20VC: Revolut Founder Nik Storonsky on When and Where Revolut Will IPO & What Revolut Need to Do to Hit $100BN Valuation

Summary

Summary of "20VC: Revolut Founder Nik Storonsky on When and Where Revolut Will IPO & What Revolut Need to Do to Hit $100BN Valuation"

The Twenty Minute VC (20VC) features an in-depth conversation between host Harry Stebbings and Nik Storonsky, the Founder and CEO of Revolut. Released on December 4, 2024, this episode delves into Revolut’s growth strategies, IPO plans, product development, regulatory challenges, and leadership philosophies. Below is a comprehensive summary capturing the key points, discussions, insights, and conclusions from their dialogue.

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1. KPI-Based Leadership

Approach to KPIs: Nik Storonsky emphasizes Revolut’s KPI-driven culture, highlighting their structured goal-setting process. “We set up the goals for the companies. Usually we have five, six goals a year and then we quantify those goals,” Storonsky explains (04:07). These goals cascade down from the company level to departments, teams, and individuals, ensuring alignment and accountability across the organization.

Performance Reviews: Revolut conducts quarterly performance reviews where employees are evaluated based on their metric achievements, skills, and adherence to cultural values. This rigorous process ensures that the team remains focused and driven towards the company’s objectives.

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2. Distributed Management and Hiring Practices

Managing a Large Team: With over 40 direct reports, Storonsky discusses the importance of hiring excellence. “They should be like a self-guided missile, right? Excellent people, they select the goal themselves. When they press the button, then they reach the goal themselves,” he states (04:53). This approach minimizes the need for constant direction and fosters autonomous performance.

Hiring Excellence: Storonsky categorizes employees into excellent, strong, average, and below average, based on their ability to meet goals independently. He believes in maintaining a high standard by selecting only strong or excellent performers, as those who do not meet expectations within the first three months are unlikely to improve (05:44).

Evolution in Hiring Criteria: Over the years, Revolut’s hiring criteria have shifted from favoring management consultants and investment bankers to prioritizing operational excellence. Storonsky explains, “I was always looking for people who can deliver, right. So it was always execution oriented rather than talk oriented” (07:06).

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3. Scaling the Team: Challenges and Lessons

Mistakes in Scaling: Storonsky openly discusses the painful mistakes made during Revolut’s scaling phase, particularly the overreliance on executive recruiters. “I think I hired 55 through executive recruiters, paid 2 million in fees. I ended up firing 49 or 50 of them,” he admits (07:40). This experience taught him the importance of selective and strategic hiring.

Leadership Evolution: As Revolut grew, Storonsky had to adapt his leadership style. While he acknowledges being inherently friendly, he clarifies that his primary focus has always been on accountability and delivery. “I was always friendly… but I was always forcing people to deliver,” he notes (08:09).

Continuous Improvement: When hiring for unfamiliar roles, Storonsky adopts a learning approach by interviewing numerous industry experts to understand the nuances before selecting the best candidates. This method ensures informed and effective hiring decisions (08:38).

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4. Regulatory Relationships and Banking Licenses

Building a Regulated Business: Navigating the complexities of banking licenses, especially in the US, has been a significant challenge for Revolut. Storonsky shares, “whenever you want to build a bank, you'd rather get a banking license before you have customers” (11:42). This strategy avoids prolonged license processes that become more stringent with a larger customer base.

Enhanced Regulatory Relationships: With experience, Revolut has improved its rapport with regulators. Storonsky emphasizes the importance of clear, data-driven communication over jargon: “Whenever you speak with regulators yourself… you build it yourself… you show data as well that our results are better compared to legacy banks” (13:06).

Cultural Differences in Regulation: Discussing the US market, Storonsky points out cultural resistance to regulation among tech companies, which hampers the efficiency of neobanks. This, coupled with the dominance of credit-driven financial products, makes the US a challenging landscape for Revolut (16:13).

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5. Product Strategy: Successes and Failures

Successful Product Launches: Revolut’s ability to introduce products that achieve rapid growth is a testament to their market fit and scaling capabilities. Storonsky mentions products like Revolut’s business accounts and “Esim” as significant drivers (19:06; 23:02).

Product Failures: Not all ventures have been successful. For instance, Revolut’s attempt to introduce "seller events" competing with credit cards faced poor conversion rates despite the innovative idea. “It competed with loans… but it didn't work for us because the whole conversion funnel was very bad” Storonsky explains (19:46).

Managing Multiple Bets: Revolut runs over 20 product bets simultaneously, with a selective scaling approach. Of the 27 bets launched in the past few years, around five to six failed, while the majority generated significant revenue contributions. “If you look at the whole portfolio, how much money it generates, it's just amazing” Storonsky asserts (21:34; 21:46).

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6. Expansion Plans: US and Latin America

US Market Challenges: Storonsky outlines the obstacles Revolut faces in the US, including regulatory inefficiencies and the dominance of credit cards over debit cards. He believes that Revolut's comprehensive financial services within a single app give it a competitive edge over existing neobanks like Monzo (16:13; 17:18).

Latin America Strategy: Revolut has proactively obtained banking licenses in Mexico and Brazil ahead of competitors like Nubank, aiming to capture significant market share in these regions. “[We] are trying to capture top of markets and launch” Storonsky states (18:38).

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7. Future and IPO Plans

IPO Readiness: Revolut operates with the structure and controls of a public company, preparing for eventual public listing. Storonsky emphasizes the necessity of stronger controls and transparency to meet public market standards (28:03).

Listing Preferences: When discussing potential listing locations, Storonsky expresses a preference for the US over the UK due to better market liquidity and lower trading costs. “If I have a better product from UK then I will list in UK… one is far ahead compared to another” (28:46).

IPO Timing and Investor Liquidity: Going public will provide greater liquidity for VC investors looking to exit, aligning with Revolut’s growth and funding strategies. “Public markets allow you to have more liquidity compared to just private markets” he explains (28:28).

