not very fast, we just leave them alone. But I'm surprised that ideas would need to be validated economically, because you're distributing products across millions of customers. Won't the cost of, you know, can't kind of any idea support a five to 10% engineering team to go develop a V1 of it? Like, it's very unlikely that a product won't work economically when you have such a large customer base and you can kind of fix it with pricing. Like, example is we only traveled at light across many countries, 100-plus countries, without a banking license and without e-money license, purely like in the money transfer business. And then the idea was to build Venmo internationally. It didn't really work out because we thought distribution costs would be much lower. So it didn't really grow organically fast enough. So we had to do performance marketing and then our unit economics with the performance marketing didn't really work in terms of payback. So in majority of cases, 90% of cases, yes, you're right. If it works out, it works out very well financially. But there are some cases, exceptions, which you still need to validate. Brian Armstrong from Coinbase has talked about how when he was first pitched USDC, he thought it was kind of a silly idea. He wasn't convinced. But sure, okay, if you guys want to go work on that, have at it. Are there ideas that came to you that you were initially not fully convinced but ended up being successful? To be honest, I'm always, in 99% of cases, I'm always up for new ideas. I just try to be open-minded. Maybe it's an idea that surprised you. You didn't expect it to work. You were open-minded, but you were pessimistic but then it had performed your expectations. I just had too many failures in the past when my judgment was wrong. So now I'm fully optimistic. I think it's not about the idea. Even though idea is important, I think it's about execution, to be honest. You can make almost any idea work. Can you? Even the bad ones? If it's not that bad, then you can make it work. Provided you spend enough effort and enough time on it. And people are bringing you the plausible ideas. I mean, if the team is very strong, then even if idea is average, you can still make it work. There are cases when idea is great, business model is great, team can be bad, it can still fly. What's your favorite example of the great idea, great team intersection? Well, I think our subscriptions team, our department is very good. And then when they came and then they said, okay, we want to launch like additional ultra subscription. I thought it was, idea was okay, right? It ended up being amazing bet because it's a very expensive subscription. So ultra is effectively ultra bank account where you pay about, I think it's 50 euros per month. But then it gives you additional, a lot of additional benefits. And I thought, I mean, idea is okay. Probably this business won't be very large. It ended up being very, very large business. Is the closest comparison, it's kind of like an Amex premium card or something? Yes, yes. I'm so interested to hear you say that growth dynamics were not critical in the early days of Revolute because firstly, so many financial products spread because a payment transaction has two legs. And so it's just very well suited to viral product growth, whether it be bill.com or PayPal, where you can send money to an email address even if they are not signed up for PayPal. Like it's a very classic acquisition dynamic. And so it's interesting to me that that wasn't the case for you. And also, I mean, the peer-to-peer product is now so successful. Peer-to-peer is definitely acquisition driver, especially in countries where they don't have very good payment system. So for example, in certain markets in Europe, Ireland is one of them. Romania is another. So yes, it worked in many markets where bank payment system is pretty old. But I wouldn't say it was primary kind of acquisition. Yeah, because I would draw a distinction between word of mouth, where someone has to like go to a bar and be telling you, hey, I discovered this great new product last night. And then viral product adoption mechanics, where if I want to pay you money, you become a Revolute user and then you can tune it. It's like, have you thought of sending money and you can promote that? You know, Meta does a very good job with this, where when they want to grow new parts of the product, they promote them in the app. And again, you have knobs and dials similarly that you can use. And so the in-product growth stuff feels to me very powerful. Yeah, of course. I mean, we tried a lot of things, peer-to-peer included. Like problem with banking product, KYC, onboarding, right? There's a lot of friction. So even if you have these viral things, then, you know... There's a steeper drop-off. Yeah, it's a lot of drop-off, yeah. So it's not really viral. Yes. Plus, you cannot really sell it worldwide, right? You always need to sell into countries where you have licenses. Yes, but it can be viral in the same way that, you know, Facebook was viral in the early days, where they would go college campus by college campus. Like, you can't do the cross-border transfers, but there's so much activity within a country that you can get viral growth within a country. If you can onboard subject to one click as a Facebook, then yes. Which, then again, you