I Built A $1B Company... Here's 7 Business Ideas I Would Start This Year

you hear about these companies that going from like 0 to 100 million in like 2 years or 3 years or whatever like the equation is very simple from a company [Music] perspective what's up uh we got my buddy Imad here he's the founder of mercury an awesome company that I use and love and is uh you've created a billion dollar company dude you did it you did the thing that all of us when we were living in San Francisco and and in our 20s trying to build these companies you finally did it how does that feel uh it's funny you say that so you we raised our series B in 2021 uh which is actually like four months uh after we did our last podcast together at my first million in January 2021 uh and then we're just announcing our series C uh which is a 3

5 billion valuation with seoa leading but in 2021 when I raised my Ram that was at a 1

6 billion valuation and it was so weirdly anticlimactic uh because it's like I started as an entrepreneur in 2006 so 2021 what is that like 15 years so I've been working towards this objective of like building a unicorn company right like that's as you say like you I moved her when I was like 22 and like that's all it was about for me for a long time it was like getting this like really successful company uh and then you you hit this objective like becoming a unicorn and like nothing changes so I have this like I have this helmet behind me me cuz that's like this is from Joe Montana uh he was uh he's an investor and he's he's a uh footballer so he sent me the helmet and that's literally the only thing I got when I became a unicorn I mean obviously I had a successful company but I keep it there to show like you know like these objectives don't really matter it's like you have to enjoy the journey because you hit the objective and then you're like okay now what dude Joe Montana should make that his thing he's just he should send a helmet to every founder who becomes a unicorn I mean he sends it to the ones he funds because this says like billion dollar Club on it uh it's kind of cool all right I told you I said uh love to brainstorm with you ideas I thought you would come with a bunch of fintech ideas CU you're the bank guy but you came with a bunch of you sent me a list of bullet points none of which sound like fintech so I'm excited give me some of these ideas things that you think Founders today could be going and doing or if you weren't doing Mercury that you would be interested in doing yeah uh so I I had three trends that I think are interesting uh trend number one is space and space Tech uh there's a few reasons I like the trend number one you know I'm I'm just a Sci-Fi nerd like I love space so I think it's really exciting as a space and it's finally hit this point where like there's all of these kind of enablement factors so you number one like just a few years ago getting anything to space was like a 100 million Endeavor right like we're talking about like literally $1 million to get something in space that works because you know there was no SpaceX and all of the space satellite stuff was like these hardened like you know radiation proprof Like Satellites now the other week like SpaceX did like 8 flights or something in one week like it's insane so you know you this there's this repeatable kind of channel to get things in space it's much much cheaper and it's going it's getting cheaper every every month basically and nowadays people have these kind of micros slat platforms where it's basically computer in space like it's not going to cost you a million dollars to get like just to build the satellite like you can do it for like $100,000 or something so this is like huge enablement thing and I've invested in a bunch of companies I did this company called albo that's doing that's doing kind of very low earth orbit pictures of things so you can get like 10 cm kind of resolution pictures from space yeah everyone's kind of excited about AI which I'm also excited about that but that's a heavily you know everyone's doing it competive I think actually space is still like super open there's not that many people kind of attempting things in space um so the crazy idea sent to you which I don't love this idea in terms of like we need to come up with like why we should do this but I think a nuclear power plant in space would be really cool uh like potentially we put this thing on the moon uh and then we mine uh mine water from the Moon and you one of the cool things about water is if you can split water you get hydrogen and oxygen and oxygen and hydrogen together make rocket Fu but it's also like you get breathable oxygen which is useful uh so having power in space is pretty useful uh and there's lots of interesting things on the moon uh and you know if you have a nuclear power plant there you could probably like there's this other cool company that does this thing I don't know if you've SE seen it I can't remember the name but like it spins things super fast and then like basically fires them out I think it's very hard to get something from Earth's surface into space by like spinning around around and flicking it but you I think on the moon it's much easier the gravity is lower and there's no air resistance right um so yeah if you had a nuclear power plant you could power there uh so I thought that was cool let's see what else uh I I'll talk about my second uh theme because it ties into space as well so the second theme is defense deck in general uh obviously we've seen andero um but you there's kind of two Trends well actually three tends Trends in defense deck that I think interesting number one uh yeah there's a lot of geopolitical disturbance everyone is basically yeah we're living in like or moving into a multi-polar world which means like you know there's India there's China there's America uh and America is no longer kind of the policeman right like the only way America since the 1990s has been able to be a policeman is there hasn't been any other power to really challenge that right uh so it's not just the US is is needs to rearm it's all of Europe uh you know India whatever like everyone is like arming so so you have like all of these people that are in the market now that weren't and then number two autonomous vehicles have changed the game right there drones uh AI in general can be applied to all of this stuff and then number three yeah you're going to get a ton of drones like it's not just like big billion doll fighter planes right it's going to be actually like a thousand or million like tiny drones that are like easy to manufacture so so all of these things kind of make it so startups can now compete again in a way that like wasn't possible before so I think there's like two two types of ideas that I think are interesting number one like how do you make more things autonomous so people are doing autonomous drones but you could do autonomous Subs autonomous boats autonomous tanks right like I think a lot of these things are not being head on uh and when you make them autonomous you can change the form factor as well like you can make them smaller you can make thousands of them uh so that's one aspect and then second aspect is like uh a lot of these autonomous things kind of favor defense so I was reading about this and the Ukraine Russia war is like actually like trench warfare which is kind of crazy like we haven't had it since World War I but they're literally digging trenches and like that's why the lines are like hardly changing because it's like neither of them has a superiority uh the drones actually make it hard to get air superiority because you can have like a tiny drone knockout at like a million dollar plane uh so in that world like yeah so you've got one side is the autonomous side second side is like the kind of how do we build more defensive autonomous things as well so like you know maybe we automatically have these machines that are drink building trenches uh you could have autonomous mines that are like smart and they don't I mean I guess that sounds like bad to people but you could have it so like it's a if it's a civilian it doesn't blow