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8. Personal Insights and Work-Life Balance

Work-Life Imbalance Philosophy: Storonsky challenges the conventional belief in balanced lives for happiness and success. “I think in reality disbalanced life allows you definitely achieve your goals” he states (37:52). He acknowledges the high pressure and stress but maintains that maintaining high energy through a structured lifestyle enables him to manage the demands effectively (38:31).

Daily Routine: Depending on his location, Storonsky adjusts his schedule to accommodate different time zones, often working from early morning to late evening to manage Revolut’s global operations efficiently (39:17).

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9. Quantum Light: Innovating Venture Capital

Addressing VC Challenges: Storonsky introduces Quantum Light, a venture capital initiative leveraging machine learning to outperform traditional VC models. Frustrated by the emotional and crowd-following tendencies of investors, Quantum Light uses data-driven models to select the best startups, achieving superior returns (32:00).

Model Features: The model incorporates over 300 features, including IRR of funds, founder quality, education background, and age. Notably, founders aged 25-35 with STEM degrees show higher success rates, influencing investment decisions (34:57; 35:32).

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10. Advice and Reflections

Advice to Young Professionals: Storonsky advises young individuals to deeply understand their passions and pursue areas they genuinely enjoy. “Just go into the area. If you enjoy something, I mean you're definitely together” (41:10).

Reflections on Revolut’s Journey: Looking back, Storonsky wishes he had accelerated operations and reduced costs. “I would do everything faster and I would do everything much cheaper as well” he reflects (41:55).

Definition of Success: Success, for Storonsky, is straightforward—achieving the set goals. Money, while not a source of happiness, is a tool to achieve these objectives. “Money is just additional instruments that you can use in order to achieve certain goals” (37:24).

Future Aspirations: Beyond Revolut, Storonsky expresses interest in biomedical or genetics sectors, highlighting his eagerness to explore new fields (41:44).

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Notable Quotes

• On KPI Leadership: “We set up the goals for the companies. Usually we have five, six goals a year and then we quantify those goals.” (04:07)

• On Hiring Excellence: “They should be like a self-guided missile, right? Excellent people, they select the goal themselves.” (04:53)

• On Scaling Mistakes: “I think I hired 55 through executive recruiters, paid 2 million in fees. I ended up firing 49 or 50 of them.” (07:40)

• On Regulatory Relationships: “Whenever you speak with regulators yourself… you build it yourself… you show data as well that our results are better compared to legacy banks.” (13:06)

• On Work-Life Imbalance: “I think in reality disbalanced life allows you definitely achieve your goals.” (37:52)

• On Quantum Light: “The machine learning model actually amazingly outperforms 95% of VCs on backtest.” (33:36)

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Conclusion

In this episode of 20VC, Nik Storonsky provides valuable insights into building a global fintech powerhouse like Revolut. From a KPI-driven culture and strategic hiring practices to navigating complex regulatory landscapes and innovating within venture capital, Storonsky outlines the multifaceted approach required for sustained growth and success. His candid reflections on challenges, coupled with forward-looking strategies for IPO and market expansion, offer a comprehensive view of what it takes to lead a company aiming for a $100 billion valuation.

For those interested in venture capital, startup growth, and fintech innovations, this episode serves as a rich resource, showcasing the intricate balance between disciplined management and dynamic innovation that drives Revolut’s trajectory.

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Note: This summary excludes advertisements, introductory remarks, and concluding advertisements to focus solely on the core content of the discussion between Harry Stebbings and Nik Storonsky.

Transcript

[Nick Storonski]

I just don't understand how the product which is being provided by UK can compete with the product provided by us. It is less liquid so it's much worse compared to us. Plus it's much more expensive because you pay stock. It's just not rational.

[Harry Stebbings]

And so you would list in the.

[Nick Storonski]

US because I don't suffer Russian person. Right? That's all I can answer. So unless I have a better product from UK then if I get a better product from UK I will list in UK what's so far. If you just compare these products one as far ahead compared to Lala this.

[Unknown]

Is 20 VC with me, Harry Stebbings and the show today is the one that everyone has been waiting for. Revolut is the generational defining company of our time. 50 million customers, $2.2 billion in revenues and aiming to be the number one bank in the world. Joining me today we have Nick Storonski, Founder and CEO at Revolut to discuss growth and IPO plans, how Revolut approaches new products and building a hiring machine, and why work life imbalance is the secret to this was such a special one to do live in Revolut's offices. But before we dive in today, if you're driven by the pursuit of knowledge and personal growth, you'll love exploring the vast collection of insightful book summaries on the Blinkist app. So with Blinkist, you can access expertly crafted summaries that distill the essence of thousands of influential books, allowing you to read or listen to each in just 15 minutes. I know they beat 20 VC being recommended by the New York Times and Apple CEO Tim Cook. It's no surprise that 82% of Blink Blinkist users see themselves as self optimizers and 65% say it's essential for business and career growth, empowering over 32 million users since 2012 as a 20 VC listener. Even better, you get 25% exclusive discount on Blinkist. That's B L I n K I S t. Just visit blinkist.com 20vc to claim your discount and transform the way you learn. And while you're optimizing your learning, what do Henry Ford and AI have in common? Neither could change the world without automation. In the future, there will be two types of businesses. Those that have automated and those that wish they had. Uipath, the undisputed leader in automation, is taking us into the era of agentic automation. UiPath's new AI agents don't just follow rules, they think they make decisions. They work alongside the world's most powerful software robots already trusted by over 10,000 businesses. If agentic automation sounds new, just think of UiPath as more growth, not more overhead platform or happier customers, happier employees platform. Whatever you want AI to do for your business, agentic automation with UiPath will make it happen. Try UiPath's new AI agents for free at uipath.com the future of automation is both agentic and robotic, so don't get left behind and talking about building trust Secure Frame provides incredible levels of trust to your customers through automation. Secure Frame empowers businesses to build trust with customers by simplifying information security and compliance. Compliance through AI and automation Thousands of fast growing businesses including Nasdaq, AngelList, Doodle and Coda Trust Secure Frame to expedite their compliance journey for global security and privacy standards such as SOC2, ISO 27001, HIPAA, GDPR and more. Backed by top tier investors and corporations such as Google and Kleiner Perkins, the company is among Forbes list of top 100 startup employers for 2023 and Business Insider's list of most promising AI startups for 2023. Learn more [e-mail] it is a must.

