Visa Follow-Up and Today’s Payments Ecosystem (with Gaurav Ahuja)

24:51So behavior we can lean into. What's your craziest points story where you traded a paperclip for a house? So I grew up in Michigan and the Detroit airport is a Delta hub. And so quickly through consulting, I got Delta status. Now occasionally each of these airlines will do status matches. However, most of the time they don't have these live and active. Apparently if you email the right people at each of these airlines, you can actually get custom status matches with very little burden of proof. And so every year I was kind of emailing from a new address or making a new sky miles equivalent at other airlines such that I could get to the diamond status or whatever the equivalent was at each of the airlines.

25:35Now what I can never find out a way to crack was all of these airlines have something above their highest listed status. So for United, it's called global services for Delta. It's called Delta 360. That was one that I could never figure out how to kind of play the game for and get behind the scenes in two. Wait, so when you say status match, it means you literally email a person. You're like, I'm super statusy on this airline. Can you make me that on your airline and I'll start flying that? And they'll just give you all those qualifying miles effectively for free. Yep, that's exactly right. Wow.

26:05Right now you can do this on JetBlue. JetBlue is seeing an opportunity at this very moment to steal Delta customers away. Because Delta changed their rewards program this year. And they went from miles flown as a qualifier to simply dollars spent. And believe it or not, turns out the only people spending massive amount of dollars are business travelers on Delta. And the regular consumer is really frustrated with this who's been playing the Delta Rewards games for decades. And JetBlue is seeing this as a frustration moment to go steal a bunch of those hearts over to JetBlue and their offering status matches that are pretty friendly for all the Delta users.

26:42Amazing. All right, well, this is actually, I think, the perfect time to transition to the Rewards ecosystem piece of this. And we may come back to banks and interchange an MDR and all that. But the Rewards piece we talked about for just the general bank credit cards. Why even trans actors like Ben and me are still worth it to have in their ecosystem because of the cross sell to other products. But obviously there are a lot more credit card programs out there today than just from banks. And many, many merchants have their own programs. And so are participating on the other side of the aisle here.

27:21This really gets to your expertise and the company that you found at Imprint. Talk to us about this whole merchant rewards world. Yeah, absolutely. So all the rewards we've talked about till now are one to one. They're between a bank like Chase and Chase Affair or Amix and Amix Platinum and their users. When you add a new variable into the mix, which is the merchant, I think things get really interesting because there's a new rewards. Well, it's not just interchange an interest revenue that's monetized. It's a merchant also giving rewards saying, I think you're going to spend more at my store now.

27:54So I get there's a third value pull you get to tap into, which is more sales and more margin for the store. That's the why here as the backdrop. Now let me get into Imprint. So if you guys have, as we've talked about, an Amazon credit card or a Delta credit card or a co -branded credit cards and what we do at Imprint, it's pretty simple. We power these co -branded credit cards for the best and largest merchants. So today we've raised something like $100 million plus from Thrive and Cliner and Stripe and Ribbit. This year we've 10x our transaction volume in the last six or seven months and we power cards for some very large merchants.

28:35If you have any Southern listeners tapping into this episode, we work with HEB, which is a top five grocery store in the country that does about 40 billion of revenue. Yeah, HEB is actually like a really amazingly well -run company based in Texas, based in San Antonio. Huge that you guys work with them. Totally. We've absolutely loved them. Fun fact for everybody listening. They're famous for their tortillas that are made fresh in the store and they have a butter tortilla candle. So definitely go get that out. So how does it work when you say Imprint powers them? What is it that Imprint does where HEB couldn't sort of directly create their own co -branded card program?

29:13It's maybe helpful to tie this all back to the personal story why I'm a credit card junkie again from before. It told you I have dozens of credit cards, but like let's understand the user behavior behind those. Most of them just sit in my closet at home and they don't have a physical presence in my life. I'm explaining all this because the why is really important to understand behind this category. Most of them don't have a physical presence in my life. And despite living in my closet, they're doing their job directing my spend in the right places. So if I'm making an airline purchase, I will irrationally tell myself, I shouldn't go price check United and American and spirit.

29:54I'm just going to Delta and I'm booking there because that value from booking with my card and the extra points I'm getting and the potential free seat upgrade I'm getting. The emotional value I feel there is so much greater than the actual dollar value or similarly if I'm making an expensive purchase, say a Dyson fan, I'm going to make sure I'm doing it on Amazon to get my 5 % cash back with the Amazon credit card versus Dyson .com. Similarly UberLift so easy to price compare by opening up both apps. I'm not doing that. I'm going straight to Uber because I'm know I'm getting my 5 % cash back on the Uber credit card.

30:26And so these are marketing tools of their heart. They're not financial products. And that's the extra variable I was talking about by adding an emergent and relative to the way I think you guys talked it on the episode. This is the investor in me coming out. Why I'm so economically attracted to this market. It's not about marketing for Visa. I think that's how you guys might have laid it out in the show and it used to be that way. So it used to be in the 90s. There were these affinity cards that went viral everywhere. So every university had a card, every nonprofit had a card, every sports team had a card.

30:58And the logic was kind of gimmicky in my mind. It was, my users love me. My users will love a card that has my image or logo on it. And they'll use my card. That was it. However, with co -branded cards specifically with merchants, we're talking about a value pool shift. We're talking about a business model innovation. And so imagine your Walmart. Every time you see one of your customers swiping a card at checkout at Walmart, say it's a city double cash card or a Chase Freedom card, you're watching a bank get 2 % of interchange, city or Chase getting 2 % of interchange. And as we talked about, another maybe 8 % or 6 % at least of interest revenue on average per dollar spent.

31:37So this bank that did nothing to help consummate the transaction between me and the user is getting 8 % of every dollar going through my store. Why don't I instead as Walmart partner with the bank and take some of that 8 % by working with that bank through a revenue share back. And I'm going to give that portion back to my users. So now it's this free value pool. I already have a Walmart loyalty program. It's positive ROI for me. People want to spend more when they're using my loyalty program. I can boost that at no extra cost and maybe double the value in it by working with the co -branded card.

32:10And so it's this thing that you can use for your highest value users that account for most of your spend. And why is the bank willing to do this and split their revenue pool with a merchant? It depends on which bank. And this is structurally why I think we're able to enter. If you zoom out already, it's clear that this is a pretty big industry. 30 % of all credit card volume is actually going on merchant or store branded cards. So that's a trillion dollars of transaction volume just on co -branded credit cards. But I think as you properly point out, Chase and Amix, the bars really high for them to care about doing a revshare with a merchant.

