Nov 14, 2023 · 32m · a16z
Competing in a Crowd of Incumbents with Mercury's Immad Akhund
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of a16z's 'My First 16', host Seema Amble interviews Mercury Co-Founder and CEO Immad Akhund on how to build, launch, and scale a standout FinTech startup in a category dominated by incumbents. Immad shares key strategies regarding Minimum Delightful Products, viral customer acquisition, founder-led sales, and early unit economics.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 2.8 Guest teaching 2.1 Guest disagreement 0.6 The host pushing back 0.6
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 22:45 Rejecting price-based competition in FinTech
The guest strongly criticizes the standard playbook of FinTech competitors who differentiate through margin giveaways, calling pricing a dangerous methodology to compete on.
Hardest push from the host ▶ 4:21 Probing vision versus customer-driven scopeThe host challenges the guest's initial answer about feature selection, asking specifically whether the robust MVP was driven by explicit customer feedback or just internal founder vision.
Biggest teaching moment ▶ 4:48 Redefining MVP dynamics in incumbent marketsThe guest reshapes the standard VC notion of an MVP, explaining why competing against established incumbents requires a much higher 'minimum delightful product' baseline compared to creating a new market.
The host holds their own ▶ 21:00 Articulating early hiring hazardsThe host demonstrates clear domain expertise by expanding on the guest's point about hiring ICs, providing a nuanced explanation of how premature executive hires build unnecessary management layers rather than executing core tasks.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Show Opening and Title Animation | 1 | 0 | 0 | 0 | Introductory segment where host Seema Amble sets up the interview premise, guest background, and episode topics. As a monologue/intro structure, host pushback and guest combativeness are zero. | |
| Building a Minimum Delightful Product in Incumbent Categories | 2 | 3 | 1 | 1 | The guest reframes the concept of a standard MVP to a 'minimum delightful product' needed when competing against incumbents. The host probes gently on whether this feature depth was customer-driven or vision-driven. | |
| Essential FinTech Features and Early Team Structure | 3 | 2 | 0 | 0 | The host demonstrates domain familiarity by contrasting FinTech MVP requirements with lightweight SaaS extensions, while the guest outlines technical and compliance complexity. | |
| Finding Early Adopters and Navigating Customer Feedback | 4 | 3 | 1 | 1 | The guest explains why pre-launch customer feedback can be misleading when introducing superior products. The host adds a quick complementary reference to consumer behavior predictions. | |
| Launch Strategy and Establishing Trust in Banking | 2 | 2 | 0 | 0 | A collaborative discussion where the guest outlines the three pillars that established trust during Mercury's launch, including investor backing and polished UX. | |
| Scaling Go-To-Market and Early Hiring Strategy | 4 | 2 | 0 | 0 | The host active-listens and demonstrates deep venture expertise by elaborating on why early startups should hire individual doers rather than managers who build empires prematurely. | |
| Pricing Philosophy and Product-Led Differentiation | 4 | 3 | 2 | 1 | The guest pushes back against the common FinTech strategy of competing on price and margin giveaways. The host highlights how this product-first focus provided a stronger signal of product-market fit. | |
| Lessons Learned on Demand Generation and Unit Economics | 3 | 2 | 1 | 2 | The host presses the guest on when he performed unit economic spreadsheet modeling and whether those early assumptions held up over time. | |
| Advice for Founders on Demystifying Sales | 2 | 2 | 0 | 0 | The guest gives advice to technical founders on demystifying sales by viewing it as a quantitative pipeline process, concluding with host wrap-up. |
Statements from this episode (19)
B2B FinTech founders' top concern is customer acquisition and trust
“The number one question I get asked by early B to B FinTech founders is, how do I acquire my first set of customers, as well as, how do I get my customers to trust me with their money?”
Akhund: No neobank offered domestic and international wires in 2017
“I felt we needed both domestic and international wires where, you know, now there are other new banks that have done that, but back in 2017, no one had done that.”
Akhund: Mercury spent 1.5 years building its initial feature set before launching
“It took us a year and a half to launch because we were quite Stubbin about hitting all of those features, which were not all trivial to get.”
Akhund: Startups competing with incumbents must catch up and be 10x better
“We were very deliberately serving a set of people that had alternatives. So and then the bar is just much higher. You have to catch up with everything that exists, and you have to be 10 X better than that.”
Akhund: Fintech products take longer to build due to compliance and back-end needs
“Everything just takes longer in fintech, right, because you've got you need all the back-end fintech connections, and then you need all the compliance and risk side of things”
Akhund: Startups should stay under 10 employees before product-market fit
“Pre-product market fit, it's better to be sub 10 people.”
Akhund: New B2B startups should focus on early-stage customers first
“In the startup space, if you want a new product, you want to initially focus on the earlier startups just because they're the easiest to win.”
Akhund had invested in roughly 90 startups prior to Mercury's beta
“I'd invested in, I guess by that point about 90 startups and, you know, Just by the fact that done done fairly recently, I only started investing in 2060, 16.”
Akhund: Customer feedback before having a live product is ineffective
“I think there's a ton to learn from customers when you put a product in front of them and they use it and you see how they use it and you ask them like, oh, what more you want. It's much harder to learn from customers when you imagine a product and you haven't…”
Akhund: Mercury's international wire transfers failed silently for six weeks post-launch
“For example, for the first six weeks, we thought sending international wires was working, but it wasn't working.”
Akhund: Early-stage startups should hire sales ICs before a head of sales
“I mostly think of these things as like, I think it's a mistake when startups go and hire, like the first hire shouldn't be ahead of sales. Like, I think you should just go hire some salespeople and see if there's a repeatable process that you can come up with …”
Akhund: Building functions zero-to-one should be founder-led
“Yeah, I don't think like taking a function from zero to one is, is something that like, I think actually kind of. Should be founder-led with, like, some, like, IC or player coaches and then once you've, like, built out some of that function, then you can think…”
Akhund: Zero-to-one ICs rarely make good scale-up team managers
“Yeah, and those people aren't always, you know, the person who's going to be the IC and then figure stuff out is, is not necessarily great at, like, managing a thirty-person team and, you know, and vice versa, right? Like, someone who's, like, doing a 30 or hu…”
Akhund: Differentiating fintech startups through thin pricing margins is a mistake
“I think it's one of the mistakes that fintechs make is they become, like, differentiated through pricing power. Like, they're like, we're going to give away the most margin possible.”
Akhund: Day Zero distribution tactics fail at $10M ARR
“The other problem with any of these distribution mats is like, you know, what you can do at day zero is not going to work when you have ten million ARR anyway.”
Akhund: A large TAM gives startups room to maneuver
“The thing that you can predetermine is like going after something that's got a big enough time, right? Like if it's a, if the time is big enough and obviously business banking is a huge time that gives you a lot more room for the maneuver, right? Like you can …”
Akhund: Fintech startups cannot secure bank partnerships without significant upfront funding
“Basically with Mercury, I was like, okay, I can't build this without raising money because you can't get a bank partnership without raising significant money. So you know, it was like straight into, I did build some like screens and things like that, but it wa…”
Akhund: Technical founders succeed at sales by treating it as a numbers game
“I think the thing that I would tell that person and I tell other founders is, like, I think it's better to Think about sales as like a numbers game. It's like, how many people do you talk to? How good's your conversion rate? And you know, that's the, that equa…”