The Exchanges

Q This is too good. So like, I always have founders who are very product-led and they're like, you know, I built amazing product and customers will come And I go, no, that distribution is a product in itself. And we must create an archetype that. Do you agree with me? Or is that what you're saying in terms of create such a great product that people talk about it?

A Totally. But, uh, so just stepping it through and making that more practical, um, with us, customers talked about price, talked about speed, talked about ease of use. You can measure price. You can measure speed. You can measure ease of use. When we enter a market, we find that if we are, um, slightly cheaper than the incumbents, then we don't really get hockey stick-like growth. Banks are at six percent. We're at .3 in most markets. When we launch in some markets, say we were at 5.8, when you're at 5.8, you don't get any growth. So we learned you have to be an Order of magnitude better than the alternative to get word of mouth. You need to give customers an experience they did not know previously existed. So when founders say I built a great product, it needs to be that great. People didn't know you could move money instantly, right? So we're moving about sixty billion pounds instantly from one side of the world to another, and that is the kind of experience to get people talking about it.

AI assessment note: “you have to be an Order of magnitude better than the alternative to get word of mouth”

Q This is too good. So like, I always have founders who are very product-led and they're like, you know, I built amazing product and customers will come And I go, no, that distribution is a product in itself. And we must create an archetype that. Do you agree with me? Or is that what you're saying in terms of create such a great product that people talk about it?

A Totally. But, uh, so just stepping it through and making that more practical, um, with us, customers talked about price, talked about speed, talked about ease of use. You can measure price. You can measure speed. You can measure ease of use. When we enter a market, we find that if we are, um, slightly cheaper than the incumbents, then we don't really get hockey stick-like growth. Banks are at six percent. We're at .3 in most markets. When we launch in some markets, say we were at 5.8, when you're at 5.8, you don't get any growth. So we learned you have to be an Order of magnitude better than the alternative to get word of mouth. You need to give customers an experience they did not know previously existed. So when founders say I built a great product, it needs to be that great. People didn't know you could move money instantly, right? So we're moving about sixty billion pounds instantly from one side of the world to another, and that is the kind of experience to get people talking about it.

AI assessment note: “Totally. But, uh, so just stepping it through and making that more practical”

Q What does that mean, sorry, creating useful content for end users?

A The way, way I think about content, um, starting with SEO and then going to YouTube is, uh, There's two broad kinds of content that I see people push out there, uh, and I encourage people building, building startups to do. One is what I call on-topic content, and you should really think through how you can own all the on-topic content in your, um, chosen vertical. And then there's the, the off-topic adjacent. So I'll talk you through it with examples. So on the on-topic side, um, for WISE, if it's sending money internationally, you want to build the best page on the internet that tells people how to Send money to India, for example, right? But then you can go a step further. You know your customers are with Barclays. If you build a better page than Barclays has on how to use Barclays to send money internationally, then people will link to this page and it will naturally go up the rankings and you'll start getting traffic on Barclays, on Western Union, etc. If you start helping people understand their fees at the exchange rate, this page becomes even more useful. What else do you need? When you send money internationally, you need those like pesky BIC and IBAN codes. So obviously if you search for a BIC or an IBAN code, you'll find wise there because we've built pages on every BIC and IBAN code. We bought and built our own, uh, BIC, uh, calculator and IBAN calculator and convert…

AI assessment note: “you want to build the best page on the internet that tells people how to”

Q What does that mean, sorry, creating useful content for end users?

A The way, way I think about content, um, starting with SEO and then going to YouTube is, uh, There's two broad kinds of content that I see people push out there, uh, and I encourage people building, building startups to do. One is what I call on-topic content, and you should really think through how you can own all the on-topic content in your, um, chosen vertical. And then there's the, the off-topic adjacent. So I'll talk you through it with examples. So on the on-topic side, um, for WISE, if it's sending money internationally, you want to build the best page on the internet that tells people how to Send money to India, for example, right? But then you can go a step further. You know your customers are with Barclays. If you build a better page than Barclays has on how to use Barclays to send money internationally, then people will link to this page and it will naturally go up the rankings and you'll start getting traffic on Barclays, on Western Union, etc. If you start helping people understand their fees at the exchange rate, this page becomes even more useful. What else do you need? When you send money internationally, you need those like pesky BIC and IBAN codes. So obviously if you search for a BIC or an IBAN code, you'll find wise there because we've built pages on every BIC and IBAN code. We bought and built our own, uh, BIC, uh, calculator and IBAN calculator and convert…

AI assessment note: “for WISE, if it's sending money internationally, you want to build the best page”

Q Do they get cheaper? I'm always thinking this with companies as an ambassador, I'm like, they should get cheaper over time because you build brand, Word of mouth into use more, you become more well known, but then part of me thinks they get more expensive because you saturate your core market and you're reaching kind of further and further edge cases in terms of customers. Which one is it?