think the KYC is a bigger impediment. So when we first launched, there was a lot of virality because we were doing onboarding. I think it was up to 1,000 to 100 euros. You can do it without KYC. So back then, this regulation allowed to do it. So there was a lot of virality, but then I think it was stopped in 2017 or something. So the KYC changes actually made the viral growth loop a little harder. Oh, yeah, 100%, yeah. So you can presumably still do a lot of nice viral growth, where, you know, if there's money waiting for you and you just need to go through KYC to claim it, then, like, you can do one leg of the transaction and not complete it, right? And that will still be plenty enticing for a customer. That's true. Yeah, we also have it. But again, it's like, you know, this K fact is never larger than one. So you cannot really experience financial growth. It's always, you know, less than one. Could you not? Like, there could be a K greater than one product. Not too pessimistic. Everything we've tried so far, last 12 years, always less than one. Okay, so you're in the K is less than one business. The other thing I find interesting about Revolut's business is you're a bank whose primary revenue source is not net interest margin, which is obviously unlike other banks. Did you arrive at this accidentally? Was it part of your thesis for Revolut? Like, you're very different in that way, and it's quite asymmetric versus other banks. I think it's pretty—the answer is pretty simple, because we started in the UK and Europe. And then in the UK and Europe, conditions are very tough, right, for startups. So interchanges are very low, plus credit is extremely regulated. You cannot really charge customers very high interest rate, same as you can do in Mexico and Brazil, for example. So you end up—for example, you have, like, 10, 20, 30 startups starting in financial services, and then the majority will die, right? And we were forced to optimize our transactional business and to effectively make it profitable. If we would start in Brazil and Mexico, we would obviously be focused on credit business, because it's less regulated compared to Europe. And we would make a lot of money on our credit business, but in Europe, it's not possible. But aren't you developing a balance sheet, because you have one side of it, which is the deposits, and you could build the other side of it with loans? Yeah, but before we got deposits, I mean, we couldn't build a credit business. Now, we're building a credit business. Yes, now, yes, we are. And will you build a traditional bank credit business where you have the deposit side and you have the loan side, or will it look atypical in some way? Well, I think our business model, in my personal opinion, is we want to have the least amount of risk. So even if we lend, it won't be a large portion of balance sheet. So at the moment, target state is less than 10%. And then the rest, we will securitize. Why? Well, first, the simpler the model, the better, from a regulator point of view. Plus, again, if we want to be a tech business, right, we would rather be in subscription business. As soon as you get into lending business, your multiples become similar to banking multiples. So if you look at tech business multiple, you can usually get, like, 40, 50 PE. In banking business, you'll be lucky if you get 10 PE. But is that because, like, I'm always skeptical of multiples-based arguments because, ultimately, the business is good or it isn't. And you can educate investors if the business is in fact good. When we started Stripe, people thought payments businesses were horrendous and deserving of low multiples and everything like that. And over time, they came to appreciate payments businesses more. But if we had been fixated on the multiple that people ascribed to the business, we might have been scared off this path. And so I think you just need to decide, is this lower quality or higher quality as a profit pool? And so do you think it's actually a lower quality profit pool or investors just have a weird hang-up? I think it's more the business itself. So if you look at the credit business and banking, general credit business, so every time when you do a loan or credit card, you need to put provisions against it. And then really the amount of these provisions highly depend on the models that you use, on the economic conditions. Because really you don't know in three or four or five years will you receive the loan back, right? So you kind of model it. On average, you hope to receive money back. But really things can change, right? And this uncertainty is being pressed in, I think, by investors and generally by low multiples because, okay, the bank can produce a lot of money now from credit portfolio. But look, in two, three years' time, unemployment goes from 3% to 6%. And all profit is gone, right? Plus they're losing money. So I think this uncertainty, yeah. So you think fundamentally making your money via credit is this very cyclical profit stream that can be entirely wiped out in a downturn. It's very sensitive to you doing the math right. Whereas the nice thing about subscriptions is ultimately people are paying you this money in a recurring basis. And yeah, in a downturn, maybe some people cancel their subscriptions, but you can't make negative money on subscriptions. You can only