Dee Hock, every mention

Visa (Audio) · Acquired Nov 27, 2023 · 78 mentions

• ▶ 3:59 David Rosenthal So, Dee Hock, the founder of Visa, who we will talk a lot about as we go along here, he told this great story of how after his time at Visa in his kind of older age, he would start his speaking engagements with a little thought exercise…
• ▶ 4:45 David Rosenthal It's just wild, as we were saying in the intro, how important this company is, and yet still to this day, I think, you know, maybe a few more people than in Dee's time know the answer to these questions, but not many.
• ▶ 5:04 David Rosenthal So, our task today is to tackle Dee's questions.
• ▶ 24:02 David Rosenthal This is a version of D Hawk holding up the Visa card.
• ▶ 39:30 David Rosenthal You can find our material for this episode, including Dave's awesome book and D Hawk's memoir, one for many at blinkist.com slash visa.
• ▶ 41:39 David Rosenthal In this second chapter, there is also only one person in the world that could have taken Bank AmeriCard and turned it into Visa, and that is D-Hawk.
• ▶ 59:27 David Rosenthal But for the moment, the person running their Bank of America card franchisee program is one D.
• ▶ 59:50 David Rosenthal No, and we're gonna talk much more about Dee in a minute, but just to keep the story going so we don't leave you all in suspense on this day.
• ▶ 59:57 David Rosenthal During the lunch break, Dee has gotten put on this committee.
• ▶ 1:00:52 David Rosenthal So, the whole summit reconvenes after lunch, and D gets up on stage, not the Bank of America guys, and he proposes this idea to the group.
• ▶ 1:01:36 David Rosenthal But D kinda thinks he just got authorization to go create Visa.
• ▶ 1:04:15 Ben Gilbert Okay, so David, D-Hawk thinks he's got a mandate to go change things up in a big way and create some big, crazy new proposal.
• ▶ 1:05:58 David Rosenthal So as Dee goes off and reflects on all this, he realizes that the fundamental problem is you've got this huge and diverse set of banks that both directly compete with one another, but also if they're gonna make this thing actually work,…
• ▶ 1:06:33 David Rosenthal But, you know, and this is Dee, he's like, okay, if though, if we could do this, what is the opportunity?
• ▶ 1:07:47 David Rosenthal You know, if you could get every bank in America, and then every bank in the world, and D is thinking big from the beginning,
• ▶ 1:09:32 David Rosenthal And now we gotta say a few words about Dee.
• ▶ 1:09:38 David Rosenthal Dee is a banker.
• ▶ 1:10:53 David Rosenthal Dee is an odd duck for sure, but he is amazingly smart.
• ▶ 1:11:46 David Rosenthal I mean, Dee basically is the prototypical Silicon Valley founder.
• ▶ 1:12:10 David Rosenthal There's one other important aspect to Dee that I think we should highlight here that enables him and all of Visa to succeed.
• ▶ 1:13:08 David Rosenthal So, Dee's just gone into B of A with this grand vision of like, you should give me this incredible asset because the value that it will create
• ▶ 1:13:40 David Rosenthal Totally incredible that Dee actually convinces Bank of America to do this.
• ▶ 1:15:49 David Rosenthal Dee and a few of his other fellow committee members, they go to Sausalito, California, just north of San Francisco, just across the Golden Gate Bridge, and they do an offsite for a couple days at a hotel in Sausalito, and there they come…
• ▶ 1:18:18 David Rosenthal So the actual legal structure that Dee and his fellow committee members land on for this is a for-profit non-stock membership corporation.
• ▶ 1:19:07 David Rosenthal The way that Dee describes it to all the other banks is it is a reverse holding company.
• ▶ 1:20:37 David Rosenthal Which, in practice, just gives Dee all of the control and power of the company.
• ▶ 1:22:07 David Rosenthal Again, this is why Dee needed to paint the picture both to Bank of America and all the other banks.
• ▶ 1:23:21 David Rosenthal Dee goes on like a tour across the country.
• ▶ 1:23:40 David Rosenthal Every single one of them signs up for the new organization led by Dee.
• ▶ 1:24:02 David Rosenthal And Dee writes about this, too.
• ▶ 1:24:39 David Rosenthal So D goes to see them and he gives the same pitch to the government.
• ▶ 1:25:45 David Rosenthal And D is able to say, like, nope, got the letter right here.
• ▶ 1:25:51 David Rosenthal So very shortly after this, after the creation of NBI, National Bank of AmeriCard, Inc., Dee, in 1972, he's thinking globally from the get-go.
• ▶ 1:26:46 David Rosenthal Do I want to buy Dee's pitch of it's worth it to me to be a proportional owner of Visa, or I could be the singular dominant credit card network in my own country, which is more valuable.
• ▶ 1:27:18 David Rosenthal Dee knows that probably not all of the international banks are gonna agree to this, and some of them are gonna go their own way.