up if it's a tank it does blow up right like you can you can make these like safer uh mines that move around uh and then to tie back to the space thing uh you know I think in the next kind of War Space Warfare will be a big part of it right like if you if you can knock out uh satellites you can like Che you know cut down on uh starlink and all of this kind of communication you can remove the uh the visual side of things right like these kind of satellites that are viewing things uh you can knock knock out GPS so some of that actually happened during the Ukraine war there was like some you know there's some rumors about like some satellites being knocked out but I think that's going to be a big thing so so the counter to that is how do you how do you create defense around satellites right how do you uh maybe you'll have like stealth equivalent of stealth satellites right like you kind of only move them when like the the sun is kind of obscuring the the viewp and uh you move them to a place and then obscure the Obscure them completely so they're not reflective uh yeah I know there's a ton of ideas around like defensive kind of stuff in space as well all right so a lot of people watch and listen to the show because they want to hear us just tell them exactly what to do when it comes to starting or growing a business and really a lot of people who are listening they have a full-time job and they want to start something on the side a side hustle now a lot of people message Sean and I and they say all right I want to start something on the side is this a good idea is that a good idea and again what they're really just saying is just give me the ideas well my friends you're in luck so my old company the hustle they put together a hundred different side hustle ideas and they have appropriately called it the side hustle idea database it's a list of 100 pretty good ideas frankly I went through them they're awesome and it gives you how to start them how to grow them things like that gives you a little bit of inspiration so check it out it's called the side hustle idea database it's in the description below you'll see the link click it check it out let me know in the comments what you think so what I like about what you just said is that there's probably Three core things I think about when it comes to great ideas and I will differentiate a great idea from a good idea so on this podcast a lot of times we'll talk about good ideas a good idea means a business where there's there is demand there might even be competition it might even be established but that gives you a bit of a Playbook and there's there it's not going to be winter take all there's room for everybody to eat and a good idea what it profiles out to is that you make millions of dollars maybe tens of millions dollars maybe aund couple hundred million dollars with a higher likelihood of success but you'll pretty much never get to the the billion dollar or or sort of groundbreaking new category creation type of companies doing that and what you're talking about is a different criteria for great ideas and a great idea I would say there's three test the first is the Peter teal test so famously teal went to YC and you know he was asked to give a talk and he went and he drew two circles on the white board like a vent diagram and he basically said he he colored in the middle and and he labeled one Circle sounds like a bad idea and the other Circle was is actually a good idea and he's like you're looking for the overlap because the the best ideas sound initially like a bad idea but actually are a good idea and so um now that's hard to do because you don't know what's actually a good idea you you have to sort of think for yourself there but what it is good at is it sort of reminds you not to run away if your initial idea sounds a little crazy sounds a little out there or or you know eight out of 10 people who first hear it say nah no way right and so you uh so that's the first thing it's like a great idea typically comes disguised as a bad idea the second thing is some inflection point so you talked about how for space suddenly if SpaceX is doing eight trips in a week right it's like going to space went from somewhat impossible to possible now a regular thing it's like oh I could just hitch a ride on one of these trips and the trips are getting cheaper and cheaper every year or somebody's already taking a payload up and I can just add something to it or I can build on top of their satellite platform that's already already going to be up there so I think that's a huge inflection like you're talking about the other one you talked about with defense is autonomy so just the ability to make things self-driving self-flying self um you know self- swimming you know just basically uh give a thing eyes and now it has a brain because of AI and suddenly you can take humans out of the equation for for that job and when it comes to like Warfare or defense great because that's you know Liv saved when you when you do that um so you know you have these inflections so that's thing number two and thing three I would say is um scares everybody off so like you know you were saying AI in general like you know uh if if I said I'm building an AI agent startup that's probably like the biggest bloodbath competition right now but you're kind of right that smart capable teams that are doing interesting things in space there's still like way more opportunity and way Le versus the number of teams pursuing them um and same thing in in defense that you know still the average smart capable team is not um not going after that right now and so there's just like a lot of room and you know these are huge Tams right so uh obviously like you know space and satellites that's a that's a huge market and then defense is obviously huge especially as you said the whole world is rearming so it kind of hits all three even though my first reaction when you say nuclear power plant in space I'm like all right I don't even that breaks my brain a little bit I don't even know what that means it's not even possible um I kind of like the underlying thought process you have going in even though I don't fully get the like you know the end product idea cuz I just don't know anything about the space uh yeah I mean I have like some simple ideas that are maybe good but not great but like you know more achievable um here's a fun one I thought about last night I thought it' be fun to have a billboard in space uh so you first space so so I had this like a few years ago I was like going camping and I didn't have internet and like you there was this like starlink satellite launch and I don't know if you've ever seen it but like I think they fixed it so it doesn't do this but they basically launched the satellite so they were like they were kind of positioning them so they were all visible and there was like 20 in a string in space and you could see them naked eye with a telescope or just naked eye no just naked eye you just look up and there's like a string and then initially I was like are those stars are they UFOs because they're like yeah they're like very bright like they're brighter than a star uh but they're like they're like completely in the line and they're moving quite fast because they're in like Alo right um but I was like oh that's kind of sick like I you know you can literally as a human like launch this thing that changes like everyone's view from the earth uh right I thought that was like kind of insane uh but yeah I think I don't think it would be that hard to put a billboard in space and make it so you could view it from a telescope I don't think you could do it like I mean you could probably do the natural eye thing but like obviously people complain uh but making it so you can be with the telescope I think would be actually kind of cool and then people would like buy that uh so this one's more a good idea I mean I don't think that's a billion dollar idea but do you remember there was a a whole service around uh buying and naming stars do you do you remember this this was kind of like a big idea in the '90s maybe early 2000s three body problem that's like one of the one