Fintech Takes

Elon Musk, Amy Rowe Klement, Peter Thiel, Julie Anderson, Max Levchin, Reid Hoffman. 

What do these powerhouse entrepreneurs all have in common? 

Hint: They all played a role in the meteoric rise of PayPal.

Find out the intricate web behind one of the biggest startups in the world, as Alex chats with the author of "The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley," Jimmy Soni.

They dive into the history of PayPal and discuss the early days of the company, its vision, and the talented individuals who were part of its success. How did PayPal start as the result of a broken AC unit and a simple ploy to get free air conditioning from a college campus? How did Elon Musk’s role in PayPal fundamentally shape his views on banking? Find out how some of today’s most seminal minds collided and how things culminated into the height of Silicon Valley’s fintech revolution.

For a fascinating glimpse into one of history’s most fundamentally impactful fintech companies, you don’t want to miss this ep!

Read “The Founders” here.

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To learn more about Payment Guard Insurance, visit https://www.trustage.com/payment-guard.

00:01:59 - Book on PayPal's Genius Team

00:09:02 - Paths Crossed: Silicon Valley Engineers

00:13:21 - Evolution of PayPal Founder's Ideas

00:19:21 - David Sacks: From Email to Product Officer

00:21:31 - Elon Musk's Early Banking Experience

00:24:03 - Elon Musk's Financial Services Interest

00:32:33 - eBay and X.com's Email Money Concept

00:39:13 - PayPal's Merger Against Elon's Will

00:44:32 - Shorting the Stock Market: Peter Thiel's Proposal

00:50:39 - PayPal's Evolution in Fintech Industry

00:52:24 - PayPal: From Startup to Modern Regulations

00:57:37 - Elon Musk's Vision for Efficiency

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Follow Jimmy: 

Website: https://jimmysoni.com/books/the-founders/

Book: https://www.amazon.com/exec/obidos/ASIN/1501197266

LinkedIn: https://www.linkedin.com/in/jimmysoni/

Follow Alex: 

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Twitter: https://www.twitter.com/AlexH_Johnson

In this super special edition of Bank Nerd Corner, Alex and Kiah are joined by Steven Kelly, the Associate Director of Research at the Yale Program on Financial Stability.

They dive into the Q1 Bank Earnings, debating exactly how much stock prices matter in determining bank health. Is there too much emphasis placed on the connection between stock prices and deposit runs at the bank? Kiah, Alex, and Steven debunk some of the biggest misconceptions about bank solvency and unravel how banks have always operated at negative equity—and why that doesn’t mean they won’t turn a profit eventually.

Later, Steven shares his insights into tokenization outside of its crypto origins and explains which aspects of the underlying blockchain technology regulators are most excited about. What are the downsides and risks? And despite crypto’s widespread problems, how will blockchain technology sustain outside of it?

Plus, the gang also unpacks the role of the FHLB in the banking system, discusses the explosive growth of private credit, and gets into a heated debate about the merits of… potatoes. Yep—you heard that right. Kiah has some *thoughts* about the mediocrity of potatoes. We never said they were correct though. 

TruStage Payment Guard Insurance is a first-of-its-kind insurance solution built for digital lenders, designed to help you attract more borrowers, strengthen your loan portfolio and reduce time spent on collections — all with minimal tech lift needed to go live.

To learn more about Payment Guard Insurance, visit https://www.trustage.com/payment-guard.

00:02:44 – Q1 Bank Earnings Released

00:18:21 – Tokenization

00:35:44 – The Federal Home Owned Bank

00:55:04 – Private Credit

01:04:32 – Go Off Kiah! 

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Follow Steven: 

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Another week, another consent order.  

Welcome back to BaaS Island, where regulators keep throwing more bodies at the problem, hoping something will work.

Fintech Business Weekly’s Jason Mikula chats with Alex about the latest consent orders for Piermont and Sutton, as the duo debate whether or not “direct” has lost all meaning. Is it possible to really go “direct” from a fintech company to a bank without middleware? Too much regulatory authority has pushed banks away from doing everything except for technology, so in what form do regulators really want BaaS to survive in this current climate? 

