The CEO on a Mission to end Your Credit Card Debt｜Philip Belamant, Zilch

33:31There's no human here, right? There's just clicks. And the problem with this model has always been that what you get paid for generating a click or impression is more than what it costs you to run a computer to click. So what are people going to do? They're going to arbitrage it all day long. And so almost 35 % of ad budgets are wasted. It creates this waste. So what we did is we said, well, if you've got someone who's taking out credit to buy something from this party who's wasting a huge amount of ad budget, ad dollars to bring that person to them and make the sale. If we can combine these two things, you can make this more efficient for both.

34:12So you can significantly reduce the cost of bringing a customer to that seller and at the same time then use that budget to subsidize the cost of credit, deals and rewards to that consumer buying. yeah and that then became the solution we said this is the thesis let's go and see if we can prove it and i presume with a great thesis like that a strong background like yours easy to raise money no that's not yeah i like the t-up on that one but um your face you're like yeah he's joking he's joking for you uh yeah i read somewhere the 250 fundraising calls is that right it's probably more than that yeah you know it's like it's hard to even keep track but i think maybe you should have just got better at pitching i think so that's the moral of the story sounded good seven years on when you just told it that to me that way it obviously wasn't so crisp that yeah pretty pretty crap at uh at the pitch but it's like you know the funny thing is is so so we went off started the company in 20 back end of 2018 so 2019 um great let's go build the business and fortunately so you know i founded the business my with my father uh you know so he he chairs the board.

35:22And, you know, it's fantastic to have his strategic, you know, oversight. And, you know, I'm fortunate to have someone like that. And my co-founder, Sean, Sean O 'Connor, so he's a northerner. And so what I love about that is the mental model of how you spend money and make money and deploy your money is very similar to how I grew up, which is you make profit and you reinvest, you know, carefully your profit into building your company. And I think like, northerners, I think, pride themselves on making sure that every penny is going to work really, really hard. And so we're very like-minded in that way.

35:59And so what happened is we start this company, go and build the technology. And as we start rolling out, we're like, right, we can go and raise some capital. Of course, COVID comes around, right? And so everyone's now, when I say everyone, 12 and a half people that we had were working from home. Everyone's on their own. and we're kind of like, now we've got to go raise the capital. So let's start making these calls. And, you know, what was useful about COVID is before you would have to travel around and meet all of these people, right? Because they want you to come in and tell them about the company.

36:33If you think about before COVID, you would never raise money without having sat in front of someone. Yeah. Didn't work. So what was great about COVID actually is we could do 10, 12 pitches a day. right it's just zoom call zoom call zoom call zoom call before you would never be able to do that you can maybe do two three and so we just kind of knock these out right hundreds of calls and you know what it's like and so eventually you you know you get the first check that's the hardest part and then you can tell the next one oh actually we've got 20 of the raise done do you want to come in and so it gets a bit easier so so in total for for today we've raised over 240 40 million pounds in the business total.

37:12And initially, this initial round was meant to be a couple million, we ended up raising 10 million on the initial, this sort of calling that we did through COVID. That was the starting point. And you have a very cool, you know, slogan, almost, which is, you know, fastest company to unicorn status in the UK. And that is something quite incredible, no? It is. I mean, again, it's like we kind of we always, it's a bit how you asked me earlier about these kind of events these events that that we see and i mean it is great and it's fantastic i mean we always say to the team you know uh let's take a quick moment to appreciate it but let's get back to work you know it's um for us i think what's more interesting is how much are we saving customers how many customers are we serving how good is the product is it getting any better genuinely in our business those are the things we'll all get around have a drink and have big celebration for the milestones and these things that are a bit more of an year um you know i struggle to really stop and go oh that's exciting i mean you know there's but there's you know sort of an effect around this stuff though so especially in a fintech being a unicorn and then you know uh more recently two billion right that whether you like it or not and i mean you will like it because you're the founder CEO so it's fucking great for you um but ultimately it creates consumer confidence too it does like that in a fintech and and so you know there are some companies where you're like well it's all fluff and who really cares like whatever they just managed to find softbank or whatever right and just convince them but in this space you know it matters because consumers are always cautious about where to put their money and there are lots of fintechs and yeah there's a very much in in the uk as well you know a rising a rising tide lifts all boats kind of scenarios it's very helpful that there's a monzo and a curve and a revolute and you know the market is very receptive to new fintech ideas here i would say new ways to spend money and stuff like they've done a great job of making people more comfortable that you don't just need stuff in lloyds and nationwide the old way um but so does having unicorn status as one of these businesses.

