Airwallex's Jack Zhang on Fintech, Failure, and Growth

24:03Jack Zhang:Why was Max not like, dude? I mean, I never sort of thought that's kind of the business for me. and I was basically used as an experiment. And Max had a lot of passion for coffee, so he volunteered to do it himself. And this could be a very big business, right? I mean, this is 2013, and if we persisted it, you could build a multi-billion dollar coffee chain. And during the first phase of the coffee shop that we were funding a point of sales, and we're actually going to do a square. which is the first idea. And my CTO was just like, oh, this is a bad idea and blah, blah, blah. And we never did it.

24:51And Airwallis was the second idea.

24:54Jack Zhang:Okay. Sorry, Lucy, you met her at the coffee shop? Yeah. And she's friends with Max. Just on a Friday evening, it was a random day. I went downstairs, met Lucy. And we talk about it. She just resigned from her investment banker job in Hong Kong. and then she's like, what are you guys doing? Do you need an investor for the coffee shop to expand? And I was like, not really. I mean, I actually don't want to do this coffee business anymore. I have some bad ideas. I mean, the coffee business is very operational heavy. It's not quite my thing. We have random staffers just disappeared one day and we look for her for a week and then realize she's partying somewhere.

25:36And that kind of stuff just happens all the time and you're dealing with a lot of people just not very responsible. and I was like, that's not the type of business I want to run. And we sit down at a dinner and during the dinner, I talk about the idea of building a swift alternative, a global money moving infrastructure. She's like, wow, that's a long way

25:56Jack Zhang:from coffees and burgers. And she got excited and she's like, do you need money? And I was like, yeah, I'm going to raise money from VCs. And she's like, how much are you raising? I was like, probably like a million. And she's like, What if I give you$2 million? And just out of nowhere. And this is like within four hours I met this person, right? But we went to the same college. And she's like, you know, I'm really interested. Why don't we go to the law school tomorrow, 8 o 'clock, and let's talk about it. And we met next day in the law school, 8 o 'clock, and her husband was there. They just recently, you know, was married, you know, at that time.

26:40just got married and you know they have they were planning to buy a house in melbourne and to settle down have kids and uh and lucy wanted to invest some money into air wallets and her husband was like going crazy he's like no no no i'm not doing that if you want to do it you do it yourself uh and uh and you know i was kind of smart i was like i kind of sensed lucy want to do it i was like hey lucy i mean if you want to do it why don't you join us as a co-founder and you can see how we spend your money, right? So we agreed she would invest a million dollar at$5 million post for 20 % of the company by 11 o 'clock.

27:16And, you know, because her husband refused to invest and she had to call her dad, you know, to get the million dollar funding, which I'm amazed that like a 23-year-old can convince her dad to invest a million dollar on her behalf.

27:32Jack Zhang:and what's that investment worth now probably half a billion dollars it's pretty good yeah with all the dilution it's pretty good and she owned 20 % yeah back then obviously it's diluted now she's like 5 % probably today pretty good yeah that's her first investment and also probably the last investment and she still does she run finance No, she's our president. She runs all the calm and she runs our charity foundation. And she does, yeah, a lot of the public affairs stuff. And so she gives you the money. Yeah. You close the coffee shop and the burger shop down? No, that was still going. The shop's still there.

28:22Today? Yeah. No way. Yeah, I mean, some of the other stuff is running. We're not really involved anymore. Do you own it? Not anymore. We sold it after, I don't know, four or five years, after I started Airwallex. So you quit the bank? We not entirely sold it. We just gave it to a friend.

28:42Jack Zhang:Okay. And your friend still owns it? Yeah. Do you ever go back? Yeah. The shop's still there, doing pretty well. I mean, almost died during COVID. But, you know, she struggled a bit, but still there. I mean, you're, you know, in a position where you could probably buy it back yeah but like i make it an office make it an office i i don't i don't think that way like why i mean the coffee shop doing well just let it be i moved on right maybe how do i say this the feeling that i seem to get is that it didn't really matter what business you were really in. The end goal was the business, like going and building a big company.