shrink the book slightly. So it's much higher quality. Yeah, exactly. It's similar to selling options, right? Yeah. You can collect premium for 10 years, and then year number 11, you lose it all. Yes, yes. So there's a problem. Okay, I want to go back to your product development methodology. So, okay, you're describing the early stages of there's some tops-down product ideas, there's some bottoms-up product ideas. They have to be validated that if it works, it can actually be interesting economically. You have a talented product leader and a few engineers working on it. Then what? How do you decide which products actually get the in-product distribution? How do they earn that? How much are you willing to give them credit for, oh, I think this will become a good product over time? Product developers always tell you, oh, I would be doing very well if you just gave me more distribution, but the product people like to blame distribution, the distribution people like to blame the product. Maybe you can talk a little bit about how the scale-up works. So basically it's pretty simple, right? So we've got the team that work on the product for up to 18 months, and hopefully they'll launch the product. They'll work up to 18 months before launching anything? So from the moment we decide to launch, to launch is usually 12 to 18 months, because it takes time to get the team, onboard the team, build the product, go through all this whole process on the banking side. So 18 months, probably a good number. Because you're a regulated bank, you have to go to your bank regulator to get signed off on the product. It's not the bank regulator, but more like internal governance. Oh, I see, your internal function. So we'll launch the product, and then we'll first release it in a test country, for example, Ireland or UK or whatever. And then if it works, if everything's fine, we'll release it to more countries and more countries and more countries. And then we add it to our cross-sell engine as well, which is automated. So there's no kind of distribution problem, right? It's automatically being added to, hopefully, the whole user base, if everything works fine. And because we've done it for a long time now, we have already historical data on performance of, say, about 100 bets. And then we just look at month one after launch, what is the gross profit compared to previous bets, month two, month three, month four, month 12. And then how it's stuck with all the other bets. If it is top 25% quantile of all the bets, we just scale it up. So we hire more people, we have two teams, three teams, four teams, and so on. Bottom 25%, we just don't do much, so we redistribute the team to do something else. And then in the middle, sometimes we keep the team, sometimes we don't keep the team. Is a new product like that actually an option, or are there costs to shutting it down? Are consumers annoyed if they were relying on a product and then it goes away? Or are there some products you kind of... I don't know, if you had a pension product, you actually just kind of can't turn that off because it's their pension or something. And so do you think about the cost of shutting off a product when you decide to fund it? Does that differ by product? Yeah, of course, we look at custom detriment, if there are already customers using the product. If there is detriment, we just keep it as it is, so we stop investing it, so we just maintain it. Can you talk about the automated cross-sell machine? Automated cross-sell machine, well, basically we have many products on the platform, and then we effectively have a machine learning model that decides based on certain events, based on customer profile, which is the most suitable product at this point of time. For example, it can be, I don't know, you land in Ireland, you have a UK account with Revolut, and then we offer it to you eSIM, because, for example, you land in Ireland and then you spend money on air allow, right? Because we see all the transactions, we can offer you a single product from ours. And on top of it, we also have an LLM model, which effectively behaves like an account manager, right? Through human reasoning, it looks at all the products, at all events, at all suggestions generated by machine learning model, and then decides which product to push to a customer in this particular point of time. So it's kind of all automated. I hadn't thought that you are in a much better position to cross-sell products than anyone else, because you see what people are spending money on. Yes, as well, yeah. If they're overpaying for something, you kind of know. I mean, we don't see the full details of the bill, right? We just see the transaction. And so the cross-sell engine has some propensity model for the customer, and you're basically trying to find the conversion maximizing sale, like the thing that they are most likely to buy next? It's a bit more complex than that. It's not only conversion. It also takes into account GP, the product, and we also try not to spam customers, so there's a certain negative value of our message to a customer. So altogether, the model makes the decision. It's interesting that you describe products needing to perform well on a revenue cohort curve, where it's a little like a race, where your job is to stay in the pack or stay at the front of the pack, but you are judged