[Harry Stebbings]

You have now arrived at your destination. Nick, I'm so excited to do this. Thank you so much for having us in your office.

[Nick Storonski]

First, thanks for coming.

[Harry Stebbings]

Not at all. Listen, I was chatting to Klaus Hommels.

[Unknown]

Before and he said, you know, I'm.

[Harry Stebbings]

Not going to do the German accent because I'm terrible at it. But he said that Revolut is one of the most KPI led companies and so it's just wanted to start with how do you approach KPI based leadership and what does that actually mean?

[Nick Storonski]

Well basically it's the whole goal setting, right? So we set up the goals for the companies. Usually we have five, six goals or a year and then we quantify those goals. So what does it mean to achieve certain goal? Then we cascade these goals on the department level, then on the team level and then on individual. So every single effective team department and on the company we have metrics describing the performance. Then all people go through performance review process every quarter. Then they judged based on the metrics that they delivered their skills and then cultural values.

[Harry Stebbings]

In terms of the management. When you get the metrics, how do you think about distributed management? I spoke to a lot of your team and you have a lot of direct reports.

[Nick Storonski]

Yeah.

[Harry Stebbings]

How many direct reports do you have and how do you think about distributed management?

[Nick Storonski]

So we got the 40 plus reports and I mean to balance your I build a Team already for last five years. So generally, because I don't really work with people who are not excellent. Another way I define people who are excellent, strong, average or below average is pretty simple. So they should be like a self guided missile, right? So excellent people, they select the goal themselves. When they press the button, then they reach the goal themselves. Strong people, you need to show them the goal and they reach the goal themselves without you iterating with them. Average people, you need on a weekly basis iterate to reach the goal and then I below average people, I mean you iterate with them but you know, sometimes, very often they don't reach the goal. So the key is to select all your direct reports either strong or excellent. So they're able to reach the goals themselves without you kind of directing them.

[Harry Stebbings]

Will they be excellent on day one and how long do you give them to get good enough?

[Nick Storonski]

Well, majority of people you see them performing strong or excellent after three, four weeks, right? So they hit the ground running on week three. Majority of them they actually probably week one. So generally if you see a person is not performing for one, two months, most likely they will not be performing for the next year. So I don't really believe in kind of, you know, needing some time to adapt, to speed up. So if the person is not delivering within first three months, most likely they will not.

[Harry Stebbings]

What are the most common ways you find them not delivering in the first three months? What are the most obvious signs?

[Nick Storonski]

Well, you just give them the goals, right? And then you have some weekly or bi weekly catch ups and then they show you what they produced and then you just observe what they produce for two, three weeks, how small they are, how deep they go with their analysis just based on what they show you.

[Harry Stebbings]

Do you agree with when there's doubt, there's no doubt 100%.

[Nick Storonski]

I mean as soon as they start doubting, I mean there's no doubt in.

[Harry Stebbings]

Terms of the different people. I love that kind of spectrum from like excellent to strong to average. I chatted to it. I mean you're Alan Chang's of the world, but so many who work with you and have worked with you and they said that what you look for in people has changed a lot over the years. You used to like not like the management consultants and the investment bankers and now you've got a lot more professional management. How do you think about that and is that fair?

[Nick Storonski]

Other things fair right there because I was always looking for people who can deliver, right. So it was always execution oriented rather than talk oriented. Because if you look at all these management consultants. They come to you with a nice presentation, explain you how to get things done. Reality is, when you start hiring management consultants to help you run the company, that means your employees are not competent in what they do. Right. And for me, it's a bad sign.

[Harry Stebbings]

Can I ask, when you look back at the growth of the team in particular, what was the most painful scaling bit and what did you learn from that?

[Nick Storonski]

I made a lot of mistakes scaling team, and I think the most painful mistake was believing. Well, I never believed it, but I was forced to believe that in order to scale the company to hire experienced professional managers, that's a dead end. I think I hired 55 through executive recruiters, paid 2 million in fees. I ended up firing 49 or 50 of them. So that's a short money.

[Harry Stebbings]

How did you change as a leader? I mean this in the nicest way. You also got a lot more friendly.

[Nick Storonski]

I was always friendly.

[Unknown]

You're always friendly?

[Nick Storonski]

Yeah.

[Harry Stebbings]

You feel more comfortable with media?

[Nick Storonski]

Well, yeah, probably, because, you know, I know by now I have a lot of experience speaking with media, but I was always, you know, holding people accountable to delivery. Right. You know, sometimes I was communicating more in a harsher way or sometimes, you know, in a softer way, but I was always, you know, forcing people to deliver.

[Harry Stebbings]

What do you think when you look forward now, you most need to work on in your own leadership style? Why are you like, I'm still not great and I'd like to get better.

[Nick Storonski]

Or usually when I hire people in a new area that I haven't worked before, for example, when I started Revolut 10 years ago, I was hiring my first head of compliance, head of recruitment, head of people. I'm terrible at hiring my first roles. I never kind of worked before. So I ended up trying on many people until I find the good ones. I learned how to do it now. So every time when I hire a new role, which I never hired before, I first interview the whole market, try to learn from people how they do their job. And only after I learn how they do their job, I kind of, you know, select the best person for the job. Because really, if you never kind of worked with designers, you have zero skills to hire designers. You never worked in reg affairs or government affairs. You have zero skills to assess who is good, who is not. So in order to first learn the skills, you need to interview as many people from this area as possible. Then you learn and then you'll be able to select.

[Harry Stebbings]

When you think about the different areas where you invest in you mentioned that kind of the compliance, the regulatory. Do you think the best CEOs are the best resource allocators?

[Nick Storonski]

I think so, yeah. I think the best CEOs can squeeze a lot of IRR out of very little resources.

[Harry Stebbings]

When you think about where you squeezed IRR most effectively, what comes to mind first?