of the ideas I hav't I haven't actually read it now it's like on my kind of to-do to read list but we um back in the day we had this business called Birthday alarm and birthday alarm was like a to remind you of when it's your friends and family's birthday and then you could send an e-card just like a greeting you know animated e-card but there was this company that had approached us that was like Hey if you add the um gift of naming a star after someone you get a certificate blah blah blah and it was like whatever 30 bucks to to buy a star in someone's name and that company was doing like 20 million a year I remember and it was just like a couple of guys and they were and they approached us to that we said no but when we had gotten to know them I was stunned that they were doing you know that much revenue um at least at that time I do think it was a bit of a fad but still that was that was very impressive to me I thought the other one that would be kind of cool is like you know when I die if I it would be cool to send like I actually don't want to be crom but if I was cre it would be cool to send some ash to space uh having like some sort of memorabilia being sent to space I think is kind of interesting as well uh and that would be easier uh in the more practical ideas I do think intelligence as a service is kind of like an interesting idea so you mention AI agents so there's tons of these companies going after to these big categories right like this ai sdrs ai customer support agents uh I haven't seen too many companies kind of go after more Niche ideas where people are willing to pay so uh AI sat T tutor right like imagine like actually like AI is great as at education because a like the content is like extremely easy for AI to do super structur B yeah B can be completely personalized C it's just extremely patient right like I mean when I try to teach my 13year old I'm like pulling my hair out after like a few minutes uh so there's a whole class of like you know you take any test and you could probably make an like a AI agent that's like great at that and great at teaching that so like you could do the bar exam you could do MC whatever a no-brainer is somebody doing that somebody has to be doing that right because I haven't heard of anyone doing a great jaw I'm sure nobody's won yet which is amazing but like you know you look at Kaplan and you look at you look at the the Big T prep companies they were built like decade like many decades ago right and they were built in the I mean I used to buy like those giant books with uh you know the practice tests in them from Princeton I think Princeton Review or whoever when I was studying for the SATs and then sure it moved to like video and online after that but now you're right like if you just did AI a personal one-on-one tutor I think that's you know obviously that's obviously the best I don't know if you've seen the studies of like are you right about the like the the two s thing when it comes to tutoring it's basically like nothing has shown as measurable of an effect as one-on-one tutoring in education yet and it's basically the the problem for a long time was I think I think you basically would get something like two standard deviations above the meain and by the way this is kind of debated and people say no that was it was measured wrong and it's not true I think intuitively it's like feels right right like when I'm learning something if I talk to someone like if I had a gun to my head and it was get the best grade possible on this test right if my life depended on it would I choose uh just showing up cold no would I choose just a book where I self-pace and self-study no what I choose a library of videos no if it was like a a tutor comes to my house and sits with me for six hours a day and that's how I study for this I'd be like that's my best shot and if it was the smartest most patient tutor with infinite knowledge and knew exactly where my level was and was ready to work with me the moment I was ready to do it all times of the day right that's an AI comp um so I think that's kind of uh kind of great because it's so scoped to you know one CH one specific um test which people are not doing because they voluntarily want to you know educate themselves but like I need to pay X dollar to get y grade to get into Z College yeah you're willing to pay yeah I think like the the good ideas right now in these kind of AI agent whatever things are like these like kind of more nichy ideas that you can expand from later like rather trying to do like all tutoring right I think that's actually like quite a hard problem and AI is not quite there yet like if you pick just one thing and you just like completely nail it uh then you can always expand from there as well right right right I like that um what are some of the most interesting companies you've invested in recently so have uh is there any company that's like taking off or doing well that you you you feel like more people should know about but they don't they don't know about it yet you know this like what I put put as like intelligence as a service company so I'm an investor in 11x which does kind of AI sdrs and I'm also an investor in decagon that does kind of AI customer support agents um you know they just have like these insane numbers uh I don't think they're public but you know you hear about these companies that going from like 0 to 100 million in like you know two years or three years or whatever like all of these ones that hit where they're like you know like the equation is very simple from a company perspective it's like hey I'm paying a ton of money for customer support or SDR like if you can do the same task uh with some sort of like fallback to humans uh at half the price sure let's do it right so there definitely across a bunch of these spaces uh and the big ones are like you know sales customer support legal uh accounting uh a bunch of these and I'm an investor in like many of these companies uh there's definitely like a moment where like they're really winning and obviously it's still early but it seems obvious to me that like a bunch of these things will be delivered by AI so on the other side every company's that has sales or CS or whatever the CEO the board is saying like Hey how do you make yourself more efficient through AI right so uh you the buyers are like really looking for Solutions and anyone there's not that many actual right in each of these spaces there are a lot of companies but like normally it's really hard to do Enterprise sales right like this is like a 9mon 12 month cycle but when you have like buyers that are just like hey I need to deploy something something to show something that I'm like I'm doing stuff in AI it creates this like moment where you can actually like have this exclusive Enterprise sales growth which is actually very rare it only happens like in these kind of rare Trends would you let's say you weren't doing Mercury right now you had all your free time and you know everything you know today and you wanted to find an AI idea a winning AI idea what would be your process like explain to me how Imad finds like kind of comes up with the ideas and vets them and sort of figures out what idea to do versus what idea not to do I approach things like both top down and bottom up so top down uh and actually did this as part of like your your podcast prep stuff I you know I went to chat GD and said like hey tell me every every human worker in the US that like does knowledge work give me a list of all of them and tell me how much labor cost for across each of them right so that's very top down and you're like okay you know there's education there's medical there's lawyer there's accounting there's yeah whatever like all these like knowledge worker type things like design coding Etc so that's like a top down approach and you can say okay you know here's the most interesting and you could do like a matrix kind of thing it's like okay here's all the interesting ones here's the Tam here's all the companies that are in those spaces here's all the bits that are not done uh you know his uh yeah maybe you want to avoid regulated spaces or