32:49And so it's got to be Amazon for Chase to worry about doing a Chase Amazon card. Or it's got to be Delta for Amix to worry about doing a Delta Amix card. But most of the time, it's like, hey, I'm Chase. I'm Amix. I'm already winning. One in every five cards is a Chase credit card. One in every five credit cards is an Amix credit card. So they're already doing a good job capturing that full 8 % the full value themselves. They have zero or very little incentive to partner with a standard merchant out there. So that's why you when you look down the list of hundreds of co -branded programs, most of them are not Chase and Amix.

33:21That's just a handful. It's most of these banks that you should never be working with, which are Synchrony Bank, Comenity Bread, or US Bank. And the reason you never want to work with these banks is that on the one hand, they're not technology companies. But then secondly, I don't believe that they realize they're marketing products. They still think they're financial products. On the technology front, these banks, they don't build out their own banking core. They each sit on top of thigh server teases. Bread, Comenity is an example, went down earlier this year. You couldn't issue a card, you couldn't log in.

33:54Their merchants were extremely annoyed. Even Goldman Sachs who powered the magical Apple card experience. On the one hand, they didn't build out the front end. Apple built all of that out. And on the other hand, they didn't build out their own core. They used something called Core Card. And so it's like, what did they do? And I look at this, and it leaves a lot of obvious gaps. It's like merchants take 12 to 18 months just to get launched with one of these banks. Every time a merchant wants to make a tweak to a loyalty program, it's extremely difficult because you have to go back to the negotiating table and basically re -belled out the entire revshare agreement.

34:29The bank doesn't know how to share transaction details with the merchants. So imagine going to your Delta account and not knowing how much you've spent on your car to see how close you are to accruing the value status that you were hoping to get. Syncrony, by the way, has two different logins. So for Web and Mobile, you'd have two different logins. Or if you had two merchant cards both powered by Syncrony, they'd also have different logins. This is the thing that frustrates me the most. That was the technology piece. They don't realize, on the other hand, that they're marketing programs. And so here are your best customers as a merchant.

35:00And you have this panel of your most loyal users spending the most at your store. You have all their transactions. You have all their skill level detail where you have no ability through your bank partner to interact with these customers, send them promotions, engage with them, send them the right messages at the right time, or even just the basics on greening insights about what are they spending? Let me tell me more about my best users. It's just such a shame. One thing just to be clear, these banks, the synchronies and the like of the world that you say you know, you should essentially never be working with.

35:28These are dedicated banks for like merchant card programs. These aren't like we were talking about earlier in the episode, the small community banks that are powering fintechs. These are not like mom pop shops. That's such a great point, David. Most credit card companies are competing on one dimension when they're going after users, which is rewards and maybe user experience in their app for that consumer. The dimensions we're trying to compete on are much more multifaceted. There's this entire layer of products or faceria that we're trying to build for the merchants. So of course, we've got to have great user product, but we've also got to build an entire B2B effectively marketing tool for marketing, marketing offices at each of the merchants that we work with.

36:12So everything from sending specific promotions to your best users or understanding the insights and how they're spending throughout the year or being able to say I have another merchant in Texas who wants to be a part of our loyalty program for the month of December this year. How do I add them in seamlessly as a partner to my to my card network? Those are the sorts of things that that software should be able to let you do that somebody else can't. And so if I'm understanding right, what you're essentially saying is because it is provable that you actually can increase loyalty, you know that there is an additional revenue pool to play with in creating even better rewards for frequent shoppers if they use this card.

36:53Exactly right. Interesting. The logic for a Walmart or any other merchant out there is that right now they've all got loyalty programs that they've found the perfect investment into. So they're saying as Walmart, devoting 2 % of my annual sales to a loyalty program is yielding positive ROI with the good customers in my basket. Now with this co -branded card, I can make that 3 % or 4 % at no extra cost to me and all of a sudden juice a lot more value from my highest spend users and get them to stop spending at my competitors and only at my store. And there's also, I didn't understand this before, for merchant card programs, depending on the terms of the Rebshare agreement, the merchants also get to participate to some extent in the interest revenue that the banks are making from those cards.

37:42Is that correct too? Yeah, it might not be exactly framed that way, depending on how the deal is structured. But the simplest way to think about it is for every dollar spent, there's some percentage that is going to the merchant. The merchant is using that percentage, some or all of it to devote into their loyalty program. Gotcha. So back to the ATB example, they certainly could have created and perhaps they likely did have their own, you know, credit and debit cards before. But they had nowhere near the fine level of control and insight into their customers and their customer spends and their customer loyalty on these platforms.

38:19I would say it's even more basic than that. I think as a brand, if you care at all about your user experience, the bank partner that you choose is an extension of you as a brand. And it is very hard to put synchrony or any of these other legacy banks in front of your customers and expect them to still be high NPS on your brand. Trying to explain the credit card ecosystem today versus trying to explain it in 1995 is completely different. Like where the value pools are, how it's cut, what the percentages are, it was a pretty clean story in the 90s of how this whole system works. And the answer today to basically any question about who makes money in what scenario is, well, it depends.

39:05And it is wild how everyone has sort of figured out without massively changing the overall system, you know, like the merchant discount rate is still to your point, grow approximately what it was 30 years ago. But everyone has sort of figured out, well, for this particular situation, I'm providing more value. And therefore, I'd like to negotiate some custom deal for this segment in this scenario where I'm able to get more of the economics on it. I think that's a really good insight. The ecosystem has gotten increasingly complex. And this is just one example where merchants are now a new variable added in and a new value pool that you can tap into because of sales uplift.

39:44But there's tons of examples of this. I think corporate card and corporate spend is another version of this where there's new variables popping in certainly it gets even more complex as you start to think about corporate also with travels. Now you're getting OTAs and the OTA margin involved in this and companies like ramp are trying to get into this space and take advantage of it. I think every new variable you add into this, there's new value pools you can tap into which creates both more room for complexity, but also more room to just align incentives for the right people in a transaction versus what in the past has always been really one to one.

40:17And the right framing for this is probably as a business you can no longer think about well, you know, I have 3 % or whatever it is that I owe in card processing and then I'll think about the other 97 % as my business that I have to run that 3 % is sort of blended in now with yeah, it's card processing, but I could use it to my advantage. I could be clever with it. I could say for some customers, it's this percent for some customers. It's that percent. It sort of gets rid of the clear bright line between the business I'm operating where I acquire customers and sell goods and retain those customers.

40:52And oh, yeah, I owe some money for payments as this cost over here. Certainly. I think if you're thinking about it the right way, there are always going to be those merchants who look at that 3 % and have a limited number of things they can do with it. And so we'll continue to look at it as the 3 % cost. Thus all the pressure that we've been talking about earlier in this episode on visa and master card. I think where that will particularly hold true is you guys mentioned low margin businesses. What's even lower margin than say a retail goods business might be for example, a really low take rate marketplace.