[Nick Storonski]

Myself. Yeah, I think I'm very efficient into getting people to deliver with small resources and I'm very cost conscious as well. So I think, you know, people when they throw money at the problem, they just wrong people. I think, you know, what really delivers the most is your brain power, right when you sit down then forces yourself to think how to solve the problem. The most kind of, you know, cost effective and efficient way that's actually much more powerful compared to spending millions on, I don't know, external people, external consultants, or hiring, you know, super experienced professionals for a lot of money.

[Harry Stebbings]

Where did you spend money? That was the benefit of hindsight. You wish you hadn't.

[Nick Storonski]

Well, I think we're very efficient in spending money to be honest here. I think when I look at our costs, I think our top cost is actually marketing now and then. The second course is people.

[Harry Stebbings]

Has your idea around brand marketing evolved, you know, before you're a very data driven, performance driven guy. We like seeing what inputs lead to what outputs and brand marketing is fucking hard because it's like 50% worse. But you don't know which one. Has your ideas on brand marketing changed?

[Nick Storonski]

I do believe in brand marketing now before I didn't and. But you need to be very careful in what you buy as an asset to show your brand. For example, recently we started buying AirPods jet bridges. I personally believe IRL and it is amazing but you know, we clearly cannot measure it. But if your brand marketing is only a very small portion of performance marketing and you can afford it and then you believe, you know, that these assets are great and why not?

[Harry Stebbings]

When you think about the expansion to the US and banking licenses, I do want to start on the banking license. It took longer than expected. What did you learn about building a regulated business from the banking license process taking longer?

[Nick Storonski]

Oh, what I really learned is so whenever you want to build a bank, you'd rather get a banking license before you have customers. So that's key lesson because as soon as they have many customers, millions of customers, tens of millions of customers, regulators will be much more thorough in assessing your capabilities. As a result, the whole license process will take much longer. And then for smaller banks or for banks who don't have clients, they don't really assess because there is nothing to assess, right? So they granted license much easier.

[Harry Stebbings]

Can I ask you though, if you have that status much earlier and you are say Monzo, where you did decide to get it earlier, it inhibits your ability to execute on product in such a fast way because you are bluntly encumbered by regulators much sooner. No, like, do you wish you'd done it sooner?

[Nick Storonski]

100% no reality. You can also build their governance process around the products, around all the countries in a very tech driven, efficient way. So yes, it will be a bit slower, but I mean, not that slow. To be honest here, if you really apply brains, how to optimize governance, how to build a whole structure, processes, who approves for and when you can do it much better compared to legacy things.

[Harry Stebbings]

Why did you not earlier then when.

[Nick Storonski]

You reflect on it or I wasn't experienced, right? So I didn't know what is the right way, is that it is wrong.

[Harry Stebbings]

How would you rate your relationship with the regulators today?

[Nick Storonski]

It's actually much better. Again because I was inexperienced and I had this perception in my mind which was well, not forced on me but confirmed by many, many people investors, that because I'm young, right, Techie, I should not speak with regulators because they will not understand me. Instead I should hire some gray hair banking CEO who've been in the business for a long time and now they need to speak with regulators. What I really found is actually very bad advice because whenever you speak with regulators yourself, whenever you explain exactly in plain English what we do, how we do it, because you build it yourself or I build it yourself, right? I can explain it in very simple terms. And because we're also innovating a lot in these areas compared to legacy banks. You show data as well that our results are better compared to legacy banks. That's in that what matters, right? If you show data, that's how you've been like, you know, three or four years ago, that's how we do now. That's how other banks are doing. We're ahead of them. That's what matters. A problem with traditional banking CEOs they're not tech driven at all. And then they rather speak in a very vague jargon to hide their incompetency or their limited knowledge in tech related matters. So regulators, I don't think they like it.

[Harry Stebbings]

What have been your biggest lessons around crypto?

[Nick Storonski]

Nick, never speculate.

[Harry Stebbings]

Have you changed your mind on anything in crypto? You made the decision to include crypto early. How do you reflect on that now.

[Nick Storonski]

I think it's a good decision because reality, a lot of use cases in crypto is still speculation, right? People, I mean speculate is more, I would say entertaining for them. But then some use cases are definitely valid. For example stablecoins or enabling instant money transfers through stablecoins competing with Swift on corresponding banking system is actually very valuable.

[Harry Stebbings]

What's been the biggest challenge with the crypto product?

[Nick Storonski]

There were quite a few. I mean really probably biggest challenge is different licenses in different countries and then different rules attached to these licenses. I remember when we received our crypto license several years ago in the uk there were certain rules attached to it which actually cost kind of 99% false positive. So for example, a person wants to send money in crypto to another account and then we would block this transfer because of certain rules imposed by regulator. But then in 99.9% of cases we were wrong. You know, blocking this transfer because I mean transfer was okay, right? It wasn't fraudulent. It wasn't. So it took us, you know, some time to explain to regulate a short data that these rules that you impose on us are actually wrong rules. We should optimize it and then we can capture, you know, more fraudulent transfers and then not waste time of innocent people.

[Harry Stebbings]

You mentioned that kind of the different regulatory elements. You added the U.S. as another geography. I never understand the U.S. nick, if I'm honest. Because like the thing I love about Revolut is Revolut is the one company from Europe that shits on its US counterparts. Like China is the biggest player in the US which is like a quarter of the size of Revolut, which is completely unique. Why has no one been able to win US Neo banking? I didn't understand that.

[Nick Storonski]

Well a thing in US first of all. So there is a culture in tech companies. They don't want to be regulated because they don't want to be regulated. They need to partner with the bank to use their license and use their platform. As soon as you partner with the bank and use their license, their platform bureau, you need to follow their processes, which are not automated, which are not built as a product. It slows you down. Plus on top there is a compliance for the bank that needs to approve every single screen, every single marketing material and so on. And because they are not very efficient, it slows you down. Plus because you're not a bank, you're not able to use your balance sheet or your deposits, so you cannot really do credit cards efficiently. And the US is credit driven market. Whatever a customer spends Over a credit card bank receives actually much more money from a merchant compared to debit card and banks they spent part of this interchange to do to give additional benefits to customers in amounts of points. The resolve credit cards are much more attractive for customers compared to debit card. Well, as a result you see Fintech Security partnering with the bank issuing debit cards just not their attractive value proposition.

