From: Joshua Reich <firstname.lastname@example.org>
To: Shamir Karkal <email@example.com>; Jerry Neumann <firstname.lastname@example.org>
Sent: Friday, July 17, 2009, 3:43:08 PM GMT+2
Subject: lets start a retail bank
What would it take to start a really boring, simple bank?
As I see it, a bank provides basic functionality:
1. A place to hold my money so I don’t need an oversized wallet or mattress
2. Electronic payment & transfer interfaces
3. Ability to lend my cash to others in exchange for a risk adjusted return
4. The opposite of 3 = borrowing.
Atop of this banks go to great lengths to optimize revenue…
I spoke to my sister in India over the weekend. As you’ve probably seen, there is a huge Covid wave in India at the moment. The numbers and the human stories behind them are truly horrific. My 80-yr-old mother lives with my sister and my brother-in-law. They all got the first dose of the Astra-Zeneca vaccine (called Covishield in India), and are waiting for the second dose. But with the reports of “escape mutants” and the “India variant”, I was quite worried about them.
My sister told me two stories:
“But won’t we lose ownership of the customer if we do this?”
I have lost track of the number of times I’ve heard that comment. Usually from a bank executive who has something like customer or retail in their job title. If I am feeling particularly snarky I’ll respond
“Ownership of people was outlawed by the 13th Amendment in the US, except as punishment for a crime. So unless you are punishing your customers, NOBODY owns the customer”
Back when I was a consultant at McKinsey I used to just accept that world-view at face value. Banks built branch networks…
One of the things I am proudest of was how Josh Reich and I handled the Simple sale to BBVA. Out of the $117M sticker price for the deal that closed in March 2014, $14.6M in cash was paid out to 100 employees excluding founders.
How did that $14.6M happen? First of all we fully vested and 100% accelerated every single employee’s options at close. Those new Customer Success employees who joined the company 6 weeks before the sale? They got 4 years of options fully vested and paid in cash. But that totaled up to only $6.4M. That just…
I opened my first PNC account in 2004, when I started my MBA/MS dual-degree program at Carnegie-Mellon. I already had a checking account at Citibank, but Citi didn’t have branches in Pittsburgh back then, and PNC was everywhere. They also had a desk on campus that made it easy to open the account. Over the years as I completed my MBA and dropped out of the MS to get a job at McKinsey, PNC became my primary bank, and I ended up closing the Citi account.
Fast-forward a couple of years, and I heard about PNC’s new Virtual Wallet product…
It looks like the furore over outsize pay in banking is dying down. Kenneth Feinberg’s final report on the pay practices identified $1.6 billion of “ill-advised” pay among banks that took TARP funds. Yet it named no names, and insisted that the pay was all legal.
The transatlantic gap on pay looks set to widen. While the European commission is requiring that 40–60% of bonuses be deferred for three to five years and half the upfront bonus be paid in shares, pretty much all that the Dodd- Frank bill does is require that…
Brad woke up with a feeling of foreboding on Saturday morning. The moment he checked his phone, it turned out to be justified. He had been laid-off.
He’d been expecting it for a while, truth be told. His speciality was more old-school full-stack coding, and his employer had been getting more “nocode” projects lately. With the economy slowing down, it was no great surprise that they’d let him go.
As he glanced through the termination notice, his mind wandered back to the first time he’d been laid-off, back during the great Coronavirus pandemic of 2020. As a young Gen Z…
I run a private Slack group for Fintech nerds, and Covid-19 has been a hot topic there. I posted a rant there, and thought I’d post it publicly as well. So here are my thoughts on all this.
Facebook’s Libra project is going to be announced soon. If the Block’s reporting is accurate, it will be announced on June 18 with an impressive list of partners. Everybody from Coinbase to Stripe to Andreessen Horowitz has signed up to be a launch partner of some sort.
I recently tweeted about the TransferWise secondary sale.
My own belief is that as a startup founder, you should go public as soon as reasonably possible. There are a bunch of compliance and regulatory hurdles to cross, which makes it unpractical for any early to mid-stage company. But once you get above $100M in revenue, you really should be actively planning on an IPO. Get on the path to profitability, build some reporting muscle, get your cap table in order and hire an underwriter (or do a direct listing). Here is why :
There has been a boom in late…
Co-founder and CEO of @SilaMoney. Co-founder of @simple. Investor in @realty_mogul, @earnup, @transferwise and others.