Jouk Pleiter, CEO of Backbase – Bootstrapping to €2.5 Billion, Scaling Worldwide, Simplifying Banking Technology

Summary

Fintech Leaders Podcast: Jouk Pleiter, CEO of Backbase – Bootstrapping to €2.5 Billion, Scaling Worldwide, Simplifying Banking Technology

Host: Miguel Armaza
Guest: Jouk Pleiter (CEO and founder, Backbase)
Date: November 5, 2024

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Episode Overview

This episode of Fintech Leaders dives deep into the journey of Jouk Pleiter, CEO and founder of Backbase—a global fintech powerhouse transforming banking infrastructure. Pleiter shares how he bootstrapped Backbase from its 2003 inception to €2.5 billion valuation, why product pivots and vertical focus defined their success, and the key lessons in scaling, leadership, and modernization of banking technology. The discussion balances tactical advice for fintech founders, cultural philosophies, and insight into the state and future of banking tech.

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Key Discussion Points & Insights

1. Bootstrapping Backbase: Origins and Early Strategy

[02:25 – 04:49]

• Motivation for Bootstrapping:
  Pleiter’s previous negative experience with venture capital seeded his determination for independence:
  "I was really starting another company, but we had a lot of stuff there with venture capital. So it was actually kind of a negative experience. …I really felt like I cannot control my own future." (03:00)

• Early Tactics:

  • Started with B2B, doing services and website projects for cashflow.
  • Separated short-term “cashflow gigs” from long-term product ambitions.
  • Leveraged grants for non-dilutive growth.
  • View on frugality: "You get a frugality. I knew from previous experiences you need to separate... But you need to get [cashflow]." (03:20)

• Key Lesson:
  Bootstrapping means slower growth, but instills discipline, creativity, and scrappiness.

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2. Evolving Product and The Power of Vertical Focus

[04:54 – 08:32]

• Initial Product:
  AJAX developer tooling in early 2000s—but open-source competition forced a pivot.

• Pivots:

  • Moved to “customer experience portals” (aggregation of siloed information).
  • Eventually focused exclusively on banking as the core vertical, following Geoffrey Moore’s "Crossing the Chasm" beachhead strategy.
  • Pleiter: "We decided like we need to probably pick a vertical… it became quite apparent... the banking one was the most promising one." (07:24)

• Reason for Banking Focus:
  Large market, healthy deal size, high frequency and intimacy of banking interactions—making it compelling for specialized software innovation.

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3. Scaling Internationally & Building Teams Globally

[11:14 – 14:45]

• International DNA from Day One:

  • English as company language.
  • Global marketing via LinkedIn/Google.
  • “You just need to behave like what you want to become.” (11:28)

• Serving 150 Banks in 50–60 Countries:

  • Initially ran everything from HQ with heavy travel.
  • As scale grew, banks wanted local presence—Backbase established “hubs” and empowered local leadership.
  • "We basically got advice… please establish local hubs especially with your services and your delivery and your customer success organization." (13:38)

• Playbook:
  Build centralized expertise, then selectively localize and decentralize for customer closeness.

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4. Core Problem: Modernizing Bank Technology

[14:51 – 17:16]

• Legacy Challenge:
  Most banks run decades-old, siloed, channel-centric systems (branch, internet, call center, etc).
  Pleiter: "It's a very bank centric inside out model...every decade, but they are created in isolation.” (14:53)

• Backbase’s Solution:

  • Replace siloed channels with a “system of engagement”—an orchestration platform that decouples customer experience from backend, allowing for rapid, journey-centric innovation.
  • "Instead of having channels, we're going to kill channels… an orchestration platform like Uber or like Netflix, just one platform." (15:32)

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5. Progressive Modernization & Fintech Integration

[17:16 – 19:28]

• API-First Approach:

  • Expose legacy systems via middleware/API gateways to “preserve systems of record.”
  • Integrate with modern fintech-as-a-service (KYC, AML, fraud detection) through open APIs.

• Modular Transformation:
  “You don't have to bite the elephant in one go. You slice and dice it… It's called progressive modernization.” (18:47)

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6. Successfully Selling to Banks: The Change Maker Thesis

[19:29 – 22:59]

• Identify Change Makers, Not Status Quo Defenders:

  • "Our product is change, not status quo… create critical mass with change makers and preferably decision makers that have a changemaker mindset." (20:21)
  • Use research and networks to find “trigger events” and transformations in banks.

• Account-Based Focus:
  Target specific institutions and build deep, lasting relationships.

• Timing Is Everything:
  Success depends on aligning with the right moment in a bank’s change cycle.

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7. Leadership & Scaling: Reinventing Yourself

[23:23 – 27:15]

• Chapters of Leadership:

  • Pleiter breaks company growth into sequential “chapters” (3-5 years).
  • "Every five years, do I still like it? Can I do this? What is the type of team I need around me?" (23:41)

• Adapting Leadership, Building Culture:

  • Early on, culture is lived not written; later, explicit values and behaviors become vital.
  • "Today our culture is still like, can do, let's make it happen...collaborate as one...But as you scale, you have to make it explicit." (25:49; 27:15)

• Scaling Challenges:

  • Difficulty but necessity in evolving leadership teams.
  • Importance of embedding company values into recruitment, performance, and promotion.