39:19Like that is ironically something that certainly your early adopter customers will want to know because it means that where they're putting their confidence is also where smarter people than them have put their confidence. I mean, I don't disagree with you. And obviously, you know, I could never sit here and say, you know, we weren't proud to hit those milestones. You're not going to be my first guest ever to be like, no, I was pretty disappointed the day. Exactly, exactly right. But I think the funny thing is, is that people don't realize, and this is the problem with entrepreneurship or when you build things is that people don't sometimes realize just how painful it is.

39:51And so, you know, when someone sits down and says, you know, we sit with media and we do a discussion interview or whatever. Oh my gosh, this is so exciting. You know, you've been working on it for, you know, six months. You've been grinding it out for 18 hours a day. So by the time you get that thing done, you've moved on, right? Like I was thinking about it six months ago when you didn't know about it we've moved on we we kind of on the next thing and typically the next thing as the ceo founder of a company is is the next problem right it's it's typically not the next fantastic thing because you get the distillation of problems that's how it works so you know so normally i'm quite preoccupied with how we're fixing the next problem to get to the next level but look we were really proud of the achievement the point is actually the the point you make is interesting is i found that the unicorn status of the company does works really hard for us to attract good talent to the company from a customer standpoint actually getting regulated so when we announced our fca consumer credit license we actually saw a huge increase in customer applications so so it's almost what you were saying there which is that clearly customers they savvy they get it they understand i mean i couldn't believe it actually when i moved to the uk that people here really understand quite generally section 75 protection and chargebacks on cards i'm like how are people even understanding this stuff like you know normally if you're not in payments you wouldn't even know about this stuff but here the consumer is really savvy so i think when we um you know when we announced that that gave customers a huge amount of of confidence in using our product and our service yeah and there are obviously such big points of differentiation that makes sense so let's talk about what makes zilch so unique so incredible so you're converting I've got numbers here in case you don't remember them, obviously.

41:41At 55.4%. So you're converting, is that like ads to conversion? Yeah, that's click to conversion. Click to sale. Click to sale. I mean, that is insane. It like, I don't really understand. So Google and Meta are 1 % to 2%, as you say. So how is that even possible? What are you doing? Forcing people to buy. well if you don't buy we've got your grandmother hostage your grandmother's hostage click this ad should i just say yes that's a soundbite thank you yeah it's just this is the thing is that you know kind of the way we see it is we're a payments product so naturally we hire intent we're not a we're not tick tock we're not a browsing product right so you're not just kind of sitting around on the couch opening zilch because you feel like it, right?

42:33So we are a high intent product. The point is, you know, you go online, you're on YouTube, you see something cool, you're interested in saying, as soon as you have this intent vector, that is where our apps comes into the fray, right? So we're not trying to be discovery. We just don't think that's a good idea. We think there are so many amazing apps these days and more and more of them that do discovery really well. Brands are always going to have to pay for discovery. They need a budget for that. So if they want to make sure everyone sees their trainers, they're going to have to do that. Yeah.

43:02But as soon as our customer generates this intent vector, I have intent to get something either to get that thing or something like it. They open our app. And that's why then from there on, we're really good at driving that sale through because the customer starts with good intent, right? They're like, hey, I really am in the mindset of saying, I think I want to buy something, either that thing or something like it. They can come to our app. They type in what it is that they're looking for. We will push that to all of the underlying ad infrastructure across Europe, the UK, and the US. And then we get programmatic bids of commission in real time from all of the brands.

43:42So brands are paying 3%, 5%, 6 % commissions in real time. Right, because they're aware that they're about to get a much higher conversion rate. So it's worthwhile them bidding much more because they're just so close to being about to make a decision. That's right. So they're saying, I'm always going to have discovery as a budget. I need that anyway with Google or Facebook. I need that anyway. But now the difference is I'm not going to pay for my impressions or clicks and hope they convert well. I'm not going to do that anymore. And this means I can also take this budget out of the sales team.