41:28And so you might only be getting a 5 % to 10 % net revenue take rate on all the GMV going through your marketplace. But boy, you still got to pay 3 % not on your net revenue, but 3 % fees on the entire GMV. So as a portion of your net revenue, it is a really high cost to bear. All right, listeners, we want to thank a new friend of the show, plaid. The name is likely very familiar to you after our recent ACQ 2 episode. Odds are you've used plaid before without even maybe realizing it. If you've ever linked your bank account to apps like Robinhood, Venmo or chime, you're one of the millions of people like one in every two Americans who've already used plaid.

42:07I feel like I've grown up in the tech industry alongside plaid. There are so many modern experiences that are powered by them. And at its core, plaid isn't just about making it easier to connect to your bank. It ends up being the backbone for thousands of companies building faster, safer, and more seamless financial experiences. So whether it's reducing fraud, speeding up onboarding, or turning old school banking processes into something that feels instant and effortless, plaid is making it happen. So last year plaid rolled out some powerful tools. Think cashflow data for better credit decisions, anti -fraud tech with AI, and analytics for bank payments.

42:43And this year they've leveled up again with major updates across all three of those product lines. Yep. They're even helping businesses manage things like direct billing for your subscriptions. So the bottom line is plaid is making it easier for companies to build smarter, safer, and more personalized financial experiences that just work. If you're building financial tools or infrastructure, plaid's data analytics can give you a serious edge, whether it's fighting fraud, underwriting smarter, or managing payments more efficiently. So if you want to learn more about how plaid created one of the biggest networks in financial services today, listen to our recent ACQ2 episode with plaid's founder and CEO, Zach Paray, and our thanks to plaid.

43:22Well, I've never actually thought about this, but like my mind immediately goes to Airbnb, like how do they deal with this? Well, Airbnb is a high -take rate marketplace. Well, I mean, yes, and no, it's not a high -take rate on the GMB. After you factor in fees, it is. Maybe that's how they deal with it. So I don't know exactly anyone at Airbnb or how they've thought about this, but outside in, you can see they launched with a new product called Stripe Link, not too long ago. And for anybody who doesn't know yet, Stripe Link is kind of like, think about shop pay, but for anything on the web, not just e -commerce.

43:58It remembers you, based on your phone number, and or email, and your identity, and your saved payment methods at any checkout. However, the way Airbnb has chosen to implement this is not as a credit card remembering tool and remembering your identity for increased conversion that way, but as a bank linked payment method tool. And so that would indicate to me that they have hopes of, yes, also lowering the processing fees, just like other marketplaces might as well. By shifting the money movement from the credit and debit rails to the ACH rails, you got it. It does make super low take rate marketplace businesses basically non -viable.

44:36You could imagine if you only take a 5 % take rate on your marketplace, the payment processing is 40 % ish of your total revenue. It's pretty hard to have below the line costs and stay profitable as it go in concern. I think that's very well said. And it's why in a lot of brokerage industries that are low take rate, they tend to be more B to B, and they tend to be as a result, almost always ACH and or cash. Real estate is filled with examples like this where you'd never use a card to go make that payment because the fees would be unbearable, and they've stayed on ACH and or check as a result of that very large barrier.

45:18Well, I imagine for imprint the idea to part of this, we've been talking about the Amazon merchant card programs, the deltas, the HBs, the really large customers that you all have. Part of this also must have been about just democratizing access for merchants at lower scale into having their own card programs and thinking strategically about the 3 % right in the old world would a midsize regional merchant be able to get the time of day from one of these banks to customize their programs. I'm imagining probably not. I think that's such a good point. I think Visa can sometimes get a bad rep for being a non innovative company, or at least that's what investors might say.

46:05They'd say it's classic big company profits. They have no incentive to innovate. They haven't done anything new in years. At least I've heard that narrative before. I've got to tell you, David, to your point, our experience at imprint has been pretty different with Visa. I'll head on a couple of examples. One is a BD example. The other is a technology example. The BD example is for your listeners looking to learn more about Visa to give you insight on how they think about the co -branded credit card market. If a new merchant is looking to launch a card or re -up a deal for a card with a new bank, sure, it might seem like this deal between the merchant and the bank, but Visa and MasterCard are kind of watching.

46:46They both smell blood. They both look at this and say, I got to get the banks that I work with. For Visa, that might be Chase, for example, and get Chase to go win that deal. If Chase wins that deal, it means I win the deal. That volume is coming to me. In what is a pretty steady state market share business between Visa and MasterCard, these can be pretty big chunks. If you, as Visa, just swung over the Costco card to you, for away from, say, Amix as a hypothetical, that's 1 % of all card spent that just moved over to you as Visa. Yes. The Costco card alone is roughly on the order of magnitude of 1 % of all card spend.

47:26These are one of their few opportunities and strategic ways to try to go win business. And what's been awesome to see is they aren't just staying with what they would have considered to be safe, old banks for new merchant programs. I know this was effective for us at HEB, and it's effective for us in new deals that we've won, but not yet launched with. Visa is out there saying, you gotta work with imprint. This is the best bank for you. It's really amazing to see them leaning into startups in a process like this because the story of them not being innovators totally when lead you to believe that.

48:01So that's the BD kind of side of this. The technology side of this is Visa's tried to make themselves a lot more approachable, and in the past, it used to be that you couldn't, as a startup, looking to play in this 3 % interchange world, get directly connected to Visa. You had to go through some intermediary that was big and had a relationship with Visa as a conduit. So you would have worked with a core processor you would have worked with some card issuing company like Stripe issuing or Marquetta or Lithic, and they would have had a deal with Visa that you'd ride the back of. However, now Visa has launched something called Cloud Connect, and it's what we use at imprint, and it actually is this instance that we can plug into directly, and it gives us direct access into Visa net.

48:48So we are directly plugged into the ledger through Visa, not working with some big conglomerate that they had to go partner with before. And it's not just technology. They've got teams of people who can talk to Fintechs. They know how to speak our language. It's been a really cool site to see. All of this speaks to just the general power of technology getting better. Everything from our previous discussion on, well, it depends on the type of transaction, on who the customer is, on which card they're using. You can't do this sort of clever individual segmentation on a per transaction basis without more advanced technology.

49:24Or in this more recent example, this API, you can't facilitate thousands of small partners working directly and plugging into Visa net without modern technology. And so it does definitely support the story of, as technology gets better, as Visa adopts modern technology, you sort of can have a much more cleverly routed ecosystem for these transactions and for all these different parties involved in each transaction. I think that's totally right. And look, I'm seeing all these positive things with my founder hat on and from personal experiences. Then if I totally remove myself from the situation and put my investor hat on for a second, I look at these things and I say, hey, they're great.

