The future of fintech with Plaid CEO Zach Perret | E1818

26:31Directors, board of directors, officers, the people who run the company, your management team. So what do we do? We send them right over to Embroker. Embroker is business insurance built specifically for startups. Embroker's single application helps startups get four quotes for four lines of coverage in 15 minutes. They connect you with one of their expert brokers for unmatched service, and that goes beyond your policy, okay? We use this at all of our companies. It's easy, peasy, lemon squeezy. And if you're not getting insurance, you know, at some point you're going to have to get it. So let's make that point today.

27:05Right now, this weekend, tonight, just go to Embroker today with the code TWIST, and you'll get 10 % off their startup package. How do you get the startup package? Embroker.com slash TWIST. That's E-M-B-R-O-K-E-R dot com slash TWIST. Make sure you use that code TWIST for 10 % off. That also, more importantly than getting the 10 % off, that shows them that you're listening to This Week in Startups. So we love Embroker. They've been amazing in terms of supporting our founders for years. And of course, this very podcast. Great job, Embroker. So you support more platforms. You build community. What worked in building a community?

27:41If you look back on how you get the community jumpstart, a cold start problem, as we say in the business, you're trying to start the car. I mean, once the car's running, you're in good shape. But how do you get the car running? How do you turn that engine over? What did you learn about community building and tech? I think the honest answer is there is no trick. You have to do the hard work. And the hard work is whatever you can figure out. So for us, what worked was we started in New York. We eventually moved to San Francisco because there were more people. There were more developers there. We thought there'd be more customers there.

28:14And in both places, kind of before and after we moved, we would just literally talk to everybody. So I'd go to every meetup. My co-founder and I were basically building this company. It was two of us for the first two and a half years. We had an intern along the way who was an amazing intern. But it was two of us for the first two and a half years. And pretty quickly, it became obvious that I needed to spend my time on getting customers. And my co-founder was a much better engineer than me. So he would hold things together. And I would go to every single meetup that I could. I would go talk to every single customer that I could.

28:42I would fly all over the country to find people where they are. So we had people that were building in Chicago. Why people were interested in FinTech in Chicago, I don't know, but it was a thing. So we went there and spent time there. Chicago's got a big financial industry there. That's probably their top industry, right? Real estate and finance. So yeah. Exactly. Yeah. So then we started doing these things. We called them plat outs. It was a terrible name because it was actually a plat in. So in our office, we'd just invite everyone we knew in financial services just to come, hey, have a beer on Friday.

29:08And we do this like week in, week out. And people would just swing by. And like, you know, all of our friends and our team didn't really drink very much. So it wasn't the most social of environments, but we would talk to people about the company. We talked to people about what we do. And, you know, we'd invite all the people that we're trying to recruit and to work for us there. And little by little, the community grows. One of the best things that we did, though, was we gave everybody our personal cell phone number. And we said, hey, if you have feedback on the product, we want you to text us.

29:36And I also want your phone number because I'm going to text you and ask for feedback on the product all the time. Yeah. and the fascinating thing is um through this we became like close personal friends with a lot of our early customers um even to the point that now many of my good friends were early applied customers or are still applied customers and this this this kind of genuine relationship to the community um it's something that we still deeply deeply value at plaid and something that you know when we think about the brand we want to build with our customers it is this like hey you have a problem call me like i'm going to be there to help you solve it that kind of thing people really underestimate the personal touch and making a business personal.

30:10When I started the magazine Silicon Alley Reporter in New York, at the same location you are, Union Square, I too would host small, you know, pizza and beer and just invite anybody in the industry. And my friend Nicholas Butterworth had a website called SonicNet, which is the first music website on the internet. And we would just go to the ATM. We'd each take out the max, which was two or 300 bucks at the time, we'd go to the deli we'd order some pizza and we just invited hey anybody working in tech come by and then we just i give him a copy of the magazine and he'd show them what's on the website and do a little demo on his projector and that's it and then all of a sudden momentum momentum momentum and everybody brings a friend and you know if every 10th friend winds up consuming your product you know that builds like really strong embers really hot coals those personal relationships right so then when you put on bigger marketing efforts you got this really hot coals in the bottom of your grill right and that's that's how i always envisioned that one-to-one one-to-few marketing kind of efforts and they pay off how did going from new york to san francisco change things because at that time new york silicon alley you know it's always had a really strong presence but nothing like san francisco in terms of developers yeah i think the move to san francisco was a really good one for the company.