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8. The CEO Role & Communication Style

[28:48 – 30:25]

• Be True to Your Style:

  • Pleiter: "I think every CEO has a style, so I wouldn't say it's a prerequisite...stay true to who you are and try to work with the assets you have." (28:58)

• Banking Context:

  • Straight talking is valued—with patience and diplomacy.
  • "A huge level of patience and a huge level of diplomacy in working with clients." (29:25)

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9. Why Raise External Capital After Bootstrapping?

[30:25 – 32:51]

• Rationale for Fundraising (2022):

  • Company had grown large with operational responsibility for clients’ cloud infrastructure.
  • Wanting a “fortress balance sheet” for stability; also opportunity for M&A consolidation.
  • "It would be good actually to fortify our balance sheet just in case something would go wrong...and opportunities to do some consolidation in the market." (30:35)

• Choosing an Investor:

  • Sought subject matter expertise over “spreadsheet investors.”
  • "…with the Motive people who clearly are ex-operators...very respected business leaders that can act as a sparring partner…” (31:39)

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10. Radical Thinking in Banking—Lessons from Elon Musk/Twitter

[33:27 – 36:00]

• Applying First Principles:

  • Admiration for cutting through legacy, “cut the bullshit” thinking.
  • "Any bank...can learn from being more bold and more brave to do these things. But like many people will not execute...if you don't have that leadership style, nobody will try it.” (33:39)

• Banks’ Inertia:

  • Deep resistance due to regulation, habit, vested interest.
  • “A lot of people have a vested interest to keep [legacy] running...So you have to be very brave.” (34:22)

• Backbase’s Bold Claim:

  • “I think we can run the technology stack of any bank at 10% of the cost. That's a very bold statement..." (35:09)

• Not Just Orchestration—Massive IT Simplification:

  • "With the Backbase platform you can replace 400 proprietary systems into one platform. Absolutely." (36:17)

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11. The Future: Efficiency, New Models, and Progressive Banking

[38:05 – 39:29]

• Fintech Efficiency:

  • Reference to Wealthfront’s $1M+ revenue per employee vs. legacy institutions.
  • "The traditional banking model will not survive... They're basically in a legacy trap…legacy technology, legacy culture…but with progressive leaders, you can, you have the right culture." (38:20)

• Modern Infrastructure Enables Change:

  • Cloud, APIs, fintech services, and white-label platforms now make transformation feasible for any ambitious bank.

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12. Book Recommendations & Final Thoughts

[39:29 – End]

• Most Recommended Books:

  • Crossing the Chasm by Geoffrey Moore
    “It’s the ultimate book that helps you...find product markets.” (39:39)
  • The Lean Startup by Eric Ries
  • Good to Great by Jim Collins
    (Now resonating more as Backbase scales.)

• Closing Sentiment from Jouk:
  "Great. Thank you Miguel, and it was great to be here. Thank you." (40:37)

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Notable Quotes

• On Bootstrapping:
  "You get a frugality. I didn't see it as a handicap, I just saw it as a game and as a positive thing...The only downside is it takes a little bit longer." – Jouk Pleiter [03:20]

• On Pivoting and Focus:
  “We need to probably pick a vertical… and the banking one was the most promising one.” – Jouk Pleiter [07:24]

• On Finding Change Makers in Banks:
  "Our product is change, not status quo… you really need that support at the C-suite and below to drive this change." – Jouk Pleiter [20:21]

• On Modernization:
  "You don't have to bite the elephant in one go. Right, you slice and dice it." – Jouk Pleiter [18:47]

• On CEO Style:
  "Stay true to who you are and try to work with the assets you have." – Jouk Pleiter [28:58]

• On Boldness and Radical Change:
  "Any government, any bank, any organization can learn from being more bold and more brave to do these things. But many people will not execute against it…" – Jouk Pleiter [33:39]

• On Backbase’s Impact:
  "With the Backbase platform you can replace 400 proprietary systems into one platform. Absolutely." – Jouk Pleiter [36:17]

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Timestamps for Key Segments

• Bootstrapping origins & first pivots: 02:25 – 08:32
• Europe/Amsterdam ecosystem, international scaling: 09:30 – 14:45
• Banking tech: architecture and modernization: 14:51 – 19:28
• Selling to banks, change makers: 19:28 – 22:59
• Leadership evolution & culture: 23:23 – 27:15
• Capital raise & funding lessons: 30:25 – 32:51
• Lessons from Musk/Twitter, radical banking change: 33:27 – 36:00
• Backbase’s role in simplifying banking IT: 36:00 – 38:05
• Books & closing: 39:29 – End

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Memorable Moments

• Jouk’s embrace of “chapter thinking”—seeing CEO life and company as a sequence of five-year reinventions.
• His bold assertion that modern tech can reduce banking IT costs by 90%.
• The frankness about finding, and sticking with, clients and employees who are genuine change makers—not just going through motions.

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For Listeners Who Haven’t Tuned In…

This episode is a masterclass in long-haul entrepreneurship, transformative leadership, and the complex reality of bringing modern technology to one of the most entrenched, risk-averse sectors: banking. Jouk Pleiter’s journey—with its pivots, staging, vertical focus, and international scaling—offers hard-won lessons for founders at any level, while his unfiltered perspective on modernization, culture, and tech gives plenty of food for thought for incumbent bankers, fintechs, and investors alike.