[Harry Stebbings]

When we think about going into the market, it's been hard. What's been harder than you thought and what's been easier than you thought?

[Nick Storonski]

I mean 99% of things were harder than I thought.

[Harry Stebbings]

Nothing in life that's meaningful is easy.

[Nick Storonski]

Yeah, nothing is easy.

[Harry Stebbings]

Do you think the Revolut brand is strong in the us?

[Nick Storonski]

Not yet, but we will get there as soon as we get banker license in the us launch a bank there. It will take time but I think, you know, we can get where we are now in Europe.

[Harry Stebbings]

I saw your talk with Antoine, not Antoine Martin, sorry at Index and you said about the U.S. banking license, is that now how do you think about the staging of the US rollout and the banking license there?

[Nick Storonski]

So basically first we need to roll out our UK bank so go through all its mobilization conditions and then put our UK customers on the bank. As soon as we get it done, it actually unlocks our ability to apply for license in the US what will.

[Harry Stebbings]

You do to win the US in a way that people who've tried before haven't won the US with?

[Nick Storonski]

I mean people in the US never tried their digital bank with a credit card with all the functionalities that we have already. So one simple app where you have all the financial services that you need. Do you think Monzo did Monzer Steel are not in the US as far as I know.

[Harry Stebbings]

I mean they expanded there. You're also in Latin and crushing there. How do you feel about Latam market? What did you do that worked really well?

[Nick Storonski]

No, what we've done, we. We applied for license in Brazil for banking license in Brazil. So we got a banking license in Mexico ahead of Nubank. We. I think we applied already in Colombia for banking license. So we're working on terror as well. Basically trying to capture top of markets and launch.

[Harry Stebbings]

Can you do north and South America at the same time?

[Nick Storonski]

Yeah, you can paralyze. I mean it's hard, but almost anything is possible.

[Harry Stebbings]

When you look back at the products, what product introduction that you made has.

[Nick Storonski]

Been the biggest needle mover? Good question. In reality it changes. When we launched five years ago, business already went very well in terms of growth. But then recently we launched also, I don't know, Eins growing super fast. Rev 1 is growing super fast because our scale is so much larger compared to five years ago. So whenever we launch product on market with the right product, market fit just scale super quickly. So you cannot really compare with also very successful product. We launched five years ago because yes, five years ago it was super fast, but if you look at speed of growth now, it was very slow.

[Harry Stebbings]

What product did you think would be a mega hit that wasn't?

[Nick Storonski]

I'm actually pretty bad at it. Like every time when I think on certain products that it will be a mega hit, it's not. And sometimes when I think it will not, it will.

[Harry Stebbings]

Which one? When you thought it would, did it? Not most comes to mind.

[Nick Storonski]

Well, for example, we launched seller events to compete with credit card. So the idea is a person just receives salary in our account and then halfway through the period for the salary, the press button will receive half of your salary. So it's pretty cool. So it competes with credit cards and it competes with loans. Much cheaper as well. But it didn't work for us because the whole conversion funnel was very bad. First you need to sell to enterprise and enterprise needs to sell to their employees. You also need to sell into payroll systems. If you look at conversions for a lot of effort, we ended up having, I don't know, like 100 plus people using solar dashboard. So we decided to set up.

[Harry Stebbings]

Well, this is the hard thing when you get to your scale, which is that it has to be meaningful and there's opportunity cost to everything that you do. You know, I always chat to Anton, he's like, oh man, it needs to be 10x. It needs to be 10x. How do you think about what is worthy of your time in terms of new products, in terms of size?

[Nick Storonski]

So usually to launch a product you need to have a very small team of 10 people. They will work on the product for say one, two and a half years. Cost will be probably, I don't know, two, three million pounds. Because they're all independent, you can run all the bets independently. So the way we think about what to launch or what not to launch, we just have a committee of people who've done it before, who launched products before and they have our opinion. And so when everyone is positive, we launch things. When everyone is negative, we don't launch. If there is a mixed opinion, we still launch.

[Harry Stebbings]

How many bets do you have running at a time?

[Nick Storonski]

20 plus in parallel, 20 plus bets. If you look at the last two, three years we launched, I think 27 bets.

[Harry Stebbings]

Okay, so you have 20 plus bets running at once and then what percent make it?

[Nick Storonski]

So usually. So out of 27 bets that we launched, last two and a half, three years, like amazingly worked, probably say five, five, six didn't work at all. And the rest are just somewhere in the middle. But if you look at the whole portfolio, how much money it generates, it's just amazing. See if it's explanational.

[Harry Stebbings]

Okay, so with the five, six, because the five that work, you're like, great, let's give them more money with the five, six.

[Nick Storonski]

Scale it up. Yeah.

[Harry Stebbings]

How much more money do you do you give them all the same.

[Nick Storonski]

Does it the way it works. So you've got the team, then they launch it, and you look at how much money they generate after they launch the product. Month one, month two, month three, month four. You compare it with other bets when you launched it and then say top 30, 40%. If you have growth stick, you just allow them to hire additional teams and additional team. So one team becomes two teams, three teams and becomes a department.

[Harry Stebbings]

And so they're the five that work. The five sticks in the middle are really hard because you don't want to waste money. There's an opportunity cost to those people. What do you do with the ones.

[Nick Storonski]

Where it's like, so you don't scale it. Right. So you still have only one team working on it for those bets. With really scaling up, producing a lot of money, you add more people to work on new features for this particular product.

[Harry Stebbings]

Which one of these bets today are you most excited about?

[Nick Storonski]

I like it actually, Esim. It worked pretty well for us. It's a very nice product. I think it's the best in the market. So super easy compared to all other kind of standalone apps out there.

[Harry Stebbings]

Other winners obvious. Do they always just go up and to the right, or does it take time for you to build conviction in what you like?

[Nick Storonski]

Surprisingly, like on month one, month, two months three, they always, you know, Europe, so you don't have belts.