44:12It's not a marketing budget because the problem with marketing with clicks and impressions is at the end of the month, you have to add up how much you spend. You have to divide it across all of your sales. And you have to look at what percent that means you're giving up on your margin. With Zilch, you don't have to do that. There's no brain damage because you're only paying for sales. So you can actually go to your sales team now and say, guys, we have a 14 % or 20 % or 40 % margin on this product. I'm happy for you to spend 3 % or 8 % of that margin on whatever channels you like, but bring me sales.

44:41And they can now do this with Zilch. So they can go and bid, I want to spend 4%. Now, what's interesting is Zilch doesn't have a rate card. We don't tell brands what to pay us. Brands can pay nothing if they like. They can pay more if they want. the difference is that we will rank all of those results and we'll give you more prominence if you're bidding more commissions and so what we'll never do is like google right so google sort of forgotten about the point of google which is i'm asking you a question give me the answer they forgot that for some reason now they give you a page and a half of rubbish and then conveniently have moved their ai summary now from the top to the middle so that you still get the impressions and maybe click on something because obviously they're worried about that and then maybe what you'll click three or four times and find the answer maybe that's a problem for google and you know who knows how they're going to fix it um but for us so what we do is for instance if you come to the zilch app and you say i'm looking for trainers or i'm looking for even a store let's say uh you know jd sports we then take that intent and remember we have a lot of data around what you bought in the past what you can afford what you can afford in the future google and meta don't know that right so you could be paying for impressions and clicks that person clicks they come to your site they can't afford your product yeah with zilch we don't have that problem we know what you can afford so we push that anonymously into the partner network and say there is this person with this high intent they can afford this much they typically spend this much they've bought these types of things before you want do you want to bid on that sale and brands in real time obviously programmatically will have set up rules to say i want to bid for those types of sales will then rank order those commissions for you as the search result to say you wanted jd sports we show you jd sports like let's get that right but by the way jd sports isn't paying us enough ad commission to offset the cost of credit for you completely so let's say it might be in this example a pound or two for you to access credit still the best credit product you've ever seen but by the way here's a better deal you're looking for trainers actually has nike you know here's footlocker and And by the way, that's free.

46:45This is 2 % cashback. That's 7 % cashback, so on and so forth. So if the customer is looking for value, they might now go and say, well, I was going to buy Nike trainers anywhere at JD. Let me just go to Nike. Yeah. And I'll actually just go and spend there. Now, what the magic of that is, we've driven Nike a sale they otherwise may not have made. Yeah. And we've done it at a fraction of the cost of CPM or CPM campaigns. And on the other side, so I'm the consumer. uh how have you got such a good understanding of what i can afford can't afford how does the buy now pay later model work for you and not bankrupt you by making some mistakes yeah i mean you know consumer credit is just you know it's a difficult thing it's like we always say to people you know we're right above our offices are right above victoria station and you know if i say to you here's a thousand twenty quid notes go down to the station and hand it out all right just pick pick a thousand people and give them 20 pounds each yeah as then become simon squib exactly well no here's the difference within within six weeks though you need to get it back all right that's the challenge and by the way if you don't do that your business is gone all right off you go let's see how you do so it's not so simple right and then the question is how do you make your decision what would you do would you look at what they're wearing would you ask them where they're from like you know how would you make the decision and how would you do it in a split second and how would you do that millions of times a day that's really the the complexity here and so you know and so a lot of this obviously is not um like you know mind-blowingly different to what consumer credit businesses that have done a good job of this in the past are doing.

48:33And that's why when we think of Zilch, we kind of say, let's just take two types of payment technology or consumer credit technology, credit cards and BNPL, the buttons on the checkout pages. What do they do really well? And then what don't they do so well? Let's leave the stuff they don't do well and take all the things they do well and combine those things. And that's really been what we've done. So if you think of like very simply a credit card, it's simple to use, they're ubiquitous, you can use them for everything and they regulate it that's really important right you know you can charge back or get section 75 protection or complain to the ombudsman but the problem with credit cards is they revolve you into debt there's compounding interest rate um you know and it can create quite a quite an uncomfortable burden so we don't like those things and then you look at bnpl simple to understand buy now pay later buy now pay later so the buttons you'll see um you know pay 25 % every two weeks on the checkout page.