A I think that's pretty smart what you just said there. So I think it is, uh, I think both those things happen literally at the same time. So as you start out, usually there isn't much competition, especially maybe on the very targeted audiences that you're going after at the beginning. Uh, and then over time, as the competition enters, it kind of goes up in the market, and then slowly, slowly over time comes down. For us, uh, we had this really fun challenge. There were a small, there's still a, a bunch of the market, not much, so I'd say about 10, 15% of the market, that will Google, uh, before they send money. So they'll Google, send money, uh, cheapest way to send money to India, right? And, uh, people were doing this before WAGs existed, and custom, and companies like Western Union existed there. Western Union is like, uh, seven to eight times more expensive than WISE. So they could spend seven to eight times more than us on marketing. And therefore there's no way we would ever be able to compete on those, on those SEM key head terms. So that was the point at which when we started realizing the economics of this, we pushed so hard towards word of mouth. And getting to, moving on to word of mouth, what it became was understanding what would it take to build a product that's so good that people would talk about it? How do you instrument that product and how do you organize a c…

AI assessment note: “I think both those things happen literally at the same time.”

Q it well. My question too is like, unless you're very explicit about those, like, benefits, it's gonna be very challenging for consumers to understand them. If you told me, Harry, 0.3% transfer fee, I'd be like, cool. But it wouldn't strike me that shit, that's a 20th of the cost of the competitor. So how do you think about product marketing and messaging, the measured data of how you're better?

A I think you more or less got to my definition of product marketing. So, actually it was my dad that taught me this. Um, so my dad used Wise, and then he'd use Barclays, and then he'd tell me, like, is he It see Barclays would say it's three pounds, and it see, with wise it will cost two 99, and he'd missed the whole hidden fee in the exchange rate. And so he'd tell me, yeah, I like your products, and it saves me like 10, 20 P. And I realized that even my dad didn't understand how much he was saving. So we spent a lot of time trying to create a UX that explains to customers really clearly, like a picture, That says, this is how much you've, uh, how much this, this transfer cost you. And this is how much you would have spent with your bank by showing the rate and how much was hidden in the rate. And we iterate and iterated and iterated and iterated this till the point that when we show this to people, they're like, oh my God, I didn't realize it was that amount. And then we learned, I learned one of the biggest areas of growth that we had was when we took that picture and we put that on the success screen. So once you've done a transfer and it completed, it's like, You saved 25 pounds. I believe they saved some money, but they didn't believe the 25 pounds. But then we put this, what we call a comparison graph on that page that really, like, explains to you where exactly this numb…

AI assessment note: “we spent a lot of time trying to create a UX that explains to customers”

Q it well. My question too is like, unless you're very explicit about those, like, benefits, it's gonna be very challenging for consumers to understand them. If you told me, Harry, 0.3% transfer fee, I'd be like, cool. But it wouldn't strike me that shit, that's a 20th of the cost of the competitor. So how do you think about product marketing and messaging, the measured data of how you're better?

A I think you more or less got to my definition of product marketing. So, actually it was my dad that taught me this. Um, so my dad used Wise, and then he'd use Barclays, and then he'd tell me, like, is he It see Barclays would say it's three pounds, and it see, with wise it will cost two 99, and he'd missed the whole hidden fee in the exchange rate. And so he'd tell me, yeah, I like your products, and it saves me like 10, 20 P. And I realized that even my dad didn't understand how much he was saving. So we spent a lot of time trying to create a UX that explains to customers really clearly, like a picture, That says, this is how much you've, uh, how much this, this transfer cost you. And this is how much you would have spent with your bank by showing the rate and how much was hidden in the rate. And we iterate and iterated and iterated and iterated this till the point that when we show this to people, they're like, oh my God, I didn't realize it was that amount. And then we learned, I learned one of the biggest areas of growth that we had was when we took that picture and we put that on the success screen. So once you've done a transfer and it completed, it's like, You saved 25 pounds. I believe they saved some money, but they didn't believe the 25 pounds. But then we put this, what we call a comparison graph on that page that really, like, explains to you where exactly this numb…

AI assessment note: “we spent a lot of time trying to create a UX that explains to customers”

Q Tell me, final one, what's the most recent product or growth strategy, not including OpenAI? Uh, that you've been most impressed by.