29:32Jack Zhang:And you have belief that that company could be a national franchise burger shop or coffee shop or magazine. Is that fair? I think I was just trying to be happy. And I wasn't happy between 20 and 30. I mean, literally since 17, right? I wasn't happy with where I was. You know, I grew up very happy. You know, I was one of the Walsh's family in the town, and my academics are very good. I was very popular as a kid, and I played basketball really well. I just kind of have everything, and I was really happy. But since my family moved to a new country, don't speak the language, you know, you just feel that your life has fundamentally changed, and, you know, really just struggle to find my belonging and find my happiness in a society.

30:28And I think building businesses is one way for me to keep discovering how can I get back to where I was from both of a mental and spiritual perspective.

30:42Jack Zhang:Like when you were a kid. Yeah, like when I was like a teenager, right? It was like building the magazine. I was, you know, the happiest period of my life. and I had everything I need to have in life. And I was extremely happy and I just never able to get back to where I was. And it's just sort of that struggle throughout my 20s. Literally all of your 20s. Yeah, I mean, just really, I mean, I work in a decent job in an investment bank. Yeah, Goldman's not bad. I mean, I write in code and... Yeah. But I just don't feel that's where I'm belonging. I feel I can do bigger things. I feel I can, I'm smarter than most of the people I'm interacting with.

31:21And, um, I'm just different, right? I always complain about, oh, this is so bad and why can't we fix it? Uh, and why can't we do this and that? And you always have some sort of management of the management come to tell you, I just, just, you know, that's not your job. Don't worry about it. And I look up to the people that my managers and my manager's manager and the head of the entire investment bank. I'm like, I don't want to doing that job. That's kind of like a shitty job. And just become part of this machine and you're doing nothing relevant. You're not creating anything, especially as a trading, as a sort of writing code of trade and you just see a P &L.

32:03You know, I used to say daily P &Ls of hundreds of million dollars, right? And then you're running this machine behind this massive number and then you feel like a sense of, you don't feel a sense of achievement. and you feel that you're just dealing with a number that what do you do have zero impact to the society? You're not helping anybody. You're playing a zero-sum game. All you try to do is showing that you're smarter than the guy sitting next to a computer, you know, in front of a computer screen in Chicago, probably like just also doing algo trading and hardware trading. I just fundamentally don't know the value I'm creating for this world.

32:42I just really lost. But I don't want to resign from my job because I love writing code and I feel that if one day I can do something, it's probably technology. And that's the scale I would love to see. And I wanted to keep writing code so I can do something one day. That's why I always get Max to do the stuff full time and I'm always like keep writing code. Do you feel happy now? um better than than um you know like when i was in the 20s i feel i've found something i really enjoy doing and able to scale right the economy scale is really exciting and building something that changing the financial infrastructure landscape globally uh building a new generation of a global bank is is very exciting and now you're able to leveraging ai to creating a genetic finance on top of this infrastructure even make it more exciting but if you ask me like am i as happy as i was 14 years old and building that magazine probably not do you think you'll ever get there do you think it's possible i don't think so why not you know like have you reflected on this as you're getting older you you're just getting more complicated that you you see more you know the ugliest side of the world um and you just don't have the the spiritual mindset anymore when you as a kid as a 14 years old that the world is so pretty you know you you're building something that from nothing and you you work with the people you like and no one's getting paid but you get a lot of you know well how to call it like everybody just love what you do, you know?

34:29And I couldn't say all the employees in Airwalla love what I do. I mean, they, you know, I've not, you know, they might not understand the decisions I'm making sometimes, right? But when I was 14 years old and everybody just truly, truly believe in what we're doing, enjoy what we're doing, there was no such, it's almost like a fantasy, if you know what I mean? It's just like a perfect world that there's no downside. It's just people just happy and have a lot of upside. And people are just simple as a kid, you know?

35:02Jack Zhang:Are your parents still around? Yeah. My, uh, my parents live in Melbourne. And do you keep in touch with them? Yeah. Every week. You enjoy running a company of this scale? I think you enjoy, I don't, I don't sort of think that way. Right. If you think about me, um, I've described myself as a professional athlete. It's like a basketball player, right? And I have a team. And, you know, if you are sort of the lead player of this basketball team, you wanted to play in NBA, you want to play with the best team in the world. Or if you're like a tennis player, you wanted to play with Sinner and Akira's, right?