49:27What's great is they are convenient because they're there. They're easy to understand. There's installment payments. So you don't have this bullet payment that's like, oh my gosh, how am I going to pay for it? And there's no interest. So that's fantastic. And in some cases, no other fees. That's different providers do different things. So we like that. The downside is a lot of them are unregulated. You can't complain to the ombudsman there is no section 75 if that retailer goes bust and doesn't give you the goods you can't claim back you're not protected etc so we sort of took the best of both of these and put them together so with zilch it's a regulated product it's a visa mastercard product so you can put on apple pay google pay you can go anywhere you like with this online in store anywhere you want so very simple to use it's ubiquitous there is no interest and there's no late fees with zilch so it's the best of all these products and how's there no late fees so if you are late then what you just see more ads no so so what we've done is that we we've kind of combined these things so most credit lending we assess the person for risk you would underwrite this person say how risky do they look yep and then you would offset that risk with price right that's how credit cards do this that's how any online lender would do this um now obviously that that can be egregious so then the issue is that what do you do?

50:49You either don't lend so you exclude that person or you have to charge them a huge amount of money and that's a problem. So what we do at Zilch differently is we use three things. We use down payment for the loan so how much do you have to put down of your own money against this upfront? The tenure of the loan, how long do you have to repair? And price, we use these three things to start with. That already makes us very competitive on pricing and then of course we generate ad revenue from the brand and we subsidize that price further. So in a lot of cases, it's completely free. So that's the unique sort of secret sauce of zilch.

51:21That's what makes this thing work. But if you pay late, we have protections inherently built into the product. So because you're paying installments, if you late on any one installment, we freeze the card. You can't continue to use the card. And this is to protect the consumer. At the end of the day, if you late, it probably means you're in a bit of distress. You might not be in a position to pay this back. You can also go into the app and snooze these installments. You can reconfigure the installments through the app. There is nothing worse. I don't know if you've ever had this yourself or experienced this.

51:52If you can't pay your credit card or a debt on a date, and you have to call up a call center and say to that person, hey, I can't afford it. Can I pay you another time? It's not a great experience. It's terrible, right? So a lot of people just run away from that. they just they have every good intention they're just either embarrassed or it's it's too much effort and you're busy in your life because you know life happens here you can just pick up the app you can reconfigure this you could tell us actually i need more time and in a lot of cases do that for free and then of course if you can't do that and make good on it we'll freeze the card you need to catch up you can continue to use the debit product and get rewards for that which will then help to pay down what's owing.

52:38And then once you're back in good standing, use the product again. Got it. And you manage a 25 % profit margin, whereas other businesses are so much less. So how does that part happen? Because it's one of those magical things, you know, as you're telling the story, it's like everyone seems to be winning, including you. Rare. It is rare. I mean, look, there's obviously, there's always some complication and there's a fine balance between what value do we think we bring to merchant partners? What value are we bringing to consumers? And then what is the business receiving? What value does the business get?

53:14And actually, we had a 52 % gross profit margin. And so for today, so we have a 52 % gross profit margin. And so this is the flywheel we sort of look at and go, if you thought of this as a loyalty program, the problem with most loyalty, if you think about it, is that they either seem a little bit meaningless, they don't seem to help, right? You get these points, you can only use them on certain things you don't care much for. So no one likes those. What loyalty has ever done really very well, it typically is airline loyalty programs. Those tend to do the best. So Delta Airlines, let's say, or of course the BA product in the UK.