[Harry Stebbings]

Do they present to you 27 bets at 1 time? How do you manage that hierarchy of information, decision making?

[Nick Storonski]

So we just build a nice tracking system, right? So we have Jira, obviously tracking every single bet. Then everything fits into dashboard as well. So just open the dashboard. When you see the list of union bets, the list of bets that are being cooked, another 20, which stage are they like, you know, they're being developed. Are they at our kind of approval process? Then you see how much gross profit Beachbed generates. And so on and so forth. So it's pretty visual and very clear.

[Harry Stebbings]

It's going to sound so random, but Ben Affleck gave a speech the other day about AI in movies, and he said that art is knowing what to build and craft is knowing when to stop. Which I thought was a really nice description of Bartley. The importance of simplicity. Do you worry that with so many bets you lose simplicity and you get overcrowding?

[Nick Storonski]

You need to solve this problem through interface. So interface should be super simple, right? So you need to show the right product at the right time. If you look at the car, the car has a lot of functionality, but then it's pretty simple. Right. And then on top of it, we've got electric cars, like screens. I mean, if you think about functionality of the car, there's a lot of. Yeah, right. But then it's very simply built. So you just drive where you want, you play music when you want and so on. So the same with banking, product, and ultimately people need a lot of products. But then if you position everything in a very simple way, there is no problem.

[Harry Stebbings]

Which product would you most like to do that you haven't done?

[Nick Storonski]

Private bank. I think it'll be pretty cool to build a private bank.

[Harry Stebbings]

Agreed. Why haven't you done it?

[Nick Storonski]

I think it was too early. Now we have a lot of customers and then a lot of customers actually have a lot of balances with us. Some of them have millions on our accounts. So I think it's time to build product banking for people with a lot of liquid assets.

[Harry Stebbings]

So we have Revolut today. What does Revolut look like in three years time, both from a product and from a business perspective? Three years.

[Nick Storonski]

So in three years now we would love to be probably live in 50 markets to be where we stay.

[Harry Stebbings]

How many?

[Nick Storonski]

We live in 39 now. So we want to be number one in say 90% of these markets in terms of growth.

[Harry Stebbings]

How many are we number one in today?

[Nick Storonski]

I think we are number one in 19 or 20.

[Harry Stebbings]

19.

[Nick Storonski]

20. Basically fully localized as a bank in say 40 markets. So providing local accounts or local credit cards, local payment methods, loans and so on. So just be as competitive as local banks or even more competitive. So that's the goal. And then hopefully to have, I would say 30 to 40 million delective people. So now we're around 10 million delective people.

[Harry Stebbings]

So we have that in three years. Which market is the most important that you win?

[Nick Storonski]

I think in three years it'll be too early for us to win. So yeah, maybe if we win every single large market in Europe. So top top 10 markets in Europe and then right now we have our penetration of market share. I would say it depends from 5% to sometimes 70% on average, I would say 10%. So if we manage to go from 10% to 30, 40% market share in our top 10 markets. So there will be already probably 4x business compared to what it is now.

[Harry Stebbings]

Do you think the market makeup of banking will fundamentally shift in the next generation? And what I mean by that is I saw actually your again talk with Martin and you said about the huge fragment segmentation in the banking market. Do you think that will continue or do you think we will see certainly a lot more concentration with fewer bigger players?

[Nick Storonski]

Yeah, I think because of different regulations, different markets, all the banks are very local. Right. Because it's very hard to kind of build a bank in one country and then scale it outside without proper tech. So I think we have as a company we have a unique opportunity to actually scale and build a global bank across many many markets purely because tech allows us to do it. And actually if you think about it, there are similar picture was in venture business. Right. So when the venture business started, you have a lot of VC funds focused on the us, some VC funds focused on Europe, a lot VC funds focused on Asia and so on. So they're very similar to banking as well.

[Harry Stebbings]

As we move into a world of globalized banking players who own running much larger.

[Nick Storonski]

Yeah, I think with time, in five years time you'll see much less number of banks and there are fewer global players.

[Harry Stebbings]

Nick, what needs to change in the business before you go public?

[Nick Storonski]

I mean in reality we already run the business as a public company. We're just not a public company. So we run everything because we're a bank. So we need to have even stronger controls compared to public companies.

[Harry Stebbings]

So why would you want to go public? We saw databricks do this secondary transaction. I think Yesterday it was 6 to 8 billion of liquidity to investors and to employees obviously revolut publicly done the secondaries. Why would you want to?

[Nick Storonski]

Well, we still have a lot of VC investors. Right. But sooner or later they want to kind of, you know, sell their shareholdings and the return money to investors. I think public markets allow you to have more liquidity compared to just private markets.

[Harry Stebbings]

There's no way this is going to get capped in. But I have to ask it. Sure. Would you list in London?

[Nick Storonski]

The problem with the UK is if you think about UK versus US, our UK is much more liquid. And then trading in the US is free. Right. If you look at trading in UK, you always buy a stamped tax which is 0.5%. So I just don't understand how the product which is being provided by UK can compete with the product provided by us. It is less liquid, so it's much worse compared to us. Plus it's much more expensive because it pays some duty. It's just not rational.

[Harry Stebbings]

I agree. And so you would list in the.

[Nick Storonski]

Us I consider myself a Russian person. Right. That's all I can answer. So unless I have a better product from uk, then yeah, if I get a better product from uk, I will list in uk. But so far, if you just compare these products, one is far ahead compared to another.

[Unknown]

How do you respond to the suggestions.

[Harry Stebbings]

That you've moved to Dubai?

[Nick Storonski]

Well, I do spend some time in Dubai every year, so with Flash team there, plus we're getting a license. But no, I don't live permanently in Dubai.

[Harry Stebbings]

Is the culture different across the world when you go to different offices around the world? Is Revolut a monoculture or are they actually very different independent cultures?

[Nick Storonski]

Our culture is the same across all offices. So people are smart, people are hungry, people working hard, people want to achieve things. That's common across all the cultures.

[Harry Stebbings]

Can I ask you one on we mentioned the liquidity to investors earlier. You've been unbelievable at maintaining a really tight control of your cat's table where other founders haven't. What have you done to maintain such good control of the cap table? Control it on the water in preventing secondaries, preventing private transactions, preventing side deals.