50:07Mastercards leaned into a few of these things as well. They have a product called Finicity, which is kind of a plaid competitor. They have a product called session M, which is a merchant loyalty software. But then I look at them and I think, boy, like, I hope I'm not offending anybody, but who that cares about these? Well, they move the needle on a half a trillion dollars of enterprise value. We've got this massive secular shift going on from cash to digital that will last for decades. And these other things are on the margins for these businesses. It kind of reminds me of Google of what has been a 30 year tailwind of just movement to search online and digital advertising online and every other consumer product that Google launched just kind of doesn't move the needle further PNL.

50:50And it doesn't matter. What's interesting? This seems like a case where Visa and Mastercard want this increased volume on their networks. Like that is core to like their whole business. But building these types of technology and marketing technology programs for merchants to enable that more volume happening on their networks. And as competitive vectors between the networks, that feels like less of Visa's core competency. So it makes sense that they would like open their APIs to allow startups like imprint to do this. I think that's absolutely right. All of these things are, and tell me if you think I'm seeing this wrong, ways that Visa is using technology to play defense.

51:40Like, oh, we have to keep that birch on our network. Or, oh, we got to go get that merchant to be on our network instead of Mastercard's network. On the episode, we talked sort of more about ways they're using technology for offense, which is, can we expand beyond our core market of consumer to business payments like with Visa Direct or with B2B payments? Do you think that that story is credible of a huge driver of Visa's future is something other than the consumer to business tailwind of digital payments? I definitely think there are other categories for them to tap into. Whether it's under penetrated categories of consumer payments or to your point B2B payments, those are definitely growing parts of the pie that I know their BD team is leaning into with Fintechs.

52:31Take rental payments as an example on the consumer side as an under penetrated area of spend for credit cards. They've done a couple of things here. They've partnered with some Fintechs who are launching rental payments rewards cards that actually give back a lot of the fees to users when they do manage to pay rent with the credit card. But then secondly, within the last few years, they've actually lowered interchange fees or lowered MDR for rental payments. And so Visa is not a one -size -fits -all type of MDR. Every category has a different type of MDR and they've purposefully lowered it in some categories like grocery or gas that are kind of necessary for the everyday consumer while it's higher in other categories.

53:15They've added rental payments to one of the lower categories on their list as well. Those are some of the levers they can push on the margins on the consumer side. On the B2B side, I think they're doing a great job leaning into all of the rapidly growing corporate credit cards startups out there. And one thing that's constantly surprising to me is you guys talked about on the episode this McDonald's advertisement that felt kind of like a shock in the 90s of this is a big deal to accept credit cards. I wonder sometimes if we're in the same place in that journey on the B2B side of businesses just starting to realize that I've got to accept credit card payments in 2023 to be able to stay competitive and win business and make my process of accepting customers as easy as possible relative to my competitor.

53:59So I think a lot of the services industries are starting to adopt credit card payments as a result and Visa is right there making sure they're ready to capture it. It's never been crossed my mind of should acquired except credit card payments for our sponsors. But like maybe, I don't know, maybe that's a world that we're heading towards. If the fees were low enough, I mean, it's one of these interesting things where if there is real competition for a consumer between merchants, then Visa should massively lower the MDR so that they can shift ACH payments to card payments. But when there's not competition, like let's say I move into a apartment building, I'm not making the decision on which apartment building to move into based on who's going to let me use a credit card versus who's going to require me to enter my bank information.

54:53If I'm that apartment building owner, there's almost nothing that you can do to compel me to take credit cards. Push back on that growth, but that feels like a hard category to ever actually move the needle on. I agree with your higher excitement on the B2B side and lower excitement on cracking some categories within consumer that have seemed uncrackable like rental payments. The way it's starting to happen in rental payments is less of what you just said, though. And so the emerging properties we're sharing to see are not individual landlord saying, hey, I'm going to accept cards. That individual landlord is still going to take Venmo or check or cash, whatever it might be that they're doing informally today.

55:32It's happening more on the property management side. So these companies operating at scale that are trying to formalize their business. It's much easier to think about digitizing all of your payments versus just accepting cash or informal payment methods. And it's not to say that they're accepting all the credit card fees themselves. They actually do pass on a lot of the fees in most of these instances to the user. So they have the user at checkout. Again, it kind of feels like an e -commerce experience. Equity residential is a good example of a property management software company doing this.

56:04They at checkout will offer the consumer the option to pay for fees and you'd be surprised at the uptake rate of users buying into this. And one of the trends I was referring to is people like these in master card working with startups. There's one called built out there that are saying, sure, user, you're paying a fee, but let us give you rewards back in the version of that fee. And maybe in some cases, we can even partner with the property manager to get another value pool of what is now increased conversion from users feeling like it's easier to pay and live at this building. So that's again, small portion of the industry, but I'm trying to explain narratives as to where they could crack into new markets that they've just had a tough time cracking into so far.

56:43So as we're talking here about B2B payments and about rental payments and niche consumer use cases and ACH and banking versus credit card networks, this of course takes my mind to the really big question out there, at least for startups and VCs of like, is there any potential that a competitive, you know, very large global network effects payment network could emerge out there like a true competitor to the visa master card doopoly. And lots of people have talked about this for a long time. We spend a lot of time on this on our visa episode. Is there any path that this could actually happen? Yeah, it seems like a tall task.

57:33As we've kind of keep circling around, it just feels like visa and master card are so entrenched and do such a good job protecting their positions. But all that said, I think it's fun to go through the theoretical exercise of who could start to take away share. So maybe not cut them off at the knees to use my old language, but find pockets of opportunity. And broadly, I think about two areas, the first area you guys touched on. So who are the processors out there already that have one foot in the door on this business? What does it take to display visa as a processor? It's either really large scale on the payment acceptance side or it's really large scale on the consumer side.

58:16And there's a few names, PayPal, Shopify, you guys didn't mention, I don't think on the episode, Stripe Launch Stripe Link, Square, you definitely mentioned. So maybe to take through each of those four, like PayPal is the first legitimate threat here. And they showed that yes, we can take some share of our payment processing and direct it to a user's bank account or their PayPal wallet instead of a card. It's not clear that that is ever going to increase share from here, but it certainly means they can keep the entire payment processing spread on a select number of transactions that don't go through visa.

58:49So they at least proved it was possible. I think Shopify is probably the most similar informed factor to PayPal, but a way better experience in my mind. My guess is that Shopify is a way higher percentage of total Shopify GMV than PayPal while it is of entire brain tree processing online. And you could see a world where Shopify now that they have rewards, this rewards cash concept, they make one of your five default payment methods, your bank account, and default to that each time and offer you some percentage of rewards to go pay with bank account. That would be another example that comes to mind similar to PayPal.

59:28On the square side of things, they're way stronger on the consumer end. They've got 50 million MAUs, which is an incredible number of MAUs to have in today's market. On the processing side, the payment acceptance side though, I do think while they have a couple hundred billion of processing volume every year on square terminals, those are still really small businesses and it's hard to change user behavior that way. So yes, when I go to my coffee shop, I can scan the cash app QR code and it's an amazingly fast experience that does bypass visa and mastercard. But until I think you get some big big merchants, it's hard to just see that story play out.