31:25It was a bummer personally. I love New York and we're fortunate to have opened an office in New York and still get to go there a good amount these days. But we ended up in San Francisco where it was just the mecca of developers, obviously, at the time. Good for two things. First is we were, I think at the time, maybe 23 and 24. And our entire professional network was on the East Coast. And we needed to figure out how to hire people because there's just two of us at the time. So we had to get really, really good at just cold outreach, cold recruiting. Second is, and doing that in this market like San Francisco is way better than a market like New York.

31:58In New York, there were not very many big tech companies in San Francisco. There were a ton to recruit from, so that made a big difference for us. The second big thing is that many of our customers were in San Francisco. So, you know, you go down and sit with them. At the time, Wealthfront was getting started, so we could go spend a bunch of time with Wealthfront. Great company. We could spend a bunch of time with Robinhood, which is, I think we started working with Robinhood. Great company. Investors in both of those companies. There you go. Yeah. I think we started working with Robinhood when there were five people.

32:24And that way we could go sit down in their office. You're really early. We can talk about the integration. We can talk about the pros and cons. Your team has a problem. We can come sit there and bug fix with you. We can do your integration for you for some customers. Not Robinhood. They didn't need that. But some other customers needed some more help. And so just being really close to your customers in physical proximity mattered a lot. And the fintech community in New York is really big now. But it didn't grow as fast. It took a lot longer. And so the move to San Francisco was a good one for us.

32:50Funny enough, we were also in the middle of our seed fundraise, which, I mean, our seed fundraise was like a horrible process. We pitched more than 100 investors. And finally, we got a yes after that. But when we moved from the East Coast to the West Coast, everybody, all the investors, no matter where they were, they took us more seriously because we were in San Francisco. Fascinating. Yeah. And so, yeah. You're in the big leagues, right? You went to the NBA, right? I mean, listen, I got love for New York. It's my hometown. But I do advise people, you know, if it's your first company and you're here in the Bay Area, yes, you will get taken a little seriously.

33:24And if you throw a rock, you're going to hit like three VCs before the rock hits the ground. It's going to bing, bing, bing. And it's just the loft numbers. There's so many of them here. But how fortuitous is that, that Robin Hood and Wealthfront, Vlad and Andy Ratcliffe were both building a service that needs you at that time. And both of those services got incredibly well funded and had unbelievable product market fit. So now, you're the infrastructure, you're the AWS in the minds of the investment community, incorrectly so, that's helping them build these very large businesses. That must have been a great pitch.

34:02So we got incredibly lucky to be at the earliest formation of this market. So we were working with, I mean, Venmo is another one that even before those two, that was the first emergent digital finance company, aside from, as I said, PayPal and Mint, that really captured consumer attention. And we were fortunate to start working with them when they were very, very small. And that was, you know, that was the big logo for us. The interesting thing is one of the early ways that we grew is that people would use Venmo. They would say, hey, that bank connection experience, I've never seen that before.

34:36How did you do it? And they would literally email the engineers of Venmo. And then we, because again, we make good friends, we give people our phone numbers, we like try to be as close as we possibly can to our customers. The engineers of Venmo would just say, Hey, it's my friend, Zach, like, here's his number, or like, here's his name, you can go do it. And that led to basically like that, that was when we really started feeling the market pull is you get the one big logo and biggest relative term Venmo was 20 people at the time. Yeah, but and people start seeing it, they start emailing Venmo engineers, and engineers started sending them to us.

35:06And then that started to compound. Fascinating how that all came out. And this is where catching a wave, right? And being part of a movement really can drive scale and product market fit. You were part of something very big and you were enabling a whole group of people to do these things. But a lot's changed since then. And the financial giants, I think, did they see you? When did they start to see you as competitors? Because I think a lot of them have APIs, maybe they want to provide the APIs directly to people and maybe they don't want them going through Plaid or am I wrong? When they start to see you power so many things, are they stoked or are they like, huh, who's this intermediary here starting to get big and mitigate people's use of our service?

