Ignoring Silicon Valley advice to build a $3B fintech unicorn | Immad Akhund (Co-founder and CEO of Mercury)

Immad: Four days after launch, someone signed up, never spoke to us, and transferred $1 million into a Mercury bank account and I was like, "Wow."

Brett: For today's episode, I'm excited to sit down with Immad Akhund. He's the CEO and co-founder of Mercury, a banking platform for startups. Mercury is Immad's third company, and he's been a founder for the better part of the last 20 years.

Immad: "What does it take for this to be your only bank account as a business?" That was my level.

Brett: In our conversation, we dig into the squishier topic of company culture and how Immad's personality shows up in everything from product building to hiring.

Immad: I never understood culture for my first 3 companies. The way I describe it now, what is the personality that you have, both you personally and then what is the personality you encourage in the company.

Brett: Immad then shares the founding story of Mercury and what he's learned about finding product-market fit on his third go around.

Immad: If you're actually a strong founder, you can sell anything. You'll get weak product-market fit almost out of any idea, and that's the problem.

Brett: Let's dive in. Well, I'm excited for the conversation. I appreciate you joining.

Immad: Yeah. Thanks for having me.

Brett: I was curious, for you, what have you learned from starting multiple companies? Meaning, like, the most important things you figured out that you could have only learned as a founder of multiple companies?

Immad: I've been doing startups for 19 years this year. I feel like one of the things that's fun about being a founder/CEO, but also knowing, is that every year you have to learn new things, especially if you're progressing. Mercury is almost 1,000-person company, so even the lessons I learned in my previous companies are not always applicable when it's 1000-person company versus a 10-person company. I'll try to pull out some that I think were hard for me to learn that, later on, I have grabbed. This is a meta lesson which really took a while to truly learn, but it's quite an important lesson for me, which is you can't take other people's lessons and make them your own. What's the cool thing nowadays? Like founder mode or something like that? I think it's very easy to take something that Brian Chesky says or, back in the day, it used to be all about MVP, minimum viable product, and you're like, "Oh, yeah, this is a great philosophy. It makes sense." And then you try to copy paste it and apply it to your situation and you're like, "This is now a prescription for how I will run this business or come up with ideas," and I just think that never works. The lessons work in that particular way for that particular situation and you have to adapt them to your situation, what's your customer segment, even what's your personality, all of these things. There is still things to learn there, but the answer isn't to take a framework and copy it and apply to yourself. The answer is to understand the framework, understand what was the specific situation that led to that working there, and then try to blend it into how you would compare it to your own situation. I'll give a concrete example of this. Once we got to a certain size at Mercury, maybe 40 people, everyone's like, "Oh, you need an OKR framework." When we were small, I was like, "Okay, this is just silly. We don't need it. We don't need a structure for objectives. There's just five people in the room. Let's just do this." But there was a certain point where when there's enough layers of management and you do have to have some sort of way to have a top-level goal and percolate that through, if you're always like, "If we measure it, we'll optimize and we only do the measurable things"... Doing an extra bit that creates a magical experience for customers, that's very hard to measure a metric against, in my opinion, and it's dangerous to have like, "Everything must be driven by metrics."

Brett: Do you translate these things to your own company in a taste-driven way? You go read books, talk to people, and then just sort of have a model of the company in your head and whatever feels intuitively right? Or if I were to study all the things that you do at the company and the related things that exist at other companies, there's more structure to the way that you figure out how these things apply in the context of Mercury.

Immad: I think some things like this probably have to be top-down and the way that translated is I go do this work and then I talk to the exec team and collect their ideas and then we percolate that down. But we also try to create a culture where people have their own ideas and there's upward mobility of ideas or they can... I want to make us every team can run their team slightly differently as well.

Brett: If you continue to push down this set of ideas, it is definitely true that most of the remarkable companies are kind of their own unique organisms and, particularly when they get started, they're a little bit weird and the founder tends to invent as much around how the company is run and the choices they're making and how they recruit on and on and on as much as it is the product. There's sort of this weirdness about it that it isn't copy-paste. At the same time, you look at most 50, 150, 200-person really good Silicon Valley companies and they do tend to look more similar than different. They eventually have a managerial ladder, there's engineering there, on and on and on, and some people push off hiring product people or this, but there is a thread that definitely runs across these companies. What do you make of that? Is it just like that there are certain things that are just broadly correct?

Immad: Yeah, I think it's not worth reinventing everything and there's definitely a lot of osmosis in Silicon Valley. We have a bunch of people from Stripe and Block and Google or whatever, so people bring their ideas and the good ideas tend to be memes that percolate. That's good. I don't think anyone should go like, "I am going to reject all ideas upfront," right? I think that's going to end up being pretty dysfunctional. I do think it's worth assessing each idea individually and not just saying, "We will get it because it exists and other people do it and it's worth saying, 'Okay, does this actually make sense for us?'" 90% of the time, yeah, if everyone else does it. Should you write tests when you ship code? Everyone does it. Everyone says it's good, "I think it's good. Let's just do it right." You don't need to go reinvent everything, but it is worth checking with your gut, checking with what makes sense, and making it slightly different if it makes sense for you. I do think one thing that is different pretty drastically between a lot of companies and I think is particularly hard to copy-paste this culture, this goes back to your original thing of like, "I never understood culture for my first three companies." People would say, "Do culture. It's so important," and I would say, "What does it mean? Is it whether you have beer in the fridge?" Those kind of things sound like culture. It's like, "This is how people work." The way I describe it now, at least what makes sense to me, is what is the personality that you have, both you personally and then what is the personality you encourage in the company. I find personality easier to think about than culture, and there's a set of personality traits that work well together. For example, for Mercury, we look for humble people that are helpful, that are curious, that are customer-centric and product-minded. I think all of those traits actually work pretty well together, but it's almost completely in contrast to some other companies that look for competitive people that are very goal-driven. It's not that we don't want goal-driven and someone competitive people, but we won't take that instead of... If there's ego associated with that and a lack of helpfulness, et cetera, we will do that trade off. But that's very much like... That's my personality, that's the co-founder's personality, and we've embedded that personality throughout the company. You need to be consistent. In my last company, we just didn't have. I didn't understand it and we had some people that were very competitive, alpha people, and some people that were like this and this. There's just this continuous kind of inconsistency and clash of cultures. So I do think that is very company-specific. There's a really good book by Ben Horowitz, The Hard Thing About Hard Things. Actually, that was the other book, but that's also good. But the What You Do Is Who You Are, I think that's the best book on how to build a company culture that I've read and I really liked it. But that came out pretty late, unfortunately, I didn't have in my earlier startup.