53:54And the problem with those products is that there's only so many seats on an aircraft, right? So as the loyalty program grows bigger, in fact, the value to consumers grows smaller because you have a finite amount of seats to give up. In the Zilch ecosystem, there is no limitation. So as we drive more commerce to brands and convert better for those brands, those brands don't all of a sudden run out of product margin for those sales. In fact, those margins are infinite. As long as they're making a healthy margin, they can pay those all day long. right and so what's great about this product is that you know we're sitting right at the center of this consumer intent a sale being made and an infinite budget that could continue to grow as we onboard more and more customers and so what you don't see is as friends tell each other about the program like for instance i've done with the ba amex products in the past and as more people join you find oh my gosh actually i can't get those tickets anymore i can't find the seat wasn't worth those 30 ,000 extra avios points i got because my friend got 60 ,000 but the fucking you get the bonus points you can't use them on anything right yeah in zilch's case in fact the more customers that join the better the program gets the deeper the subsidies become and the more sales brands can make got it and earlier you mentioned that you know uh google you know bad experience because you've got the search results and they're pushing the stuff down and ai and you know i was going to ask you about you disrupting google or where that kind of sits in your head But actually, the more interesting question, honestly, is how Google's own AI products are having to disrupt their own core business.

55:33And so really, the more interesting question here is how does AI and the speed at which that's developing disrupt your business? I mean, there's lots of ways to answer that question. You've obviously got the more boring. Can you answer it well, please? I'm not sure. We'll see. All right. Fair enough. Let me start with the boring stuff. So you kind of get like the utility, right? So there's problems of toil. This is just like we don't want people to answer the phone as much. We don't want people to send as many emails and so on. And those problems I just feel like are like, you know, people talk about them like it's inventive and I'm not sure it really is.

56:11We're a young company, so we benefit from the fact that we've had this technology almost from the start of the company, right? So if you're 20 years old and you're getting super efficiency in your call center now, good for you. It just shows us how bad your technology was. And that's not your fault. It's just what it is. Also, to this point, interestingly, you know, one of your major competitors, Klarna, global PR about literally customer service. Yeah. We're getting rid of it. We're bringing it back to global news stories. What they're really saying there is we're an old business. We've implemented things without any new technology.

56:42And that's because they didn't have it. It's not their fault. Yeah. And we had to hire a bunch. We had to throw bodies at the problem because we had no good technology to do it. now there is better technology and guess what we're going to use that instead of these people i mean that's all that you're telling people i don't think that's exciting that's just like yeah well just get on with it guys like who cares so so the problem news day though yeah yeah exactly i mean it's just like so problems of toil obvious get that done the thing that's more interesting on the llm side right so why why for us are llms exciting machine learning everyone knows that if your if your business doesn't make use of this type of technology that would be odd On LLMs, that's a bit different.

57:21So, you know, something that we see in this is even helping teams in the business is really interesting. And I'll give you one quick example. So let's take our fraud team. So typically what you would have is if we have like a credential stuffing attack, you know, so you have someone writes a computer program to take a whole bunch of email and password information they've bought off the dark web and stuff it into the login of the app. and see, can I get into any account? And they're just stuffing millions in. That's kind of a lot of the attacks that you see with apps like ours because you can gain access to balance.

57:58So if you see that, what would typically happen is that, of course, you have some machine learning system that on the backend recognizes this vector and goes, there's a lot of logins coming from this range of IPs. That's probably an issue, right? And so it'll immediately start, our technology would start curbing those and what you would see more of for instance is those annoying like hey how many buses do you see here you know those squares yeah so we don't do that normally but if we see a heightened amount of logins we'll start upping the technology to start slowing down the logins and making it more difficult for a machine to understand how to do that but while that happens obviously we then want to generate a report for our fraud team and say you should look at this and today or in the past what would happen is they would get an alert that says there's all these outsized logins from, you know, and there would just be a file that shows you IP login, date, time, so on and so forth, maybe a device ID and so on.

58:54And you just get this file. And then you'd have to have a data team, data science team to sit there and go, okay, how do we analyze this and interpret this? So what's going on? And they would have to look at this for hours and cut it different ways and go, oh, we think this was happening. Well, now we don't have that problem, right? Because now what we can do is we can say, so the machine learning thing spits out the file. We can pass that to an LLM and say to it, why don't you interpret here what's happening? And it can now send an email to the team and say, you know, it's already cut the data and gone.