35:42You don't want to play with some number 20 player in South Asia or whatever, right? So that, you know, when you are not on the court to compete, that you are training to make yourself and your team better. It's like a very professional sort of athlete type of mentality and sport. And you do that with everybody in Airwallex, try to build something amazing and competing with the best in the world. So competing with Stripe, computing with RAM give me a lot of joy. Does it? Yeah. I mean, if you already, you know, winning, you're not a challenger anymore. I don't know. I mean, you know, I feel like Stripe now is like a default for payments for startups in Silicon Valley.

36:31Right. And, you know, I, you know, I mean, that's a great position to be in, but I'd rather be in the position I am. And I'm like, okay, I need to figure out how to beat them. And it is a very difficult challenge. And achieving that is fascinating and interesting for me.

36:47Jack Zhang:I started a company that we incubated here at Kleiner Perkins that I'm, that I'm leading and people, it's like 17 people now, people have been asking me like, how is it? Like, are you having fun? And I'm like, I wouldn't describe it as fun. Like, that's not the word that I would use to describe how I feel on the day to day. And they're like, why not? I'm like, well, let me just give you my lived reality on most days. I'm either negotiating with a lawyer or a VC or a candidate or a customer or somebody on my own team, almost at all times. And no matter how many times I try and become not the bottleneck, and maybe this changes, maybe, somehow I end up, it ends up coming back to me on these things.

37:42Jack Zhang:And I'm like, and they'll say, well, but Jubin, you're good at those things. Like you're a good negotiator. And I'm like, maybe, but like, that doesn't mean I like it. Like that doesn't mean it's fun. And they're like, well, why are you doing it? And I'm like, because, you know, for the last six and a half years, I've been sitting across the table from people like you and sitting shoulder to shoulder with Kleiner Perkins founders, watching them do the hardest thing and talking to them like in intimate detail. I feel like I knew more than anybody. and I come from the startup world about what it actually means like how hard it really is and I still couldn't help myself still couldn't help myself and so I think like at the end of the day like it didn't really it felt like I had to do it if for no other reason than to prove to myself that I can do it otherwise like I end up just becoming the talking head that gives blanket advice, empty, empty words, and almost is jealous of the people that are willing to do what it takes and sacrifice.

39:13Jack Zhang:Maybe it's not fun, but I just couldn't imagine a world where I lived with myself, not seeing what my potential was. But I would not describe it as fun. No, I don't. That's why I don't describe, you know, you ask me, are you happy or you're having fun, you're enjoying. I don't think I enjoy most of the work I do. I do feel I, you know, as a professional athlete and team leader, I have the responsibility of the team and I wanted to win. I wanted to keep competing and I wanted to be the best in the world. Right. So that is continuing to motivate me. And when you actually see that you're supporting.

39:55a greater mission and you're supporting millions of businesses around the world to able to transact and grow in the sort of without the restriction of the current financial infrastructure. That is very fulfilling. And then you feel that you have a high order of happiness, right? So that I think that high order of happiness, it's the ultimate motivation.

40:15Jack Zhang:How quickly did things start to grow? As in the business? We pivoted twice, right? So the first idea we had is we need to figure out how do we connect to the interbank market. But, you know, as a startup, that is very hard to connect to the interbank market on the FX side. On the payment side, you need to get licenses, right? So I was an engineer in an investment bank, right? Why would a regulator give me a license? So I had to write a pitch letter to the commission of ASIC, which is the regulator in Australia, to pitch, you know, innovation illustrator that for some reason he actually read it and give me that chance.

41:00So one of the two lessons they granted that year, you know, the asset commission especially approved it, which is amazing as a regulator. I kind of remember that, you know, forever. And that is not how most regulator works. But we had a chance to do that. We got a license as a small team of less than 10 people. One person does legal compliance and risk and everything. And we got a license and we stopped building the product. And we need to figure out how to do FX at an interbank rate. And the way we thought about it is doing peer-to-peer, right? If you have transaction happen from Australia to the U.S.

41:49and you have the other way around, then you can net it off and then give you like a fair market value. But then we built the algorithm and we did a simulation. We need like billions and billions of volume to do even, you know, a fraction of the netting. And then people need to wait for too long for, you know, the two sides of the transaction to be netted. and we just thought it's not going to work. And I cold called one day Macquarie Bank at 7.45 a.m. The guy picked up the phone is a guy actually doing an overnight shift to cover the other hours in an investment bank, and I pitched the idea that we raise this, you know, at that time we raised$3 million,

42:39sold him the dream of building one of the largest FX and money movement platform in the world, and he believed in it. He convinced his management to allow us to have a fixed connectivity, as he fixes a kind of protocol in FX trading, into the Macquarie front office that allowed us to connect to the interbank market.