1:00:08The positive narrative there would be they bought after pay and Jack is spending a lot of time, he says, on after pay itself, that they find a really good way to integrate that into the network such that that same coffee shop scan the cash app QR code experience I just mentioned starts to show up anywhere after pay is accepted to that would be certainly a boon in their direction. Would the natural play for someone like square who has the consumer side of the marketplace, but not the the terminal side of the marketplace at scale at least they've got only these sort of merchants should they just go buy a varifone or someone like that and then enable the pay with cash app on, you know, these huge merchants also.

1:00:47Yeah, that's an interesting thought. So any terminal with the screen effectively, they can start to put the cash app QR code is kind of where you're going with that. Right. And of course, the merchants would have to opt in and of course, would have to make economic sense for them. But you can imagine the merchants would be really excited about this. Wow, just as fast payment rails that 50 million consumers have access to and I don't have to pay the full merchant discount on this sounds amazing. Totally. And I think it's worth calling out this is probably the most direct thing that Apple, the biggest competitor on your list could probably do.

1:01:21So I think the two of you ended your episode with the understanding that Apple had a tall task of needing to either be a bank or overcome some compliance regime to be able to close the loop on the transaction. I actually am not sure the bar is that high. So again, they've got all the users out there and they're by the way, the highest value users, right. Just think about every app that launches on both Google Play Store and iOS like most of the value comes from the iOS users. So these are the right users that they've got. And already you can close the loop but Apple doesn't talk about this. So if you are going to pay with Apple Pay, which is splattered all over the web at this point, yes, your cards pop up is one of the things you can choose to pay with Apple Pay, but your Apple Cash wallet is also one of those options.

1:02:05And my guess is, do either of you use your Apple Cash wallet frequently? No. No. That's because the three of us are not cool. We're not young high schoolers at this moment in time. But if you go survey high school users at this moment in time, Apple Cash has surpassed Cash app as the number one peer to peer app for this population. And so as I think about opportunities of where people are going to naturally start closing the loop, without thinking that they're closing the loop, that feels like one opportunity to me. And that's just the online side for the offline side. The reason I brought this up is because that's kind of the varifone example in my mind.

1:02:39Could an Apple, if anybody has to scale to play hard at the negotiating table, could an Apple go work with each of the payment processors that work out there and say, yes, add me as a network with your core processors. That feels like an outcome that is worth thinking about without them needing to be a bank or some kind of compliance regime. And so high schoolers are using Apple Cash as their peer to peer wallet. Therefore, they constantly have balances stored in there. It's almost like an extension of a bank account. And so it would be a natural next step for them, unlike us, the three of us who never have balances in there.

1:03:14When they click Apple Pay, check out, they see their cash balance right there and they start selecting that as a de facto way to go pay. So in some ways, it's already a version of closing the loop. Okay, so we're talking about this interesting Apple scenario. What could they do here? So, Gaurav, what you were proposing a minute ago is different, I think, than what Apple Pay does now. So what they do now is they throw, what is it, 10 basis points or 15 basis points on top of every transaction and say, I don't really care how this transaction routes, we get a little spiff on top. So it's a little bit more expensive of a transaction when you use Apple Pay.

1:03:52And what you were is sort of proposing there is what if they bootstrap another parallel network to Visa and they say, well, rather than running it over the Visa network, we're going to run it over our own network. How does Visa think about sort of carrots and sticks that it has with merchants to keep transactions running over their network versus alternative payment methods? I think the source here would likely have to be the processing terminals or the processors that each of the networks are working with because that is who Apple would have to go to to get approval in this process. And there are not a lot of them.

1:04:33This is a pretty consolidated market at this point. Exactly right. Exactly right. So when there's a few and you can imagine most of their business today is Visa. Visa is threatening, hey, if you work with Apple, I would not work with you. That would be the obvious stick that they can go apply to the market. That the DOJ would likely have a lot to say about. Yeah, exactly. Visa tells Verifone they can't accept alternative payments. Exactly. And look, we're getting into two or three layers of hypotheticals if Apple entered and then if Visa responded. So this is all fun storytelling at this moment.

1:05:10But the carrot then is, okay, Apple's come into the market and they're going to charge 1 % fee. Do we for the first time lower MDR to match that? We're still going to keep our Visa share of MDR. But banks, like, sorry, you got to deal with it because otherwise you're going to get zero from Apple. Yeah, yeah, it's fascinating to think about. And it almost does feel like an inevitability that something in this area will happen because as you and I have talked about in previous conversations, the wallet and the notion of what card is at the top of your wallet is so much less relevant now now that your phone in many cases is the payment method.

1:05:49Like, I don't care often like what card gets used or what rails it goes over. All I care about is I'm going to hold my phone up to your little thing. And I know in a post -COVID world that the transaction is going to complete. And so like who is providing value in the whole chain of the transaction here? Like, a lot of who is providing value is now the terminal and the phone company. That's so well said. It's an abstracted user experience. There's another way of saying that, right? There's an abstraction layer above all of your cards when you're paying with your phone. I think that's also, by the way, what would make it easier for rewards nerd like me to constantly optimize, right?

1:06:30And always be choosing the best card for the best transaction. In fact, there are some startups out there that specifically lean into that value prop. They say, always pay with our card and we're going to reroute the transaction to your best card that you send to us. Wow. So you can do like proxy cards like that? Yeah. And the business model there is for anything where you don't have a better rewards proposition than our card, we have to keep those transactions for ourselves. Fast. This is the perfect transition. We've been talking in this potential competitors to Visa Mastercard section. We've been talking about all these big companies, Apple, Stripe, Square, Shopify, etc.

1:07:16That's all well and good. But like, we're all private company investors here. Let's talk about startups. Is there a vector? Do you think? I mean, you do so much work in this space. Is there a vector that there really is like the ultimate prize here that a new company that a new network could win? Gosh, I go back to the beginning of the story. Remember how this entire journey started with payment networks? It all dates back to the diners club. And the diners club, as you so well highlighted in your episode, doesn't really scale horizontally. And as a result, that's what paved the way for Bank AmeriCorps to be this horizontal network that could work anywhere, not just at restaurants.

1:08:02But I love the kernel from the diners club narrative that there was this network effect that emerged in just the restaurant industry in New York. And I think that's such a powerful insight. So diners club in its very first instance was launched at one restaurant that one restaurant had 200 users that were think the madmen of their days going out in New York City, having great meals. And they probably didn't just shop at one restaurant. They probably went to multiple. And what that means is the other high -end restaurants in New York City also wanted access to those users. Those users already had a diners club card.