Then, the guys debate whether or not 15% of American households actually use Chime. According to Ron Shevlin’s latest article for Forbes, Chime is poised to IPO with 38 million customers, on par with the likes of Wells Fargo. Does the math… math? Because the math certainly seems to be generous math…

Meanwhile, states want to protect their residents from out-of-state banks charging interest rates above state usury caps. Sure, it sounds like a good thing, but is it actually a good thing for consumers? 

And later, Alex and Simon talk about the misuse of the FDIC logo and the uptick in fintech Twitter trolls. Why can’t we all just get along? Or at the very least, why can’t we all just say nasty things on Twitter without the protection of an anonymous handle? 

01: 45 – BaaS Island

22:15 – Chime

42:27 – Trade Groups vs. Colorado

53:30 – Misusing the FDIC Logo and Debating with Twitter Trolls

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Follow Jason:

Newsletter: https://fintechbusinessweekly.substack.com/

LinkedIn: https://www.linkedin.com/in/jasonmikula/

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This week, Alex is joined by Gabby Cazeau (Partner at Harlem Capital) and Emily Man (Partner at Primary Ventures) to workshop some theories about the future of fintech. 

With open banking rules for the U.S. being finalized this year, it’s clear that cashflow underwriting is about to have its time in the sun — do we have the necessary infrastructure in place to fully capitalize on it?

Then, Alex, Gabby, and Emily dive into the increasing concerns surrounding fraud and identity due to the rise of AI. Is there a better way to develop solutions other than playing a game of Whack-a-Mole each time problems pop up? The crew noodles on some potential solutions worth considering.

Plus, what role can LLMs play in helping to increase automation in accounting? And what the heck are shadow banks? Learn why these institutions are responsible for managing risks that regular banks don’t want to take on, and what it may mean for the way we think about underwriting and portfolio management solutions.  

1:47 Workshopping Fintech Theses

2:53 Open Banking 

15:28 Fraud Solutions

28:14 Accounting and Tax Automation

36:44 Shadow Banking

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Follow Gabby: 

LinkedIn: https://www.linkedin.com/in/gabriellecazeau/

Twitter: https://twitter.com/gabbycazeau?s=21&t=1x8HDmFw3LAfIx3yYgYFDQ

Follow Emily:

LinkedIn: https://www.linkedin.com/in/emily-man-02a1a486/

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Simon Taylor’s back on the podcast and he’s excited (but oh so exhausted) to be talking about some of fintech’s most promising startups with Alex.

First up on the docket, is Chipp.ai the next Shopify for AI? As a platform offering to build custom AI prompts, can Chipp.ai help freelancers productize themselves? Since the rise of AI, freelancers have needed to gain greater leverage over their unique set of skills to fit market demand—will this be the solution to weaponize them?

And as if there weren’t enough apps competing to become the next Shopify of (fill in the industry), Simon and Alex are tackling Whop, the Shopify-like marketplace connecting buyers and sellers to sell entrepreneurial opportunities on the internet. Want a marketplace for learning how to day trade? Whop’s on it. Need a community where you can learn how to become an influencer? Then Whop’s your homeboy. Need a place where you can’t be entirely sure you didn’t just enroll in an influencer Ponzi scheme? Then call us cynical elder millennials, but Whop may not be right for you (because it’s definitely not right for us). But it is right for someone, so maybe there’s hope yet?

Then, Alex and Simon discuss the one company out there that’s not looking to become the next Shopify of anything, Revenew. Is the platform, which is helping companies to manage complex payment flows by providing a complete payment breakdown, a brilliant ploy or way too niche to succeed? 

Plus, what’s the deal with NayaOne’s unique “Sandbox as a Service” approach? Can NayaOne actually help to eliminate the massive amounts of work that go into finding new fintech partners? And later, Simon manifests building the next Moody’s and Alex ruminates on how to solve the reluctance of Buy Now, Pay Later to share their data with credit bureaus. 

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Follow Simon:

LinkedIn: https://www.linkedin.com/in/sytaylor/

Substack: https://sytaylor.substack.com

Follow Alex: 

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Twitter: https://www.twitter.com/AlexH_Johnson

Just because Alex is finally leaving Las Vegas, doesn’t mean he’s escaping the banking desert back in Montana. And for that matter, neither are the vast majority of Americans. This week, he and Bank Director Editor Kiah Haslett discuss the growing impact that closing bank branches have had on rural communities— what are these “banking deserts”? And what really happens when online banks are all that’s left in a town?  