43:01Jack Zhang:And this is like the biggest bank in Australia. Yeah, the biggest investment bank in Australia. it's very rare. Because in the investment bank, when you trade on the interbank market, the minimum ticket size is, you know, like tens of millions, and sometimes you trade in the billions per ticket, right? And, you know, we convinced the Macoro Bank guys to change the API to allow us to trade a minimum of$50 ,000 ticket. And it's amazing, like, how that kind of happened. the guy who was doing overnight shift in the inner bank now is the head of FX distribution in Mercuribank. So I kind of helped his career as well.

43:41That's amazing. And we've become the largest customer in Mercuribank.

43:45Jack Zhang:That's amazing. On FX desk. How long into the business was that? This was the first year. So after the P2P idea failed, and we basically co-called Mercuribank, try to connect to the inner bank market and pivot the business to a SMB invoicing type of business so that you can send invoice or bills to pay overseas, right? Or getting paid. And targeting SMB didn't quite work because we're running out of money and SMB acquisition is very costly and we couldn't raise more money with that idea. And we pivoted again to an API sort of business that allow larger businesses to move money around the world.

44:24And that is basically the third idea. and that succeeded. By early 2017, we started building the API and then we signed up two very large customers who also ended up being, one of them being investors, which is MasterCard. And we also signed up Shein, which is one of the largest e-commerce companies in the world now. And we were able to ride with these customers. or Moscow promised like a billion dollar, but ended up delivered almost nothing. And that's a different story. But we had some very large customers that took off in between 2017 and 2018. So the business is growing over 100x in 2018 from a transaction voting point of view.

45:13Jack Zhang:Before that, when you were pivoting, was Lucy freaking out? She's like, what have I done? No, he was, at that time, she was a CFO, right? She's leading finance. And, you know, we raise, you know, when we try to pivot, when we, you know, try to pivot to the API idea, we already raised from, you know, Sequoia and MasterCard and a few other famous VCs.

45:44And that is, you know, obviously that the brand kind of helped, the VC's brand helped and we're able to build a better team and then we have the money to pivot to this API-first business. That's how the business took off. And then within like two years, by the end of 2018, we got a$1.2 billion offer from Stripe to BIOS, right? So that is a pretty insane two years time. Damn.

46:09Jack Zhang:How big was the company when that offer happened, people-wise? I'd say 160, 170 people. So you grew from five to 170 in two years? Yeah. It's fast. That's fast. Yeah, half my engineers, and we made a lot of mistakes in recruitment. Like what? We hired a bunch of people from Citibank, from big banks. Fancy pedigrees. Yeah, and they told us, this is how it's supposed to work, and they've been building swift systems, and what you're doing is wrong, and you need to do this and that. I didn't, yeah, we paid a lot of price for that. Like what? I mean, you still got an offer, a pretty good offer, 1.2 billion.

46:59Yeah, but that is probably considered the team and the future of the company. At that time, in 2018, we only did$2.6 million in revenue. Before, we probably did$10 million in revenue.

47:11Jack Zhang:The next year. Yeah. So they paid like, you know, more than, you know, it's 800 million on the cap table and 450 to me and my co-founder. And that's 80 times forward revenue, which is better than most AI people right now. Obviously, you said no. Sorry, and can I actually ask you a personal question? Because this morning, right before I walked in here, I had a decision on a candidate. This just reminded me of it. right now it's me and basically basically like 16 engineers one person in gna one person in design basically all my two co-founders and all engineers and the company it's called roadrunner has like it's got quite a lot of demand but i also know all of the customer base it's definitely i am becoming the bottleneck on everything non-engineering related.

48:13Jack Zhang:And we've starved this plant for long enough where I need to go like build the company around the product. Let's put it that way. Which is probably what you felt like after you started hiring all these, you know, bankers from Citi. And I have resisted hiring anybody from this industry because I think the industry is like old and sucky. So like, why would I hire, why would I hire those people? And there has been a guy that's been trying to get a meeting with me for six months, basically since the company started. He knows somebody well inside of Roadrunner. And he comes from sales, but he's like, I'll be the janitor.