relative to other products. Have you ever had slow burn products that, for whatever reason, had a gradual start? Maybe the team was just learning exactly how this works, but that wasn't actually any negative signal about the product. It just took a while for them to get going and then really took off? To be honest, it's almost never happened. I don't even remember the example when it was kind of slowly growing and then started growing fast. Usually, trend is your friend. The thing is growing very quickly. First 12 months, it will continue to grow very quickly. A classic bigger company behavior might be to say, oh, this isn't working yet, but there's a good reason for it, and blah, blah, blah. You think that's all excuses, and the trend is your friend. The trend is your friend, yeah. Why don't other companies operate in this revolute model of developing many new additional products to cross-sell the customer? It feels applicable to many other consumer companies. Grading them against the curve of how other products have done at a similar age, I don't think most companies, even that sell multiple products, are that strict. Instead, they make excuses for why the product isn't performing, and oh, yeah, we just need more staffing. They're not as strict. I think because majority of companies don't do many bets at all, because we've done a lot of bets, and we had feedback loop a lot as well compared to other companies, and because of that, we are very strict. Other companies, okay, they do probably seven, eight bets, and feedback loop is delayed, plus management changes. As a result, they never end up implementing any kind of strict process on your bets. Are there products you've done that have not been well-suited to this model? I can imagine, say, a product that involves changing many different parts of the Revolut experience would be hard to fit into this new bet model because it's fundamentally much more infrastructure rewiring or something like that. I don't know. Do you sometimes have to do products that don't fit into this standalone bet model? To be honest, you can fit any product into this model, even if it is a product which is very new to us, for example, not a financial product, and it can be a B2B product. For example, we've done a bet, Revolut People, so we build internally our HR system for ourselves, and we decided to make it a new bet, and then we separate into a standalone team, plus we sell it externally. It's kind of a new bet, but we cannot really cross-sell it to our retail customers. What about products that just don't generate revenue at all by design? Imagine if I'm a product leader and I'm building a financial insights product, and it generates a lot of engagement with the app because it sends people a summary of their transaction activity and ways to spend money and blah, blah, blah. But the point is not revenue. The point is app engagement. How would you grade my success? We still have P&L attribution to it by indirect attribution of P&L, because you can also calculate it. So you have some churn model. So we'll have two numbers. One is direct GP, and another one is indirect GP. And so I have some synthetic profit that I can attribute to myself because I saved this many customers from churning by having them come back to the app or have them spend incrementally. I'll give you an example. So we've got RevPoints. It was also a new bet. What is RevPoints? Is it a reward system? RevPoints is more like a reward system. So you've got points, and you can effectively use these points to buy additional products that we offer. As accounting GP, it's very small. But if you calculate indirect GP, then it's very high. It's very interesting, because I feel like a lot of the most successful companies get to an understanding of their economic equation and then take that very seriously, where Amazon says, oh, an incremental Prime subscriber is extremely valuable, and so we're going to set up a movie studio so that we drive more Prime subscriptions. And it sounds crazy, but if you really believe the math on how much a Prime subscriber is worth, it's not going to make sense, or Google was always very fixated on just how valuable the incremental search customer was because of the lifetime value of the advertising revenue. And so they do all sorts of crazy things, pay a lot of money to become the default Safari search box. But again, it was all that attributed P&L. And so you think the attributed P&L revenue is very important so that you can actually create accountability with product teams to know if something's working or not. Yeah, ultimately you need to have one number which defines whether a product is successful or not. I think a lot of companies actually don't do that to a surprising extent, chase through the full accountability with a synthetic revenue number. Revolute's global scale presents a hard but familiar problem, how to stop fraudulent actors without turning away legitimate ones. So Revolute uses Stripe Radar. More than 9 in 10 payment cards that show up on your checkout page have been seen before by Stripe, and so that gives you a serious head start, separating good activity from bad. Add to that fraud detection models trained on more than 70 trillion data points across the internet, and you're off to the races. So if you're trying to reduce fraud without losing legitimate sales, visit