Transcript

[A]

I'm a big believer is that stay true to who you are and try to work with the assets you have. Stretch yourself by learning and experience. But like I think you have to work with your natural capabilities and tune them. I think any government, any bank, any organization can learn from being more bold and more brave to do these things. But like many people will not execute against it because if you don't have that leadership style, nobody will try it. So profitable that apparently it makes sense to keep these systems running foreign.

[B]

And welcome to Fintech Leaders coming to you from New York City. I'm your host Miguel Armasa. I'm a co founder of Gilgamesh Ventures.

[C]

A venture capital fund.

[B]

The Back's early stage fintech entrepreneurs. If you enjoyed this conversation, I invite you to leave a review on Apple or Spotify so more people can learn about Fintech leaders. In this episode, I sit down with Yok Plater, CEO and founder of Backbase, a global fintech that's modernizing software and infrastructure for banks around the world. Founded in 2003, Backbase was bootstrapped to over 200 million euros in annual revenue until they raise a single private Equity round over 120 million Euro from Motif Partners in 2022. Valuing the company at an impressive 2.5 billion Euro. They have now grown to over 300 million in ARR. They work with 150 banks and continue to expand across the world. We discussed bootstrapping the company and why they eventually decided to raise external capital.

[C]

Successful strategies for fintechs trying to sell.

[B]

Software to banks why company leaders should think in 5 year chapters Amsterdam as a tech and fintech hub and a lot more.

[C]

I want to start by hearing a little bit about your story.

[B]

I would like to hear how you.

[C]

Started back basically bootstrapping the company, right? Was it because you did not have access to capital? Was it because you didn't know venture capital was available? Or was this a very conscious choice?

[A]

It was out of necessity, right? So I was really starting another company, but we had a lot of stuff there with venture capital. So it was actually kind of a negative experience. It was really bad and it was really emotional at the time. I really felt like I cannot control my own future. These customers we have, they are not serviced well. So I decided to kind of go back to basics. That's backwards. And start a new company. And if you do that, I was kind of deeply motivated to do it without external capital.

[C]

And so tell us about the differences between some obvious differences. You don't have capital. How did you put this into practice to actually get the ball rolling.

[A]

Yeah, well, that, that was very easy because, well, of course then you take on a stance and you say, I want to do this without it. And. But then if you take that mental position, then also you are very open to a. You would like to kind of find a great idea, you want to find product markets, but you also realize then, like, probably the best thing to do is to go for B2B, because then I can also start with a services element. So. And I have to say, in the earlier thing, we always kind of separated, let's say, our North Star vision for the product from, let's say a side hustle where we were doing basically services gigs. And in all fairness, in the first year of Backbase, we were building websites for beer companies where we're doing anything just to kind of get cash flow. And that was totally fine because that cash flow and that kind of margin you generate over there, we could kind of invest that in our mission. So you get a frugality. I knew from previous experiences you need to separate, let's say the cash flow stuff, which is maybe tactical, it's not your end game, but you need to get it. And then here in Europe at the time, you were also able to kind of get some innovation grants. So you get very scrappy, you get very creative to find other sources of growth capital. You need to make it, you need to earn it yourself. You need to be a little bit more creative in the grand system. And in those early days, that's what we did. I was very motivated. I didn't see it as a handicap. I just saw it as a game and as a positive thing just to get it going. The only downside is it takes a little bit longer. You just, you, you cannot kind of immediately go for a dream. You just need to take a couple of extra years to kind of grow into it.

[C]

On that point, how, when you got started, what was your plan?

[B]

How long did you.

[A]

Yeah, the original idea behind Backbase, and that's already 20 years ago. It was kind of at that time, basically our original founding idea was technology idea to modernize the user interface. It's a long time ago, it's 20 years ago. But like at that time, the web browser was like you're reading a comic book, like you're clicking on a link and then would reload a new page. So everything in the page was actually server side rendered. And then my co founder at the time, he was our CTO and he had, he was starting one of One of those first kind of innovators that was Starting to use XML and JavaScript to do a partial page refresh. Now that's commonplace, you go to Gmail like any app. So I think our original technology vision was perfect. But we very quickly ran into a situation where there were these kind of free open source libraries where that was our commercial product. It's people were starting to coin this technology AJAX, asynchronous JavaScript and XML detail. But there became many Ajax libraries for free open source. So three, four years into the company and we were already grew the company to 50 people. So it was kind of, you had a lot of responsibilities already at the time for people that put their trust in Backbase. So that was very difficult. It was one of our most difficult moments in time because how do you compete with free, how do you create a commercial model if you have to compete with open source libraries? So yeah, that was kind of also forcing us to kind of go into basically figuring out how to biz it from competing with with open source into something that is more sustainable and why financial services? Well the story of it's like a little bit like so quickly. Phase one of Backbase was AJAX developer tooling. Not a good market and we moved into what we call a customer experience portal. So we took the core technologies we had, were able to kind of add additional technology steward and then it became more meaningful. Was not just developer tooling but it was basically a next generation lean portal. And with that portal we basically said like hey, the problem many businesses face is that you have information in all sorts of different silos. How do you bring it together in one screen? So that was kind of the next evolution of background, especially the first pivot. And that really kind of put us back on a healthy growth trajectory and you got a healthy license value, etc. But at the time we were having portal customers in telco, in health care, in banking and we still felt a little bit vulnerable. Like you're still kind of, if you go to a particular industry, your portal is relatively empty. It doesn't really, does doesn't really solve the real business process for that particular industry. So we got a feeling like hey, we need to do one more pivot to really make it hardcore success and kind of real product market fit from through that lens. So we decided like we need to probably pick a vertical and it's a little bit in line with maybe the book Geoffrey Moore Crossing the chasm. If I pick your beach hat and I read the book many years before already, I Was thinking like how can I apply this to back base? And then it became quite apparent that like picking a vertical would be a great beachhead strategy. And we took our time, it took two, three, four years to really kind of get conviction that out of all the verticals the banking one was the most promising one. And I think that had to do with it's a large industry. The ticket size of the software deals is typically relatively healthy in banking. But also the application itself, like Internet banking, it is high frequency and it's high intimacy. Right. If you compare that with insurance, how often do you, at the time you don't really go to an insurance portal. But already at the time Internet banking was very popular. So I think that kind of gave us full conviction. This is now 10 years ago, like 2012, 13, 14, that we really said okay, let's really go all in on the banking vertical.