A Newbank and JP Morgan, uh, for two different reasons. So Newbank, uh, very similar playbook to us. Customer led business, uh, incredibly high word of mouth, incredibly high NPS. Look, when you, when you open their analyst investor presentations, it's how they brought down prices, how they made the payments faster, et cetera. So, but when I look at their culture, it's really, really strong and we have a lot to learn from them. They're obviously ahead of us in terms of scale. Great business. And the other end of scale is JP Morgan. So when I look at the, I mean, there have been large banks offering cross-border services for years. Biggest like Citi, HSBC, Barclays to some extent, that West, JP Morgan. JP Morgan have a pretty good infrastructure. They built it out really well. They continue to innovate at scale and at the size they're at. And I, you know, Jamie, Diamond went pretty hard after payments. Payments have grown to be a material part of their business, and that is a real differentiator for them when they, in their corporate banking, and they're, they bank banks, when they bank banks as well. So, still very impressed and inspired by JP Morgan.

AI assessment note: “Newbank and JP Morgan, uh, for two different reasons.”

Q For those that don't understand, what is above the line?

A Above the line is, is brand advertising, so you have, like, generalizing terribly. There's two types of marketing. Performance marketing, where you spend some money, and you try to measure a user turning up, and then brand where you, you spend money, and you can do it Relatively strategically, you could build, you could spend the money to solve a perception problem in the market, to raise awareness of your product, and then you have to measure, in like, maybe a much more difficult way, what the impact of this is. I mean, things that struggled to work were getting above the line to work. When you look at our marketing mix, it looks light on that, and we still wouldn't say I've cracked it. It's hard, right? So our customers aren't everybody in the UK, for example, or everybody In Australia.

AI assessment note: “Above the line is, is brand advertising”

Q How do you prevent brand confusion when you have successful product marketing in one category, when it's like, hey, You've sold so well in terms of product marketing for simple and cheap, and then the bank is like, really?

A Yeah, yeah. We're gonna use Wise as B to B? Or going further, like, our consumer marketing can feel like it's bashing banks, like, how do we, how do we tailor that? Two bits here. One is, we do have a very strong brand marketing team that puts the architecture in place around all of this and thinks through, like, what is, what is the Wise brand? What is the platform brand? Etc. And then from a creative strategy, everyone understands that we're going to end up becoming an API business, that wise. Like, um, in a five to 10 year period, the majority of our customers won't be using our apps. They'll be in banks. And therefore, we need to evolve our marketing strategy. We can't be having, having stuff here that, that makes it harder for that to happen.

AI assessment note: “we do have a very strong brand marketing team that puts the architecture in place”

Q Do they get cheaper? I'm always thinking this with companies as an ambassador, I'm like, they should get cheaper over time because you build brand, Word of mouth into use more, you become more well known, but then part of me thinks they get more expensive because you saturate your core market and you're reaching kind of further and further edge cases in terms of customers. Which one is it?

A I think that's pretty smart what you just said there. So I think it is, uh, I think both those things happen literally at the same time. So as you start out, usually there isn't much competition, especially maybe on the very targeted audiences that you're going after at the beginning. Uh, and then over time, as the competition enters, it kind of goes up in the market, and then slowly, slowly over time comes down. For us, uh, we had this really fun challenge. There were a small, there's still a, a bunch of the market, not much, so I'd say about 10, 15% of the market, that will Google, uh, before they send money. So they'll Google, send money, uh, cheapest way to send money to India, right? And, uh, people were doing this before WAGs existed, and custom, and companies like Western Union existed there. Western Union is like, uh, seven to eight times more expensive than WISE. So they could spend seven to eight times more than us on marketing. And therefore there's no way we would ever be able to compete on those, on those SEM key head terms. So that was the point at which when we started realizing the economics of this, we pushed so hard towards word of mouth. And getting to, moving on to word of mouth, what it became was understanding what would it take to build a product that's so good that people would talk about it? How do you instrument that product and how do you organize a c…

AI assessment note: “both those things happen literally at the same time”

Q For those that don't understand, what is above the line?