stripe.com. How important is the way people think about neobanks as I understand it? Whether there's an account or an account is whether people deposit their paychecks. And so you can use Revolute. A majority of Ireland uses Revolute in some degree, but they might just use it for peer-to-peer or something like that. But they have an account, and then there's using Revolute as your primary bank account, which in the banking industry, people basically think of as, do you get your paycheck deposited there? How important is it that you move people from being a lightweight user to a heavyweight user, from like occasionally using certain features to actually being the place that the paycheck is deposited? It's super important, obviously, right? Because as soon as you get salary into the account, then people use a lot of other products that we have. If they're just using PTP, they, I don't know, load $20, send money to someone. It's not very profitable for us. So we spend a lot of effort to move salaries of these people to Revolute. And overall, I mean, it depends on the country. Like it's from 10% to 20% of multi-active users, we have our salary accounts. What moves people over? It's a very slow burner, right? Yeah. So we actually spend a lot of time and effort building products for kids. Because kids, as soon as we capture kids, then we can easily move them to 18 plus account. Because it's very hard to move adults. Yes. It's a tale as old as time. I remember when I was in secondary school, maybe a similar experience. The local bank came and they gave us a soda and a bag of chips to sit through a presentation on like how to use Revolute. out, save money, and then they gave us all a bank account. But you know, they were in the school, age 13 or 14, doing customer acquisition on the theory that bank accounts are very sticky. Okay, but you see very different behaviors from the people, presumably, like, if you have 10 to 20% primary banking share amongst the regular population, presumably that's way higher amongst the younger population because they're Revolut native. If you look at different cohorts of users, then we probably capture more than 50% of users up to 35 years old in almost every single country where we're in in Europe. And then where we have difficulties capturing 50, 60, 70 plus people who still hold a majority of liquid assets. But then it's very hard for them to move from legacy bank to digital bank. This is hard. What's that 50% of under 35 statistic? Well, basically, if you take all the countries in Europe, then if you take, I don't know, kids, then people from 18 to 25, 25 to 30, 30 to 35, and then older, in majority of countries we already captured more than 50% of people up to 35 years old. Having any kind of Revolut account. How is this product development engine different as a regulated business versus if you were just a normal tech company? Well, I think in a normal tech company it's much easier to do because in banking you need to go through many approval processes. The way we're structured, it's basically because we have many banks. So then the way the approval process works, we call it NEOP, New Product Approval Process. How do you minimize churn? Well, trying to build the best product. But more than that? More than that... Because, again, you're very quantitative, you're very product-oriented, and this is the thing that quantitative, product-oriented people obsess over. Yeah, we used to have this framework of a state machine, you're probably familiar with it. How many people went on board, how many people went through, I don't know, from being PTP customers to seller customers, how many of them churned. But then it just became not too complex. So we end up just having a host of customers who joined the country, and then how many of them are still with us within 12 months, 18 months, 24 months. Then what we observe is that we have a smile, right? So out of 100 customers, monthly active can be, say, 60 people can be monthly active. Then after two years, it will be 65, 70 customers. So people return to us, so we actually have, I would say, negative churn. Why do people come back? Why do people leave but then come back? I think it's more because a larger and larger pushing population started using Revolute, so people who got churned because of different reasons, they still hear about it from friends, family, and then they come back. I see. So you have multiple word-of-mouth kind of shots on goal. I was curious to ask you about AI. How AI-pilled are you in how you run the company? Well, I always started with AI about two years ago, and then the goal was just to optimize customer support, translation. Now it's almost in every single area of the company, obviously engineering as well, marketing. Now we're even trying to create an AI employee end-to-end. So yes, we're very involved. And the last 10 years, I optimized a lot of things in the company just based on people, based on advantages and disadvantages of people. We build all the systems of KPIs, roadmap, process, hiring, performance management. And now it might be all redundant, right, because of AI in two, three years' time. So it's kind of, you know, we're all reinventing how the company should work. How has it changed how you hire, either at an overall company level or at an individual team level? Like are the eight-person