[C]

And I'm curious, did you have to fire your customers from other verticals?

[A]

Well, I don't think we are in a position to fire customers. We were very grateful for the cash flow but I do realize I was sitting there at the time with our CMO at the time. And I think in 2013 we decided to change our homepage from a customer experience portal into an engagement banking platform. And at that time still 50% of our revenues were non banking customers. So that, that at the time was not firing them, but at least we had to choose color to the market and say like we're going to go in this direction and yeah, so you kind of, you have to show your intent and your direction. And we've been able to service many of these non banking customers for many years but over time they of course they churn and they go in, they take care of their own future.

[C]

Yeah. And so maybe share a little bit about building in Amsterdam in Europe.

[B]

And I know there are plenty of.

[C]

Great companies being started in Europe, plenty of fintechs getting started in Amsterdam, but at the same time Europe has been kind of staying behind if you compare to the US innovation. So how have you been able to.

[A]

Yeah, I think there's actually major progress in Europe. You think take things in a historical perspective. I really think like 20 years ago there was barely no ecosystem. At the time you had a few companies that were kind of doing some stuff, but maybe in Europe at least the Nordics, I think with Skype and a few like that was way more material. So Holland or Amsterdam was certainly not on the map. And I think that kind of, I see very healthy progress how that has been developed in the last 10 years how the ecosystem. So maybe it's by coincidence that we have companies now like RTM, Backbase, Booking.com, but they kind of all came from that era and they got critical mass, which is great. I think what you also see is that you see a lot of, let's say international US companies moving to Amsterdam to establish their European development centers here. So I think also in the market it was a blessing and a curse. But you saw basically more talent because everybody is recruiting expats from abroad into Amsterdam. So that was I think good for the larger market. But everybody's also stealing from each other. So we had our moments. That that was. That competition was quite intense and was not easy. But overall I think Amsterdam and I think Europe is much has mature. Of course it's not at the level of the US or Silicon Valley, but I think it made. I'm very pleased and grateful for the progress we've been able to make.

[C]

And at what point did you start considering international expansion? Because today you are serving how many markets?

[A]

We are serving around 150 banks, individual banks around the world and they are pretty much in every continent. So I think in total it's between 50 and 60 different countries. I think from day one we decided with Backbase to go to be an international company. So from. Although it was founded in the Netherlands, our default language from day one was English. The exposure, the website from the. And I knew that from the previous experience you just need to kind of behave like what you want to become. So you go immediately also in with Google advertising, we were kind of proclaiming our value proposition on LinkedIn, on Google etc, just to go out there and do your growth hacking. So for us especially at the moment you go into banking that is such a specific market, you basically are targeting around 5,000 institutions. So you can be pretty, pretty focused there. And the whole idea is of course if you build worth of mouth and you have to build reputation. So now from day one it was international and basically it meant that we had to kind of get into the plane and do a lot of traveling and you come in a lot of exciting countries where you think okay, how is this going to play out? But yeah, if you go for a vertical, I think that goes back to Jeffrey Moore. If you go, if you pick your niche market and you put all your energy, your product roadmap, your positioning, everything, you can have a shot to kind of become a real specialist. And that deep expertise, that deep specialization has then moat if you are competing On a global scale. So interestingly enough we have been very successful in out competing local alternatives with an international company.

[C]

That's interesting. I guess if you're specialized in financial services, whether you are, I'm going to make up some countries in Pakistan, Brazil or the Netherlands. You're speaking the same language right with your customers and it's the language of the industry, financial services. But at the same time, I mean you, I'm sure you've built local teams or you're partnered with local talent. What have you learned about building a global.

[A]

Yeah, so I think there's different phases. Like the first phase you really do everything from headquarters and we have to do an institution amount of travel but then you get critical mass and people say we actually would like you to be much more closer to us. Ideally you are in our. Ideally you're in Manila or you are in Sao Paulo or like you are in New York. Right. So they really want you to be closer. So I think that's kind of about six, seven years ago. That was really the signal from the install base at the time. Please establish local hubs especially with your services and your delivery and your customer success organization. Be with us and let's work together. And we basically got advice. We basically just responded to their demands and I think right now we have around 16 different hubs around the world where we basically get with the idea of how do we kind of create a local back based franchise. How do you enable local people to be entrepreneurial and basically own a book of business. They are responsible for 4, 5, 6, 8 large banks and that's their book of business and it's all about how do you build close relationships with the bank. How do you understand the use cases they have and that you actually deliver on those use cases. What kind of scoring does the customer really give you? Like are you really executing what they are looking for and expecting? It's very safe. It's kind of basic. Right. But if you do that well then you build trust and you can do more together.