Brett: When you looked at the culture of your other companies, is the biggest difference that you weren't intentional about who the people you hired were or it was other parts of this idea of culture and personality?

Immad: Firstly, we never wrote it down. If you never write it down, no one knows what it's supposed to be. I think the process for culture is like you write it down, "What do you care about? How do you care about it?" That's step one. Step two is how do you then put a hiring process that tries to pick people who have that cultural attribute and you try to come up with questions of... We have a product interview that we do for almost everyone, even non-product people get the product interview. So you write down those kind of hiring traits. Then, within the company, you celebrate it. When people do things in a certain way, you're like, "Oh, that's great, that really was helpful." We have a channel called Grateful and people just post when someone does something nice and they're grateful for it. That was organically created. Because you've stated what you care about and you hire against it, then you start doing these things that reinforce it. That's why I think it really comes from the founders' personalities. It's very hard to live something you're not. I have three kids. When I imagined being a parent, I was always like, "Oh, yeah, I'll be like, 'Do things in this way or that way.'" But then, once you have kids, you'll realize you spend 24/7 with them. You are who you are and, if you want to be someone different for your kids, you have to change yourself. It's very similar in a company, you are who you are, and that is the culture of the company even if you write down a different culture from who you are. Unless you're willing to change yourself to become that culture, it has to be true to you.

Brett: Do you find that it's relatively easy to hire for personality fit or, said differently, when you think about all the people you've had to manage out of the company? Is it a vast minority that the primary reason is that they were not aligned with the personality of the company or sort of vice versa, and actually culture fit or whatever term you want to use is surprisingly hard to actually get at the essence of in the interview process?

Immad: I think, over time, we've got better at it. I think we're pretty good at getting to the essence of it in the interview process. The main thing is try to have ideally a whole 30-minute interview that's just on one particular cultural attribute. If you can pull that off, you have a pretty good sense of it after 30 minutes.

Brett: What does that look like?

Immad: I can't remember the exact wording on it, but we have a cultural attribute of pointing people who are curious. The thing that we do to test that is we give people basically an hour to prepare a presentation on any subject they want. We're just like, "Hey, pick something non-work-related that you find really interesting, spend an hour, write presentation," and then we spend 45 minutes. They're supposed to do the presentation, but it's really just a conversation around that subject. That test actually a few different attributes, but you can see the curiosity in someone super quickly if they're talking about something they really care about and you're like, "Okay, why do you care about this?" and like, "Okay, tell me about this aspect," and you just keep asking questions. I feel like within 10 minutes normally in those interviews, I'm like, "Wow, this person is super passionate about kayaking or gardening," or whatever. These are often mundane, everyday things, but curious people just have this weird level of detailed attention to some random things. It tests ego to some extent because sometimes people get defensive in those things when you ask them more detailed questions. It tests that curiosity aspect. It tests communication skills. So I really like that interview exercise. At many other companies, they wouldn't learn that much from that because it's very geared around our culture and what we're looking for.

Brett: I'm curious if you had any reflections about that. I was really interested to hear your thinking because you've worked in... and the companies that you've started have been all very different. What sort of comes to mind for you around the values and personality of you as the founder and what does it mean to harness them correctly in what the company is actually doing, or does it not really matter?

Immad: I think it matters. I don't know, if I was an investor, whether I could judge it. I think that's a level of nuance that's probably hard to pick up on. I do think it matters. I think our set of personality traits that the company has, culture is also aligned with the product we make. For example, we create this high trust environment where we give a lot of responsibility to people, et cetera. That's also how the product is. We try to speak to people very cleanly. We create transparency. Our fees are very clear. We don't want to hide details from people. We want to be like, "Hey, this is a wire and this is what a wire means and this is how long it takes, and this is a system." Internally or externally, we don't want to treat people as children. We want to treat them as adults and give them all the information and be very transparent about what's happening.

Brett: What else have you noticed across building these multiple companies? The thing I'm interested in is Mercury is on a trajectory to be the most important company I think that you've built thus far, meaningfully. What have you reasoned about that? It's the same founder of the company. Now, you could say you're much wiser, you've learned so many things, but have you learned 50 times more than before? What's the why behind the success of this company relative to the success of the other businesses you worked on?

Immad: I'd say there's two elements here that I think I would have liked to tell my younger self. Number one, I think the idea matters a lot. There's this feeling in Silicon Valley sometimes that, "Yeah. If the entrepreneur is good enough, they'll figure out the idea or something." Actually, I'm not even sure exactly what the feeling is, but it's more like the idea doesn't matter, just iterate around. We iterated a lot. We actually pivoted four times in my previous company. But if you start in an idea with... If there isn't a societal level trend that's pushing your space forward, which I think was true in FinTech in 2017 or it's true in AI now, it's very hard to iterate around it and often people don't... Actually, the right thing to do, and something else I would tell my younger self, is, "If the thing doesn't work, just go back to zero." I think one of your questions that you sent me was why didn't I do Mercury earlier, because I had this idea in 2013. Actually, we pivoted twice more in my previous company since 2013. I'm like, "Why didn't I just do Mercury then?" Really, because people are often stuck in this pivot box, it's like, "Oh, I raise money against this. I understand this," and like, "Oh, now, I have this other idea that's related to this." Most of the time, in that company, we're serving game publishers. We just started with flash game publishers, ended up in mobile game publishers, and then ended up in ad tech, but it was often around that core audience. But really, I could have just done Mercury then and... yeah. It was a little easier maybe in 2017, but I think I probably could have figured it out and made a lot of progress and would be four years younger or something. I do think idea matters a lot and I think people undervalue how much it matters. I think the second thing is, when you have product-market fit, it's really blazingly obvious. I've had it twice. I eventually did get it in that last company and obviously Mercury had it. I think when you are a stubborn, high-grade founder, you just don't know when to give up. At least, that's my experience. We had an idea and we would go like, "Let's sell the hell out of it." If you're stubborn and willing to do whatever the hell it takes and do the things that don't scale, you can often sell the things and make progress. Every idea we had, we spent two years on it. We made some incremental progress, but in hindsight, I was like, "Oh, it's super obvious we did not have product-market fit." Product-market fit is just so obvious when you get it. But when you've never had it before, you just don't know what it's like. You're like, "Oh, yeah, of course, I should wake up every day and I sell the hell out of this thing or whatever." The way I describe product-market fit now, which to be fair I think works in consumer, prosumer, and SMB and maybe it doesn't work in enterprise sales, it's like you wake up in the morning and you have more users and you don't know where they came from or people sign up and they want the thing and they're pulling the product out of you. Sure, you still have to figure out distribution, all that, in the long term, but at least initially the market should be so big and the demand for what you're being is so interesting that people will just come to you and you just don't have to try that hard. It's still a pain in the ass because then, now, you have to keep up with this demand and there's features you don't have and support you haven't built up and all this stuff, but you don't have to work hard to find people to want your product. That's how I describe product-market fit at least, and that's been... At least when I've had it, it's just been so obvious. When I did get out, I was like, "Why did I waste all this time trying to sell this thing that no one really wanted that, previously, I could have just learned and quickly moved on?"