35:54It's a good question. We're fortunate to have exceedingly few competitors. We have a couple of direct competitors that do very similar things to what we do. But we've been able to make almost everyone in the ecosystem into our customer or our partner. And we like that we really want to be focused on creating an ecosystem of companies of banks of digital finance products. Because that's, that's, that's what's good for consumers. So the way that we do all this is first and foremost, we say that we start with our mission. So our mission is unlock financial freedom for everyone. We're focused on helping consumers live better financial lives.

36:27We're a B2B company that talks about consumers and our mission, because it's incontrovertible. All of our customers, they want to help consumers live better financial lives. The banks, they want to help consumers live better financial lives. And that deeply resonates with us. And so, yeah, we work with the banks. We've integrated now with 12 ,000 financial institutions, maybe more than that by now. Those integrations are hard, complex, and that's a whole lot of legwork to get there. But those integrations... And a moat. A moat over time, yeah. And a moat. Yeah, that's very true. Those integrations allow us to let our customers which are 7 ,000 or 8 ,000 digital finance companies, connect bank accounts in.

37:02The interesting thing is that a lot of the banks, most of the biggest banks are our customers as well. So they build fintech products themselves. Let's take Citibank, for example, Citibank has an online account opening process, we help them open accounts online. So when you open a new Citibank account, you need to fund it with your existing bank account. And so you have to connect the two together. So Citibank is a customer there. Likewise, many of the fintechs are data sources, they become large enough that they become banks themselves. or they for us, and they're not technically banks, for us, they become data sources.

37:31So you might want to understand, you know, how many dollars are in your Chime account in your budgeting app. So we connect Chime to the budgeting app. So it's become this multi-sided ecosystem, which is really great. And they're getting in on the game too, right? Like I know Bank of America or something has Zelle and then other people are making quick pay. Like they're all trying to make their own Venmo kind of product. Exactly. Everybody's building everything. Zelle is a bank consortium. Oh, right. But Bank of America is a part owner of it. But in my opinion, that's great. Like more innovation equals more options for consumers.

38:02More option consumers for consumers means that consumers get to pick and choose the best one and they get better financial outcomes. And so from our perspective, we want all of this to exist. We want it to be a big, vibrant ecosystem. Now, we put a huge burden of trust, of security, of privacy on top of it. We have to be very careful about who we let use our platform, who we let connect on the other side. And we partner really deeply with the banks and with the regulators. to make sure that the applications that are using Cloud, the applications we enable, the use cases we enable are good. But once we get through that burden, and that's why we do so much of this partnership with the banks.

38:37And once we get through that, then it tends to be a fairly open ecosystem. And there's a lot of really amazing new companies that are being built. And I think, as I said, we're still in the early innings of financial services. I think one of the things I have is that every company is a FinTech company. It's a question if they just know it yet. So anyone that accepts a payment, they have a FinTech team internally. Whether they call that a thin take team or not, I don't know. You see these blue light glasses I'm wearing? I'm not wearing for style, although they are very stylish. They've totally changed my life.

39:05Why? I started having headaches, right? And had eye strain. So I got these blue light blocking glasses that do a little magnification because I need readers. Yeah, I look nuts. But my eye strain's gone down. My headaches have gone away. And I'm sleeping better. Do you know how I got on this? I got on it because I now have a health coach. Who is my health coach? It's found. F-O-U-N-T. It's a health company that's created custom health and performance programs that are tailored to your body, obviously, also your goals, and they take into account your lifestyle. My coach is incredible. I text with them all the time.

39:40They did a blood work for me. They check out my wearable data, and we do weekly calls to see if I'm on track and getting the results I want. They also told me about some supplements I should be taking based on the blood work, and they do it at a fraction of the cost. We upgraded my diet. I'm doing a little more protein. We've optimized my sleep. That's great. I got the supplement packs. I feel great. I feel like I'm in control of my destiny. If you want to be like me and you're concerned about your health and you want to just try to do better, have some experts on your team. Build your own program.