teams, should they now be three-person teams, or can you have higher aspirations for what an eight-person team can accomplish? I mean, technically, one person can accomplish much more now. I would even say you don't really need to have separate Android developers, iOS developers. One front-end developer can do things. You can even have, you know, one developer covering front-end, back-end, possibly data science as well. So you can have, you know, one person doing all aspects of the product. You should probably still have a designer, although it's so much easier to design. So one developer can do design as well. So a team can be of two people, probably. But like, you work in this relatively standardized way of product bets, where you put a small team on something to initially test it. Has the size of that product bet initial team changed, and shouldn't it change if not? I mean, not yet, to be honest here. So we're still operating in the old framework. Isn't that very old-fashioned of you? It's pretty old-fashioned now, yeah. But I just prefer to continue doing things that work, and then in the meantime, experimenting with new things. And then when we have a proven track record that new things really work for us, we will start changing. That's interesting, because you think that a four-person team is too, like, kind of cannot bring a new product to market, even with all the new productivity enabled by AI? No, a four-person team definitely can. Just because all the process within Revolute, we still set up, like, you know, by specializations. Okay, you need to have an iOS developer, and they have the system, the know-how system for Android developer, and back-end developer, and data science, and ops manager. So the thing is, it will be very hard to just hire one person who gets access to all the systems and then produce with AI all the required code. I see. So partly it's just you need to reorient Revolute a bit. So we need to change process, yeah. So how does this change the shape of the Revolute organization? Well, first of all, we're just trying to automate a lot of things. Then hopefully when automation is done, we can start hiring less people. So at the moment, I don't think we're at the stage when automation is done. You traditionally competed with legacy banks, and so people might go to their bank for FX, or they might use a Revolute multi-currency card. And you had a lot of advantages, where you had no tech debt, and you had no retail branch presence to have to afford, and kind of many other advantages versus traditional banks. And so you're very successful. As you go to Brazil, you compete with NewBank. And as you go to Kazakhstan, I guess, you compete with Caspi, is that their name? Yeah, there is a Caspi. Caspi, yeah. We're not in Kazakhstan yet. Okay, but when you do, how is the world going to look different when you're competing with new banks rather than traditional incumbents? Well, obviously, it's more difficult, right? Ultimately, when we go into the country, the decision to go into the country is a combination of how bad banks are, right? Because there's less competition, and then what is kind of our unit economics, the customer, and how difficult it is to get the license. Obviously, if a country has a lot of digital banking competition, it's difficult to get the license, and the economics aren't great. So we will not go there, or we try to kind of deprioritize it. And then we try to prioritize markets where there are a lot of legacy banks. Unit economics is great, and then hopefully, it's easy to get the license. Okay, so you look for markets with sleepy incumbents. That's a good market for revolution. What predicts the unit economics of a market other than how rich people in that market are? Well, it's interchange legislation or laws, and then legislation on credit rates as well. And then generally, if inflation is high, then credit rates are even higher, and then the margins are even higher. But isn't it surprising, then, that you grew up in Europe, where both interchange rates and lending rates are regulated? Like wouldn't that be a bad market in this rubric? Yeah, it's a very bad market, yeah. So does the rubric miss something? I think it's just because we started in Europe, where it is very hard. I think out of 50 digital banks, probably three or four survived. So we really survived in a tough competition. But then that means we are more fit to compete in other markets. Yeah, so let's talk about the US market. The US has historically been very resistant to neobanks. Remember Simple? Yeah. That was, what, 2012, 2013? I think those were the earliest ones, yeah. Yeah, exactly. Even before Europe, yes. Yeah, around then. And various foreign neobanks have tried to enter the US market. The US is such a quick adopter of so many technologies, and invents so many of the technologies. Leaving aside Revolute for a second, we'll come back to that, why is the US so slow to get neobanks? Well, I think historically it was a very tough regulator. The US regulator was one of the toughest ones, that's number one. Number two, all these startups, they couldn't really get the bank allies, so they chose not to get the bank allies because it was difficult. The traditional tech companies don't want to be regulated because it kills their business. And as a result, they jumped into partnerships