Brett: What did you observe in yourself when you reflected on that why?

Immad: Honestly, it's just like I didn't know what product-market fit really was, right? It's like culture as well. You read these things and you're like, "Yeah, sure, this thing moved really fast and it was obvious, but maybe I'm different and maybe I just have to sell it and maybe I'll iterate my recent to product-market fit." I think that's the biggest element to it. As a founder, you do need all of that. You need the grit, you need the unwillingness to give up, and all those things. It's just one of those things that's hard to find the balance where you're like, "Okay, actually, there are times where you should move on and give up and do the next thing and that is the best opportunity cost answer," but yeah, I have a tendency to just not want to give up. I have an infinite set of ideas to try, so I'm like, "Oh, why don't we just sell it this way or why don't we... Maybe we just don't have the right lead list." You could just go on and on.

Brett: In the last company, you mentioned towards the end you did get the company in the slot. What was the change? Was it one click away? Was it a massive change and then it immediately started working? What's sort of like the pre to post-product-market fit in that company?

Immad: Without going too detailed, we built a mobile ad network, which I would say did not have product-market fit, but it got us profitable and it was working. And then we noticed a space that was adjacent to it, which is a developer tool around advertising to make it easy for any app publisher to plug in five or six different ad networks and optimize them for you, et cetera. The two people in that space were both bought out. One was bought by Twitter at the time and the other one was bought by Apple, and there were both these super clunky, enterprise-y tools that didn't really work for just a normal app publisher. Literally, Apple had just bought it at the second player, which was Burstly I think. From that side, no one would've understood that this opportunity exists. We were very deep in it, so we built the thing. It's called mobile mediation. So we built a platform. It wasn't instant product-market fit because the initial version just didn't work that well, so we did have to build out all the features that worked well enough. It did take launch and then six months of iterating. But six months later, it was super obvious. It was just like we'd wake up in the morning and, suddenly, the top iOS app in the App Store was using Heyzap, that was the name of the company, and we literally hadn't even spoken to the developer. They just found this and they'd started using it. We're like, "What the hell?" It's such a different feeling when that kind of stuff happens and it just basically grew by 10X and then 10X again the next year. So that was very strong product-market fit, but in a space that maybe is not huge enough. It did take some iteration. Mercury was pretty different. Mercury was product-market fit from the day we launched. We just grew by 30, 40% a month for the first year.

Brett: I think the biggest challenge is weak product-market fit, which is what most reasonable founders have that don't fully have product-market fit, and that's what I think someone can keep chasing down for five years. If you have a widget and you talk to 100 people and they all slam the door in your face and say, "I'm not interested in this," the reality is telling you, "I need to go in a different direction." But if you find a few people that are interested out of the 100 and they're kind of using... that's I think the loop that gets someone-

Immad: That's what I was saying. If you're actually a strong founder, you can sell anything. You'll get weak product-market fit almost out of any idea, and that's the problem. It is a tricky road to go down, and I see it a lot. Sometimes, people get to a few million in ARR on weak product-market fit too. It's like you can reach a reasonable scale and raise a series A. That's almost worse. I feel like the worst for founders who actually go raise a series A that have weak product-market fit, it's a slog for nine years. I look at it, I'm like, "Oh, man, this is so painful."

Brett: Going back to this question about what you figured out and maybe why Mercury is so much more successful in so many different metrics than your previous companies, you were talking about the importance of the idea what really strong product-market fit-

Immad: Again, not Silicon Valley wisdom and something that I fell for, we talked earlier about like MVP, et cetera. I had this real mindset that, "Hey, I should just be launching things in three months. I should have an idea. I should launch in three months and I should iterate, et cetera," and maybe, A, that does work sometimes, a lot of the time maybe, and, B, it probably did work way better in 2009 or '10 when social and mobile and all this stuff was new and there was just a lot of idea space to explore. I think, now, things are more mature and I think it's better to spend more time and build a deeper, better product in a space. Mercury took a year and a half before we launched. I really think maybe we could have launched a little earlier if everything had gone right, but it was minimum of one year to build this product end to end. It was a complicated product when we launched. We had four different types of payments in and out. We had check and credit, debit card and wires and international wires and non-immigrant support. We had a pretty well-developed set of features and then it also looked great, which, to make things look great, you have to spend twice as much as making things look kind of shitty. I remember even talking to some VCs. They were like, "Hey, why are you launching a new bank? Why not just..." Part of my pitch was like, "Hey, we'll give you analytics around your finances." They were like, "Oh, why don't you just use Plaid and get some analytics around people's finances?" I was like, "That's really not the point. That's just a feature of the bigger thing," but there was definitely... That's what they felt, that we'll launch this thing in three months, "Then, you can iterate yourself to a new bank." I was like, "I don't think you can iterate yourself to a new bank." One thing I have realized, once you launch a thing, it's very hard to change it. If you just spend more time... When you don't have any users and you just build, iterate a little bit more and you build the thing that you really want... There's lots of features in Mercury today that were built pre-launch, and I think if we... Trying to move things now is much, much harder. We have a hundred thousand users, we have a bigger... It just takes a lot more to change features once there's real users and people around them. Another lesson for my old self would be just spend longer thinking of the idea and spend longer implementing the idea. It's not always rush to come up with the idea in two weeks and try to launch it in three months. Yeah, I did Y Combinator twice, so there's definitely... Some of this is like Y Combinator philosophy. Obviously, it works for a lot of companies to be fair, but I do think big ideas take longer. They took longer to come up with, they take longer to execute, and I think a lot... Especially if you're a second-time entrepreneur, I think it's worth it if you can raise more money and spend more time and build a bigger thing. This often also has a bigger impact on the world. I think we're all somewhat here to try to improve the world and coming up with bigger, scary ideas that had that impact. I think it's more powerful.