maybe you want to go all in on regulated spaces maybe you're like hey no one's stretching doctors because everyone scared of doctors like why don't we just make a amazing doctor for like I don't know Africa or something because like you know there's less regulation there and you can prove it out Etc um so so that's one kind of top down approach and then I'd also go bottoms up and I'll go okay you know what what gets me excited right I love serving entrepreneurs so like i' go because I'm an entrepreneur all my friends are entrepreneurs I I love the idea of like people making things so maybe I'd say okay you know what are things entrepreneurs struggle with and you know one thing that I still don't have a great solution for is like you know as a CEO there's so much knowledge across the company I'd love something that yeah there's a few companies doing this but uh I would love to have like an AI twin of Imad that like is like continuously absorbing all the knowledge across like the company and maybe across the internet and telling me stuff it's like I think Gad should really pay attention to this and like or like even like I thought would be kind of fun to make it so like on on the slack like there could be imma twin and someone could ask it questions say like oh what what would Emma think of this idea uh yeah actually like a funny thing that just came up the other day and I was like I'm pretty sure my AI T could answer this was like someone was like oh you know our Board Room is like kind of small and we just added two people to the board like hey should we do the board meeting at a law at our law firm and I was like no [ __ ] no I'm never going to do a board meeting at a law firm like that sounds awful I'd rather stuff like 16 people in a tiny room uh than do that so I feel like in my AI twin could have answered that question uh so that would be like my Bottoms Up approach and I yeah I do think like you should really work on things that get you really excited uh like you know an AISD like I'm happy for those guys I personally would not get excited about that like I hate receiving sales emails and calls uh so I think I think doing things that you would like wake up in the morning and say like I I'm excited to solve this problem because like these things take such a long time right like I've been doing Mercury now for like eight years uh and if I you know if I was doing something boring I would like probably wake up in the morning or like why do I have to do this again so so I think that's like the bottoms up approach where you try to think of like what do I care about what do I want to see in the future and try to come up with that and then you know you kind of merge those two kind of Concepts together and and you know often you do something and you find out actually it's a bad idea as well so yeah Mercury actually had like a very smooth ramp where it was like I was like okay I like this idea and then I executed on the idea and we never had to Pivot but you know often you do like as you learn something you're like oh actually this doesn't make sense but this makes sense so you know that's part of like ideation is to like actually go build things do you um so let's let's take an idea we'll role play it real quick so pick pick one of the ideas like plausibly you'd be like oh yeah that's kind of checks the boxes it kind of top down makes sense Bottoms Up it resonates with me like what would be an example of that is it the digital twin thing or is it uh let's do the yeah let's do the digital twin I think that's like kind of the most funol so you have a you your digital twin CEO who's basically reading all the slacks the documents and in Google Drive the he knows everything about the contracts that are all there he looked at the he has access to the CRM so he can see anything in the the dashboards Etc um all right so now first few weeks what are you doing is is it like I trust these five people I'm going to bounce the idea off them do you make a deck CU that clarifies your thinking do you just go build a prototype do you go look at competition that's a great question where do you go next you know with Mercury I I had this moment where so we you know we' raised the money we were doing the thing and I was like okay you know let me go talk to a bunch of like potential um companies that could use this like you know create like a big Pipeline and also just learn what it's about and I talk to basically 100 and I remember remember like getting kind of depressed after I talked to them because I talked to 100 and most of them were like oh yeah that sounds kind of cool but like there was it's very lukewarm and it was only two of The 100 companies that were like oh yeah like I would [ __ ] use this like give it to me right now kind of thing uh and at that point like you know it was like it took us a year and a half to build this so this was like one year in so you know you're like you're kind of running out of momentum anyway because it's taking so long to build something and then you go talk to 100 people and everyone's kind of lukewarm I was like what am I doing um but you know I've was like I would really want this so I just like powered through it and and it turned out you know a if 2% of people want something and the Market's big enough that's like probably big enough for like an early adopter base uh right but if you think about it like you know talking to 100 people and having only two people get excited about something is like actually like kind of like uh tricky and you know maybe I wouldn't have talked to those two people because like you if I talked to 50 people I might have missed out on it completely uh so I think it's actually like surprisingly hard to vet an idea against humans uh like people just just don't know and it's hard to imagine an idea as well uh so I what I think I would do is you know I would do that talk and I would go talk to some VCS well like I talk to a bunch of users I talk to some VCS just get an idea of like what is the reception like uh but then I would like try to spend a lot of time and you know first thing for me like one of the things that gets me excited about Mercury is that uh you know after like last year we launched a bunch of new things like we launched uh invoicing and bill pay reimbursements and personal banking and some ideas are like hit a dead end over time right like you kind of do the idea and then you end up like 5 years later you're just like making like small features and just selling it more Etc and then some ideas like turn out to like Fork like a thousand ways and Mercury is one of those things because a there's just so few people in banking that like a lot of these spes are unexplored and B banking is like this kind of platform where it has all your money it has all your Finance team so you can build a lot of things on top of it so I'd want to think about like okay you know if I did the digital twin idea like what are the forks like why why does this become even more interesting the more users that you get on it and and maybe the interesting thing is like okay it's not just a CEO twin everyone at the company has a twin and maybe maybe some of the people don't even exist at the company maybe these are like the uh you know maybe you have like a coms person at the company that's just literally just AI uh uh I'm just like riffing off this uh maybe the maybe your AI twins shows up at the zoom calls uh you maybe it's like becomes your coach and it's like helping you through difficult times right like I think there is that is an idea that could probably Fork a lot of ways because like it has all the knowledge it learns a lot about you it's in your in your communication channels like it's got these cool ideas that like uh yeah it sounds like a pretty good idea now that riing on it but get excited yeah well you also with Mercury you uh it seems like this may be too simple but like it seems like you you had been a Founder for 10 plus years and you were like I don't personally like have a banking product I love but every startup needs a banking product so I want to build for startups there's nothing that anybody loves maybe they don't