48:56Jack Zhang:I don't care. Inside sales, cold calling, he has AE offers at real tech companies. He's like, I don't want those. I want to be a roadrunner and the thing that I've been like struggling with it's not the first hire that I should make in this function it's just not there's like several other priorities in this function I need like a finance person like probably someone on marketing there's like several other roles in sales that I should hire for first a bunch on engineering some platform engineering some QA engineering some infra we have like an agent team that we need to build all these things right?

49:34Jack Zhang:He's never, he's never done a POC before. Like the sales that he comes from is like green tech sales. Anyway, I could go on. Eventually I was like, nothing makes sense about the timing of this, him. If somebody like, if my board looked at it, they'd be like, what are you, this seems weird. And I just couldn't help but have this overwhelming feeling that in despite nothing making sense. Like, how can this guy fail? I just can't see him failing. And what's the worst that happens? He sets, he creates too much customer demand. And so it puts more product pressure on us, puts more engineering pressure on us, puts more pressure on us to hire.

50:19Jack Zhang:So anyway, I call him right before I walked in here and I said, like, let's do it. And he was about to call me to back out because he was like, obviously the timing is not right. And I'm like, yes, the timing is not right. That's true. But like the timing's never right. Meaning like I've told myself that if I find the best person in any function, I'll hire them independent of timing, because I know I'm going to need them all. And best people don't just like come around on trees. They don't just grow on trees whenever I need them. So anyway, I pulled the trigger. And as I was walking in here, I was like, this is going to look dumb if I'm wrong.

51:00And the people from Citibank, you don't look dumb because they have all this experience.

51:09Jack Zhang:And from the outside, you know, they know everything. They've done it all. They have all the answers to the test. And anyway, I don't have like maybe anything other than you saying that reminded me of the thing that I was just deliberating all morning. I think like founders intuition in recruitment is extremely important. And sometimes you see this CV, it looks like a really good fit, but you just have this weird intuition like maybe it's not the right fit. And sometimes you don't trust your intuition and you just trust professional advice and you end up being very, very wrong. I think able to like recruit and fire people very fast is extremely important in early stage company and we made way too many mistakes that we shouldn't and we made a lot of mistakes in recruitment by looking at experience which is completely relevant I wish I had known that 10 years ago and I just didn't right so I hired a lot of these experienced people and end up all create a lot of issues for the company.

52:16And then we have to fire them all. And which taking years to do that, which is also another big mistake. We should have done that in weeks, not years. Why did it take years? Because I kind of just doubt myself, right? Because they're very good at convincing you, you are wrong. And I think maybe I am wrong because I've never done that. What do I know about it, right? So they wanted to build a product in a certain direction and maybe I was like, well, you have built this similar system in the city for the last decade.

52:49Jack Zhang:You probably know better than I do. You probably better know, yeah. I have to rewrite a lot of the system afterwards because at the end of the day, first principle thinking is a lot more important than the experience. What were the highest performers? They didn't have experience? The initial sort of playbook is all quite random. Because we are from Melbourne, and it's not like, oh, there's like 10 companies you can just be recruiting from. You can just sit in the front of that door of that company and just try to talk to everything or engineer. There's no such thing in Melbourne. And we kind of have to go everywhere and then try random places.

53:30And it is very kind of coincident. You know, our chief power officer came from Palantir. He spent 12 years at Palantir, which is the first hire Palantir outside of the U.S., become the GM of Palantir Australia and New Zealand, and then started the Palantir European office and built a European business. Then went back to New York to become an engineer manager or product manager to build a fountain product. But then after a decade and more, he is Aussie, and he wanted to go back to Melbourne and live in Melbourne. and we just randomly, he applied a job in Airwallex at a random job and we just randomly met and then end up, he's like, wow, amazing.

54:20How do you end up in Melbourne? But can you find another person like that in Melbourne? You can't. So it's just like a lot of luck and a lot of random things have happened. And I think we raised the most amount of money in Melbourne and also probably helped that some of the talent will come to us and want to talk to us. But it's very difficult. There's no playbook that you could borrow from somebody to build a business out of Melbourne.

