The Exchanges

Q Yeah. I, I think that's really curious. Like, has that made you rethink your service providers and your different vendors? I've listened to a couple of pause that you're on and you specifically have talked about deal and how much of an impact that's made on the business.

A Yeah. So what, well, I think one of the things that started happening is we started realizing that one of the biggest challenges is that if you think about Klana has a relationship with Sephora. Right? So Sephora is a client of ours. The information that's necessary for us to take care of Sephora in a great way and offer our services and upsell them on new ideas or whatever it might be, it's stuck in Salesforce, in some analytics dashboards, in Google Slides, in emails, in Slack messages. It's spread out across so many different systems. And there's so many inconsistencies and so much information there that is, it's hard to know what's true and what's accurate and what's valid and non-valid and so forth. And if that's true for a human, that's also true for AI because AI is like an employee that comes to work every day and has forgotten everything. Like they're like first day job, you know, what can I do? Like, and you need to give it like all that context and all the things for it to be productive. And even if you have a million tokens, there's a limitation to how much that is. And so what we started realizing, we need to standardize, simplify, bring the information in one place, harmonize all that information. And that's going to help actually our employees as well as AI to make work more fun. And then the challenge we had with some of our software as a service vendors is that…

AI assessment note: “the challenge we had with some of our software as a service vendors is”

Q my questions already. So one of Sorcery's sponsors is Brex. It's all about spending smarter, moving faster. And they love performance. And one of the questions was going to be, how do you think about that with employees? And I know you evaluate them against revenue. The revenue per employee is increasing. So an alternative question is, what is one of the biggest lessons that you learned as a CEO?

A Hmm. Wow. That's what those always like so difficult. There are so many and I I've done like every mistake in the book. I think more recently, you know, I used to hear there used to be this fantastic guy, Sir Ian, I think was his name. He was the CEO of Tesco for a while. And he turned Tesco who was like on the ropes in the UK and he made it a smashing success. And he said, everything is about customer obsession. He would even force his finance people, the CFO, like, oh, you're going to get a new accounting system. How's that going to make life better for our customers? And like, I used to listen to that, and we did some of that, but in the last one year, we have just gone all in on this. The amount of time I now spend talking to customers on the phone, calling customers, talking to them, reviewing people's sessions with how they use the Klarna app. Like, we're just changing that. And it's, it is so interesting. So many times internally at Klarna, people will sit and have opinions like, yeah, we need to do this or that, or our customers want this and that. We pick up the phone, we call those customers. Totally different. Like totally, like we're totally lost it. Right. Cause you get so, like, you get so caught up in your own views and clown and we know all the products, we understand how they work, you know, all that stuff. And then these people who, you know, they just use it …

AI assessment note: “he said, everything is about customer obsession.”

Q Why aren't you using Lovable? That's one of your neighbors.

A I've tried Lovable as well. And I, I love it for prototyping, like more designs, but when I want to do something, you know, that is more, uh, backend, then I need cursor for it. So, but it's been fantastic. And I, and I said, you know, I actually said this the other day because people said that to me, they're, you're vibe coding. I was like, but honestly, because I'm not an engineer, I've been vibe coding my whole life. Right. I come into a meeting room. There's tons of product people, engineers. I say like, I think we should build an app that kind of does this and it should work like that. And they're like, okay, try to make sense of what it's saying. Try to like, you know, interpret what I'm trying to say. And then like, yeah,

AI assessment note: “when I want to do something that is more backend then I need cursor”

Q Yes. So there's Chime, there's JP Morgan, there's all these different kinds of banks out there. How are you differentiating?

A Well, I think that the, uh, it actually came back to that idea 10 years ago when we said, okay, fine, the future of financial services is going to be this digital financial system wakes you up in the morning, tells you I've analyzed your mortgage, Uh, I can save you 50 pounds or 50 dollars, and the only thing you need to do is say yes, and I'll switch and do all the paperwork for it. Okay. To me, that's like, that's going to happen. Um, that's where retail banking is going. That's where digital financial services going. And it was funny because I was at Jamie Dimon's conference in Yellowstone, and I said this on stage when I was with Eric, with Sam Altman and, um, and the others. And then, you know, Eric Schmidt was like, how can you say that when you were at JP Morgan's conference? I was like, I don't know. Sorry, man. I was just trying to share my, what I think is the future. Um, but the point is, what does that mean? That means that excess profits are going away because all these banks make so much money because they rely on our unwillingness to switch. And if switching becomes very simple because you have a digital financial system that just says, Hey, use this. It's cheaper. That is better. Then suddenly you can't compete that way. And that's true for so many things that we use in life. It's true for our carriers, electricity, you know, tons of things. And, uh, where compa…

AI assessment note: “And that's what we want to differentiate us to really put the customer first”

Q How is Klarna going to become a trillion dollar company?

A Wow. Um, well, I think we're fortunate to start with one thing is that we're in retail banking, and this is an industry that itself like credit card in the US is like 1.2 trillion dollars or something like that. I mean, it's just something humongously great, huge, and it's a market ripe for disruption, tons of excess profit, not so happy customers, low customer mobility, people haven't really switched that much. And so there's just like everything is set up For coming in and trying to disrupt it and create something better, newer, nicer, friendlier, more customer focused, you know, there's all these opportunities in it. So I think that that is really the key thing. Uh, and that's not just in the U S that's true in Europe and many other countries as well. So I think like at the core, that's really.

AI assessment note: “we're in retail banking, and this is an industry that itself like credit card”

Q I'm sure a lot of people are looking at you and will be looking at you as a playbook for restructuring with AI. Um, in terms of the business units that you went after, how did you start to restructure the business?

A Well, it wasn't necessarily business units as it was. So the key thing when ChatGPT came along, you know, and I, I, uh, you know, to me, I was just reading on X and I was like, there's this new thing and you're supposed to try it. And I was like, okay, let's go and try it. And then I was just blown away. I was just like, wow, you know, this is amazing. And then I realized like, okay, Sam Altman is going to be very quickly become a very popular guy. So like, I gotta get hold of him before it's late. So I, I talked to Sequoia and my shareholders who were investors, of course, because they're always investors and everything. That's great. So they were obviously investors there. And I said, can you connect me to Sam? And they were sure. Sam answered. And I was just like, okay, I'm going to make up a reason to go to Silicon Valley. And I did. And at the time I got on the plane, I had a booking with Sam for three hours. By the time I arrived, my meeting with Sam was 30 minutes. So I could kind of see, I was getting to a point where like, I would not have a meeting at all.

AI assessment note: “Well, it wasn't necessarily business units as it was. So the key thing”