Affirm

“But if you go on Google and you say, like, I'm out of money, need money, credit, credit, credit, like you're probably a bad credit risk. So kind of going back to the general store concept, People that aren't looking for credit, that might not have their wallet…”

“As a person recovering from doing lots of machine learning in the service of social media, which was, you know, good and well, but wasn't really what I was meant to do, and lusting for the days of doing machine learning to fight fraud, my MO was, I just want t…”

“And the only difference that Beautylish Did as they implemented Expedite, I think by then it may have already, I think it was named the firm by then, was that they told their shoppers up funnel basically as they were selecting their shampoos and perfumes that …”

“A firm briefly flirted with being a payment provider to the online educational facilities, which we ran out of kicking and screaming because the reason they're willing to pay these enormous MDRs is because the quality of education is largely terrible.”

“There will never be an asterisk on a firm zero. That, that is the origin story of why we don't charge late fees, we don't do deferred interest, all the sort of gimmicks and gotchas that the industry loves to throw at people.”

“We've transacted with roughly 50 plus million Americans alone, and we're now live in four countries and growing pretty quickly.”

“And like, I think to me, one of the coolest things about a firm to this day is it has negative customer acquisition cost. I mean, it is paid to acquire a customer.”

“So we are the only company in the industry really, there's plenty of competitors who are trying and some degree of success, but mostly not really, who will go into longer term loans. And by longer, I don't mean mortgage or, you know, 15 plus years, but like th…”

“These long term loans, which are actually quite hard to manage and quite hard to maintain reasonable default rates and delinquency rates on, is the price you pay as a provider of financing to upsell consumers on more and more services.”

“They just signed his giant deal with us, like, all right, so we have 1200 employees, 800,000 merchants, I'm just going to give everyone 700 and something merchants to review manually. And so for like a week with no sleep, people are just like manually reviewin…”

“But it is true that majority of our shareholder letters contain subtle or not so subtle references to the Big Lebowski, and because it's been public for twenty-ish quarters, and At some point, all the stuff that I've memorized has been used. So now I need to c…”

“So for a while we'd sort of had this point of view of like you're writing code, do whatever you like and have whatever tools you want. And as the tools improved, we had come more and more sure of what works for us and what we don't like. And so we've been Sort…”

“We don't compound interest specifically to make sure that we can pre-price every loan and say you're borrowing 500 dollars and your total interest charges will be 25 dollars or zero dollars if somebody else or merchant is paying your interest for you.”

“We'll do north of 47, forty eight billion dollars of loans this fiscal year alone.”

“Going public, most people will tell you it's this long protracted affair and it's so hard and it's actually not like we decided to go public in September. We were basically ready with everything by November in December of 20, 20”

“NetSuite cannot handle the scale of something like a firm or any consumer company where you have, you're tracking millions to even billions of money movement events throughout the day.”

“Even if I look at durable, among our largest positions in the public markets are DoorDash, Affirm, Toast. We led those last private rounds, right?”

“You know, we did the affirm affirm, you know, Max Levchin's company. You know, we did a twenty billion dollar partnership with them. Where we formed a joint venture with them so they could originate more assets and have more operating leverage.”

“Surprisingly, we see a large percentage of our purchases go through a firm. It's probably 15% of all purchases are running through a firm.”

“All of those providers would pay you money to actually add it to the website. So I think it was either Klarna or a firm gave us 50,000 dollars to have it as an option on that.”

“The story about knowing the letter grade of every person you hire in your company, whether it's 2000 people like a firm, but that's just silly.”

“Sometimes you look at work and you say, wow, like this person cannot do better. Full stop. Don't worry about being direct. The conversation you're going to have with them at some point very soon is, I don't think you have a place on this team anymore. And that…”

“We have a whole culture of postmortems at a firm where we record every decision we make”

“The problem is that with successes, the texture of each individual decision is much harder to detect.”

“I have a friend who grew up in a very managed parenting environment where his parents would ask him when he showed up home from school with a 98% result in a test, like, what happened to the other two percent? And you know, I'm not sure it's a great way to hav…”

“We literally have a postmortem depot where people can go and review every major or minor Nothing we did going back to the beginning of a firm time and learn from it.”