1:08:40So those next restaurants are more likely to want to join the diners club network. So after a year, they had 27 restaurants, not just the one, those 27 restaurants, now attracted 47 ,000 card holders. And so on and so forth, you kind of saw this virtuous cycle emerge after a decade, diners club card had a million users on the network. And so for so many reasons, the business didn't really work. And that's why Visa and Bank of America card took over. But but but that kernel is interesting because every industry has this power user dynamic. And it's certainly one that I've invested behind. I love studying different corners of the world and understanding how the highest spenders, the most loyal users of that industry really operate and what their specific needs are.

1:09:23You can look everywhere and you see it. So in mobile gaming, the top 6 % of users are 88 % of all mobile gaming spend in healthcare. I think it's something crazy, like 10 % of patients are 78 % of all patient expenses. And the list goes on in other industries. Trucking users, cannabis purchasers, luxury apparel shoppers, there are power users in every one of these industries that have specific needs. And just to make those specific needs really tangible, take healthcare as an example. If you have a large transaction you got to make, it's probably not as simple as just paying with your Visa card.

1:09:59It's probably more complex. You've got to use your HSA or your FSA account. There's obviously insurance billing involved in that. And then you even got for high AOV transactions. You've got to have buy -now pay later. You've got to have some sort of installment loan option at checkout or the equivalent of checkout. And sure you can maybe say healthcare is a two complex in industry. Of course, it's it's different there. But even look at cannabis, there's regulatory needs and cannabis. And every time you make a purchase at a dispensary, you need to show your driver's license in most states and prove that you're not an illegal buyer of this cannabis product.

1:10:35Mobile gaming, no regulatory requirements. But that mobile game company wants to reward you or sell you items and sell you those coins or gems as packages at different rates depending on how good of a player you are. How many minutes you spend in the game? What level you achieved? And so the vertical specific nature of checkout introduces opportunities for these vertical companies who process payments to emerge. And as I think about startup opportunities, each of them probably have pockets of areas they can start to do what PayPal showed as possible, which is for certain pockets of the power users, which might be a very small end of users.

1:11:11If I can give them an incentive to link their bank account, I can actually keep the entire 3 % spread for myself. That's the name of the game. And while I don't think that's a strategy to go take down Visa, it is this really great opportunity that I know I'm excited about and see a lot of our founders going after as well. It's funny. The bear case on Visa is not that someone is going to come in and take all of Visa's lunch. It's that a lot of these vertical and niche opportunities that they could have taken if the world had stayed a simpler place and technology had not progressed this far, get eaten away by a fragmented set of little specialized players.

1:11:48Exactly. The diner's club was this vertical use case to start because nothing existed before then. And then the standardized protocol of Visa and a standardized counting method took over for everything everywhere. But technology has actually made it easier to verticalize again and make checkout more specific to each use case. That's a great point. Particularly like the healthcare example. And as you say, there's all sorts of regulatory stuff there. So maybe it's possible. Maybe it's not. But I can think of three or four examples just in Jenny and my own history over the past few years where you have enormous transactions, multiple diverse payment sources.

1:12:26All sorts is not because we wanted it that way, but it just had to be that way. Particularly where you go through fertility. That was $30 ,000, $40 ,000 transaction with so many parties involved. And that's a huge opportunity. Absolutely. And I don't think it's just value extraction from these vertical companies. I actually think it's good for the user. If you are a power user in a particular category, if you're checking out in gaming all the time, or you're checking out a cannabis to a sensory all the time, you being remembered in a shop pay like way every single time with your stored payment methods is just a better experience for you.

1:13:06So it should be a win for both sides. It's not this only value extractive play. Popping up a level, you've listened to our visa episode. What else do you have comments on? Or what else did we miss in our episode? So one timely thing that I don't think came up in the episode was this ongoing conversation about the Credit Card Competition Act. Is that something you guys are familiar with? Not terribly. It's probably the most active version of a proposed actor bill that could threaten Credit Card merchant discount rate today. And essentially what it says is that any bank issued card, even if it has the visa logo on top of it, has to have at least one other network that it works with as well.

1:13:53And so that would be saying, emergent, if you're accepting a card and somebody swipes a chase visa, you're not forced to just use visa. There's a backup network on that card that they have to have legally now that can set their own merchant discount rate. And hey, it's probably cheaper than visa. You can choose to use that one instead. That's kind of the logic behind this act. And the theory is that by introducing competition or at least two networks on each card, you'll start to see fees come down naturally. And whatever market equilibrium I discussed before, having settled for the last 13 years starts to move back down in favor of merchants.

1:14:29This isn't a totally new idea. So it's not like this act came out of nowhere. It's very similar to how our debit cards actually work today. So every debit card, even if it says visa on it, does have a secondary network that it is forced to also work with. And we never talk about it because one nobody's heard of these secondary networks. No regular user has ever heard of these secondary networks. And two, most merchants don't care to ever use them because the approval rates are lower. And guess what on debit fees are already capped. They're very low in the first place unless it's dirt and exempt.

1:15:01So visa and master card remain dominant. But in some higher risk industries like the adult entertainment industry or the cannabis industry or the gaming industry, these industries do tap on these secondary networks at times because they can't work with these are master card in some cases. And so as I look at that example, I think that would be one version of the world that we can try to glean and peek around as a corner of if this act were to get past for credit cards, how impactful might it actually be. That's maybe one thing that wasn't covered in the episode. And then I step back and zoom out and I think about visa.

1:15:38They've got to be pretty actively thinking about this. Or at least I would assume they're actively thinking about all these risks. I think there are some things they're probably doing actively to manage it. And then there are other things that they might be doing not so actively or they might not be doing so intentionally to manage it as well. The most obvious thing that they do is they share the value pool. We've talked about this a few times now. But the fact that so much of the value goes to banks and so much of that value goes to consumers means you've got all these constituents lobbying and fighting for MDR to stay where it is to oppose the point.

1:16:10The point is Kylovy exactly. That's the intentional thing. And I think that will that will continue to remain. So you've got other people fighting the good fight. The unintentional things are this is all conjecture at this point is I feel like they do a good job leaning into the press narrative that visas kind of helpless against merchants. You guys had this fascinating story that stuck with me from the episode which is Bank of America played dumb effectively and pretended their credit card business was so unprofitable and as a result, it invited no competition for a better part of a decade. Sometimes I feel like these it does this too.

1:16:50Honestly, if I were the CEO I'd probably be very actively leaning into it and telling my PR team to say always plant stories about how everyone's attacking us about how there's regulatory pressure all over us and we're being forced to lower our fees and Amazon doesn't like us and this country doesn't like our fees. And in reality, we've seen that fees have held steady for 13 years. And so just take a look at this headline this article had a moment on Twitter earlier this year. Here's how the headline goes. Visa and Mastercard agree to lower average credit card interchange fee below 1%. I remember seeing this.