Brett: Are you able to explain what you think makes a very good idea, the higher order bit? I'm very well aligned with this, which we call internally the pick, what is the person choosing to do is not obsess about and, "We just do anything and iterate," is just generally incorrect, and sure there are examples of that. But I can just come up with an example of a successful company that did all sorts of random things that the general population would not be served by sort of following that. Are you able to unpack in your own mind what makes a very good idea or what makes a bad idea or sort of anywhere in between?

Immad: I think it's really hard. Often, early ideas sounds crazy. A good example I have of this that gave me a lot of humbleness around this is I was in the YC batch with Dropbox and I was like, "Okay, amazing idea, amazing founders. This is obviously going to be huge," and I actually did two bets with people that's going to be a unicorn in the batch. I guess, in theory, they owe me some money. But I was also in the batch with Airbnb, so that was my second YC company. I was in the Airbnb batch.

Brett: That's a good bet.

Immad: I thought, "What a silly idea." I was like, "Who's going to trust people in their house? What are these people talking about?" Obviously, they seem smart, but I was like, "This is just... They've gone too far with the sharing economy. This is just obviously wrong," and I was so sure of it. I wasn't slightly wondering. I was like, "This is just obviously not going to work." I didn't say that to them, but that's what I felt. Yeah, it goes to show you it is very hard to judge ideas often at the start that look silly. You can come up with frameworks and I can come up with frameworks. Even today, I see ideas and I'm like, "Okay, this is silly," and then it works. And I'm like, "Okay, I was completely wrong." Whether you are investor or a founder, you have to have the humbleness behind it. It is tricky. So I guess to answer your question... I am also an investor, so I have a shape of things that I think works. One of the criteria is, "If this thing really, really worked, could this be a game-changing huge company? If everything went right, is this a 10 billion, $100 billion opportunity?" Again, you can't always see it, but you can kind of imagine. It's like, "Okay..." In the Airbnb case, it was like, "Okay, lots of people do have an extra room and lots of people have second houses and people go on holiday. Hotels are not always the best experience." Even if you were like, "This is never going to work," you could kind of imagine there's a path that they would have. That's one way I approached the idea, and that's also how I thought about Mercury. I was like, "Okay, if this worked, is banking going to be mostly digital in the future?" I was like, "Yes." "Do entrepreneurs really have a bit of banking experience?" I was like, "Yes, this is a market that's big enough." That's a combination of this kind top-down TAM kind of approach and bottom-up like, "Could this thing be the thing that breaks into it?" And then, sometimes actually you look at an idea, you're like, "Okay. Even if this worked, it couldn't be that big because it's in a niche market or whatever." That's definitely an analysis that can help. But yeah, I don't think there's a sure-fire way. Often, I find... Even if you take Mercury, I was just so annoyed using the business banks that I used as entrepreneur. A lot of the things I did afterwards were time analysis and this kind of post ad hoc justification to get myself comfortable with actually doing it and persuading investors and things like that, but in some ways it was an intuitive kind of idea that I just wanted to build this product for myself.

Brett: Obviously, many years later, Mercury has turned out to be a very good idea. Even if you didn't know all this back when you started the company, maybe explain to people in as much fine-grain detail why you think it was a good, correct idea to pursue.

Immad: I think there's a top-down way to look at it and a bottom-up way to look at it. Let's just do top-down for a second. Top-down, banking, huge category, but it used to make sense to go to a bank branch. Now, money's mostly digital. Entrepreneurs, especially, I think actually everyone eventually, want to just interact with their bank from their computer, from their laptop, from their mobile phone. So that's a huge trend, and it's pretty obvious that incumbent banks are not ready for that trend. Most of them don't build their own apps, they don't build their own website. It's kind of a secondary thought. They still think of themselves as a branch network and app or digital experience secondary. Obviously, fintech was happening. I started this in 2017. There was already Stripe and Square and PayPal and things like that. In 2006, it wasn't surprising that banking was bad. Everything was bad, right? There was no Slack, no Stripe, no Gusto. I remember as an entrepreneur going like, "Oh..." It's just like, "One more slog is my bank account," but it wasn't like that was the only slog. By the time 2013 was around, which is when I had this idea, I was like, "Okay, actually, all of those experiences have improved, but banking still basically the same."

Brett: Tell the story about the sort of original moment that you thought, "Huh, maybe I could build what then became Mercury."

Immad: I guess because, my previous company, we used to pivot a lot and I was just very interested in entrepreneurship in general, I always had a list of things that someone should build. It wasn't like, "I will build these." It was just like, "Oh, someone should do this," and this idea of looking at tools that we used as a business going, "Okay, someone should..." We started my previous company in 2008, so there was no Gusto, for example. I literally had a list which was like, "Someone should build a better payroll provider because..." Someone from ADP literally came to our live workspace when there was only two people with a literal file, old-school file, that they made a sign and all this to set up payroll. I was like, "This is insane that people do this," but I had a similar experience with banking. I was like, "Okay, it's insane. I want to send a wire and it's not enabled in my account. I have to go to a bank branch and spend three hours to get it enabled." Everyone has this kind of frustrating experience with banking. I just literally had a list and it was a long list of 10 ideas that I was like, "Okay." What made the banking one a little more real for me is... I think it was around 2013 when I was like, "Okay, this isn't just an idea someone should do, but it's an idea maybe I could do is..." I met this guy called Kai, and the startup's name was True Link I think. It was a fintech company for seniors, and they basically issue debit cards to seniors because seniors often get taken advantage of and the kids want to be able to set controls and things like that on cards. It was just like two kids, it was a Y Combinator company. I guess they weren't kids, they were adults, but they weren't any different from me and I was like, "Wow, these people went and did a deal with a bank partner." I chatted to them, and it was demo deal, whatever. I was like, "Okay. If they can do that, maybe I could just do this at some point if no one else does it." I think that's actually the power of Silicon Valley. Often, you find it hard to imagine how something is even possible. Whereas when you come here, you're like, "Okay, just everyone..." When I first came here in 2007, there was the Facebook app's craze. Everyone had a million plus users and I was like, "Wow, it must be easy to get millions of users." In London, which is where I'm from, it seemed like impossible to get a million users because I had a consumer idea that only had 4,000 users. I feel like this is like a cauldron of people and ideas and it just makes unimaginable things real seeming. So that was the thing that's flipped it from just an idea to something I could probably do. I kind of assumed someone else would do it since I was busy, but it changed it from like, "No, I could never do this," to, "Maybe I could do this."