59:25This is a summary of the data you're about to trawl through. And so, you know, we're seeing an outsized number of logins, you know, from this range that have now moved to this range and it's happened over this time from this jurisdiction and so on and so forth. And now the company knows, oh, this looks like a credential stuffing attack that's coming from this range of IPs in this territory. And they can start there. So that's really interesting, right? Now, obviously, you could take that forward and go one day, if you can start to get a workflow automation included in these things, which is what we're seeing with scheduling and some of the latest chat GPT stuff, you can now schedule a workflow that says do the certain things as a workflow to try fix the problem and once you've done it by the way write a report which it can now do using llms and post that to us yeah so do you think that um i mean obviously that's a lot of like you know how we're going to use ai inside our business like you say yeah so you know zooming out i guess what you've described the fundamental way that Zilch works, like I say, everyone feels like a winner.

1:00:29So do you think it's possible to overtake Google in the trillion dollar advertising market? I think that's, I mean, I think that would be a little audacious for us to say that that's possible. I think, you know, I think, I think like an audacious guy. Yeah, I mean, you know, but maybe unreasonably audacious, I would say, you know, our expectation, if you get back to the AI, so what's interesting as an application is, you know people come to the app and tell us what they want to do my view is that that's still like it's a bit annoying if we already knew what you wanted to do wouldn't that be more interesting and so you know what we have started using ai i think more prominently for and interestingly in you know is that we're guessing what you want before you tell us and so we have a you know shop again feature so when you open the product today about 92 percent of the time we guess right all Right.

1:01:21So we actually put where you're about to go in front of you before you've told us. That's really interesting. But but more so than that, if you take it forward would be what would you want in the future? And do you even realize there's benefits you're missing out on? And a simple example would be we know you shop at Sainsbury's every Tuesday. We know you do. Right. If we can go and take that vector of intent before you get there, not at the time, and post that to the ad network and say, who is willing to provide the same basket of goods for 20 % discount as an example and put that deal in front of you before you go and do that shop.

1:02:00That could be really interesting, right? That's adding value you didn't even realize existed. And then if you go one step further than that, how do we start to manage how you pay and where you pay without you thinking about it? Because the cognitive load to give you lots of different payment methodologies, should you pay over three months, six weeks once get cash back how would you know right like a financial decision in real time is really difficult for you to understand as any human if we could have a computer make that intricate decision for you one day and say we've actually authorized this as a pair of a three month transaction or a pair of six for you this is why and of course you can then step in and grab the wheel and go reverse that or change it we think that's a good use of ai for us moving forward And if you think what universe that opens, we think that moves us away from a market taker of credit card share, let's say, and BNPL share into more of a market maker where we're saying exactly this.

1:02:56How do we compete with the stimulation of intent, not just the conversion of intent vector to a sale? And that then is more interesting when you talk about Google. so obviously when you uh you know quickly brush aside with uh i suppose very british cultural uh you know bashfulness of yeah we're a unicorn let's move off that um we did go a little red but you know um there's not many unicorns in the uk um but there are a few we're doing well i mean obviously that i say yeah there's quite a few and you're one of them so you are obviously a a prominent voice. You're a leader in UK business. You are still one of the prominent few.

1:03:42And I'd love to talk about the future of business here in the UK. So one of the biggest problems that I have noticed, I'm sure you have too, is if you get a great British business, you know, there is a lot of temptation to then just go and list on the New York Stock Exchange. Bigger numbers, America feels more exciting, etc, etc. And then, you know, the in the day, like, or, you know, NASDAQ, the UK has taken a bit of a hit. So how are you thinking about that? How are you involved in trying to basically save, you know, British companies going public in Britain? Okay, I mean, so, you know, I would say the first thing is, if you look at even just fintech, in the UK and in Europe, right?

1:04:28There are, you know, a huge number of unicorn companies here in the UK. It's actually quite incredible to see. And the amount of capital raised for these companies in the last year, if you go back two years, is more than all of Europe combined. Okay, so when we kind of think of Europe just generally, we really do need to be quite proud about where the UK is, you know, from this point of view. But that would not be very British of me. no but i would put ourselves down at all times you're like uh let's let's be self-deprecating about this but actually it's just fantastic right it's unbelievable and the technology sector here in the uk is the third largest on the planet you're talking about you know the third largest technology sector just behind the us and china that's pretty incredible right it's a small country so so that's just the starting point so you go okay cool so what do you you know how do we think about that what do we do with that and you do find that you get a number of the news articles the media is quite tough um you know which has always been something i must say i've found a little bit difficult to understand the media is really quite tough on the outcome of some of these things and some of these companies you know oh we've lost another company to the us and we don't know why even though we criticize them the whole time for being successful yes and that's the thing right so it's like exactly right so something i don't know what it is I can't quite put my finger on it.