54:51Jack Zhang:Two years in, Stripe, what happened? Tell me, like, Stripe calls you, Sequoia connects you? Yeah, Sequoia connected us. And they wanted you to sell the Stripe? Yeah. Makes sense. They have a big position in Stripe. They have a big position in Airwallex. You're starting to compete? Well, not really. At that time, Stripe was doing payments. Airwallex was doing global money movement. Okay, so they saw it as symbiotic. It's like perfect match. You were international. They were in the bay. It's like a perfect match. We have global money movement, which they haven't built anything. They have payments and we want to get into payments because you know, money in is where everything's to get things started.

55:38We want to pursue a banking. They didn't have any plan to do banking. So it's just like a perfect match from a vision perspective. Everything's aligned.

55:48Jack Zhang:So Sequoia connects you. Yeah. You talk to what, John or Patrick? I talked to Will initially, Will Daybreak. Yep. Okay. Then, um, then I connected with, with, with Patrick, mainly just Patrick. I haven't really, you know, I only met John once in that process. Okay. And how many conversations did you and Patrick have? A lot. Probably like, you know, 20, 30, 40 conversations and spend a lot of time together. Over how many months? Two, three months. That's a lot in a short period of time. Yeah, we're on WhatsApp every day and talk about it. I mean, he started like, he really liked writing things down.

56:24So he started like a memo on Google Doc and just share about his thought and asked me to comment and contribute. And yeah, quite amazing that we just figured out, wow, the company's mission ultimately aligned. Okay. And so then he says, hey, I'd like to buy you. How's it work? I don't know how that kind of conversation started that. I think I remember what Michael Morris said. I mean, this is 70 years ago, right? So Michael Morris said, starts building a trillion dollar company. and you know I was you know I think initially I was like I'm not sure I want to sell we only like three years in I haven't even enjoyed the journey yet I mean like feels like half baked something and then had to sell like after three years and am I gonna have the energy to do another startup and Michael Murray said it's like the earlier that you're compounding the faster you can get to a trillion dollar.

57:21And, you know, if collectively you guys can achieve that faster and that is a better thing for everybody and for the world and you should seriously consider that. And that was quite convincing. I was like, if you're going to end up getting there ultimately in the next 10, 20 years and, you know, getting there faster makes a lot of sense if we can work together. But ultimately, it's come back to the question what makes me happy, right? I was 33, 34 at a time. You know, it's a five-year journey. I'll be 39 when I finish the five-year lockup as a CEO of APAC or the GM of APAC. Am I going to be happy at that time?

58:09I'm going to be proud of what I've been doing for the last five years? The answer is very unclear. It's like, probably not. I mean, do I have the energy to build another startup that I feel super excited about?

58:25Jack Zhang:Like to go zero to one again. Yeah. I mean, when I'm 39, am I able to do that again? So it's just a lot of question. And then if even I wanted to do a zero to one and build another business again. What are the odds that happens? What I'm going to do. Yeah. Right? I don't even, I don't have a next idea. I mean, again, it's like five years away. And then, you know, it's a very difficult decision. I walked around in San Francisco for two weeks and, you know, and I actually verbally told Patrick we should do it. I mean, it kind of makes sense, like logically makes sense. And but when I'm back to Melbourne, I was like, hang on a minute, I'm actually going to be happy by doing this.

59:06You're going to have a lot of money, but like, what does that mean to kind of, you know, from a happiness standpoint? and ultimately asked my co-founders and they all said, it's your call. And I, you know, it's a bit of a naive, right? That, you know, I said, you know, I think that we have more possibilities of doing this on our own. Did anybody want to do it? Anybody want to sell? Max suggested we should sell. But all the other founders... Why? Money? You know, Max, you know, Stripe was one of the best tech companies in the world, even at that time.

59:48Jack Zhang:Right, of all the places to go. Yeah, I mean, if it's all the places, there's one company we should consider work together, it's probably Stripe. It's not like a random bank want to buy you and you just, you know. You're not going to Citibank. Yeah. So, I mean, it's a very exciting place to work and it's a very aligned mission. Patrick's one of the best entrepreneurs in the world. it's not a bad outcome logically. How much money would you have made? I'll probably get half a billion and then 70 % strap stock. Because it's$800 on the cap table and then I think it was $380 to me and my co-founders or$375.