Brett: What is the context on when you decided, "Okay, I'm going to go start this company"? What was happening six months before that decision?

Immad: I sold my previous company in start of 2016. I had to work at that company for a year, the Acquirer. At the start of 2017, I was just like, "Okay, what should I do?" That was the start of it. I was like, "Oh, maybe I want to be a VC," but then I kind of decided not to do that. And then I had a list of ideas to go down. I feel like those were my top three ideas, the bank, the API for a CRM, and a kind of hardware tool for remote work. The bank one had been in my head for years. At that point, it had been there for four years. I was like, "Okay, let me just explore this," and the more I explored it, the more it turned from impossible to doable, but hard. Doable but hard is like, "I'm in."

Brett: How did you explore it?

Immad: I mostly just talk to a lot of people. I talk to every single fintech entrepreneur I could find. Especially the Y Combinator fintech founders were particularly helpful. They were very open to chatting and laid out. When you first explore an idea, you feel really stupid. Fintech is full of acronyms. People are like, "Oh, you need to worry about KYC." I'm like, "What is KYC?" "It's... Hey, whatever," this whole list. I would make a list of everything I was like, "I don't know what this is about, but I'll just run a list until I figure it out." People are just very generous with their time, fintech entrepreneurs, fintech VCs and investors, and then lawyers. Actually, lawyers were probably the surprisingly most useful set of people. Most lawyers will do a 30-minute call with you for free, and there's a lot of fintech/financial services lawyers out there. I wrote a list once. I did 90 conversations like this. Often, some of the most useful ones were four intro chains down. I talked to someone, they'd introduce me to someone, they'd introduce, but it was a fun process. I'm curious, I like learning, and this is a completely new space to me. I think often I tell people like, "Yes, I could have gone and built the code or tried to do something else," but everyone knew I could build a product, I knew I could build a product. The hard bit was proving that I could get a bank sponsorship, I could figure out what is the framework for compliance and risk and legal and all these things, especially at the start to spend all your time doing the thing that you're the least capable of doing and the least capable of proving to the world that you can do. After four-ish months of doing this process, I had a pretty good framework that... Another thing is when you're in a space that's somewhat new, which fintech in 2017 was still pretty new, you can quite quickly become almost an expert in the space.

Brett: Maybe talk a little bit more when you think about the three types of people that you talked to. One were fintech founders, two, fintech investors, and three were fintech lawyers or financial services lawyers. What was the texture of those buckets of conversations? What in each of those were you trying to understand about the opportunity?

Immad: Entrepreneurs, I really wanted to see how did they build it. Many of these were failed entrepreneurs, some were successful. So I wanted to see, "Okay. If they failed at the idea, what failed? Where was the failure cases, and how long did it take to build it? What was the..." The entrepreneurs, you can learn so much from entrepreneurs. These weren't people building new banks for businesses, they were like consumer credit card or whatever, but similar shapes like, "What were the first five employees they had?" You can get pretty nitty-gritty. Generally speaking with entrepreneurs, there's no bad questions, no dumb questions. They're all like, "Hey, yeah, I was just like you. I was trying to figure this out," so super helpful people. I think the ideal thing is if we can find someone who literally tried to build what you were building. With investors, I was trying to figure out, "Okay. What is fundable here?" Investors tend to be really good connectors as well, so they connected me to other entrepreneurs or other lawyers, et cetera. The lawyers are also pretty good connectors as well, yeah. Just trying to understand, "What is the legal framework for this?" Yeah, the idea of law sits upstream from compliance.

Brett: When you think about yourself before that four month sprint and yourself after that four month sprint, what were the most important things that that work taught you that then informed what you ended up doing in the early months and years of Mercury?

Immad: One thing I decided in that process is that, "Hey, this is not going to be easy," and I was like, "Potentially, it'll take three years to get this live, get enough customers, and make enough progress I could raise a future round." When I set out to raise money, I was like, "I need to raise at least 5 million. So I have three years with a small team to go execute this." It changed my mindset from, "This is not going to be easy. I'm going to do it for the long run," and that was an important kind of mindset shift for me to think of this as a longer execution period to get it done. One thing that someone said to me, and this was really stuck with me, I wish I could remember who told me this because I think it was a valuable lesson, it was like, "Hey, the fintech piece and compliance and bank sponsor, all that stuff is hard, but it's all pointless if no one likes your product." I think sometimes people, and I often talk to people, they get really hung up on being compliant or sometimes they'll get hung up on some technology, et cetera. At the end of the day, if customers don't want your thing, it doesn't matter what great technology it is. That was a powerful thing. That person actually said to me, "Hey, if people want your product, you'll figure out everything else. But if no one wants your product, it doesn't matter what else you figure out," and I was like, "Okay." That have got me in the mindset of going like, "Okay, it's all about the product and I should focus on making that an amazing kind of experience for people." One thing that stuck obviously is we went with the sponsor bank model and there was other people at that time. There was a bunch of fintechs that went with the sponsor bank model and there was a bunch of fintechs that actually did try to get a charter. I think most of the ones that went with the charter model either failed to get a charter or, even when they got the charter... There's a company called Varo that was a Chime competitor, and Chime went with the sponsor bank model and Varo went with the bank charter model. I would say most people think, valuation-wise, it definitely was a better idea to go with the sponsor bank model and that's something we decided early on. I even talked to people that were thinking about building something like Mercury going down the bank charter model. Most of them did not work out. So that was a big and important decision that we made early on that stuck with us.