[C]

Maybe can you share a little bit about the main products you are giving your customers today?

[A]

Yeah, the if you think about backbase and let's kind of. Okay, let's start with the problem. I think the problem with pretty much every bank around the world is that the architecture they have created over the last 50 years is very siloed and it is basically channel centric. So you've got a bunch of legacy core systems and payment rails and then they have the branch, the call center, the atm, Internet, mobile and all these different channels are created pretty much every decade, but they are created in isolation. So it's almost like it's a very bank centric inside out model where they say, ah, great new technology, we've got another channel to push stuff to our customers. So it's, it's like we've got products and how do we push it? And I think the backbase point of view, because we were coming from the portal world who said like, hey guys, actually maybe it would make sense to do this and turn it around to do a paradigm shift, like why not start with the customer and allow them to pull stuff into a single screen. So I think our UI and our portal heritage basically kind of led us to a point of view where we said, okay, that channel model is completely broken. Why not bring it together? And that kind of was kind of, that's what backgrounds just today at scale, where we say we have, you've got your system of records, then we can decouple the channels within a very loosely coupled integration layer. And then instead of having channels, we're going to kill channels, we're going to, we're going to crush them, we're going to replace them with an orchestration platform like Uber or like Netflix, just one platform. And in that platform we can do everything with security, the process, orchestration, the payments. It can communicate with all these downstream systems. But then we can actually, from that Omni channel platform, we can service the end customer, the employees, the call center, the branch. So that's kind of how it evolves into what we call now you've got the system of engagement, system of integration and then the system of record. So the banks can keep the systems of record. You don't, you can hollow them out, but you don't need to replace them. We're not going to do open heart surgery, but where you interact with your customers, that is where you sell with to them and where you service them. So it's servicing and selling. That's where you kind of basically need to orchestrate the customer journey. And ideally you do that on a single platform.

[C]

And tell me a little bit about, I kind of know the answer, but tell me a little bit about the systems that you are working with. I think not everyone understands how messy and outdated sometimes this can be.

[A]

Yeah, well, I could take many angles, but I think what is really important for any bank and probably many of the fintech people here in the audience kind of recognize this. If you have to interact with legacy systems, I think exposing those capabilities that you do not want to replace or you're not able to replace, at least expose them via a proper middleware layer, an API gateway. So I think the integration piece is really important just to make sure that you have bidirectional access to systems of record. So that's kind of how do we preserve these systems of record and how do we kind of get them ready to operate in today's world? Then next to that system of record, you now see with the fintech ecosystem, you see so many powerful capabilities available as FinTech as a service. So from KYC to AML to credit card capabilities, fraud detection, and all these capabilities are basically headless, right? So now think of it. We have our legacy capabilities. They are available via APIs. The whole FinTech capabilities are available via APIs. That's what we call Grand Central. It's kind of, it's kind of our integrated. It's kind of basically all the Rails comes together and we bring everything together in a standardized API, which is super powerful. So now you can do anything, you can make any meal because you have access to kind of basically any data or any capability. And then what you then do, on top of that Grand Central you have what we call the engagement orchestration platform. So I think most of the system interactions are actually downstream to the fintechs and to the legacy systems. And you basically need to make sure that you've got the reels so you can compose on top of them. You can do the journey once you have those APIs and the integrations in place, yeah, I think you can just innovate super fast and. But you do that journey centric, does that make sense? And in that way you create online banking, mobile banking. We start to replace legacy branch applications, call center application, like all the legacy siloed, gradually you are replacing them. So it's called progressive modernization. You don't have to bite the elephant in one go. Right. You slice and dice it. And what we found out is you actually do a journey by journey and the journey is basically instant value for the end customer and it is instant value for the bank.

[C]

So tell us about the process that at this point I'm sure you've perfected and that you've learned about actually successfully working with banks.

[A]

Right.

[C]

I'm sure you have to identify some champions and then like you said, it's not. It's a nanoflying thing. You want to go little by little. But working with banks is something that a lot of fintech entrepreneurs aspire to do and also g where people make a lot of Mistakes?

[A]

Yeah, I would say like Banker certainly has not perfected it to be clear. I think it's. We are in a journey to do it better. I think maybe to share it with the audience. Cool. What really proved very important for us is to figure out like are we really working with people that would like to make change or do we interact with people that actually are for the status quo? The nature of our product is change, not status quo. So we basically get a lot of political stuff and pushback by people that are for the status quo. And that's just a given. I think also if you are a software or a fintech company, you need to deal with that to a degree. But I think the most positive way to deal with it is actually to kind of create critical mass with change makers and preferably decision makers that have a change maker mindset. I think that's the best positive advice I can give because you really need that support at the C suite and below to drive, to drive this change. It's not per se about fintech or about software. I think it's about basically re architecting the bank and making the bank. So I think it's, especially in the context of backgrounds, it is existential for the bank. Like do I continue to operate in my current operating model with all the legacy, with all the silos? And you basically stay in that legacy trap and a lot of people are making a living out of that legacy trap and it's kind of their baby and they're protecting it. Versus okay, are we going to move to a platform model which is 10 times more efficient? It is really 10 times more efficient but it needs to have the strategic leadership to drive that through a transformation model. And sometimes that is great and sometimes that is also a little bit frustrating for us.