40:07Go to found.bio slash twist. That's F-O-U-N-T dot B-I-O slash twist. Get your free consultation. Mention Twist. You get$500 off your first month and get your own personal health coach. Health is well. And if you're running a startup, if you're a CEO, if you're a capital allocator, take it seriously. I love this service, found.bio slash twist. There were a couple of major events that have gone on. I'm curious your take on them. We have FedNow, right? Like, and India's got their UPI. People seem to be trying to make faster payments and transfers and everything like that. What's the state of these next generation?

40:49I don't know if they're next generation ACH or rails. how is the industry doing in speeding things up the fact that you know here in america you send a wire transfer it feels like you're trying to get to the international space station and the number of you know the complexity and the time and the phone calls is just absurd and of course we have crazy insane fraud going on and and cyber security has become uh super important so maybe those two things? Like, how is the industry evolving here to get faster and tighter in the United States and the Western world? Well, one of the most interesting examples, and your listeners may know this, but there are most of the bank payments that are made in the United States run on the system called the ACH system.

41:36It's the automated clearinghouse system. And it started out as a way to process checks. So I write you a check, then you take to the bank, the bank then sends all those physical checks in a bag to the central place, and they process them. And now it's, of course, electronic and it allows that allows you to do bank to bank transfers. But this bank to bank transfer system, it generally takes three days. It only runs, I think it's, I don't remember the exact hours, but it used to run something like 8am to 6pm. It didn't run overnight. And it was just very, very slow. Now, the ACH system has done some things to modernize, but it's still not fast.

42:10And what happened, you know, ACH in the US was early to being this automated digital system. It was great. So we did a bunch of innovation up front. But then the rest of the world invaded and got a lot faster than us. So in India, they've created a system called UPI. And UPI allows for instant bank to bank transfer. So if I want to move money from my bank account to your bank account, let's say that we're in a bookstore and I'm buying a book from you. If I want to move money from my bank account to your bank account, I can do it instantly with UPI. and a lot of commerce started going over UPI in India.

42:45I think it's something like 73 % of payments in India are now on UPI. The rest are on cards and other types. And that's pretty amazing. In Europe, they have a bunch of these bank-to-bank payment rails as well. In the US, we do have a lot of bank-to-bank payments. They're for things like invoices or utility bill payments or a lot of B2B payments are bank-to-bank, but they're still really slow. And that leads to a lot of counterparty risk on both sides. And I might pay you for that book that those funds will be in limbo. Are you going to give me that book? Or are you going to wait until the funds land?

43:16What's going to happen there? There's a lot of a lot of these questions. And so in the US, the Federal Reserve launched a new system called FedNow, which allows for instant bank to bank payments. Now, only between the banks that are a part of FedNow, and it's very few banks so far. And then another bank consortium, we were talking about bank consortiums, the bank consortium launched a standard called real time payments. RTP. And that's the big banks. And so little by little, we're going to start to see a real time, very fast bank to bank payment mechanism in the US. And for me, it's a fascinating question, because, you know, this could be something that, you know, it modernizes wire transfers.

43:54And if we modernize wire transfers, that's nice. And that'll be a win and people will be a little happier. But it could be something that's much bigger than that. It could be something that, you know, maybe it competes with the card networks in terms of payment volume. This would be crazy when you think about it. Fed now, and obviously in India, am I correct that people will use the Indian system to transact my bank account to the bookstore's bank account or the restaurant's bank account? So it's a mobile phone app in most iterations. And so that means you're not having a credit card company in the middle of it, which means no fees or less fees.

44:29How does that all sort itself out? The biggest advantages are speed and then kind of ensuring the funds actually get there on the other side. So safety of funds. But then fees, that's a huge one. In India, UPI is very cheap. I think the standard itself is free and the banks charge just a little bit to do it. And then there's, of course, like processors on top of it that charge a little bit. But it's, you know, basis points to pay. In the U.S., the RTP and FedNow standards are very cheap. They're cents to pay for a transaction. And that means that we could start to see a massive reduction in the price of sending money.