with legacy banks. It doesn't really work because, okay, we've got one tech, and then we've got compliance people and banks, and it's a different company, they don't really match together. So the model was wrong. So you think you have to be willing to own the stack end-to-end, including all the licensing? Including the licensing. Which was tricky in the US because it was such a stern licensing regime. The plus culture was, okay, you need to have tech separate to compliance. You need to have tech. Reality, it's one business, so you also need to automate tech, automate compliance with tech and so on. Yes. And so why did we not see a version of Simple that worked where, again, Simple tried to do the tech via partners, but why didn't someone try to start a neobank that owned the licensing end-to-end in the US? I think it was very difficult to get a license. I know Square, Ksharp, I think they have a banking license now. They now activated it, but it took them four, five years. Now time changed, definitely, with the new administration. And so is the current regulatory environment better in the US? Process quicker, yes. Now you can get a license within a year. Before it took you, it could take four, five years. And you guys have gotten that? You will get that? So we received the conditional approval, so there are two more approvals that we need to receive. And it's from the OCC? OCC, yes. Okay, very good. And so you guys will be going big in the US soon? Like when you get the... Next year, yeah. Yeah, the rest of the licenses. Will there be a need to change about the products to be successful in the US? Well, there definitely needs to be a credit card let, because we've got a lot of benefits in the US from Amex, from Chase, so we'll do the same, which will be a credit card let proposition with a lot of benefits as well. Okay, so you want to go head-to-head with Amex, Platinum, and Chase, Sapphire? Yeah. How will you compete? Well, offering the same benefits or better, plus the whole proposition that we have, because they're offering just payments products, we're offering wealth, crypto trading, and so on. Why launch your own euro stablecoin? It's good business, obviously, that's number one. Number two is, basically, there is USD, stablecoin, and there is no equivalent or credible equivalent for euros. I'll give them the other way in Europe, we should do it. You said you've been doing this for a very long time, it's been multiple years? Yeah, tech was built a long time ago. How do you organize your day? Are you waking up and going wherever your curiosity takes you, or is this hyper-scheduled? Monday to Friday, it's hyper-scheduled, 15 or 30 minute slot. Usually, it's business reviews, product reviews, one-on-ones, and then Saturday, Sunday, freelancing and freethinking. Revolute's the kind of company that has a work-from-home policy of, you can work from home two days a week, Saturday and Sunday? Yes, true. I try to limit our external meetings as much as possible and spend 95% of my time internally. Do you think most CEOs are too externally facing in how they spend their time, go to conferences and all this kind of stuff? 100%. I think I do have a location for conferences, maybe two or three times a year, but that's it. Yeah, and you just want to be within the building reviewing the actual product? Exactly. Products and the business process, yeah. What are you actually reviewing? Are you looking at metrics dashboards with people, and what are you, Nick, adding versus you'd also have an automated system that shuts down any product that's failing to meet its revenue goals? Basically, we have all these KPIs, roadmaps, and processes actually targeting execution. So before I was doing it manually, and now it's all kind of semi-automated with our performance team also reviewing everything, reviewing the KPIs are correct, this roadmap is executed for each team department on the company level. So what I do is obviously product, product direction, product features, and then detecting bullshit as well. There can be a lot of cases when everything is rosy, KPIs are good, everything is matched, but then things can be even better, and then I just know it. What is the bullshit that you're detecting if the KPIs look good? In what way are they trying to bamboozle you? I mean, you need to dive deeper than KPIs, right, because KPI can be met because of external factors and because of luck. And then you dive deep and then you look at the product, product features, and the speed of development as well. I'll give you an example. For example, Wealth on Trading product, I think two or three years ago, it grew up 60% or 80% year-on-year, and then I thought it's not enough, right? it should have been like 300%. And then I dug deep and what I realized, the quality of product wasn't great. Features were not good. And yeah, then we changed the team and now it's growing 300%, yeah. So like, you didn't have intuition for these things. What's the easiest way to annoy you in a product review? Incompetency, yeah. Well, what kind of incompetence? There's many forms. Well, I mean, we have certain standards for quality, right? And everyone knows the standards. And then if somehow I see a product below the standard of quality, and we've done many products so far, that really annoys me. Okay, so shoddy product quality. Yeah, that we're