[Nick Storonski]

Yeah, just because again, it's pretty obvious, right? As soon as you don't have control. So then every time you try to raise a primary round, you're competing with all these early investors who want to sell at a large discount because they may make so much money and they're okay to exit, you know, as soon as possible because they make like, I don't know, like 50x100x. Right. And it actually prevents company to raise primary because they're really kind of in the heading of the company. We had to put all these controls in place.

[Harry Stebbings]

In terms of competitors that you really respect around the world, who do you most respect and why then like, obviously.

[Nick Storonski]

If I look at competition, Nubank is amazing what they do well, countries also great, right. There's no competition there and rates are high and credit cards have, you know, very high rates as well. So I think new bank is very strong then I think GP Morgan have a Very good team in the us so the bank very strong. If you look at Asia, right? So it's a bit different dynamic. So we've got companies like WeChat. So they're very strong. I mean already there are like many good companies.

[Harry Stebbings]

Which will be a harder market for you to win, US or Asia?

[Nick Storonski]

I think Asia.

[Harry Stebbings]

Why?

[Nick Storonski]

Well, because they don't allow you license, right? Because there is no chance if you get it.

[Harry Stebbings]

It's also fundamentally different UI that they used to. I mean it's an entirely new product paradigm that you have to engage with culturally. It's not nearly as aligned as US and uk. So what's on Quantum Light, Nick?

[Nick Storonski]

So yeah, let me maybe just spend one minute explaining what Quantum Light is. So basically because I was raising money so many times, I've done it like seven or eight times and almost every time I experienced some very negative experience. For example, I think it was 2019, I agreed a term sheet with investor. I think it was like 7 billion valuation and then next day market dropped 10%, it dropped 10%. Then term sheet was withdrawn and then it became like 5 billion or whatever. Then like even recently, like you know, secondaries that were done, we kind of, you know, agreed everything with all investors and then there was like, you know, market drop. Then luckily it went back. But we had some investors, you know, withdrawing term sheets or like when I was raising money for series A, like no one believed me, no one wanted to invest. I spent like, you know, four, five, six months going through every single investor and saying them that okay, it's really great business. They looked at my unit economics and unit economics was negative. Of course it was negative because you know, I just started, right? It's a volume game. Anyway, what I learned that a lot of investors, they are A following the crowd very often and B they're very emotions driven, right? Sometimes they like the founder, sometimes they don't like the founder. They don't like the founder. It's not very scientific. So two years ago I stopped effectively a small team of data scientists and data engineers who collected a lot of data on startups. And then we trained machine learning models on the startups, selecting the best startups. Then the machine learning model actually amazingly outperforms. 95% of VCs are there on backtest. That's how I started this business. I have an independent team of 20 people who are building polishing data science models and then models. Give you a list of companies, where to invest and then we just go to these companies and invest.

[Harry Stebbings]

Where's the entry point, because you need.

[Nick Storonski]

To have enough series B, okay.

[Harry Stebbings]

So you need to have enough data. So series B. Okay, so you can select the best companies better than investors. Fine. Generally though, if you can select them better and there's data for that, the winners are more obvious. Yeah. And so if the winners are more obvious, selection is one thing, but winning is another. How do you think about winning when there's five others and you've got Sequoia and you've got Index and you have all the pretty.

[Nick Storonski]

The reality is not that straightforward, right? If you look at companies that model selects and there we have with this probably like 300 plus features, then we selected now like best 25, which statistically give you a signal, right, Whether to invest in the company or not. So the features are like, obviously it's very important who are investors, who is a lead and the better the lead. So we actually track IRR for every single fund and then based on this irr, it's an input in the model. The model selects whether to invest or not, who is the founder.

[Harry Stebbings]

You track IRRs of seed funds?

[Nick Storonski]

No, we track IRR on the fund level for each investor. And then if we see a good investor with good IR investing, it's obviously like a positive signal. Right. Anyway, model takes say 25 features. One of the features is for investing with dynamic evaluation. Quality of employees, quality of founder, what they had on standard education. Age is important as well.

[Unknown]

Why is age important?

[Harry Stebbings]

What do you find about age if.

[Nick Storonski]

You look at statistics? So 2025 is actually quite negative. Too early is negative. 25 to 30 is okay. 30 to 35 is the best age. After 35, I mean, there is a clear negative correlation with the success. So Sweet spot is 25 to 35 for founders. That's Eurob.

[Harry Stebbings]

So we have 25 to 35. You said education there and you said investing in education early is important. Why do you think it's so important and do you think our current education system does it? Right?

[Nick Storonski]

Well, I just look at data, right? And then it starts. And then statistics clearly show that top universities, STEM degree have much more positive correlation with the success of the company. Obviously it's not for any other profession out there, but particularly for startups. I mean, it is important purely based on stats.

[Harry Stebbings]

Which was the hardest funding round to raise? You mentioned earlier that the series A, for example, you spent five months on which was the hardest round to raise.

[Nick Storonski]

I think our first one was very hot. Every single one was easier, easier than I think 2019. We started raising 2019 we closed I think in February or in January 2020, just before COVID We were very lucky, but it took time to close.

[Harry Stebbings]

How big was that round?

[Nick Storonski]

So valuation was 5 billion, which dropped from 7. Because you did it at 5. Yeah, we did it at 5.

[Harry Stebbings]

Oh, wow. Wow. So how much did you raise at 5 then?

[Nick Storonski]

I think it was 300 million.

[Harry Stebbings]

Does that work? Because as a relationship it kind of dam like I'd be damaged if you tried to haggle me down because the markets are moving.

[Nick Storonski]

I mean, look, in the end it's business, right? For them, it's business for me. And yeah, I mean, we just move on.

[Harry Stebbings]

Who's your favorite investor?

[Nick Storonski]

I have few favorite. I mean Robert, you know, Matan from Index, you know, very smart. John, tcv, very smart as well. Mickey, which I spoke with from Rebit. Very good.