45:10We actually have bank link payments that we've enabled with a small handful of early customers. Now, this is still traditional ACH, it's the faster versions of ACH. But for example, if you buy a Rivian or a Tesla, there's a good chance that you'll see Plaid actually executing that bank to bank transfer. and kind of eventually we hope that this will go from the really expensive high value uh items down to um many more of time fed now is not uh a digital currency it's not a federal you know version of bitcoin but it is run by the federal reserve correct am i am i correct and it just launched in July of this year.

45:49So we're in month two of it. Is that right? Something like that. Yeah. Yeah. It's very early. Yeah. It's very early. It's one of those things that I suspect it's going to have a long tail. How so? It's just going to be a slow rollout, you mean? Slow rollout. Yeah. But it'll inch by inch. And I think you'll start to see more and more and more usage over time. And the fact that the bank consortium that's built RTP is the top banks. I think we'll start to see these two compete for volume over time, which means that you'll likely see faster implementation. People seem to believe incorrectly, there's like a conspiracy theory that Fed now is like, this is going to be the central bank digital currency like China's pursuing.

46:32And that this is part of the Illuminati, you know, New World orders way of controlling you because they can be press a button. And if they don't like what you said on Twitter, or they x, or they don't like who you are, they can just freeze your funds, you know, like we do with Russia or you know other people who invade other countries uh we can do kind of sanctions but this would create a level of control do you and that's not the case right there's no indication that there's a this is going to be a digital reserve currency but do p do you worry that the government's going to have too much control and then eventually paper money goes away and you know every transaction is stored just does the i'm assuming you have some libertarian uh like most of us folks in tech and some privacy concerns about this stuff.

47:22And so just maybe your thoughts on that writ large, take it wherever you want to take it. Look, we have no indication that this is an attempt to create more government control. Frankly, the Federal Reserve, there's two entities that run the ACH system, the way that all the bank to bank and your invoices move as it is, the Federal Reserve controls one of those. So they control half of the ACH system. So, you know, the reality is, this is not a lot different. It's accelerating, is making faster a thing that already exists, as opposed to creating a huge amount more control. And I think the concept of the CBDC is fascinating.

48:02I have to admit, I won't be able to go all the way down that rabbit hole with you. I'm probably not that smart in that area. But what I will say is we're very far from doing that in the US. The promise of crypto, though, is that you have fast, instant, easy, verifiable transactions. In a lot of senses, that can be accomplished by instant bank to bank transfers, or it could be accomplished by instant debit card transfers, or whatever it is. So we're gonna be better served to do that with a central authority, because you could have insurance, you can reverse transactions, you can have more protections.

48:34So arguably, consumers probably don't want to decentralize, it sounds like a feature decentralized. But you know, anybody who's ever had money stolen from them really does like their FDA, I see insurance or the fact that the credit card company's like, don't worry about the fact that somebody ordered tires with your credit card, which happened to me. I'm a crypto optimist. So my answer is yes. And let's do both. Let's make both work. Yeah. But my general take is, you know, I think I think FedNow is a step forward in terms of speed. I don't think it's a step back in terms of a lot of things. And CBDCs, in my opinion, are pretty far away, at least for us.

49:10Yeah, Yeah, I think it's going to become like one of the major present. I think the CBDC movement is going to become like the Second Amendment and the right to bear arms. I think we're going to see a large number of Americans. It's going to just make them feel really concerned about government overreach when they're asked to, you know, be or if God forbid they were forced to use a CBDC and the government was watching every transaction. and then like, you know, putting it onto your tax return. There's something about, you know, I report my taxes. I, you know, have cash if I want to and I don't want to be tracked through Manhattan.

49:50I can buy a cup of coffee for five bucks and, you know, just use a good old piece of paper. And so I'm fascinated with how that's going. It's so science fiction, right? It's like some crazy dystopian possibility that the government could control every transaction. It'll be fascinating to watch. And like, I'm right there with you. I prefer more privacy, but we'll see how it all plays out. Talk just briefly about what happened with Silicon Valley Bank, the banking crisis, and how maybe that 60 days was for you. Because SVB, I'm certain, was hooked into Plaid, and you must have had people who were checking their balances through services that were enabled by Plaid.