1:00:31Jack Zhang:$375 million? Yeah, like as a sort of sign-on. And obviously that provides... In addition? Yeah, in addition to the$800. Dang. And that was just between me and my CTO. It was mainly just me. So you made like 150 mil just on the sign-on bonus. 100 mil on the sign-on, like on a retention. More like 250. In addition to the? The cap table, the 800 mil on the cap table, which I own, I think, 40 % of the time. Holy smokes. Man, that's a lot of money. It is. and by the way that Stripe stock now yeah I mean that Stripe was$10 billion $9 billion I mean this now I think they just did around$160 so they went$160 as well right you've gone$60 and they've gone$60 yeah do you ever regret it yeah when the things got really tough right we almost got run out of money during COVID and you know we were very close to getting a term sheet from SoftBank before COVID happened.

1:01:38And then the WeWork stuff blowed up. And all of a sudden, the term sheet's gone. Gone.

1:01:45Jack Zhang:Pulled it. Yeah. Well, they didn't pull it. I mean, we haven't signed it yet. But we kind of almost like getting the term sheet to sign, right? And then they just disappeared after the WeWork stuff. And we're running out of money. And then COVID happened. So we had to do a convertible you know we had to do a convertible from the existence then we lucky we found an investor out of London called Hidosophia to kind of basically lead a round at 1.7 1.8 billion you know like without that round we would have been running out of money again and then the COVID happened and we lost half our revenue in a day and at that point you're like what how did I not sell you had that moment but it's not like a burden if you know what i mean it's just like oh you know it's you know one of those things you know is like yeah why why do i have to choose this process that's so hard right yeah yeah and i imagine like you know probably the reality of the head of apac job settled in you're like come on do i really want to do that job yeah I think if I live in the US, I'll probably have done that.

1:03:04Jack Zhang:Done the acquisition? Yeah. Why? I think just everything is, money is a lot more important in the US. And it's just a lot more, the society is a lot more kind of capital driven, right? Then wealth means a lot in the States. Where in Melbourne, like, it doesn't matter you're a billionaire or you like work in an investment bank, making 200k a year it's kind of the same it's you know you go to the same supermarket everything's cheap you know uh you know at you know 20 years ago a house like the best house costs you know five six million dollars it's everything's cheap you don't need a lot of money and i already have money at that time because i started many businesses from real estate and everything so that you know i can't afford to buy the best houses and living the best life in melbourne And that kind of played a big part of it as well.

1:04:01Oh, you had a decent amount of money from the coffee shop and the burger stand? Mainly real estate, real estate development and architecturing.

1:04:08Jack Zhang:Okay. So you did some other side projects in addition to the coffee shop and the burger stand. Yeah. I made like more than$10 million before I started Airwax. Whoa. So you had a cushion. Not a lot, but, you know, good enough in Melbourne. Enough where you weren't like starving. You weren't like a starving entrepreneur. No. Why didn't you move to the U.S.? Why haven't you lived here? I don't know. I mean, it's just that... I mean, I moved to New York when I was in... during COVID, right? Because Melbourne had the longest lockdown in the world that they... we had the 15-month lockdown. I was crazy.

1:04:44You can only do three things in a day. You can do caregiving. You can do exercise within an hour within five kilometers of your obedience of where you live. I think the last one was... caregiving, excise, the other one is like shopping. You can buy stuff. And you can only do, yeah, you can only do one hour a day within five radians, five kilometer radians of your house. And 15 months, I was going nuts. And then if you want to leave the country, you have to apply. And I applied five times and the six times approved me and I get on the first, you know, yeah, I have to, yeah, I literally fly out of the country And, yeah, and that is like, you know, I also remember all my friends in Melbourne, all my connections and family.

1:05:38You know, it's not that simple that just like, hey, I can just move to the U.S. Do you keep up with the Stripe guys now? Nope.

1:05:47Jack Zhang:Now you're competing. Yeah. Now you're officially competing. Yeah. I mean, we have a payments product and that launched in 2021. You're competing with Ramp. Yeah. And that, you know, payments is 40 % of our revenue, right? And of course - You have some serious, I mean, man, these are big market, but these are not fun competitors. No. Ramp and Stripe are seriously good companies. Yeah, but we're also competing with Citibank and HSBC, which make up a lot of it easier. That's true. That's true. I was laughing when I saw one of the ramp investors just start going crazy on you about basically being like a Chinese spy.