1:17:28You remember this, right? Yeah. Like this sounds horrible, but it's totally not true. And the headline makes it sound like they're getting punished globally. But then you read it and you're like, okay, so this is only for Canada and you read the fine print. It's not only for Canada. It's also only for the smallest of small businesses that they have to work in some particular industries and have sales under $300 ,000. So effectively zero. Effectively, this didn't affect visa at all. But the narrative is getting out there to the broader public or at least the Twitter sphere of like, oh, wow, Visa and Mastercard really have been lowering their fees.

1:18:02Exactly. Exactly. And it kind of feels like there's like every six months, there's some viral moment like this that happens again. And then you look into it and it's kind of a total nothing. So here on the one hand, they're pointing out or letting these sub stories be pointed out again, intentionally or unintentionally. While on the other hand, they do a pretty good job kind of making it hard to see where fees are being increased at the same time. Value added services. Yeah. You guys talked a lot about value added services. And so to dive deeper into how MDR is set, it's not the simple 2 % or 3 % that we've been talking about this whole time.

1:18:38There is, as you guys pointed out, there's credit card schemes. So there's visa traditional visa signature visa infinite. All three of those have a different fee. Every type of swipe has a different fee, whether it's card not present or present, every type of customer has a different fee scheme. So whether it's consumer credit, consumer debit, charge card, credit card, small business charge card, corporate credit card, all different. And then even every category, as we've talked about, has different fees. So gaming versus gas, versus grocery, all different fees. So you've got this four -dimensional spreadsheet that they can kind of like pull and tug on different strings to increase certain parts while decreasing other parts.

1:19:14But really, the most valuable parts are probably getting increased. Whereas the least valuable parts seem to be getting the headlines. Exactly right. I pointed out how they decreased interchange fees in their rental category before, which is true. On the other hand, the gaming category is increased, which I'm sure is much larger for visa right now. What other thing I wanted you're take on after doing the episode was these systems like PIX and UPI. These are India and Brazil's real -time payment networks. These are working very well in those countries and have inspired FedNow in the US. Do you think that's a credible threat to visa?

1:19:52I think PIX and UPI were developed in a really different market environment in India and Brazil relative to the FedNow in the US. And just to say more on that, credit card penetration was just a lot lower in India and Brazil and payment terminals weren't ubiquitous everywhere in those countries. In fact, I remember looking at UPI based startups in India at the time. And when UPI was launched, India basically had 50 million active credit card users out of a population of a billion. So it was really that specific 50 million high income users that were, say, shopping at malls or some e -commerce transactions.

1:20:32But on the whole, there was this massive gap in the market that was still cash -based. And so the secular tailwind of moving from cash to digital wasn't actually totally being served, not as a result of anything visa did, but just payment processing wasn't a thing as broad of a sense. So UPI could come in with a government mandate and actually take over from day one. And I think the reason that's probably different in the US is that visa and mastercard are already so entrenched. And the problem is kind of solved. Yes, it comes with fees as we've talked about already, but they've done such a good job spreading the value that I think people are kind of happy with this equilibrium or happy in a sense that it's resulting in equilibrium.

1:21:12And then moreover, I look at how Fed now is being rolled out. And this is a huge if, but if it is being run the way it's kind of currently being run, I feel like it's got no shot anytime soon at really taking share. The reason I say that is the rollout is already kind of a slow and tedious rollout. They're trying to take it one step at a time. But the whole point of trying to launch a payment network is that it is a network. You need users. You need the banks to be a participant in it. And unfortunately at start there were only 35 banks that opted in, but some of the massive names like Bank of America or City just weren't a part of it at all.

1:21:49And so if you're somebody trying to build a product experience around instant payments on Fed now, you're going to have a really hard time because a substantial percent of your of your transactions won't be real time. So your choice as a product company is to not launch the product or launch a bad product and you're going to choose not launch the product. Funny thing about these network effect businesses, they often require near 100 % penetration in order for them to be viable. You can't really guarantee an experience and then have it only work with 70 % of the participants in the network. Exactly.

1:22:22If you're a Fintech company and you're deciding go or no go, 70 % is not going to cut it to determine launching a new product on Fed now. Fascinating. Well, Gaurav, on a lot of this stuff, I felt like I knew a lot coming in from doing the visa episode. And I've realized that in typical sort of acquired fashion, we did our best in a four hour episode to round off all the rough quarters and say like, you know, on an 80 20 basis, you now understand the 80 % case. And yeah, there are a lot of details here and there, but you sort of understand this in the majority of cases. And what I'm realizing from this conversation is, man, that 20 % is sort of growing in complexity.

1:23:06It's growing to be a larger percentage transactions. And it matters a lot. And I think that's the complicated story of payments today is you can get the general gist, but to really be successful in this ecosystem, understanding all the corner cases and all the dynamism in the industry right now is actually extremely important. I really love that as a summary. I guess there's a reason you guys do what you do, which you can take a bunch of complex detail and abstract it away, which is exactly right here. And that 20 % is both where the challenges are going to exist. It's also where the opportunities are for a bunch of startups out there.

1:23:40Yeah. So speaking of startups, you do a lot of investing in FinTech companies. We briefly touched on thrive at the beginning, but can you give me a little bit more of a sense of what does this quite secretive firm invest in? And as you guys have grown so large, I mean, 15 billion AUM reasonably quickly is kind of a crazy out of nowhere story with nine investors. Small team. Just did that great interview with Patrick on Invest like the best and everyone should go listen to that if you haven't already. But there's not a ton out there about you guys. What does thrive look like today? I'll hit on the small team part.

1:24:15It's one of the things that drew me to the firm. When I joined, we were six people on the investment team, we're nine people on the investment team today. The firm is a whole is grown a ton. But the reason I think it's so special is that each of our sub teams is really small still. And what that allows is this deep level of shared consciousness. I've worked with my partners for many, many years now such that I can probably predict how they might react to an opportunity or what questions they might be asking if they're in a room when they're not even there. And we don't have these formal investment committees where some small portion of the team is joining.

1:24:54We are all the investment committee every single meeting, critically debating each other's thoughts. And so even if we're going a little long or debating an extra minute thought one meeting, it's kind of compounding for the next one and the next one after that. And Inventure, which is a power law business as you guys know, being 1 % better every single quarter really, really starts to add up. And if you can be 93 % good in your thinking versus 90 % good, I really think it shifts the odds of you trying to get a shot at working with one of those category defining companies. So that's the team part and why we've stayed so small.

1:25:30And I think we always will have that same mentality. On the what do we invest inside, the answer is pretty simple. The answer is that we want to find category creating or category defining companies. And we want to partner with them as early as possible. And we've invested everywhere from seed stages to public rounds and everywhere in between. When we work with companies, we try to lean in in a massive way. And then the thing that makes us perhaps a little unique is that we'll go earlier than early. We will not just invest at the seed stage, but we work in a lot of ways with founders who are starting to think about that next idea, but don't know exactly what they're thinking about.