Also… Did you forget whose anniversary it is today? Happy 1st SVB collapsiversary! Alex and Kiah reflect upon the landmark news story that brought “Fintech Takes” into the limelight. How have things in banking changed since SVB first announced its failure? More importantly—have they changed since its collapse? 

Plus, with BaaS regulators cracking down, what happens when people with new ideas can’t meet the minimum barriers to entry in BaaS anymore? Are we witnessing the death of BaaS innovation? Alex and Kiah discuss what tighter regulations could mean for the future of the BaaS market.

And stay tuned as later Kiah and Alex tackle the convenience store in North Dakota who claims the Durbin Amendment is harming them and Kiah unleashes some harsh truths that Congressional leaders need to hear. 

Don’t forget to download Kiah’s report on Generative AI here!

00:04:35 - Kiah’s Bank Director Report on Generative AI

00:06:52 - Happy SVB Failure Day!

00:21:51 - BaaS’s Evolution

00:39:20 - Capital One vs. Discover Quick Take

00:41:00 - Corner Post vs. the Federal Reserve Board

00:45:41 - An Unanswerable Question

01:14:44 - Go Off Kiah!

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Follow Kiah:

LinkedIn: https://www.linkedin.com/in/khaslett/

Twitter: https://twitter.com/khaslett

Follow Alex: 

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Twitter: https://www.twitter.com/AlexH_Johnson

On this week’s episode of Fintech Takes, Alex is joined by international man of mystery and publisher of Fintech Business Weekly, Jason Mikula, along with the Ghost of Fintech Future and cruise director of New York Fintech Week, Jon Zanoff. 

First up, the guys discuss the latest in the Capital One/Discover deal and debate the nature of mergers and acquisitions. Are M&As inherently bad for fintech? How do they impact innovation and why are consumers usually the victims of consolidation? They break down the ways that M&As affect the competition cycle and ponder what the Capital One/Discover deal means for the larger credit card industry.

Then, the guys take a trip back over to BaaS Island where things have devolved into a “Lord of the Flies” situation. Alex, Jason, and Jon unpack Lineage’s latest consent order with the FDIC and discuss why regulators are so obsessed with fast deposit growth. Which leads them to ask the question—exactly what standards should we be measuring BaaS bank size by? 

Plus, think your founder is bad? Meet the founder of Zera who raised $2.2 million from investors only to use it on… horseshoes and tropical fish? And later, Alex tries to determine just how much inflation has affected the Tooth Fairy’s pricing structure and Jon reveals what he’s looking forward to most about New York Fintech Week 2024.

And if you haven’t already, be sure to sign up for New York Fintech Week 2024 and receive 15% off with Promo Code BAASISLAND.

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Follow John: 

LinkedIn: https://www.linkedin.com/in/jonzanoff/

Website: https://empirestartups.com

Follow Jason:

Newsletter: https://fintechbusinessweekly.substack.com/

LinkedIn: https://www.linkedin.com/in/jasonmikula/

Follow Alex: 

YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos

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Twitter: https://www.twitter.com/AlexH_Johnson

Founding a startup is the thing so many fintech entrepreneurs dream about. So what happens when that dream turns into a nightmare? 

In this special crossover series with Breaking Bank’s Jason Henrichs, Alex and Jason are joined by Matt Harris, former founder and CEO of Bloom Credit, and founder/executive coach of TwentySeven Nine, to discuss the challenges and emotional roller coaster that founders face in the startup world. 

Matt shares his story of startup success and burnout, revealing why the journey to foundership, for him, was akin to eating glass. Why did he choose to step down from his role as CEO of such a promising startup? 

Matt unpacks how the unhealthy, codependent dynamics between investors and founders play a huge role in founders’ mental health and reveals how he found a new purpose in helping others reshape their personal work-life boundaries. Hear how he helps others like himself to redefine past trauma and create a healthier, more sustainable workplace for all, and discover why Matt believes that failure doesn’t have to be the end of the story.