1:06:32Jack Zhang:Yeah. Basically, right? He's basically calling you a Chinese spy. Yeah. That was insane. From 15 years old.

1:06:42Jack Zhang:That was insane. Yeah. What random stuff you have to deal with? And then you have to respond, right? Yeah, but you have to, right? Because we have a lot of large platforms doing payroll and doing defense payment. And it's kind of funny that it's quite eye-opening for me what competition takes nowadays. It's, you know, I mean, I rather, you know, I'm an engineer, right? I rather people just competing based on the product, based on the experience they give it to the customer. But launching in the U.S. is quite eye-opening for me. And I'm not really sure this is something new, but I never need to deal with it in the past.

1:07:25And this is pretty mind-blowing what people do to compete.

1:07:30Jack Zhang:You must have gotten such annoying calls from customers and partners. It's fine. I mean, we did an audit and, you know, we were able to demonstrate everything. So, you know, people fact check everything. So the U.S. business is still doing extremely well. So we're fine. I mean, just that, actually, if it's anything, investors care about it more than customers. Investors. Yeah. I mean, you know how Silicon Valley works, right? There's a lot of chatters and a lot of perceptions and, you know, like it's kind of interesting. Is most of your cap table Silicon Valley investors? The majority of it. We do have Sequoia China as an early investor, but the last time the invest was like seven, eight years ago.

1:08:15We have a lot of big investors from Australia, all the three big VCs in Australia. It's actually a funny story that SquarePak, one of the largest VC invested in a company nine years ago and Paul kind of my mentor and also he's like you know one of the biggest internet entrepreneur in Australia started seek.com which you know was the biggest tech company in Australia and then started square pack he's on my board and being our biggest supporter in the last decade and and the other two VCs Blackbird and Airtree they never you know where code called them and emailed them and they never responded. And they found that they invested last year at 6.2 billion valuation the first time.

1:09:02And, you know, because they still believe there's like 10, 20 X upside from where they're investing. And now we have all the three biggest VC on the cap table. And we have a lot of pension fund in Australia, like future fund in Australia, the sovereign wealth fund.

1:09:13Jack Zhang:You're giving back to the country that adopted you. Yeah, Australian super, aware super, host plus. We have the whole country's pension fund invest in us. And also we have a lot of U.S. investors. No pressure. Yeah, like Lone Pine, Edition, Grand Oaks, and Salesforce, et cetera. No pressure. Yeah. Well, I'm happy for you. I'm really glad we got to do this. You're in London? Yeah. Mostly? Yeah, half my time. And the other half is in Australia? New York. I don't really go back to Australia much anymore. North America and Europe is close to 40 % of our revenue now. You don't go back to Australia much anymore.

1:09:50No, it's just too far. Yeah. And, you know, I'm mainly focused on the expansion in North America and Europe. And that business went from 0 % of revenue to like close to 40 % in three years. Damn.

1:10:01Jack Zhang:Which is why you open an office here. We have 300 people here. Damn. And we have another 300 in the UK and on Stamp. So, you know, I think, and we're looking to double that number this year in the US, right? So we'll probably have 500 to 600 people this year, by the end of this year. Wow, amazing. And U.S. is going 3X, more than 3X this year. So it's extremely exciting period. Wow, I'm happy for you. Are there any roles you're hiring for specifically? I'm hiring a GM of North America. Okay, that's a good one. Yeah, that's a good one. And we're hiring a head of sales for our SMB business. All right, also a good one.

1:10:40When you hear the word grit, what do you think of?

1:10:46Grit, resilience.

1:10:52persistence, and keep failing and keep trying. That's definitely the story of Airwallex coming out of Australia. And, you know, the harder you work, the more luck you get, and the more lucky you get, and the more amazing people you attract. I think having a clear mission and vision will attract a lot of amazing people, and you can build something together. It has up and downs, but you just have to hang there and keep building.

1:11:28Jack Zhang:No doubt. Well, thank you. That's it for now. If you liked the episode, please leave us a review or go back into the archives where we've done more than 200 episodes with some fantastic folks. This podcast is a Clienter Perkins production and I'm Juvin. Thanks for listening.

1:11:46You