50:31What was that fire drill like that weekend? It was another sleepless weekend. More than a weekend. It was a few days in the week before. But I think the interesting thing is it was this huge potential fire that ended smoothly, as smoothly as you could imagine. I mean, given all of the inputs, the outcome was pretty good. I agree. And I think for us, like initially as things were starting to happen, I mean, you go through the checklist of things you need to do. Number one for us is ensure the cloud's cache is safe. So, you know, we looked where our bank accounts were. We felt like cash was safe.

51:11We ended up moving past that. Second is start to talk to our customers, figure out what they need. And the number one thing that all our customers needed was connections to all the new bank accounts that people were moving money into. So what happened is a bunch of banks popped up and said, hey, I'll open a bank account for you over the weekend. I'll let you do a wire transfer. And these were good banks, but we didn't always have connections in the way that they needed to. So maybe your connections weren't scalable enough to that new bank. Or we actually saw a bunch of neobanks starting to pop up saying, hey, you know, I mostly did consumer accounts, but I can turn on business accounts for all these businesses that need them over the weekend.

51:46And so we said, all right, great. Well, now we got to integrate to your business side. So basically what happened is our team stayed up for most of the weekend, integrating to something like 20, 30 new banks. And by Monday, we were able to reset everything. The most important of that was all of the employees of basically all of the people that had checking accounts at Silicon Valley Bank, where they were getting their primary checks deposited into that. They all needed to switch their payroll immediately. So we needed to be ready for Monday when they all switched their payroll over so that they can end up getting their checks on time, not having any delays with it.

52:19And granted, a lot of these were tech employees. So it was like kind of easier for us to work with them and they gave us good feedback and so forth. But that was definitely a very busy time. Also scary, you know, you just think about it like as an entrepreneur, you never thought you need to get$10 million or your$3 million or seed round or your whatever you did, Series D, whatever, you got$100 million at a bank. You're like, oh, I can't access it. Like that didn't cross anybody's mind. Now, I had a lunatic, Elliot Cook, who worked for me and still does back in the day. and he would always put our money into four bank accounts and you know two accounts you know three or four accounts at four or five institutions whatever and had it split up all over the place and he's like why i said why are you doing this it's so much work he's like well if anything ever happens you know we have a bank run or whatever and i'm like are you living in the 20s or 30s and bank run and then here we are you know you things that you don't think can happen can happen right speaking of that uh 2022 what a disastrous year brutal uh you too had to go through the layoffs maybe you talk a little bit about how you responded to the market conditions and you let go of 20 of people that's one in five that's got to be pretty difficult as a founder and then what's happened since because we're six quarters we're in the seventh quarter of this down market i always thought six quarters plus or minus two would be the range of this uh chaos and it seems Seems like it's directionally correct, maybe on the longer side of chaos in our industry.

53:52Green shoots in 2023 and then remembrances of your very difficult 2022. Yeah, 2022 was a hard year, I think a hard year for a lot of startups. And I said before that the hardest decision ever made was to sell the company right up there. With that decision was to do the riff and the reduction force to let go of a handful of people at Plaid, more than a handful of people at Plaid. And, you know, I think the reality is the decisions that we made in 2021 and early 2022 ended up changing directions pretty quickly. So the biggest thing for us was our customers came to us in 2021 and 2022 and said, we need to go international right now.

54:31International expansions are number one priority and get us into all these new countries. And so we did. We scaled up. We built a team to go do it. We started working on a bunch of new countries. We launched heavily in Europe and we're looking at a bunch of other places. And then as 2022 turned, our customers came back to us and said, hey, our number one priority is cash preservation. We are not going international anymore. And we ended up with a really large international team that was built relative to the feedback that we'd heard from customers. But it was not built in a way that we needed to maintain going forward.

54:58Now, we are still international, but we didn't need to bring as many customers as fast, which just means we didn't need to build for as much scale as fast as we thought. And so we had to take a turn. We made the decision to reduce the size of that team. we still deeply value our European expansion, our UK expansion. We have a great team that's still there, but it's much smaller than it was before. We did everything we could to make sure that we were clear with the team in messaging. We were taking care of the people that were leaving, doing everything we could to help them find the next role. And we got a lot of great feedback both inside and from people that we unfortunately had to let go that they appreciated the effort that we'd made.