[C]

And what have you learned about finding these change makers? Right, because they're not always. No, the title run with change.

[A]

Actually you will be surprised. Like you never know, right from the outside you will discover that in conversations, et cetera. But from a demand chain point of view, we are for instance having a function in backbase that look like just kind of change in leadership. You can look at kind of when people. So like you look at these trigger events where people make certain announcements, you see these larger transformation programs being reported in annual reports. So I think with a lot of desk research you can already identify like, at least you can get some understanding like what's happening. But ultimately when we grew up, we're now in a model where we have account management functions where people have Target accounts, and they really take care of 10 or 20 target accounts that are not with on the backpack platform yet. You really make sure that you focus on these accounts and you collect as much as possible intel, and that is via public sources. But it's also in the partner ecosystem because it's critical to understand, like, when is the timing right? Timing is everything. You first need to make sure that there is a change program in the first place. Right. And you need to then identify who are the people that are driving it. So it's very labor intense, I can tell you.

[C]

Let's switch gears a little bit. Something that kind of we've talked about in the past is how, you know, you start a business. Obviously at that point, revenue is zero.

[A]

Yeah.

[C]

Then at some point you get to 10 million. Already a big accomplishment.

[A]

Yeah. And.

[C]

And at this point, you. I believe you've crossed 300 million.

[A]

We're about that number. Yes. Correct. Yeah.

[C]

So not a small business by any means. But your role as a leader of the company, CEO, is not the same as back when the company was close to 0 or 10 or even a hundred.

[A]

Right? Yeah.

[C]

What have you learned about reinventing yourself?

[A]

Yeah, I think that's at least for entrepreneurs here in the audience. What I did is kind of. I basically chopped it in kind of chapters, like writing a book, like, probably five years each or three, four, five years. And you basically need to ask yourself the question, like, every five years, like, do I still like it? Can I do this? What is the type of team I need around me? And you go to very pivotal moments in that journey where you have to a reinvent yourself or your style. But also you have to make changes to your team. And those changes are very difficult because you've been working with people for five years, eight years, 10 years. Mm. You're kind of hitting a ceiling together as a group, and you need to kind of move or figure that one out. So those, I think, are the moment, the difficult moments, just to figure out, like, per stage, what is the team composition? And especially with people that have been very loyal, like. Like, how does that work? It's difficult, but, like, ultimately you'll find your way through this. I think right now, being in the fifth chapter, like, we're kind of roughly there. The operating model of the company is completely different. Like, the first chapter is like you're in a speedboat and you can go in any direction. Theory has evolved into portfolio management, where you work with different commercial teams, you work with different product teams, and you work with a leadership team. So it's kind of a more indirect model where you interact with the different leaders of those teams and you have to conduct an orchestrate. Another thing is maybe kind of more recently, I think at scale to do culture. I think you and I also briefly discussed it, how to figure out like. Like how to preserve or be very explicit about culture at scale. Like with 2,000 to 4,000 people, that's.

[C]

Just a whole different ballgame on that point of culture. There are companies, successful and unsuccessful, who get started, and from day zero, they're thinking about culture. It sounds like that wasn't necessarily your case. That came later.

[A]

No, I don't. Making an explicit came later. I think from day one, we've been living culture. Right? You do, because you jump into a plane, you go there, you've got a vision. So today our culture is still like, can do, let's make it happen. Or we always feel like we work in a wolf pack to deliver, make a customer go live. Or like, that was kind of already from day one, our language. So collaborate as one. Just getting these things. Like. But at a given moment, you wake up and you say, like, it's really important. We're going to write it down. So I would like you then write down what you think at that moment is what you're doing. Right. So I don't think we. I think it has to be genuine in that sense. And I think there's also elements, I think, of the personalities of the different people that are in that founding team that are quite, I think, instrumental in defining that culture at a given moment. We had to kind of refine it a little bit more to make these cultural elements, I would say more behavioral. And what I mean with is that you can also say, like, hey, I really. If you do a review discussion with someone, like, hey, this was really can do. Or are we really acting here as collaborators 1. Or are we telling it the way it is? Right. In order to make it better? So I started to learn that a, you have to be explicit about values. But I think ideally the values are also behaviorally so people understand what it means for them and how they can work with it.

[C]

To remember that process or that period of time where you got pulled by maybe someone in your team or you yourself realize, okay, we need to do this. How was that exercise?

[A]

Yeah, it was a cool exercise. I remember actually, it's great question. I remember, like, we were just in a brainstorm room and we hashed it out probably in 90 minutes. We're just like whiteboarding it, putting it down and till today they are there. But like more recently, and this is this year, we started to realize, like, maybe we want to refine some of those, we want to make them more behavioral. We also would like to really kind of make sure that we can really use them in how we recruit or like very clear intent in culture selection, in what type of people entering backbase, very clear in what type of people do we promote and why are we doing that Next to the professional skill sets like the back based codes, the back based knowledge, how do we bring that more embedded? So it is actually one of the topics right now in backbench to basically we go back to our heritage, we go back to our values and we are in the process of making it way more explicit. And the reason is we figured out like, if we do this at scale, maybe just one step back through Covid, the company doubles. So you got a lot of people that are joining the company. And in that period we were not always that conscious about like, are we truly always selecting on values? And we started to realize like, if you've got a large quantity of people and you're not per se solidly explicit about what are your values, then that can be problematic. So we're kind of in a way kind of tuning that or course correcting that a little bit. As in we want to be very deliberate about and explicit so people can choose to be part of that culture.

