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Aug 26, 2017 · 17m · top-founders

763: He's Raised $18.5m To Help Banks Use Open API's, Makes Money From # of API Calls

Steve Kirsch · 8m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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Serial entrepreneur Steve Kirsch joins Nathan Latka to discuss Token, a software platform providing standardized, secure open banking APIs to financial institutions capitalized by European PSD2 regulations and an $18.5 million Series A round.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 44.5% of the talking time here. How this is scored →

Nathan as informed peer 3.0 Guest teaching 2.5 Guest disagreement 1.0 Nathan pushing back 1.5
05100:0010:001:55–6:13 · Nathan as informed peer 4/10 Token's Value Proposition and Universal Banking APIs Steve Kirsch provides detailed technical analogies and explains why standard blockchain consensus is too slow for real-time banking payments compared to Token's architecture. Nathan prompts on crypto and security comparisons, listening attentively while synthesizing.6:13–8:28 · Nathan as informed peer 3/10 Token's Genesis, Venture Funding, and PSD2 Market Catalyst Nathan playfully pushes Steve on the exact founding date and backstory after noticing a facial expression. Steve shares how the regulatory mandate PSD2 pivoted their business model and Series A fundraising.8:30–11:22 · Nathan as informed peer 6/10 API Pricing Models and US Open Banking Adoption Nathan breaks down an end-to-end hypothetical scenario to clearly illustrate Token's transaction fee model for the audience, which Steve confirms. Steve then draws an insightful historical parallel between ARPANET and PSD2 adoption dynamics.11:22–14:12 · Nathan as informed peer 3/10 Enterprise Bank Sales, Integration Progress, and Team Size Nathan presses Steve on sales tactics, bank numbers, and team metrics, while Steve candidly explains the slow enterprise sales cycle leading up to the PSD2 regulatory deadline. The segment concludes with mid-roll promo reads.14:13–16:15 · Nathan as informed peer 2/10 The Famous Five Rapid-Fire Questions with Steve Kirsch Standard friendly Famous Five rapid-fire exchange where Steve shares his favorite tools, sleep habits, and advice to hire experienced leaders early.16:15–17:12 · Nathan as informed peer 0/10 Episode Recap and Next Episode Teaser Solo host wrap-up summarizing Token's core metrics, funding, and PSD2 compliance value proposition, followed by a preview of the upcoming episode.1:55–6:13 · Guest teaching 5/10 Token's Value Proposition and Universal Banking APIs Steve Kirsch provides detailed technical analogies and explains why standard blockchain consensus is too slow for real-time banking payments compared to Token's architecture. Nathan prompts on crypto and security comparisons, listening attentively while synthesizing.6:13–8:28 · Guest teaching 3/10 Token's Genesis, Venture Funding, and PSD2 Market Catalyst Nathan playfully pushes Steve on the exact founding date and backstory after noticing a facial expression. Steve shares how the regulatory mandate PSD2 pivoted their business model and Series A fundraising.8:30–11:22 · Guest teaching 4/10 API Pricing Models and US Open Banking Adoption Nathan breaks down an end-to-end hypothetical scenario to clearly illustrate Token's transaction fee model for the audience, which Steve confirms. Steve then draws an insightful historical parallel between ARPANET and PSD2 adoption dynamics.11:22–14:12 · Guest teaching 2/10 Enterprise Bank Sales, Integration Progress, and Team Size Nathan presses Steve on sales tactics, bank numbers, and team metrics, while Steve candidly explains the slow enterprise sales cycle leading up to the PSD2 regulatory deadline. The segment concludes with mid-roll promo reads.14:13–16:15 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions with Steve Kirsch Standard friendly Famous Five rapid-fire exchange where Steve shares his favorite tools, sleep habits, and advice to hire experienced leaders early.16:15–17:12 · Guest teaching 0/10 Episode Recap and Next Episode Teaser Solo host wrap-up summarizing Token's core metrics, funding, and PSD2 compliance value