1:05:50Was it me telling them that they were horrendous for creating value? And they shouldn't be paid. And they shouldn't, you know. Yeah, exactly. It shouldn't be successful. Was it us? Nah, can't be that. And that is, I think there's - Another evil founder. That must be the reason. There's a strange, you know, I'm not from the UK. So there's a strange cultural nuance there that, you know, I couldn't purport to understand. But what I will say is that there is a lot of optimism in the UK. There's a huge number of companies here that are doing fantastic things. The talent is abundant, right? And the capital comes here for that, right?

1:06:23So that's fantastic. So then you look at all of that and you go, okay, well, then what's going on and what's happening? Why would companies go elsewhere? And I really just think that a lot of this is driven with policy. It's a bit like, why would people like me want to come here and build businesses here and create jobs here? You know, taxpaying, you know, employees here who are going to go and spend a lot of that here and so on and so forth. Why would we all do that? And there are policies, fiscal policies that drive that. SEIS, EIS, Entrepreneurs Relief, and so on and so forth. And so, you know, what really I think is going on, and we founded something called the Unicorn Council with Innovate Finance.

1:07:01And Janine there's spearheading everything. Sounded like a children's book until you said Innovate Finance. Exactly, yeah. And I must say the funny thing about the Unicorn Council for fintech is that we initially had it the other way around, fintech, unicorn council, but the acronym didn't land so well, right? oh that's amazing so now we decide we just switch the order of the of the words yeah but um and so you know and so and so what's great is we have about a hundred billion of market cap fintechs uk fintechs in this council and that's everything from some of the names you mentioned the revoluts monzos zilches etc in there um that would be like half of the footsie 100 if these companies list year and they're getting bigger right that's the that's the incredible thing so these companies are growing they're rolling forward towards what you could see as potentially a listing and there's a couple things that seem to happen the one is they don't quite get to listing and they sell right and in a lot of cases they do sell to foreign investors um how do you is that even a problem do we think that's a problem and should we fix it and then you go to what's your view on that?

1:08:09I think the circumstances are always different. It's not so obvious to say. I just don't think it's a case of you could say, well, you could fix that problem and that's not going to be an issue. There's lots of different reasons that happens, right? But I do think that naturally, if people feel like they can't get liquidity and they may be not sizable enough to list just yet it's it's a it's a tough spot what do you do and then naturally your bigger businesses tend to be elsewhere so they can afford to buy those companies so can you bring liquidity to those companies earlier or get them to list like how do you fix that now we know for instance the LSE with Julia Hoggart David Schwimmer etc have been working on this product called Pisces which is kind of like a pre-IPO market product that allows you to list secondary and this is another world first innovation from the uk like the fca consumer the sandbox that we went through with with the fca was the first of its kind in the world right so the regulator is actually quite innovative you don't normally hear those two words put together but in the uk they are and so you know this platform is meant to allow people to list private shares and trade those formally before they would go and and publicly list the company and just so i understand And the value of that is that the founders and teams can get some liquidity, which, counter to what a lot of people tell you, actually keeps the motivator to stay in the business for longer.

1:09:35Absolutely. Right. And so then you would say, okay, they may not then sell the company because, of course, they've been starving for 10 years. They've put their life on the line. Now they can build a bigger business. And now they can go and swing a little bit for the fences and build something bigger and actually then may have the chance to list. then you've obviously got listing and how liquid is the markets here whether it's aim lse how does that look what policies are driving pension funds to invest and hold buy and hold british stocks well we know that if you look 15 20 years ago um pension funds were allocating almost 50 of assets to british stocks today it's less than four percent why is that there must be a policy driving that behavior.