[C]

You are known for being a straight talker. Do you think that's a requirement for every CEO?

[A]

I think every CEO has a style, so I wouldn't say it's a prerequisite now. I think there are people that are very diplomatic and very effective. So now I'm a big believer is that stay true to who you are and try to work with the assets you have. Stretch yourself by learning and experience. But like, I think you have to work with your natural capabilities and you.

[C]

Know, but being a straight talker in banking is, I'm sure not the easiest.

[A]

It's not a good grade. No, I'm in in that regards. I mean, I've got a lot to learn there. Like, no, it's. You cannot. You have to have a level of a huge level of patience and a huge level of diplomacy in working with clients. So the conversation is more like, hey guys, what we've seen with other banks or what we think would really work in your case, or. But it's kind of recommendations, it's kind of nudges in a certain direction. But like we're not running the bank Right. So they, they absolutely do that within their own pace and within their, within their own cultural value system. But therefore I do think like the change makers within these banks are way close to, to the backbase value. So we see very good chemistry there. So it's maybe a little bit self selecting the type of people you work with on the client side but also with our colleagues and I think self selection at least being clear about where you want to go and what you value. I think that is a powerful thing to do so and enables people to decide if they like it and if they want to contribute to it.

[C]

You started bootstrapping but then eventually you decided to bring on some investors.

[A]

Right.

[C]

What changed your mind? How was that process for you?

[A]

Yeah Miguel, the company became a little bit too big like like we were already kind of approaching 2,200 million at the time and we also had like we started to move all our clients, many of our client operations to the cloud. So you have the full responsibility now to run in a probably one of the most business critical functions that is client facing 24 7. So it was, it's a huge responsibility. So we felt like it would be good actually to fortify our balance sheet just in case something would go wrong. I would have called a black swan. But like you, you've got a very fortress type of balance sheet and there's also opportunities to do as to some consolidation in the market. We thought like hey probably a few of these very niche type of very innovative fintechs they will not kind of operate and get the distribution at sales angle solved themselves but as part of the backrest ecosystem they could really do well. So with, with those two elements are the rational to, to do it.

[C]

What have you learned about kind of fundraising? Because when you go out in the market you meet with a lot of partners to process. How was that for you?

[A]

Yeah, you meet all sorts of people. So ultimately we decided to go with. We were fortunate enough to make a proposition that people there was interest in the market, it was very good interest. So that we were that kind of created a position where we basically said like we would love to kind of get someone that is kind of closest to subject matter expertise. Of course everybody's talking about added value and I think most entrepreneurs here in the call probably will take that with a grain of salt or not. But like I said that doesn't really matter. Personally I was quite skeptical about the added value. But like especially with the motive people who clearly are ex operators with Rob from Capco, with Jeff Tabouki from fiserv with a whole bunch of people like, like very senior, very respected business leaders that can genuinely act as a sparing partner and have the credibility not via the spreadsheet or via whatever the exit story, but running and operating these businesses. So that was kind of appealing. And they also have a very large network of people from their previous, let's say industry experience that bring very deep subject matter expertise. So I'm very grateful that we selected simotive and with a very good relationship. Yeah.

[C]

Good folks at Motive for sure.

[A]

Yeah. So it's kind of also there in a way. It's a vertical private equity in that sense, just like their basis, vertical SaaS company. So that's not explaining it completely, but there are definitely more similarities than with a, you know, a wider private equity approach. Yeah.

[C]

Before I let you go, I want to kind of go back a little bit to talking about banks. Right. And we talked about how you think more companies maybe not replicate, but they should learn from the Twitter Elon Musk example.

[A]

Right.

[C]

I mean, he took the radical approach, got rid of 80% of the company, the site still runs. Right?

[A]

Yeah.

[C]

How can we apply that mentality in banking?

[A]

What are your thoughts here? Well, let's set aside what people think from. Sometimes the name Elon Musk kind of gets all sorts of associations for the audience. But like I think if we focus on just positive aspect of what. What he would do is kind of cut the bullshit, can do first principle thinking. I already think that's critical. So I think any government, any bank, any organization can learn from being more bold and more brave to do these things. But like many people will not execute against it because if you don't have that leadership style, nobody will try it. And there's a lot of forces in place that will protect the status quo. Does that make sense? There's a lot of people that have a vested interest to keep Twitter running like it is in that particular example. The same with our company, my company, a bank. This is just how these things operate. So I think you have to be very brave. If I look at banking, like people will use a lot of arguments. It's not allowed by the regulator. Nobody wants to mess with that. So it's a perfect excuse to never change. Oh, if we touch this system, the bank will collapse. Well, if that's truly like. So there's a lot of kind of that anecdotal stuff around it with a lot of, let's say, argumentation and business case development why these things actually should stay the same. If I look at Breakbase does. We basically spent 15 years now to build a full stack from how we integrate to the core to the fintech. Everything is in place and I think we can run the technology stack of any bank at 10% of the cost. That's a very bold statement and I'm putting it here in a, in a podcast that I really think that's possible. You wonder like, why is it not happening? I think that has to do with change makers and, and a level of leadership to be bold enough to reimagine every customer journey for the bank. And it's just, I'm grateful to see, by the way, that we have more and more customers that actually do it. So it is totally possible. We have plenty with dozens and dozens of cases where people in their own pace, with their own, to be clear, they are absolutely not Elon Musk, but they do it, they do it in their own pace and it takes them four or five years, but they really transform. And so I think that kind of gives us a lot of conviction that the business case is there. It's kind of more the mindset and the type of leadership style to embark. Some people just want to retire. It's a career limiting move. They're not interested. And that's fine. That's certainly not a change maker.