Brett: You didn't talk about spending a lot of time with potential customers. Is that because you just knew the problem so well because you modeled the customer in your head because you were the customer and it was obvious that there was, quote, "little market risk" that if you built this magical delightful business bank that the customers would be there, or was that a part of it in any way?

Immad: Yeah, I didn't talk to customers that much. It just seemed obvious to me. Funnily enough, after we raised money and we started building the product, it took a year and a half. There was a time during that time, I was like, "I think we thought we were six months away from launching." I was like, "Okay, let me go talk to a bunch of people, collect customer interest," so I took to about 100 founders at that point. Obviously, I was pretty committed to the idea at that point. Honestly, it was a little depressing because everyone was like, "Yeah, it sounds cool. Tell me when you launch," and I was like, "Yeah." I think only two of the 100 people were like, "Yeah, I love this." It was extremely enthusiastic. Most people were like, "Okay, sounds interesting." I think it's very hard when you abstractly talk to someone and you're like, "Would you use this thing?" It's very hard to reliably believe their feedback, at least that's what I've found. Maybe there's ideas where some people are like, "Yeah, I talked to 10 people and that's how... They prepared for something." Yeah, so there's probably some ideas where it is a little more obvious. But at least for these types of things, people can't imagine what a better banking experience is.

Brett: How did you figure out what the first version of the product was going to be? I feel like that also you run into this dangerous territory when you go into build mode with this type of product, which is you have infinite roadmap. There's an infinite amount of things you could build.

Immad: Honestly, it was very simple because I was like, "What does it take for this to be your only bank account as a business?" That was my level. That was a high bar. Obviously, you need to be able to sign up, you need to have multiple owners, often, businesses are multiple owners, I guess a whole infrastructure around there. This was probably an unusual thing for me that I really insisted on. I was an immigrant when I moved here. I want to be able to support immigrant founders. I was also like, "Hey, actually a lot of Silicon Valley companies have immigrant founders." It was kind of an annoying requirement, getting the infrastructure around, supporting a non-US person. You don't have a social security number, you don't have a US ID, and getting a sponsor bank to be on board with that was an infrastructure that was not easy to do, but I insisted on it, a fully digital experience obviously. And then I was like, "You need checks, you need wire, you need international wire, you need ACA." So that was the basic framework. I was like, in my opinion at least and I think this is actually bared out there, if any of these things were missing, people would not adopt it. I didn't think there was any point in launching with one of these things missing because the only thing we'd learned is we need to go build this thing. So I was like, "Okay, there's no point in launching until we had all of this," but there was no point in building anything more than that either. I wasn't going to go like, "Oh, yeah, also debit cards," but I wasn't going to go build a credit card or build really fancy analytics before we had all those features. I was just like, "Let's just build all of that." The thing we did end up doing, which I think is pretty unusual for most startups, but we actually built the whole thing and we had one sponsor bank lined up. They were supposed to build some extra features for us, give us wires and things like that. Every month, they'd be like, "Yeah, it's coming. It's coming." Five months later, we were like, "This isn't working. We need to go find someone else," just because they kept saying it's coming and they would never deliver. We basically scrapped that, ended in a whole new fresh sponsor bank deal, so that took an extra six months. We built the whole thing, it was ready to launch basically, and then we had another six months to go. So we actually ended up redoing a bunch of our designs at our front end for some of these core experiences, for sending money and onboarding, which made them way better. I guess, in theory, we could have built some new features. I guess, to some extent, we were perfectionists. We were like, "Oh, let's just make the existing stuff really, really good," and it actually really made a difference to our launch because people went through that new user onboarding experience. Most people expect, when they're getting onboarded to a new bank account, it would be so painful, but we'd spent so much time. We did it twice that it was this really, really high level quality experience and it gave people a very strong first impression. Because a lot of people just wanted to try it out, they're like, "Oh yeah, I'll try it out," and they're like, "Wow, this is just so good. Maybe the rest of the product's really amazing."

Brett: It was just about how did you figure out what the one ready to ship was, which I think you did a good job [inaudible 00:44:19].

Immad: Yeah, I don't know, just being insistent on it being pretty broad and not going too much beyond that broadness.

Brett: Did you start to onboard early customers to test the entire product before you launched, and was there a iterative process? Or it was obvious you were dogfooding the product and you just decided, "We're ready to launch now"?

Immad: No, we had a four-month period where mostly friends of mine that I'd invested in used the product. They didn't really use it for everything. They was just like, "Hey, yeah, sure, I'll put 50K and I'll test some stuff out." But really, even some really basic stuff didn't work until the week of the launch.

Brett: When they were tinkering with it, did you get a sense that they were delighted by it or still you were like, "I don't know"?

Immad: I don't know at all because they were really trying it with a small set of things. I was like, "Hey-"

Brett: And then, only, really, you get the sense of it if you're running your whole-

Immad: Yes, exactly.

Brett: Yeah.

Immad: Yeah, it was funny. A lot of things just didn't work as well. During that four-month period, I was like, "Please, try out this, but don't try this out because this doesn't work yet." It was literally the week before that probably wire started working. And then, actually, we launched and we thought international wires worked, but that didn't work. It took us four extra weeks after we'd gone live with the feature that we thought worked but didn't work, and then we had to go get it working in the next four weeks, and people were shockingly patient with us because I guess everyone was somewhat sold that it was a new product. But also, it was just me and my co-founder were doing all this customer support, so I think everyone was like, "Yeah, these are real founders trying to figure stuff out." They were very patient with things that just didn't work. Yeah, we were working all the way to the launch to get it enough well that we could really learn about whether people loved it, but we did need those initial customers just to test things out. Fintech is full of edge cases. There's just so many edge cases that all have specific ways to deal with them.

Brett: What's the story behind the launch?

Immad: The biggest part of the launch was having these 60 people kind of blast it out, and that worked really well because, A, there was trust that people had in those people that was then leaked onto Mercury. Again, trust is probably the most important thing initially for us especially. [inaudible 00:46:31] I would say, "Hey, we backed this thing. This is great." Elad Gil was our investor and he was supportive on the launch. That was really the initial spark, what came from those 60 investors.