[Harry Stebbings]

Has your definition of success changed?

[Nick Storonski]

Nothing. If you define success or by kind of percentage of goals that you reached, that's very simple, right? If your goal is I don't want to be happily married with kids and then you reach it, you're 100% successful, right? If your goal is, I don't know, make more money, you haven't reached it, then you're not. Pretty simple definition.

[Harry Stebbings]

Does money make you happy, Nick?

[Nick Storonski]

I don't think money makes you happier. I think money is just additional instruments that you can use in order to achieve certain goals.

[Harry Stebbings]

What have you not achieved today that you most want to achieve?

[Nick Storonski]

Well, I haven't won US market. Right. I think it's very important to tick this box, especially for European startup.

[Harry Stebbings]

For sure.

[Nick Storonski]

And totally it's always the opposite, right. US companies, they always win Europe. I almost never seem exception. So I think it'll be very cool to tick this box.

[Harry Stebbings]

Listen, I want to move into a quick flight round, so I say a short statement, you give me your immediate thoughts. Does that sound okay?

[Nick Storonski]

Yeah.

[Harry Stebbings]

So what do you believe that most around you disbelieve?

[Nick Storonski]

I think majority of people believe that balanced life allows you to be happy and achieve your goals. I think in reality disbalanced life allows you definitely achieve your goals. So the more kind of imbalanced you are, more focused on your goals, sacrificing everything else, more likely you'll succeed these goals. And you know, there is a high chance it will also bring you happiness.

[Harry Stebbings]

What period of Revolut's growth have you been most imbalanced?

[Nick Storonski]

Every year it's very balanced, right. It became much more structured, much more process driven.

[Harry Stebbings]

I get it, dude, but you're very Thin, you're athletic, you look fresh, you're not losing sleep, you're doing fitness. Yeah. Talk to me. What does the next day look like?

[Nick Storonski]

Well, obviously in order to. Because I have so much pressure, right. Like a lot of 99% of time is a lot of pain, right? Because reality, what happens is even if you have organization, then all the unpleasant problems no one else solves and goes into me and I ended up doing all this shitty jobs solving problems that no one else wants to solve or can't solve. And it's pretty unpleasant. So 99% of time is not really pleasure. A lot of pain, a lot of pressure, stress. And in order to keep calm under pressure, obviously need to have a lot of energy and then in order to have a lot of energy and to build your lifestyle in a way that brings you a lot of energy. Right? So it's obviously a lot of spots, you know, like what time doesn't it.

[Harry Stebbings]

Get up in the morning?

[Nick Storonski]

I mean, depends on which country I am, right? Because the way I manage the business, I work one, two, three months from different countries, from different offices and it depends which time zone I am. Right. For example, if I'm in the UK, like probably I wake up, you know, 6:30 sometimes in our train in the morning, sometimes not. But then I start 8:39am if I'm somewhere in Asia, then I start a bit later or much later, but then I work till 11pm If I'm in the US then I need to start there early 7am Working.

[Harry Stebbings]

Which friends are invested do you most respect and learn from? Just learn from. Not like your favorite, like you go out for holidays with, like you actually learn from first call when you're in trouble.

[Nick Storonski]

I call people who've done similar things in the past. Right. So who built very large businesses? So I got a couple of friends who build very large businesses. Some of them, they never used to VCs, they, they just print cash as businesses. It's always better compared to me.

[Harry Stebbings]

What would you do if you knew you wouldn't fail?

[Nick Storonski]

I would just keep trying things. But I am, whenever I try things, I always think I will not fail.

[Harry Stebbings]

What have you changed your mind on.

[Nick Storonski]

In the last 12 months? Like, you know, I spent there 15, 16, 17 years in the UK and London really became home city for me. But then when I started kind of working from different cities, I realized, you know, there is so much more like in other cities in terms of lifestyle, weather, infrastructure that a lot of people, because they stuck in one city, living in one city they don't really see it and they just becoming very close minded. I think when you kind of manage to work or live in many, many places then you are much more open minded.

[Harry Stebbings]

If you were starting Revolut again today, where would you start it?

[Nick Storonski]

Us most likely.

[Harry Stebbings]

If you were advising a young person today coming out of university, what advice would you give them on optimizing their career?

[Nick Storonski]

Well, I think they first need to really know what they like to do, what they enjoy doing. Just go into the area. In this area, if you enjoy something, I mean you're definitely together.

[Harry Stebbings]

What consumer brand do you most respect?

[Nick Storonski]

I think Apple to be honest.

[Harry Stebbings]

Yeah, why?

[Nick Storonski]

I think they built cool products, they built cool brand and they managed to stay outside of scrutiny. Right. Because they produce so much money, they're huge monopoly, charge a lot and they're still a great company. Right.

[Harry Stebbings]

You can be CEO of any other company for a day. Which company do you choose to be CEO of?

[Nick Storonski]

I would like to try something in biomedicine or genetics that would be very interesting. Just alone because I know zero about it.

[Harry Stebbings]

Penultimate one, what would you do differently if you were starting Revolut again?

[Nick Storonski]

I would do everything faster and I would do everything much cheaper as well.

[Harry Stebbings]

Final one, what question have I not asked that you think I should have asked or you don't get asked often?

[Nick Storonski]

Why do you do what you do?

[Harry Stebbings]

People don't ask you why?

[Nick Storonski]

No, not at all. I'm very surprised no one asks why.

[Harry Stebbings]

Do you do what you do?

[Nick Storonski]

Well, I said actually myself, you know, many, many times and there I have two answers. Right, because they're A, like what else to do? B, I just need to do something right. Otherwise it's very boring.

[Harry Stebbings]

You have to have a passion for it too. And you have to have a passion to change an ecosystem in an industry.

[Nick Storonski]

Yeah, from 99% of a.

[Harry Stebbings]

Listen, Nick, thank you so much for doing this with me. Thank you for having me in the office and this has been so much fun.

[Nick Storonski]

Thank you.

[Unknown]

I mean that was such a special show to do. I want to say huge thank you to Nick for welcoming us into the Revolut office.

[Nick Storonski]

If.

[Unknown]

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