hate their thing or they don't spend too much time thinking about it but they don't have one that they love and you basically built the one you would want and then you're the BET was that there's going to be a lot of other Founders that think like me that like what I like um is that fair or is that oversimplifying it no no that's 100% fair I think generally speaking I'm a little unusual I get like if I have to call someone to do something I get so annoyed about it like press the button yeah I will delay for weeks for sure but like if I have to do it and like that's the way banks are after you know except for mercury like you have to call to like get a wire done like you know I don't want to like I guess they're kind of gone so I can probably [ __ ] about them a little bit but like First Republic like if you wanted to send a wire like you firstly you tried to do it and you'd hit a limit so you call them raise a limit and then you do it and yeah then it would go to the next phase and then they would call you and you'd have to authorize it then someone else would have to call them it's like it was like multi-week process just to figure out how to send Wes uh so I was like this is what so so you guys started sponsoring me and I was like all right cool I have an idea for the ad read because I got six Mercury accounts myself so I was like uh trust me I already know you don't need to give me the talking points I know why I use it and I was I was like I know you have all these fancy features but like for me as a Founder uh I move at a certain pace and as a Founder is one of the only advantages you have right you don't have you don't have the biggest team you don't have the most money you don't have a lot of things you don't have the most experience you don't have a brand in the in the in the market everybody knows but like your pace is the one thing that you have that all the big companies don't have the problem is if you just start hitting walls because you can't move fast that becomes very problematic so like I like to have an idea I like to buy a domain on GoDaddy in two seconds right I like to file my if I a trademark I like to just be able to file it online I want to talk to a lawyer and schedule a call if I want to start a bank and those little things they sound like one-offs but they add up and they create momentum and momentum begs momentum and so I just will always default to use any tool that can that can operate at founder speed so with Mercury it was like oh cool I can just type don't have to talk to any human being don't have to call anybody don't have to drive and park somewhere and I can get my bank account open I can get money in and I can wire money because I used to wire for my Ecom business uh at a Wells Fargo and I would have to every single month just to pay our suppliers I'd have to drive to a Wells Fargo Bank make an appointment which I always forget to do go inside they gave me this freaking fre hour to do it they gave me this thing like it's the nuclear codes and I had to have that and then it's like and then I had to sit there in an hour and then she would ask me questions and I'd have to make sure that the number's right and I'm like dude I wish I could just copy paste push a button and be done with this and then I had to get my limits raised then they had to call another lady to raise the limits because they would only let me do 50k or 100K at a time it was super annoying and so it's amazing that literally just feeling like okay these people get me and they'll build a product that moves at my speed how important that was and I also then took that to hiring I was like oh my my best hiring heris is basically did this person speed up the pace keep Pace or slow down pace and anybody who slows down pace for me even if they have other strength I found that it it rarely works out to work with somebody who operates at a slower speed like if we have a discussion or an idea and you're like cool I'll get to you next week it's like wait wait wait we said this was important let's just get it there's still eight hours left in the day what are you talking about like how long could that possibly take you um and and if you're it's not that they won't do it it's just if their default expect if their default clock speed is slow it's just not going to work I want my software fast and my my employees fast yeah so actually you know like once you describe that process like it sounds awful so I think like there's like people just get used to being abused by the current products right like I think it's in some ways like because I came from the UK I didn't I didn't I had a slightly better expectation of banking uh like the you know in the UK you can move money instantly and like the software was better for various reasons so so I think there's like some element of the fact that like I had this Outsider perspective uh as an immigrant uh and I do think that's like part of it that like people in America were like okay with once a month having to like drive to WS Faro to do something basic and like having this like beg them to let me do something with my own money convince them and sometimes they say no dude it that the term abuse is so good it's like that's going to be a new filter for me on ideas is can I describe the current abuse that the product is doing like I was in this um conversation the other day and it was like super it was I went to that dialogue conference I don't know if you ever been but like oh yeah the room was this is the dialogue Cup oh perfect perfect so I went there last like two days ago whatever and in the room was like the CEO of Renaissance techn right like the Renaissance like the best investors in the world the CE of Bridgewater like it was basically like the Who's Who and in the in the money conversation it's like a group of 10 people in the money conversation the topic of crypto came up and somebody who was a a a dean of a very famous university was basically like arguing um that you know crypto I don't know I'm I'm not convinced and I I just sort of it was the the abuse thing so I was like so you you think he's like you want to park your money and something like the dollar right cool got it I understand a bunch of reasons why but the the abuse that was normalized was so the dollar which has a a whole arm the FED whose job is to have a 2 to 3% Target inflation oh oops sometimes we we go way above that but we'll try to get back to 2 to 3% and I was like so your your default expectation is that in 30 years your purchasing power is cut in half that's like the accepted Financial abuse of saving all your money in US dollars is that every 30 years your purchasing power gets cut in half it's a lot worse than that because of like asset appreciation right like people don't think about it but like you know like houses and a lot of other things are like way above inflation uh inflation even measured where it doesn't include your house or your rent like you know like the kind of screwed up version of inflation even that even that like gain the the the adjusted the adjusted eida of inflation right where it's like this this specific basket even that's supposed to be 3% so it's like that's a system where that abuse of like what if of Savers getting penalized right anybody who saves gets penalized in the the dollar system but it's um it's a blind spot people really don't uh they've accepted that abuse they're so used to that abuse that uh it's just taken as as as fine you know it's not even problem it's not even like a known problem for them yeah yeah yeah I mean I think the part of the reason it's not a problem for like richer people is because they get the asset appreciation right so like you know people aren't sitting on cash it's unfortunately a lot of the abuse actually happens to like poorer businesses and like poorer people where they have to sit in cash because you know they don't have the living paycheck to paycheck and like most of their money is not in assets uh so I think that part is like particularly sad uh and I don't necessar you think crypto is the only answer there right like you could buy gold you could buy stocks like Bitcoin has obviously