A Above the line is, is brand advertising, so you have, like, generalizing terribly. There's two types of marketing. Performance marketing, where you spend some money, and you try to measure a user turning up, and then brand where you, you spend money, and you can do it Relatively strategically, you could build, you could spend the money to solve a perception problem in the market, to raise awareness of your product, and then you have to measure, in like, maybe a much more difficult way, what the impact of this is. I mean, things that struggled to work were getting above the line to work. When you look at our marketing mix, it looks light on that, and we still wouldn't say I've cracked it. It's hard, right? So our customers aren't everybody in the UK, for example, or everybody In Australia.

AI assessment note: “Above the line is, is brand advertising”

Q Get back to that. Yeah, yeah. Um, and so, respectfully, they don't always give you the luxury of 24 to 36 months for a more outlandish bet that could pay back. They want the much more tangible short-term. Is that frustrating for you?

A No, I think, I think we, so we haven't changed since we've been public, and a really good example of a very long-term bet that is weighed in the, in the public market very visibly, is our investment in price. So we, we dropped price. We've dropped price quite a lot this year so far. So say we, say we drop price by 10%. There's not 10% Of marginal customers hitting our product that will then switch to wise at that point in time. Does that make sense? So you drop price by three percent. It's not like magically there's a three percent who weren't going to use wise and now are going to use wise. So incrementally we've got more revenue. So this is much more a long-term bet, kind of like Amazon's, that you keep chipping away at driving down your cost and your price, and eventually the market will switch to you. And so we have, we very publicly keep, and so the people looking for us, uh, investors, uh, looking for us to kind of like optimize the company for maximizing growth in the next three months, like this doesn't make any sense. Maximizing growth in six months doesn't make any sense, but maximizing growth over a five year horizon or three to five year horizon where, uh, this makes a lot of sense. So the public markets, yep, they're there and they will, uh, there are You know, you can't, people will invest in, in the stock. People will look at the short term results and make their…

AI assessment note: “No, I think, I think we, so we haven't changed since we've been public”

Q I agree. I always think actually to Seth Godin and the purple cow, which is kind of the power of being different, not better. And I think we get to that point when we look at, like, content landscapes today, for example. So, okay, we have that. How did you come to Wise then? Because you were an advisor at Wise first, right?

A Yeah, yeah, so just going back through the, through the long story. So I was consultant for a while, and then, uh, uh, dotcom boom two happened, and I started working with, uh, with companies, getting them online. Uh, most of the shops on Oxford Street didn't have online shops, so I helped, helped build and launch their shops, and they asked me to run their shops. And once I ran a, A revenue line. I realized that's, that's what I wanted to do for, for the rest of my life, and I've been doing that for the last more or less 15, 15 to 20 years. I think even 20 years now. It's because it's so hard. Like, figuring out how you get people to turn up on your site, or download your product, and use it. I was like, you need to do psychology, marketing, mathematics, like, technology, everything. And that's, uh, that's what gets me out of bed in the morning, and that's what I've been doing ever since. So starting off, Uh, with very large companies, and then over time working with earlier and earlier stage, till I ran into Christo and Tava, um, probably 12 years ago now.

AI assessment note: “till I ran into Christo and Tava, um, probably 12 years ago now.”

Q increasingly challenging before Banks and fintech products. You had incredible stickiness and your LTVs were long actually. Now I think you have this increasing transience between different services. Most Monzo users are also Revolut users. They're also probably a traditional bank user as well from their teenage years. They kind of have, and so the LTVs are more variable, which changes your CAC budget. How do you think about that?

A So I think the best marketeers, uh, performance marketeers that I've worked with over the last, Uh, 10 to 15 years. They know this. So in businesses I've built previously, and just some of the people say that buildbooking.com or Zalando or some of the early rocket guys, it was always around, um, when you're advertising, say you're advertising, um, on SEM, on search engine marketing, and you get better and better at breaking down into smaller and smaller groups, your campaigns. For that campaign, you understand really well the cost, and for that campaign, you understand really well the LTV. And every campaign you run will have a different LTV, and you need to kind of aggregate up campaigns to a level that you can get a decent read on the LTV. And the other way I think is, it's, at the end of the day, what you're doing is making a bet. So I'm going to spend 50 pounds on acquiring, on my CAC, Because I think I'm going to earn 50 pounds back in a year. And the other way we're on marketing teams, so when I've spent that 50 pounds, I am now in the red, right, in acquiring the customer, and I'm hoping it's going to track back to this. And the discipline of tracking how much are we down from all the bets that we've spent, and what's our flaw in terms of how much you're prepared to spend, and how much you're prepared to lose, because it only needs to take Like, you're not in control of …

AI assessment note: “every campaign you run will have a different LTV”

Q Sorry, I, I just have to ask that. You said there about kind of doing things differently and in ways that other people hadn't done before and why you like maths in that way. I always wonder, are playbooks good or bad?