kind of going to the same mistakes. Yes. How's your AI hedge fund going? It's actually going well. It's now, in terms of returns, top three to 4% of funds in the world. So model really works. And what is the model? I mean, our model is a machine learning model. So which effectively is trained on a lot of data on startups. And they're based on, so it's feature-based model. And then based on number of features, it effectively tells you which startups to invest. Or it's not a hedge fund, it's a venture firm. It's a venture fund. Okay. So they're already invested in 40, 50 deals last two, three years. And the returns are good. Isn't the classic problem with this kind of approach, this with private company investing, it's about picking the right companies and then being able to invest in them. Exactly. And sometimes it's like very obviously good companies, but you just can't invest in them. Yeah. How does that work here? So basically, as you correctly noticed, first part is to create a good model, which will tell you with a high precision which startups to invest, which not. And then second, to enter the deal. And then our sales proposition to founders is that, A, we will help them with Revolut operational playbooks. So we tell them how exactly Revolut hires people, how it does performance management and so on. So they don't reinvent things from scratch. That's number one. And then number two, I help with my personal advice. And then number three is we help them to sell either into Revolut or into customers of Revolut as well. I see. So you're a desirable investor and- So added value investor, yeah. Exactly, you can trade the added value for that, yeah. When's Revolut going public? Well, I hope 20, what's now, 2026, 2028 in two years' time. Subject to market being good. Or needs to be true for everything else to be ready? Or is it just already ready? I mean, it's still a work in progress, right? We need to launch US, we need to launch a lot of new ex-marshal markets. We need to still prove that we can be as successful as in Europe, in the markets outside of Europe, especially on credit-led markets. Do you actually need to launch the US before going public? Like, isn't Revolut a huge bank already with billions of dollars in profits? Like, you're plenty scaled already? No, of course, I mean, it's not necessary, but it's good to have. Because investors are based in the United States, and so again, this home country bias means they'll be more interested in Revolut if you guys, if they're familiar with the product. I mean, I'm not really optimizing on valuation or readiness for APR, it's more like, okay, there's a roadmap that we want to complete, and then let's focus on the roadmap. You mentioned helping startups understand the Revolut playbooks. Where do you think the Revolut playbook is most differentiated? Like, you talked about performance management, you talked about a few things. Yeah, obviously hiring, performance management, or product building as well. I think with AI, it might be irrelevant. How do you do performance management differently? I think it's very important to do it quarterly, because the majority of companies, they do it once a year. I think it's too long. Problem is, a lot of managers, they are inherently biased against exiting on the performance. So by having a process once a year, you're not really helping the company, because then you're forcing managers to exit on the performance once a year. Reality, you need to do it as fast as possible. You can't really do performance management once every month, because it's kind of too time-consuming. But once every quarter, you can. And do you try and make performance more quantitative than other companies? Like the mapping products to where they should be on the cohort curve is maybe one example of that. Do you try to do that in other places? Yeah, so we are trying to be as quantitative as possible, so every person is assessed on their skills, deliverables. Deliverables are measured roadmap plus KPIs, and then culture. So all these three aspects are assessed by manager plus functional manager, plus there is a performance review on top of it, checking that everything is correct and then a person is assessed. But some domains are just fundamentally more quantifiable than others, right? Like a salesperson, you can measure how much they sold, whereas a lawyer, you can only make that so quantifiable, right? Well, in our case, we have metrics for almost each lawyer, I think. I mean, definitely for the team of lawyers, because what lawyers do, for example, if you look at commercial lawyers, they process contracts, right? And then are they keeping with their SLAs? It's number one metric. How many deficiencies are within the contracts? Again, you can measure it, and so on. So you, I mean, on the team level, we definitely have KPIs. On individual level, I'm not sure, but it's possible to do. So do you think most companies are, because I don't think most companies really believe that you can measure lawyers on a grid of KPIs, and so, do you think that, again, you can be more quantitative than you think? It can definitely be more quantitative than the majority of companies think. Can they quantify everything? No, so you need to have some other lead indicators rather than some KPIs. Okay, we'll leave it there. Thank you, Nick. Thank you. Thank you.