Brett: Did you launch it in a wait-list style product or just anybody could come and sign up? What was interesting about the first 50 people that signed up, if anything?

Immad: The people who wanted the bank? They didn't speak to us. We had no sales team. Four days after launch, someone signed up, never spoke to us and transferred $1 million into a Mercury bank account, and I was like, "Wow." That blew my mind because my assumption was always like, "Yeah, maybe some small people would just self-service," but I always thought I'd have to build a sales team. I never thought someone with $1 million would move money into Mercury without speaking to a sales team. Even today, our sales team does about 5% of our accounts. They tend to do bigger accounts, but most people just self-service, and that was really surprising to me. I did not expect that.

Brett: In those first couple of weeks, did you go from this mentality of questioning whether there was a customer base that would really love this to instantly, "I know what we're doing is going to lead to something very interesting"? Or, at what point, going back to your original definition of how you think about product-market fit, did you think, "We really have something here"?

Immad: I was very skeptical of not wanting to believe it just because... I don't know why exactly. I didn't want to go say, "Hey, we have product-market fit and let's go higher and go..." I didn't want to extend it over our skis just because we felt we had product-market fit. There's this famous kind of thing, the trough of disillusion. I was like, "Is this just the launch?" It went on for a long time, but I was like, "Okay, maybe this is just because it's fintech and people aren't ready for it. Maybe this is a really long launch and there's going to be a trough of disillusion." We never had a trough of disillusion. We just had a launch, and then it kept growing kind of thing. But first six months, I was very much like, "Hey, this is just a launch and we just have a really prolonged growth period after the launch, but it's just not necessarily real." Honestly, when things are going like that, there's so many fires to deal with, you're just like, "Hey..." We had no customer support and we were just like... Me and my co-founder is completely overloaded just talking to customers and answering their questions. Yeah, we have to go hire people like that. And then international wires didn't work. We had to fix that. Yeah, there's just so much stuff to do. Up until launch and probably until two-ish months afterwards, I was still one of the only front end engineers. There was three of us doing most of the front end. You don't have time to necessarily go think, but I was hesitant. Then, COVID happened. We launched in April 2019, and COVID happened obviously March 2020. COVID, initially, seemed like a disaster. We lost 60% of our revenue. Obviously, no one was starting new businesses in March 2020. At that point, I was like, "Yeah, thank God we didn't spend much money." I never believed, did product-market fit anyway. I was like, "Approve it." That was March. And then, April, we doubled. It was insane. April and May 2020 was this insane growth spurt because e-commerce blew up. Bank branches were shut down, so people had to go to a digital experience. At that point, I was like, "Okay, if we can survive COVID, we probably have for a while." So it took me a solid year to really believe that we had it because I just didn't want to take it for granted. I wanted it to be 100% sure before... Because part of it was also, now, we had to go hire enough people. For the first year especially, we were always behind on having enough people to go serve all the customers we were getting. As soon as my mindset shifted at that point, I was like, "Okay. Now, we should go hire ahead of our growth rather than behind our growth"

Brett: When you think back to those first couple of years post-launch, so your years three and four of the company, what are the most important things that you got right that have sort of served the company incredibly well?

Immad: We grew the team pretty fast. We went from 40 to 70, one year. And then 70 to... More than 40% a year is probably a consistent pace. But we were always very strict on the culture side of things, like having that culture upfront and always going like, "Hey, we have to keep that hiring bar." Especially when you're growing fast, it's easy to start being flexible on it. We weren't, and I think that served us really well and we still have a very strong culture and a very strong team around that culture.

Brett: How has your thinking about competition changed over the course of the life of the company?

Immad: Actually, a lot of my thinking on competition came from our previous companies. We did those four pivots in my previous company. I remember every single time we were working on something, there was always competition. They were always better funded than us. They seemed to do things really great and it was very... I feel like you were always worried about it and you're like, "Oh, what did they launch? Let me go look at that," et cetera. And then I realized, over all that time, that it never really mattered. Whatever they did, it was almost always distracting to even think about them. What mattered is just talking to customers, delivering a great product and iterating on that, and having a long-term kind of vision behind it. And the competition was always distracting, it reduces your team morale when you have to talk about competition. If you copy anything, you're not following your vision, you're following their vision at that point. When I came to Mercury, I was just like, "Hey, competition doesn't matter. Just focus on customers, focus on product." Even where it does matter, which is like, "Hey, maybe the competition does do something really interesting," you're going to learn it from your customers. They'll be like, "Hey, what I really want is X. Blah is doing X. Why didn't you guys build it?" Yeah, so we do learn from competition, but it's not because we are looking at their PR or their websites. We learn from it just by talking to customers and building the product. Some things that they do are smart and we will build those eventually because we will just talk to customers or we'll have the ideas ourselves. Some things they do are dumb and customers aren't talking about the dumb things. I've always felt like, at Mercury, that competition is not that important and it's distracting and we shouldn't think about it. Actually, the funny thing is the only time I have to think about competition is when I'm raising around from VCs. VCs are freaking obsessed with competition, but I'm like, "Customers don't care." Customers are really comparing us against JPMC or Bank of America, that's who they're thinking about.

Brett: Explain more why you believe this other than, "We have ignored it and it's worked." What's the underpinnings of it?

Immad: I just think, most of the time, if a company doesn't work, it's because the whole idea was bad, the whole space was bad, which I've had plenty of experiences with, or they were doing the wrong things and it's very, very rarely that they go killed by competition. I'm sure it happens, but at least I haven't seen it that much. My experience has also been like if you just keep doing the thing that you feel you believe in for a really long time, eventually you will win, it has been my experience, if the market's there, but it's not going to be because the competition got in the way or didn't get in the way. That's been my experience. I think the negative ways it plays out is, number 1, I think you get distracted from your vision. We always wanted to build this core operational bank account. Literally, even our VCs were saying like, "Hey, look at how well Brex is doing. Why don't you go build a credit card instead?" at day zero, before we'd even launched. I was like, "Well, good for them. I'm not thinking I need to build a credit card. I want to build this amazing banking experience." Eventually, we did get to credit card, but it was just not the core part of my vision, and I think it would've been a complete mistake to have done that. I don't think I would've built a company that I was excited about. I think it's hard to go from credit card to banking, at least that's been proven out so far. You end up being distracted and doing someone else's vision. I think from a team morale perspective, no one wants to be copying people. That's not what we... Actually, I really wonder about Meta where, a lot of the time, they are-

Brett: Seems to be working well.