done particularly well in the last 10 years but but yeah it's it's definitely like something where like there's something a bit weird about the system for sure yeah exactly you can debate the solutions but the problem seems like not debatable but it's not but it's just accepted it's an accepted abuse tell me uh you guys had this crazy situation where Silicon Valley Bank goes through this crisis tell me where you were when that happened and then what the next I don't know 24 48 Hours what did that look like and what happened to Mercury during that time because it seems like you were the big you were a big beneficiary of of that situation in terms of customers coming to you guys or adoption yeah I mean just set the scene right like svb has been around one year longer than I was alive so it was like started in 1983 so I always remember that uh and when you know when I was working on Mercury right like svb is part of the seed deck right it's like hey this is the 800lb gorilla like this is what everyone in the silic valley uses uh at that point they were like Worth 16 billion and I think in Peak Co they were worth 40 billion uh so this is a big company so you know when this started happening yeah know I wasn't we we had obviously been competing against each other but yeah it was like kind of a weirdly indirect competition in the sense that like SBB just offers something very different right like this is like the stolid uh Silicon Valley Bank that's been around forever and then Mercury is kind know this upstar fintech right like so and like I you know we used svb in my previous company I like those guys like they were like uh they were friendly they like cared about startups I mean the software wasn't great but none none of the banks had great software so uh like to be clear I didn't feel anything bad about them and I and and I felt really bad about for the people there and you know I thought I thought they'd be fine right like when Thursday rolled along I was like Hey everyone's freaking out like people like panicking about things on the internet did you find out about it at the same time as all the rest of us or did you have some inkling or some some foresight that that might happen in the December like so the most of the the bank run happened uh to svb in March 2023 uh in December 2022 there was like this article about like the fact that the msbs the mortgage back security MBS the mortgage back Securities were like massively underwater there even been some VCS that had freaked out and like uh pulled their portfolio companies out so I had seen some of those rumors in that December 2022 but again like people always calling some crisis and yeah like if you want to like right now there's someone freaking out about something so like my default is to ignore that stuff uh but yeah I mean on Wednesday uh it kind of kicked off and like you know we started seeing like just people were freaking out and they were like hey how quickly can I get a Mercury bank account right and know uh and it went from like you know normally like banking like people don't want to switch banking services right like this is a uh a lot of the customers that mercury wins are like a day Zero like you just start a new business have a bank account you need something and we we're there for you it's much harder for us to switch people so you know we obviously like hitting up every startup in s Valley with like our sales team and other marketing stuff did you have like a uh like kind of emergency meeting like hey here's the game plan or how did you how did you organize that to like Sprint our initial thing was like Hey you know I was like we do not say a word of this publicly like we don't want to like jump on their Misfortune but anyone that comes to Mercury let's like support them and we did bunch of things so we we changed the product so uh you know we're like hey if you're non svb uh customer we can always on board you next week right right but if you're coming from svb let's make it in let's do it in a half an hour so so we you know we had this plad connection thing and we put that right at the top and we said above it svb customer connect your svb and we'll like prioritize you uh and like svb customers were really easy to prioritize because they're like you know they tended to have more money they're already vetted by uh a bank uh they're not new customers so you know it we we basically like tried to think of all the ways we could speed up the process for them and we really focusing that proc was it like 2x 5x 10x normal like what what did you see so right now mercury has like 200,000 customers um and we had like maybe 100,000 back them and but yeah svb had a lot of money but not at like an insane number of customers so I want to say they had like 30,000 or 40,000 kind of total customers so uh the volume was big in terms of dollars but not necessar in terms of like numbers it was significant um I think what we published is like around 8,000 customers moved over to us like in a two we time period uh yeah which is like big but not like crazy compared to like the normal kind of monthly growth we get right uh so the other thing we did is um you know uh everyone was saying to us like hey svb failed like why won't Mercury fail and uh you know I would say to people like verbally it's like hey you know we we're not a bank ourselves we work with partner Banks s uh and your money is like has extra FDIC insurance so at that time we had uh 1 million in FDIC insurance and and then I would say okay you know after if you have more than a million put the rest of in US Government T Bill mutual funds uh which we have as part of the part of the platform so I would say this over and over again to people but obviously like you know if if em says like hey your money's safe like that's not very fulfilling right like the S spb CEO was also saying your money safe so what we did over fre yeah exactly so I was like that's the one thing I don't want to say online so what we did over that weekend is we built this product it was called Mercury Vault and it would basically visualize where your money is we'd say okay you know this much of it is in FDIC insured account up to this much so if you had uh yeah and we also actually worked with our partner Banks to extend the FDIC insurance so we went from 1 million to 5 million over that week so it's you if you had 6 million in your Mercury checking account we'd say Okay 1 million of that is no FDIC insured 5 million is and then you know we'd help you set up up your Treasury System so youd put in US Government T bill so so we built this product and that really worked uh like it's so powerful to so you used product to build trust instead of words exactly yes uh and it's also spoke to the moment it's like okay you know instead of us like hiding away from it we weren't saying like you know let's not talk about whether your money is safe or not we were like okay let's show you right like you know you don't have to like trust like 's word or like some marketing you like we were like here's a product that shows you and it wasn't you know it wasn't like something completely new like we this basically like my general view on things is like if you're saying something over and over if customer support is doing something over and over like how do you make that in the product so like people don't have to ask you and it's just so much more powerful like it feels tangible to people uh it also just felt to people like okay you know instead of us going to another bank that could also get a run we're going to something where like you get this extra FDIC insurance and mercury is's a fintech it's not yeah at that point like you know we like we are not holding your money the money never touches Mercury's bank account and it never does like it goes to our partner Banks and that they have an FDIC sweep Network so that was really important to people that like we were speaking with product and like it's also you know I think entrepreneurs appreciate that right like they want there W like the fact that like we spend the weekend building a product for them that like actually answered their biggest question uh