proposition, followed by a preview of the upcoming episode.1:55–6:13 · Guest disagreement 1/10 Token's Value Proposition and Universal Banking APIs Steve Kirsch provides detailed technical analogies and explains why standard blockchain consensus is too slow for real-time banking payments compared to Token's architecture. Nathan prompts on crypto and security comparisons, listening attentively while synthesizing.6:13–8:28 · Guest disagreement 2/10 Token's Genesis, Venture Funding, and PSD2 Market Catalyst Nathan playfully pushes Steve on the exact founding date and backstory after noticing a facial expression. Steve shares how the regulatory mandate PSD2 pivoted their business model and Series A fundraising.8:30–11:22 · Guest disagreement 1/10 API Pricing Models and US Open Banking Adoption Nathan breaks down an end-to-end hypothetical scenario to clearly illustrate Token's transaction fee model for the audience, which Steve confirms. Steve then draws an insightful historical parallel between ARPANET and PSD2 adoption dynamics.11:22–14:12 · Guest disagreement 1/10 Enterprise Bank Sales, Integration Progress, and Team Size Nathan presses Steve on sales tactics, bank numbers, and team metrics, while Steve candidly explains the slow enterprise sales cycle leading up to the PSD2 regulatory deadline. The segment concludes with mid-roll promo reads.14:13–16:15 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions with Steve Kirsch Standard friendly Famous Five rapid-fire exchange where Steve shares his favorite tools, sleep habits, and advice to hire experienced leaders early.16:15–17:12 · Guest disagreement 0/10 Episode Recap and Next Episode Teaser Solo host wrap-up summarizing Token's core metrics, funding, and PSD2 compliance value proposition, followed by a preview of the upcoming episode.1:55–6:13 · Nathan pushing back 1/10 Token's Value Proposition and Universal Banking APIs Steve Kirsch provides detailed technical analogies and explains why standard blockchain consensus is too slow for real-time banking payments compared to Token's architecture. Nathan prompts on crypto and security comparisons, listening attentively while synthesizing.6:13–8:28 · Nathan pushing back 2/10 Token's Genesis, Venture Funding, and PSD2 Market Catalyst Nathan playfully pushes Steve on the exact founding date and backstory after noticing a facial expression. Steve shares how the regulatory mandate PSD2 pivoted their business model and Series A fundraising.8:30–11:22 · Nathan pushing back 2/10 API Pricing Models and US Open Banking Adoption Nathan breaks down an end-to-end hypothetical scenario to clearly illustrate Token's transaction fee model for the audience, which Steve confirms. Steve then draws an insightful historical parallel between ARPANET and PSD2 adoption dynamics.11:22–14:12 · Nathan pushing back 3/10 Enterprise Bank Sales, Integration Progress, and Team Size Nathan presses Steve on sales tactics, bank numbers, and team metrics, while Steve candidly explains the slow enterprise sales cycle leading up to the PSD2 regulatory deadline. The segment concludes with mid-roll promo reads.14:13–16:15 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions with Steve Kirsch Standard friendly Famous Five rapid-fire exchange where Steve shares his favorite tools, sleep habits, and advice to hire experienced leaders early.16:15–17:12 · Nathan pushing back 0/10 Episode Recap and Next Episode Teaser Solo host wrap-up summarizing Token's core metrics, funding, and PSD2 compliance value proposition, followed by a preview of the upcoming episode.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 71.4% · guest 28.6%0:00 · Nathan 71.4% · guest 28.6%3:00 · Nathan 9.9% · guest 90.1%3:00 · Nathan 9.9% · guest 90.1%6:00 · Nathan 25.8% · guest 74.2%6:00 · Nathan 25.8% · guest 74.2%9:00 · Nathan 39.3% · guest 60.7%9:00 · Nathan 39.3% · guest 60.7%12:00 · Nathan 64.7% · guest 35.3%12:00 · Nathan 64.7% · guest 35.3%15:00 · Nathan 60.4% · guest 39.6%15:00 · Nathan 60.4% · guest 39.6%
Sharpest disagreement ▶ 6:18 Playful evasion on founding backstory

Steve laughs off and playfully deflects Nathan's pressing questions about the founding date and backstory before recounting the initial bank pushbacks.