• ▶ 1:27:37 David Rosenthal And Dee
• ▶ 1:29:08 David Rosenthal And Dee explains this to all, and somebody from the crowd yells out, Dee, you miserable bastard!
• ▶ 1:29:42 David Rosenthal Dee is just such a character.
• ▶ 1:30:09 David Rosenthal Dee holds board meetings all around the world, you know, different city all the time, it's a global organization, whatnot.
• ▶ 1:31:49 David Rosenthal So D holds a contest internally within NBI slash iBanko to generate a new name, and he offers a 50 dollar prize for the winning entry that is chosen.
• ▶ 1:32:06 David Rosenthal When they finally unveil it, Dee makes a big deal and writes out a 50 dollar check.
• ▶ 1:40:55 David Rosenthal In all the testimony and case with the DOJ, D is obviously a hundred percent against this happening.
• ▶ 1:41:50 David Rosenthal So D was right.
• ▶ 1:41:51 David Rosenthal D was right.
• ▶ 1:41:52 Ben Gilbert And to this day, D has been right.
• ▶ 1:43:12 David Rosenthal You know, we've answered Dee's questions.
• ▶ 1:44:01 David Rosenthal To Dee's question of where is Visa headquartered and nobody knowing that, it's headquartered in the Bay Area.
• ▶ 1:46:53 David Rosenthal But all it really bought D and Visa was the opportunity.
• ▶ 1:47:22 David Rosenthal The question of D back in 1968.
• ▶ 1:53:31 David Rosenthal So D and Visa know that this is like the first thing that they have to address.
• ▶ 1:53:40 David Rosenthal D starts a project called the Bank AmeriCard Authorization System Experimental, or BASE, to build technology to address this problem.
• ▶ 1:53:51 David Rosenthal The whole thing actually started rather inauspiciously, because right after all the approvals came through for D to form NBI, I think it was literally the evening before the first board meeting, Bank of America
• ▶ 1:54:05 David Rosenthal Comes up to Dee, and they're like, can we take you aside?
• ▶ 1:54:33 David Rosenthal And we're gonna do this, so, you know, Dee, if you want us to remain part of MBI, remember this is Bank of America, the most important part of MBI.
• ▶ 1:55:15 David Rosenthal D is, of course, pissed, but what's he gonna do?
• ▶ 1:55:19 David Rosenthal D takes it.
• ▶ 1:55:21 David Rosenthal As D then tells the story, Bank of America and Amex go out and they try and pitch the other banks in NBI and
• ▶ 1:56:40 David Rosenthal All the bids come back, and of course they are all way over budget and way over time, so Dee says, well, screw it.
• ▶ 1:56:51 David Rosenthal So in his very Dee way, he goes and he recruits the guy from the firm that impressed them the most throughout the bidding process.
• ▶ 1:57:05 David Rosenthal Dee goes back to him and he's like, I like you.
• ▶ 1:57:24 David Rosenthal Dee gives him nine months to build this entire thing from scratch, and to do this involves building a
• ▶ 1:58:34 David Rosenthal So Dave Stearns writes in his book about this whole situation and about Dee.
• ▶ 1:58:39 David Rosenthal Dee maintained that if you give computer people more time, they will just consume it.
• ▶ 2:04:40 David Rosenthal So he goes to see D and I mean, the whole visa organization, I think is like less than 50 people at this point in time.
• ▶ 2:04:48 David Rosenthal And he's like, D,
• ▶ 2:05:25 David Rosenthal And, uh, Dee, uh, in his very Dee way, he thinks about it.
• ▶ 2:05:56 David Rosenthal So now, D is not technical enough to talk about that, but this is super important.
• ▶ 2:18:47 David Rosenthal Dee ends up getting ousted from the company.
• ▶ 2:18:49 David Rosenthal I think, you know, if he were still alive today, he would probably agree with the characterization that Dee was one of the most amazing zero to one entrepreneurs in history.
• ▶ 2:19:14 David Rosenthal A lot of conflict starts to erupt, ends up with D leaving the company in 1984.
• ▶ 2:28:28 Ben Gilbert I mean, DHOC basically was right.
• ▶ 2:53:23 David Rosenthal Obviously, debit cards are a big part, and debit transactions are a big part of the Visa network today, but when Visa first tried to introduce them, this was one of the things that led to D.
• ▶ 2:53:51 David Rosenthal And obviously debit cards did eventually become part of the system, but not in the way that, you know, it was looking like Dee initially wanted them to.
• ▶ 2:54:37 David Rosenthal And actually, there was a big fight between Visa and all the ATM networks, and Dee wanted your Visa card to also be your ATM card.
• ▶ 2:54:51 David Rosenthal And they certainly weren't back in Dee's day.
• ▶ 3:09:21 David Rosenthal Which is exactly what DHOC predicted.
• ▶ 3:13:10 David Rosenthal And Bank of America, the franchisor, D had to go to them and say, hey, you're gonna forfeit the whole asset.
• ▶ 3:36:50 David Rosenthal Let's play out the DHOC thought exercise.