like made people go like oh [ __ ] like Mercury gets it right like I think that was like a really powerful moment for us yeah that's dope you have actually felt good as a entrepreneur because like I think sometimes you know when there's a crisis moment you can feel a little B like like it's like oh man what am I supposed to do here like obviously you can talk to customers and things like that but Building Product is like what we are about so as an entrepreneur I was like okay you know let's spend the weekend everyone like let's go do this like you know it gave you like something really tangible to do uh so actually the whole team like thinks like even I guess two years later like we yeah the whole team is like hey worked that whole weekend we buil this product together and like everyone's like still like excited about that moment because like it it like it did the thing that we were good at doing to solve that problem yeah yeah you got the adrenaline rush but you stayed in character you didn't go out of character and try to do something that you don't normally do um you have these philosophies that you sent over uh one of them maybe is related to what we just talked about it's go all in on asymmetric upside bets yeah can you unpack that I feel like a lot people um kind of try entrepreneurship or do things but they don't go all in on them and you know when I I did my first startup for S months in the UK and I was like you know I it was really a moment for me where like I was like okay this is what life is about for me uh like I was very you know I did College I did computer science but I was never like that excited about it I just did it because I was good at it uh and it was kind of fun uh and then I worked at a job and I hated it uh worked at Bloomberg for a year and I was like wow like you know I was worried that that's what life is right like having this like grind and like and then and then you know one of my friends was like hey let's do this like startup thing and I was like okay you know let's try it out uh and and that was like the first time I did something where I was like oh [ __ ] like this is so much fun and that startup did nothing right like it went nowhere had no users but just the idea of like working 9:00 a

m

to like midnight building something myself launching it like I just I don't know there's just something about it that like so speaks to like my core so I was like okay if I want to do this you know what is where can I do this the greatest and at the time was San Francisco I would still say San Francisco but uh at that time it was like 100% like I had to be here to do it so I was just like you know had basically no money I packed up my stuff I I did get into y com with my second startup and moved to San Francisco and I just spent you know even in that 7 months when I was in London I was all in like I was I would like code and build this thing all day and then I would go to every single event that was possible to go to and like honestly half of them or maybe all of them were waste of time but just you know you just if you work really really hard and you do all the things you'll eventually like build up a network right that's how actually like the way I came to San Francisco is I met someone through this like just extreme networking I did and they had already got into YC comat and they needed a technical co-founder and I was like okay you know I want to go to San Francisco so I'll join you guys uh so I think like I just feel like some a lot of people that do things things just kind of tough do them they're like oh you know it's my side gig and I'm doing this thing and I'm like yeah know whatever I'd had no money when I quit my job to like do my first startup but like that kind of like forceful like uh grind like where you're just like all in on things uh that just pays dividends in a way that like half doing things just I don't think really does uh and I feel like you know over time like going all and on things like you another part of my things is like going all and on family like basically like I you know I married like I met my wife 3 weeks before I moved to the US and I had a longdistance relationship and then I married her and then we had a kid like two years later uh which like I was still in like the startup grind but I was just like okay you know I'm all in on like having this family I don't know so I just feel like going all into things has just like this like big upside that like half doing things just doesn't uh and I think the asymmetric side of it is like you know the worst thing that could happen to me is if my startup didn't work I'd have to go and get another job so like I basically like I was always like okay you know at that point I was getting paid like £40,000 a year or something so I was like okay you know I'm losing 40,000 a year in salary maybe 50,000 if I get a raise or something but the asymmetric bed is like you know I could make a million or whatever but you know it's also asymmetric life better it's like I could I could either like my downside was like you know I'm going to have a shitty time and not enjoy my life and my upside was like I'll have a great life there I'm extremely motivated and excited about so uh that to me is like extremely asymmetric like doing things where you're like extremely excited and like having fun uh like that's a rare gift right like I think a lot of people don't do things that they enjoy every day and they like you know I have some friends that I like that and like it's just kind of depressing talking to them uh like having like the ability to do things that you really enjoy in life is such a such an important thing that like I think uh if you find something that is like that you should go all in on that I love what you just said cuz I go I wrote going all in right as a reminder uh I have these no cards which are usually just reminders like the the best information is not brand new information it's just true information that I needed to hear again needed to bring the front of mine or I needed to remember in my current context and I think that um the way you described it actually made it click for me in a in a new way which is going Allin is a skill and I did the same thing as you I had a startup straight out of school and I I had this idea and I was having all this fun with my friends and I was either going to go to med school as I had planned took the mcats all that or I was going to do this startup I decided I'm going to do the startup thing right then I start with that and then I got this gravitational pull I got this job offer somebody's going to pay me $120,000 uh I had to move to Indonesia where the opportunity was um but it was like this guaranteed salary blah blah blah and I remember my co-founders my two buddies I was like yeah and we told ourselves this stupid story which you know we always telling ourselves stories and I was like I'm going to go dude the lessons I'm going to learn there are going to be so useful for us like I didn't have the courage to just say I'm going there cuz I really want this this guaranteed kind of safe salary thing um and instead we told ourselves this story that I needed to learn business over there before I could go do business here and within two months when I was there I was like this was a mistake I need to be all in and I I quit my job I told the the owner I was like hey I'm out of here he's like what like it's only been two months and I just told him I was like I need to I need to see this through like I'll always wonder right like I kind of know what this is same thing like I'm not like lit up every day I had more fun over there yeah there's no guarantees over there but like I think the guarantee of feeling lit up every day is going to be like good for me in the long run so I flew back and I was like all right I'm all in and we moved that was the first thing cuz I was like is this the best place to build this company and if not why are we building it here just cuz we're already here like that seemed like a terrible reason to just do it so we immediately moved to like the Hub of where that type of company was built it was a restaurant chain and