1:26:12And we've got this wonderful insights team that will actually sprint at ideas with founders along their journey to help them crystallize their idea. You know, venture at the seed stage is kind of funny sometimes, which is, hey, I'm a founder. I've got an idea. It's not bill yet. I'm going to come pitch the VC firm VC firm go back in a black box, make a debate, ask a bunch of tough questions and come back to me and spit out guess or no, that's kind of the process today. And I think what we've tried to create here is let's kind of co diligence. This is our let's co explore this together. And over several weeks or months together, we'll ask those same tough questions and do the calls together.

1:26:48We're going to do the market report research together. We're going to go tap our network to introduce you to the right people together. And by the way, at the end of this, hopefully you're coming out with either the conclusion of this is not worth the next decade of my life spending time on or a lot more conviction in the idea. And if we can have that conviction together from the seed level, that's so unique in this market that I think it builds the foundation for a really long lasting relationship. I love that. So either way, it's sort of a successful outcome for the founder or you know, either it's yes, let's do this together or no.

1:27:19And you probably also shouldn't do it. But of course, you let them come to their own conclusion on that. I'm curious what the pitch is to founders about doing this process. And I assume it's a part of it is what you just said. And yes, that sounds like a great experience. But this also isn't happening in a vacuum. There is a market for seed financing out there. A response I might think of to that is like, that sounds great. But I can also go pitch 20 other firms and a whole bunch of them will just give me money right now. Why should I spend all this time with you? If a founder has already determined everything they need to know about the idea, which is certainly the case sometimes it's a founder who's worked in the industry or maybe it was an open source project they were running on the side and they're ready to go at it full time.

1:28:07Those are instances where you don't really need to co -explore the idea. And I totally buy that when we're still going to make sure we're there for that process as a more traditional looking seed round. But for a lot of processes out there, I actually think there's this moment in time where you have a few categories or kind of nuggets of ideas you're really excited about. But you really either want to a refine them or be kind of have the the pressure tested thinking from somebody who will be doing that eventually in a pitch anyway. And doing that in the out in the open together versus again in this like closed door black box is a VC investment committee.

1:28:47I think is a much healthier experience for both sides. And then it just leads to better partnership. I think any founder who's looking to work with the firm if you pitch somebody and get an answer in a week, that could be one great way to work with somebody. But it would be much better to have a foundation that was built over several months or better yet several years is actually often the way this happens with us. Where now we both have the foundation of working styles with one another, but also the foundation on the idea and that we've kind of pressured tested every corner. So as the idea evolves or things aren't going well, we're not sitting here freaking out because we didn't understand what we invested in.

1:29:22We're actually sitting here trying to be constructive helping with the problems. And I guess also married to what thrive has become now to you know multi multi multi billion dollar asset and your management firm. I would imagine part of the pitch too is not just like, oh, we do this and then like there's a great seed round in your it's like, oh yeah. And we can be like a major capital provider to you for a very, very long time. So it's worth it to invest in this deep relationship with us. Listen, it's capital. It's a communications team. It's data science team to talent team. There's not just one person you will ever interact with the at the firm.

1:30:04It's certainly all nine investors who are now bought in fully into your idea and we're going to storytelling your behalf. And then every type of function or service that you will either need today or at some point in the future of the company, there are thought partners that you can work with at the right moments in time. And you can pull on those strings with again a group of an entire firm, not just that one individual. We would be remiss if we didn't give a shout out to great friends of acquired the NAVA team where this is like literally a case study and exactly what you're talking about, incubated at thrive co -founded by a thrive partner, companies doing super well and thrive has been a major player in every single round that they've done.

1:30:44It's one thing for someone to come on a podcast and say like, here's the strategy and lay it out in broad strokes. But like, you know, this is literally an angel investment of mine where I've watched it happen firsthand and it's very cool. Thanks. I appreciate you saying that and the NAVA team is truly amazing. We're not always the best at talking about ourselves as you guys alluded to. So it's way better and we think it speaks much louder volumes when it's founders being able to tell stories about working with thrive. And anytime there's a founder considering working with us, our answers, you should definitely talk to the founders we've worked in in the past.

1:31:16That's a way better story than the one we're going to be able to tell you ourselves. Love it. Well, Gora, this has been a blast. Thank you so much. Totally. I am so glad we were able to do this. And if you'll let me, I just have to thank you guys for everything you do on acquired. You know, to date this back to why I'm probably working in business at all today. You know, going back to undergrad where I thought I was going to be going into medicine or become a doctor, there's this one class that I took pass fail in my senior year. So one of those kind of throw away classes taking out of curiosity called American business history.

1:31:55And man, did I work the hardest? I've ever worked at a class for that pass fail class. I just loved it. I love the material. I loved the random stories we learned about, you know, TV and TV advertising, emerging for the first time in the 1900s and how that led to consolidation of CPG brands. I loved reading about milk co -ops and how they came together in each market. And these were stories that like really stuck with me and I was applying them or thinking about how they related to businesses in the real world today. And what you guys do is a total extension of that class in my mind. You are educating the world, all of us as listeners on the most iconic companies.

1:32:33And what I like even more is that so much of my corner of the world, which is venture and startups, really admires other venture back to companies and other startups. But oftentimes those are stories that are maybe five years old or in the best case scenario, 20 to 30 years old, like a Facebook or Google. And the reality is sure of them, sure they're learnings there. But how do we actually learn from the most iconic companies that are 100 years old out there? That's a crazy thought to me. A company can last for 100 plus years. And that's what you all do. Those are the types of companies you all study.

1:33:06So I get the benefit of that education. So thank you as a founder, trying to make it as an investor, trying to always have an edge. I so appreciate and love what you guys are doing. And just really grateful for the friendship. That means so much. Thank you. That's been a huge discovery for Ben and me over the last year, 18 months of like we used to just be in our little tech and venture ecosystem. And there's nothing wrong with that. That's great. And there are great stories there too. But like actually it's these really, really old ones, the LVMATs, the Costco's, the Nike's that are under told in our industry.

1:33:44Surprisingly, yeah, David, it just occurred to me. We should make a plot starting in 2015 to today where the X -axis is date and the Y -axis is age of company covered and sort of watch it shift shift back in time. Because I think our personal taste has definitely shifted from the shiny to the enduring over these last eight years. It means a lot coming from you to hear you say that that what we've believed is that by studying those companies, it brings new dimension to the arena that we operate in, which is the new company arena. 100 % agree with that. Guys, all I can say is that I hope in 100 years, whatever the young kids are doing instead of podcasts, they are going back and looking on acquired until like the story of acquired themselves.

1:34:33Gora, let's all hope for this. Thank you so much. Thank you. And listeners, we'll see you next time. We'll see you next time.