[C]

Does that mean that you're not just the orchestration layer, you're also helping banks and your clients reduce the number of tech providers, suppliers that they use? Because I know thousands.

[A]

I think with the Backbase platform you can replace 400 proprietary systems into one platform. Absolutely. Backbase is about progressive modernization and simplifying of your IT stack. People have dozens and dozens of applications just in the call center. Even in mobile banking, you see all sorts of different horizontal technologies glued together to make mobile banking work. Same with Internet banking. I see customers that the backend for mobile is different than from Internet banking. The branches for sure are completely antique. Call center is different probably and banking is one of the few verticals that are so profitable that apparently it makes sense to keep these systems running and. But there's no rationalization for it. You can absolutely do this with ultimately and I don't want to sold balls and it needs a lot of strong leadership and it needs perseverance and it needs probably five to, let's say five years of execution. But you, you can. And I think that's what you of course see with the revoluts and with the new banks and what you will see with all the challengers. They are doing these Things typically at a fraction of the cost. So what backbacks is like we're not going to compete with banks, but we basically build a greenfield technology stack. Not a greenfield bank, Neo bank, but a greenfield tech to basically give the banks an opportunity. Like, hey, if you want to change and if you have the type of leadership to really transform the bank, here's the thing that can jumpstart you in that transformation. I like. Yeah, you're spot on. It's. You can massively simplify your IT landscape. Massively.

[C]

Yeah. I think in every vertical that we look, there's already some fintech companies making big waves and being built so much more efficiently. I mean, one of my recent guests was David Fortunato, the CEO of Wealthfront.

[A]

Yeah.

[C]

Their revenue per employee is over a million dollars.

[A]

Yeah. For employee. Yeah. Right.

[C]

That's. If you look at the. Their kind of analog version. Charles Schwab. Yeah, they're nowhere near, even though they're.

[A]

Much, much larger reservation now. Mikwell, thanks for sharing that example. So sometimes we make the statement like the traditional banking model will not survive. It's not that banks will survive, but the traditional banking model kind of, with kind of all that inefficiency, with all that duplication, with all that, they're basically in a legacy trap. And it's legacy technology, but it's also legacy, let's say, process structure, maybe a little bit legacy culture here and there, but it's a legacy trap. And with progressive leaders, you can, you have the right culture, you have the right ambition, they want to make the change. And then the good thing today if you wake up, all the cloud capabilities are there, the fintechs are there, the APIs are there, white label platforms like Backbase are there. So I think like maybe 10 years ago that was not the case. You had to do still a lot of. Let's say, I think that's also where companies like Revolut are built from the ground up. These guys had to do engineering themselves. I think in a parallel track. In the last 10 years, companies like backpacks did the same thing, but white label. So if you wake up today and you want to drive change and you want to reduce, simplify your cost structure, it's. It's totally possible.

[C]

Y. Before I let you go, books that you find yourself recommending often, any books that you. I mean, you mentioned cross.

[A]

Yeah. Now Jeffrey Moore crossing the chasm. I'm chatting with him next month. But like, I think that was kind of my. Yeah. Already 20 years ago, I think, like, because it's the ultimate book that helps you to kind of product find product markets. It's Eric Rice, the Lean Startup, I think. Also super powerful even for large organizations. I think these concepts are simple. More recently I go back to Jim Collins. I remember reading those books like, but I couldn't use them because they were for companies of a larger scale. So I remember good to great. I was reading it like it didn't click, but I was reading it my last summer holiday and it suddenly started to make a lot of sense. But probably that correlates with the size of the company. These are all boring business books, guys. So.

[C]

Yeah, you'd be surprised of the audience.

[A]

All right. No, but like, let's say they are the classics and I think they're very good classics.

[C]

Thank you for doing this. I hope we get a beer when I'm in Amsterdam, but never go there. Fascinating stuff. Congrats on all the success at Back Bass and I'm sure the audience got.

[A]

To learn a lot from this. Great. Thank you Miguel, and it was great to be here. Thank you.

[B]

Thanks for tuning in. I hope you enjoyed this great episode with Yok, CEO of Back Bass. If you want more interviews, make sure to subscribe, follow and leave a review on Apple Podcasts, Spotify or whatever you get your shows. It helps and means a lot. If you have any suggestions or thoughts about the show, just drop me a line on Twitter or LinkedIn. Signing off till next week.

[A]

I'm your host, Miguel Almaser.

[B]

The FinTech Leaders Podcast is for informational purposes only and should not be considered.

[C]

Financial or investment advice.