1:10:19No one wakes up one day and, you know, the herd doesn't wake up one day and just go, oh, you know what? We're just not going to do this thing anymore. It doesn't happen like that. So there must be a policy driving that adverse behavior. What is the policy? And it needs to be fixed. And so you look at that and you then go, you know, once we can get people buying into the market and holding British stocks, you get more liquidity and then that creates more speculation in the price. And so everyone starts to feel better about life. That's just kind of like how you would look at it. Now, we've had lots of conversations through Unicorn Council with relevant policymakers, Downing Street, and so on to say, you know, where are we with all of this?

1:10:58Like, what is the game plan? Right? Because if you think about this, like you would run your business, you don't just wake up and go, well, I'm kind of working on a bit of this and a bit of that. You know what I mean? You don't do that. You're like, guys, it doesn't matter if we're wrong, but let's at least outline the plan. And this is what the conversations we've been having, and actually, to be honest, very productively, I think so far with the new government and policymakers is to say, what is the plan? Is this a problem? Yes, we think it's a problem that companies sell to early. Okay, fine, cool.

1:11:27So you've got Pisces. How many companies do we think it'll stop being sold? Just pick a number. Pick one, right? Okay, we think this many. how many how much market cap does that keep here uh british owned pick a number okay it doesn't have to be right but let's just start with the number how many of those then could go onto list here because they've stayed and not sold okay how much market cap does that create how many jobs does that create how much of that do those people spend and so on and so forth and then you at least you've got a plan that says right we're going to launch this we expect it to get from 20 to 80 of these companies leaving by this date and that's going to have this much impact on companies staying private here or companies listing here.

1:12:07The knock on impact is, oh, we have more listings. How many more? Do you have a number? How many? Pick one. Okay. It's this much market cap. Great. That goes in. Whether it's AIM LSE, let's forget about that for now, but it goes in. All right. Great. Pension fund reform. When do we want that to happen? Cool. It's happened. How are we going to drive the capital into these companies? Because just reforming the pension fund doesn't get the capital into the companies, right? We consolidate all these pensions. We make it that they can have a bigger team that can actively invest. That's a good start because right now it's passive.

1:12:38We change the rules so that they don't get judged on the cost of investing, but the outcome. And then we want to see that money find its way, right? How much of the money do we think finds its way? When? Which year? Pick a number. Just let's have a plan, right? And that's how we've been thinking about this is to say, if all we do is put a plan like this together, at least there's something we can report against to say, are we moving in the right direction? Because right now, it actually doesn't matter if the picture looks good or bad. What we want to see is the picture. Yeah, there's no clarity on how to decide around this.

1:13:12You have most of the stuff people can dream of. You have millions of users, billions of dollars of value, and a business that you are so passionate running that's adding value to the world, your consumers, you love your team, all of this stuff so what is your advice for entrepreneurs you know you've got 55 000 that just started this month yeah well what's your advice to them how they're going to start great businesses in britain today um we kind of specifically it's funny we don't so when i still meet everyone that joins the business and we always kind of say to every every new joiner we don't give advice because a lot of this kind of business advice and these books are quite backwards narrative fallacy stuff right it's easy to connect the dots in reverse um at the time a lot of these people didn't know what was going on so it's hard to give people advice i would say the only thing we tend to tell people who join our company um is the first thing is just go and just just get going do something right just do it it's it's you know don't think about it.

1:14:16Don't talk to people about it. Do it, right? Go and do it. And iterate it forward. That's really critical. So that's like the main thing we just talked about is action. There's nothing that kills hopes and dreams like inaction. So action is the big thing. But, you know, specifically the way I think of life is you need to be interested in it. Not, you know, people speak about discipline and passion and those things help. But if you're not genuinely interested in it, the chances are likely you're not going to be brilliant at that thing. So just go find something you're interested in, right? Don't try and build a business.

1:14:53Go find something you're interested in and become brilliant at that thing. Put in the hours and then, you know, we think that that's a good, you know, there's a good chance you'll be successful at that thing. Of course, you know, put in lots and lots and lots and lots of hours and, you know, ultimately the way you think about work-life balance is that there is none. There's no such thing. and sorry no such not no such thing for an entrepreneur there's no such thing for someone who's interested in something you will never think of it as a balance if you're genuinely interested in something so be interested and do the fucking thing exactly amazing philip thank you so much thanks for having me