A In product and in growth where this reaches its forte is when there is a, like, a reproducible model. Uh, when the playbook becomes something that feels like a reproducible model, and that is in two forms, uh, usually there's a kind of a market expansion playbook, so we know we, this works, I'm gonna keep doing this again and again and again, and in my experience, it's usually disappointingly not much, like, there's, there's very few, like, truly globally scalable products that you build once and they just kind of go everywhere, uh, every, every country has a nuance usually then, That could be regulatory. It could be financial systems. It could be cultural. And these are the things that get stuck in the way of the playbook.

AI assessment note: “these are the things that get stuck in the way of the playbook.”

Q And Don- Talk to me, like, what have been lessons in making YouTube work?

A That's interesting. So it's, taking a step back, why social work for us is it, is ultimately word of mouth work. So people telling their friends about Wise and this great product is, and driving word of mouth is what's been the big driver of Wise's growth. And when the marketing amplifies that, that's when it works best. So, um, Facebook supports marketing to your friends. So if you have a, a usage of Wise, Then it's likely that your friendship group may need to send money internationally. Think French students in London, no French students in London. Small business owners who are exporting will know other small business owners that are exporting. And when you advertise to and target to, to people who are similar to your existing customer base, then this becomes pretty effective. So that, that's where the Facebook thing started. On YouTube, this more came out of our SEO playbook around Creating really useful content for end users.

AI assessment note: “On YouTube, this more came out of our SEO playbook around Creating really useful content”

Q I agree. I always think actually to Seth Godin and the purple cow, which is kind of the power of being different, not better. And I think we get to that point when we look at, like, content landscapes today, for example. So, okay, we have that. How did you come to Wise then? Because you were an advisor at Wise first, right?

A Yeah, yeah, so just going back through the, through the long story. So I was consultant for a while, and then, uh, uh, dotcom boom two happened, and I started working with, uh, with companies, getting them online. Uh, most of the shops on Oxford Street didn't have online shops, so I helped, helped build and launch their shops, and they asked me to run their shops. And once I ran a, A revenue line. I realized that's, that's what I wanted to do for, for the rest of my life, and I've been doing that for the last more or less 15, 15 to 20 years. I think even 20 years now. It's because it's so hard. Like, figuring out how you get people to turn up on your site, or download your product, and use it. I was like, you need to do psychology, marketing, mathematics, like, technology, everything. And that's, uh, that's what gets me out of bed in the morning, and that's what I've been doing ever since. So starting off, Uh, with very large companies, and then over time working with earlier and earlier stage, till I ran into Christo and Tava, um, probably 12 years ago now.

AI assessment note: “till I ran into Christo and Tava, um, probably 12 years ago now.”

Q What have been the biggest hiring mistakes you've made?

A I measure, uh, how many times do I say yes, and it ends up not working out, or how many times do I say no? So generally, I, I rarely am, uh, hiring into my reports. I'll do a final round for a leader into one of my teams. So I'll say no, but I'll always tell my team, you can, you could ignore my no, but this is what I expect that person to have done in six months time, and you will If that doesn't work out, you'll need to let them go, and sometimes they, they say, yeah, this person can totally do that, and I proved wrong. So on both accounts, I get it wrong about 20 to 30% of the time, and so what that told me, and this is after 10 years of trying, and I don't, having talked to others and watched others on this, I've learned that interviews aren't a substitute for the real thing, and you just have to Hire quickly, try and support people as much as you can, and just sometimes it just won't work out.

AI assessment note: “So on both accounts, I get it wrong about 20 to 30% of the time”

Q And Don- Talk to me, like, what have been lessons in making YouTube work?

A That's interesting. So it's, taking a step back, why social work for us is it, is ultimately word of mouth work. So people telling their friends about Wise and this great product is, and driving word of mouth is what's been the big driver of Wise's growth. And when the marketing amplifies that, that's when it works best. So, um, Facebook supports marketing to your friends. So if you have a, a usage of Wise, Then it's likely that your friendship group may need to send money internationally. Think French students in London, no French students in London. Small business owners who are exporting will know other small business owners that are exporting. And when you advertise to and target to, to people who are similar to your existing customer base, then this becomes pretty effective. So that, that's where the Facebook thing started. On YouTube, this more came out of our SEO playbook around Creating really useful content for end users.

AI assessment note: “On YouTube, this more came out of our SEO playbook around Creating really useful content”