55:33No one's happy about it, to be really clear. Yeah. And it'll be a thing that I look back on and am frustrated with and regret for a very long time. But we tried to do everything that we could. It's not easy to be the leader, right? And, you know, doing what is necessary is hard, you know? And it's people that you hired and that you're part of the team. It sucks. I mean, there's no other way to say it. It sucks for everybody. The good news is, hey, you know, tech workers, these are elite workers. They got the best chance of anyone of finding the next gig. So let's fast forward now. We're sitting here September 2023.

56:06some green shoots. We're taping this right after the Arm IPO and before the Instacart IPO. Arm had a big booming IPO earlier this week. And Instacart looking pretty good, maybe going to price above that. And stock market doing relatively well. Looks like inflation is not out of control. It feels like it's in control, but still some work to be done. What are you seeing, given your unique perspective? And how are you looking towards 2024 and 2025, just in terms of strategy, as somebody who has a very unique insight into financial markets? Yeah. So this year has been a surprisingly predictable year.

56:50And that comes from us at Plaid. It comes from our customers that we talk to. It comes from what we're seeing in a lot of the data. But despite a high degree of uncertainty, when you enter the year, what's the Fed going to do? Are rates going to go up? Are they going to go down? Is the market going to do? Are the market going to go up? Are they going to go down? Surprisingly, a lot of companies are right on plan, us included. And that is, I think, a very good thing. Now, I can't speak for everyone. I understand my industry fairly well. I understand all of them. And to your point, I like to say I'm not a macro economist.

57:18My job is not to predict the future, but to react very quickly when the situation changes. And I think our team has been really resilient in that process. So I'll say that to our team. Our team has been very quick to react to things that need to happen. We're starting to see a lot more stabilization of our fintech customers and financial services customers. We're starting to see, I can't tell if it's confidence picking up within them, but it's certainly a recognition that the world has not fallen apart, which is a very good thing. Interestingly, we saw a lot of financial services retool for a higher interest rate environment.

57:50So what you saw was a lot of the fintech companies were only focused on deposits. So how do I get deposits into my system? How do I issue cards? How do I make money on debit interchange or whatever it is? Over the past year and a half, we've seen people really shift to, oh my gosh, I need to figure out how to make loans. My customers are asking me for loans. That's the thing that I need to do. And so you're starting to see a lot of retooling in terms of the types of products that are being offered to consumers. I don't think we're seeing massive consumer adoption on the back of this. I think people are looking at the loans and saying, oh, those rates are really high.

58:23But that is preparing all of fintech very, very well for a decreasing interest rate environment where all of a sudden they build this mousetrap and this mousetrap is going to be very effective as rates start to come down. And so that's been great to watch and it's a good evolution for the fintech ecosystem. The second major change that we've seen is people are super laser focused on fraud. In 2020, when money is, I won't say free, but cheap. Zerp. Yeah, we were in the Zerp. Exactly. People were just focused on top line. And, you know, a dollar of fraud against your top line, you were just focused on your growth.

59:00Yeah, we grow out of it. Yeah, exactly. You try to minimize the fraud, but it's not your top priority. These days, when you're focused on profit, a dollar of fraud, that's a dollar less of profit that you have. So people are getting laser focused on it. And I think that's amazing for consumers because the fraud tools are getting better. The focus on is getting better. And I think we're starting to evolve a lot as an industry. Yeah, it certainly feels like your experience parallels mine across a number of different verticals where people are running their companies at a much higher operational level and looking at their margins, looking at fraud, just looking at efficiencies.

59:37And as Brad Gerstner, you know, who led your last round says, you know, just being fit, right? And just, hey, do we have the right number of people for the opportunity? And do we have the right products for the customers? I feel like it's another year sideways, but I liked your metaphor. Our job isn't to like create the weather, And we have to be humble that we even as smart as we are, can't predict perfectly the weather. Therefore, we must focus on reacting to the weather and flying the plane as safely and efficiently as possible. Zach, it's a great hour. Thanks for coming on the pod. I really appreciate it.

1:00:11Thank you so much for having me. This is great. All right. And we'll see you all next time on This Week in Startups. Bye-bye.

1:00:23Thank you.