“We had to do a layoff in about two years ago and that was morale lowest point for me and I think everyone around me”

“Every single person I talked to had said, hey, I get it. This happened. We grew too fast. We overhired. I understand.”

“Yes, it certainly is. Actually, and maybe that's a good answer in retrospect to your question about Calculated risks that did not pan out. You decide that you want every incremental engineer to build more features while the fundraising is good. And then sudden…”

“I think they announced that they grew 32% last quarter. I think we announced that we grew 35%.”

“For the last several quarters, from estimates, so we have been taking share in the market against all competitors, not, not just them.”

“I've gone through some great lengths, by the way, to make sure I don't accidentally stumble on my ticker. So, you know, my Apple desktop, if I click in the top right corner and stocks drops down, I cannot see my stock ticker. So I don't accidentally discover t…”

“The storytelling hour of like, oh, by the way, we have this shiny item that we're so excited about, that feeds the voting machine. And I'm sure some of it is important, but I spent a lot more time feeding the weighing machine.”

“If you are a careful student of my shareholder letters, of which I have now written on the order of, it cannot possibly be 16, but I think it's 16 or 15 you will see that every single one of them contains a reference to the movie Big Lebowski.”

“NewBank is bigger than Coinbase, Robinhood, Affirm, SoFi, and Lemonade combined.”

“The day we launched, I sort of said, well, we have no way of financing these loans, and it's going to be a negative cash flow business. And so I will put up a 100,000 dollars of my own money to front these payments.”

“Actually some have, you know, like I'm sure Opendoor actually is profitable, a firm will be profitable, but usually it's a 10 to 15, 20 year journey by the time that happens.”

“Because a firm, as an example, they're a great lender. Really, they're a great company, but they have a very specific product to a very specific credit box in a, in, in, in, in the US, right? They don't cover other countries. They don't cover near prime or sub…”

“And by the way, the firm is not working with us in Lenovo or elsewhere, but it's more about the ability to add more players that are believing in charge after vision and in charge after marketplace.”

“In our second fund, we had about a hundred and twenty million of a firm stock, and we were sitting on it because we believe in the company and still do, and we're still sitting on it. And that was like a hundred million dollar mistake.”

“At the time of IPO, of a firm's IPO, 28% of all of the revenue in the previous year leading up to the IPO was from the Peloton deal.”

“In addition, we do use debt and debt is the oxygen for businesses like Affirm. It's the oxygen for companies like Opendoor.”

“In fact, we end up investing both Peloton and Affirm because of that. When we are talking to Peloton, we know of Affirm, and we were interested to see who Peloton works with in order to have that payment plan, because we know that will make it more affordable.…”

“And I think the only other firm that did that was Matt at Wellington. So both of us only went and invested in both companies.”

“Klarna, Afterpay, Affirm, I like the people who start them. I think they're horrible companies for the world. I think that they should burn down completely and not exist.”

“We don't do a hard pull as they call it in the industry. So you don't really, we don't ding your credit record.”

“We see about a 30% increase in sales for most of these merchants.”

“So every time we sort of asked ourselves, what is the right next branding move for us? We sort of Search for a precedent in USA's history.”

“We're certainly in competition for that, the opportunity there is not just to be the thing that's in your head and you're using it every day, but the thing that in your head that you know is your trusted advisor is actually your helper.”

“And if you're late, we're not going to charge you a late fee because that's our fault. We didn't remind you correctly. And when we made the underwriting decision, we made the choice to take you on as a risk and that that's, we're going to have to stick with.”

“So second purchase is 80% larger than the first one on average.”

“This is actually a company that's in our portfolio that actually I co-founded called Affirm. We just need name, email, mobile number, birthday, and the last four of your social security number, and within about half a second, we can underwrite a loan.”

“Affirm, our insight was We'll use merchants to get distribution. So our cost, cost of customer acquisition is zero because we partner with merchants”

“Affirm, because it's a ridiculously hard one run by one of the best founders in history with Max Levchin.”