 Hardest push from Nathan ▶ 6:33 Nathan presses on the company's origin story

Nathan refuses to let Steve brush off his reaction, insisting that there must be an untold story behind the late 2014 launch.

 Biggest teaching moment ▶ 5:04 Kirsch educates on blockchain latency constraints in finance

Steve explains why typical Byzantine fault-tolerant blockchain consensus cannot achieve the low latency and throughput required for real-time bank settlements, citing Bank of England benchmarks.

 Nathan holds their own ▶ 9:08 Nathan articulates the commercial flow and unit economics

Nathan synthesizes the open banking business model into an accessible step-by-step example of how third-party apps, banks, and Token split fees.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Token's Value Proposition and Universal Banking APIs 4511 Steve Kirsch provides detailed technical analogies and explains why standard blockchain consensus is too slow for real-time banking payments compared to Token's architecture. Nathan prompts on crypto and security comparisons, listening attentively while synthesizing.
Token's Genesis, Venture Funding, and PSD2 Market Catalyst 3322 Nathan playfully pushes Steve on the exact founding date and backstory after noticing a facial expression. Steve shares how the regulatory mandate PSD2 pivoted their business model and Series A fundraising.
API Pricing Models and US Open Banking Adoption 6412 Nathan breaks down an end-to-end hypothetical scenario to clearly illustrate Token's transaction fee model for the audience, which Steve confirms. Steve then draws an insightful historical parallel between ARPANET and PSD2 adoption dynamics.
Enterprise Bank Sales, Integration Progress, and Team Size 3213 Nathan presses Steve on sales tactics, bank numbers, and team metrics, while Steve candidly explains the slow enterprise sales cycle leading up to the PSD2 regulatory deadline. The segment concludes with mid-roll promo reads.
The Famous Five Rapid-Fire Questions with Steve Kirsch 2111 Standard friendly Famous Five rapid-fire exchange where Steve shares his favorite tools, sleep habits, and advice to hire experienced leaders early.
Episode Recap and Next Episode Teaser 0000 Solo host wrap-up summarizing Token's core metrics, funding, and PSD2 compliance value proposition, followed by a preview of the upcoming episode.

Statements from this episode (7)

Assertion Supported
Kirsch: Most Banks Lack Open APIs for Moving Money
“The problem is that most banks don't have an open API where you can do things like move money.”
Steve Kirsch Aug 26, 2017 ▶ 3:01
Opinion
Kirsch: Banks using OAuth 2 for APIs have horrible security
“Whereas most banks are using, for their own APIs, they're using OAuth too, which is Just horrible from a security perspective.”
Steve Kirsch Aug 26, 2017 ▶ 4:26
Insight
Kirsch: Blockchain consensus is inappropriate for low-latency financial systems
“There's no real need for that in a lot of financial applications and for something that needs to perform really quickly meaning super low latency and very high throughput. The technology for blockchain is just not appropriate because you just don't have the ti…”
Steve Kirsch Aug 26, 2017 ▶ 5:21
Assertion Partly supported
Kirsch: Bank of England's Ethereum trial yielded five transactions per second
“The Bank of England did an experiment with Ethereum, and they found that they could get, like, five transactions a second.”
Steve Kirsch Aug 26, 2017 ▶ 5:43
Disclosure
Token monetizes by charging developers for free bank API calls
“So we charge for API calls, and we basically get those calls typically for free from the bank, and so we make money on the difference.”
Steve Kirsch Aug 26, 2017 ▶ 8:07
Prediction Not checkable as stated
Kirsch predicts US open banking adoption will snowball from European demand
“I think the same thing will happen here is that there's a big stick that causes the European banks to get on board the system. Once that happens, the apps get written and then the apps only work with European banks. Ooh. So if I want to move money instantly fr…”
Steve Kirsch Aug 26, 2017 ▶ 10:47
Assertion Not checkable as stated
Kirsch: Token is currently integrated with roughly five banks
“It's a pretty small number. Like five? Yeah, it's on that order.”
Steve Kirsch Aug 26, 2017 ▶ 12:12
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