the all the top restaurant chains have been launched or most of them have been launched in in Colorado like Chipotle and smash bger and Quiznos this there's like Noodles and Company there's like eight of the big fast casual chains have started in that area it's all it's it's the Silicon Valley of like you know shitty fast food and so um so we go all in there and it was the same thing which nothing really came of that startup you know like I lost money I lost arguably a year of time working on something that didn't work but I absolutely didn't lose because not only did I set myself on a different trajectory but I more importantly learned the muscle of going all in which once you fast forward 5 years and you look back at your same smart friend friends from school who have just been in you know a bit of a corporate life that whole time you see that that muscle has atrophied they don't have that muscle and that muscle is really important because whatever you're going to do the winning idea you're going to need to be able to go all in in order to make that idea work yeah 100% all right the last last philosophy I want to hear from you cuz I I dig these is is uh there are no rules just construct your work and your life the way you want what do you what do you mean by that why what makes you say that you know I feel like when you're in Silicon Valley uh everyone's got these like you know there's so many people who trying to like be influencers like VCS like you know everyone's got these ideas they're like hey you know like I remember when you know in 2011 when I had my first kid like it was very unfashionable to have a kid and have an have a startup like people were like literally like what are you doing like you're going to fail your startup or whatever uh but actually one of the things that's like a completely contradiction is like the only way you succeed is by doing things that are unusual right because if you're doing the normal things you how can you succeed because like everyone's doing those things so so weirdly like you know if you look at every single success it's a contradiction because it had to be a really common thing in C Valley is don't do consumer startups but actually the biggest startups like Amazon Facebook Google they consumer startups right like so why we why are we telling everyone not to do consumer startups and like those are the three trillion dollar companies uh so I find like the you in general like most knowledge is like you have to understand where it comes from and why it comes from and like why you're the exception but like the only way you succeed is being an exception so like you kind of have to like just ignore the rules and like just do the thing and be the exception because that's the only way you succeed but I do think there's like knowledge out there and like there's a reason people talk about these things and you should understand why it is that you are different and like you know what are the problems with consumer startups and there's lots of them but I've just generally found in life that like actually the best things I've ever done have been like ignoring the rules and just doing things that like yeah I just think like most of the time if you do the not the opposite but like if you if you pick the set of rules that you're ignoring because you have like a strong reason to ignore them you're going to be much more likely to be successful that's a that's a great point you know there's that I forgot what the phrase is but it's like experts know all the rules and Masters know when to break them um so so you know that's the the sort of the best signal of Mastery is when you know the rules and you intentionally choose which ones you're going to break so like if you I'm learning the piano right now and my teacher will be like oh yeah this is Bach or this is what be and he'll be like he'll specifically call out he did this thing that you know normally you wouldn't do right this doesn't make sense these are two different keys or that doesn't it's not part of the scale but it works because of this and it's like they make up the reason why it works yeah they make up the reason but it's post post right exactly um it's you know now it becomes a new rule later it's like oh yeah but if it resolves tension then it works it's like okay cool um but at the time this sort of breaks breaks that rule and that's what all the all the best ones do what I like about what you just said is it made me think it's worth writing down I'm going to try this after this podcast it's worth writing down like not just how I want to win how I want to live my life but specifically like what rules what kind of common best best practices or generally accepted good practices that I am intentionally choosing to break you know I'll give you an example um the other day I was having a conversation with a guy who's really smart and wise and he said he said this great line and everybody nodded and took notes he was like um you know when you get money people come to you they want to get do business with you they want you to invest in their thing they want a loan they want whatever and he goes I have this rule um you know either our friendship is sacred or the money is sacred but you can't have both and I said so does that mean you just never do business with friends he goes never and everyone's like yeah that makes sense it could be really messy yeah and I go I don't know I think that everything you said is true and yet I choose that mess because I think there's a great upside in like finding the people you love and doing life with them like life is a lot more fun when I do projects with friends or invest in people's companies and I I you know give people I bet on people and and yeah sometimes it doesn't work out and sometimes it gets a little hairy but like I choose this mess it's like I choose that rule to break and I'm I'm comfortable living with that you know and I I can always go back and change my Approach but for now that's a rule I want to break but that's a good example way you you want to understand how to break the rule as well right like it's not just like I'm going to break the rules therefore if I don't care about it you want to go like okay you know if I'm putting money in a startup I'm going to make sure there's a contract and everyone understands like here's how we work together and like yeah I do think when you break the rule you have to kind of go out of the way to mitigate uh the potential downsides of like breaking that role like and the the breaking the rule is doing the harder thing normally uh so you have to understand why and how and how do you the rule you broke was as a startup founder in SF with all the options to choose you chose the like highly regulated highly compliance based hard have to build for a year and a half before you launch you know that's not that's not the the quick and dirty prototype Vibe code like you can't do that Playbook there so you're like all I'm going to choose to break that Norm and go this way because that's what I want yeah yeah but but I spent a lot of time understanding what I was like in for right I spent like three months just talking to people and like researching you know compliance and rules andw and like all this stuff and like I wasn't I wasn't doing it blindly yeah all right soad where should people find you and who should reach out to you who do you who do you want to reach out to you uh from things like this because when you're out there you know you attract certain people but I like to say you you want to have your API you want to tell people who should connect with you and and and and on what basis so so give give me a sense of that where where should people find you and what should they reach you the easiest way is on X or Twitter uh as it used to be um I'm just imod uh yeah who should reach out you know I'm always willing to try to be helpful to entrepreneurs so you know if you have an idea you want to uh pitch me something or whatever you know reach out and Yeah know I I try to be like quick and say yes or no if I'm interested or not uh and obviously if you're interested in Mercury uh you know go to mercury