00:03:39 - Entrepreneur's Journey: From Success to Struggle

00:09:53 - Transitioning from Infrastructure to Entrepreneur

00:14:13 - Stepping Down from Bloom

00:24:07 - Importance of the Journey in Entrepreneurship

00:27:37 - Navigating Vulnerability in Startup Funding

00:29:11 - Understanding the Difference Between Therapy and Coaching

00:33:08 - Navigating Investor Feedback as a Founder

00:35:22 - Understanding Codependency in VC Relationships

00:42:33 - Challenges in Raising Business Funds

00:43:47 - Helping Founders Manage Burnout Successfully

00:54:17 - Navigating Failure: Embracing Acceptance and Growth

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Check Out Breaking Banks:

Apple: https://podcasts.apple.com/us/podcast/breaking-banks/id641357669 

Spotify: https://open.spotify.com/show/4mhqSxyBCHZ1wTQwXlAvCG?si=2964cce20998440e 

Follow Matt:

LinkedIn: https://www.linkedin.com/in/mattdharris113/

Website: https://www.twentysevennine.co/

Follow Jason: 

LinkedIn: https://www.linkedin.com/in/jasonhenrichs/ 

Follow Alex: 

YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos

LinkedIn: https://www.linkedin.com/in/alexhjohnson

Twitter: https://www.twitter.com/AlexH_Johnson

Let’s face it—profitability is in vogue in fintech again. 

So this week, Alex is mixing it up by taking a deep dive into the most reliably profitable business models in financial services. Which models can we glean lessons from? And which, if any, have repeatable processes worth considering?

Jared Franklin, fintech consultant and the master of waxing poetic about fintech business models, and the author of the Popular Fintech newsletter, Jevgenijs Kazanins, join Alex to break down three of their favorite business models in the fintech ecosystem, starting with ServiceTitan, a software company catering to home services businesses. They discuss ServiceTitan's multifaceted business model, including subscription fees, financial services, and professional partnerships, highlighting the potential for profitability beyond traditional fintech sectors. 

Then, the guys go over American Express's unique business model, pondering if Affirm might be trying to steal a few moves from AmEx for themselves. How can AmEx continue to make its network broader so that value continues to accrue for its customers in a way that makes sense? 

Plus, find out more about The Bancorp's approach to BaaS and its balance sheet optimization strategies to drive its super high return on equity ratio.

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Read “Built to Last”

Amazon: https://www.amazon.com/Built-Last-Successful-Visionary-Essentials/dp/0060516402

Follow Jared:

LinkedIn: https://www.linkedin.com/in/jaredfranklin/

Blog: https://www.jaredfranklin.com

Follow Jevgenijs:

Newsletter: https://www.popularfintech.com

Twitter: https://twitter.com/jevgenijs?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

Follow Alex: 

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What happens when entrepreneurs have to face down the most difficult decision there is — knowing when it’s time to sell, shut down, or exit? 

In this special crossover series, Alex joins Breaking Banks’ Jason Henrichs for candid conversations with fintech leaders who have experienced the loss of their company. This week, Alex and Jason talk with Shamir Karkal, CEO of Sila and former Co-Founder of Simple, which was acquired by BBVA in 2014.  

From the early days and pain points of launching Simple to the eventual dismantlement of it by PNC in 2020, Shamir describes his journey of “wandering through the wilderness” and finding his sense of identity and place in the world again. Is the founder mentality only for the young? Shamir reflects on how his hero complex and founder mentality have evolved into a more holistic approach as he enters his 40s. 

Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/

And for more exclusive insider content, don’t forget to check out my YouTube page.

Check Out Breaking Banks:

Apple: https://podcasts.apple.com/us/podcast/breaking-banks/id641357669 

Spotify: https://open.spotify.com/show/4mhqSxyBCHZ1wTQwXlAvCG?si=2964cce20998440e 

Follow Jason: 

LinkedIn: https://www.linkedin.com/in/jasonhenrichs/

Follow Shamir:

LinkedIn: https://www.linkedin.com/in/shamirkarkal/

Follow Brent: 

LinkedIn: https://www.linkedin.com/in/brentfree/

Follow Alex: 

YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos

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Twitter: https://www.twitter.com/AlexH_Johnson