Immad: ... copying. But what is a morale at that company when they're like, "Hey, Zuckerberg saw staff did this really cool thing, and now we're copying him."

Brett: [inaudible 00:55:01] the morale of late.

Immad: Yeah, maybe. Maybe this just comes back to our previous thing about like, "I am fine with copying things because customers are asking for something and we're just building the things customers are asking for." But seeing someone know something going like, "Oh, yeah, you know what? Let's drop what you're doing. Let's go copy that thing." I would be like... extremely depressing to me, so maybe it's just a society thing again. But I think it would be depressing to a lot of people that work at Mercury because, yeah, we want to go like, "We have a vision, we have a plan, let's go execute that." Yes, that changes based on what people are asking for, but that shouldn't change based on what competitors do. I'd also say these are big spaces. There's $2 trillion in US banking. I don't think it means we have to all crush each other. We've probably all built 10, $100 billion companies and we still have space to grow. Yeah, there's a zero-sum mindset to the whole competitors thinking about competitors, et cetera, that at least hasn't played out in my opinion.

Brett: What was the story of the SVB crisis in the context of Mercury?

Immad: Every conversation we had with VCs, everywhere we thought of ourselves as a counter position to SVB, right? The question that everyone asked me, which was a very reasonable question, was like, "Hey, if my money wasn't safe at SVB, why is it safe for Mercury?" I really bought this question of trust to people's forefront. It's like, "Oh..." For a long time, people weren't worrying about bank failures. But suddenly SVB and the Silvergate, there was a lot of stuff around it. What we built over the weekend was this product called Mercury Vault, which, A, we extended FDIC insurance with our partner banks from 1 million to 5 million and that product really resonated with people because it wasn't just like, "Immad says it's safe." I could say that all day long. It was like, "Hey, look at this product. This is where your money is in, between FDIC insurance and US government T-Bill mutual funds. Yeah, the US government is backing hopefully 100% of the deposits you have on Mercury."

Brett: And you, as a team, all shipped out on Friday or Saturday or Sunday, something-

Immad: We started on it on Saturday and we shipped out Monday, at least the initial version, and then we fixed it for the rest of the week.

Brett: Wasn't this insane, intense four or five days in the company, one of these just defining moments?

Immad: Yeah. We were actually bigger than SVB at that point in terms of number of customers because SVB was really focused on venture-backed startups, whereas we had a broader set of SMBs, but still we had 8,000 customers sign up in a week or two. It was actually one of our weeks or... One of our months recently was as big as that month. That was, by far, the biggest thing that ever happened in terms of signups. We had to really have a lot of the team focus on... We de-prioritize everything else basically. We were like, "Hey, let's just get these customers on board." Obviously, a lot of questions come along with that. And then the product teams were working on Mercury Vault. It was nice though. It was a galvanizing event because, most of the time, when you're... At that point, we were probably a 300-person company or 200-person company. Everyone's all working on the same thing. We're all working on our own things, but this was like... there's only one thing to work on. It's like everyone's doing this and it's very clear what we have to do. Every day, that was like, "These are the five things we have to get done. Whoever's available, let's go do it." Our whole team was helping on onboarding and the whole team was helping the customer support on shipping these products. In its own way, at least in hindsight, it was fun. At the time, it was like stressful.

Brett: Is there anything else you did over those couple of weeks that kind of are a part of the way that you think about how do you respond to these extraordinary events when you're building a company?

Immad: I think the most important thing as A CEO especially is to be a leveling function. Actually, there's various spots to this. As an entrepreneur in general, either shit is amazing or shit is awful. Whenever things are amazing, you have to go like, "Okay, I'm not going to get stuck in that euphoria. I just have to execute." And when things are awful, you have to be optimistic. I think, in general, when things are like that, you have to path the course that's more level, but then you have to then project that out to the whole company. In these kind of situations, I'm like, "Hey, it's fine. We'll be okay. Here's the plan." Always have a plan. Even if it's a plan to make a plan, I'm like, "Hey, we don't know what's happening, but these are the five things we're going to do to figure it out," kind of thing. I think being calm, having a plan, and then just driving with urgency around that plan, it's like, "Okay, these are the people who are leading up these parts of the plan," and we try to create a culture both actually internally and with our customers around transparency. I spend a lot of that time just talking to customers. I was on Twitter responding to people, people calling me up saying, "What's happening with this? When can I get this account?" and I was like, "Hey, let me work into that." I was trying to be out there to create this kind of culture transparency, but we do that internally as well. It's not that I have all the answers, but I'm out there saying, "This is what I think right now, this is the plan right now, and let's go deal with it." But yeah, I think being calm and projecting calm... It's not like I felt it all the time either. I was like, "Oh, my God, the world is falling apart," but you just got to wake up in the morning and be optimistic and calm for people in those situations.

Brett: So to wrap up, who is the person that has taught you the most about being a founder or has imparted something that's a big part of the way that you think about building Mercury? What's sort of the thing they imparted on you?

Immad: I did Y Combinator in 2007 and, back then, it was mostly a Paul Graham show. I think the biggest thing that I feel like I learned there is just thinking big. I remember, this is 2007, and Paul Graham was like, "Hey, there's going to be a company in this bag that'll be like a unicorn, $1 billion company." Actually, the unicorn word didn't exist, $1 billion dollar company I think is... and I was like, "What are you talking about, Paul? These are kids." Literally, back then, it was like half the people were off for the summer from university where... billion-dollar companies did not just happen, where there are people who were off for the summer, but he just had this such strong belief. And then every time someone pitched an idea or every time I pitched an idea, it was always like, "Okay. How is this going to disrupt Google? What's the big thing here?" And it just gets you in this mindset of going like, "Yeah, maybe I can do that." It just gives you this... I think that's probably PG super powers, having this way of seeing how something really small could be huge and making you believe that that is possible for you.

Brett: Awesome. Well, thanks so much for spending the time.

Immad: Yeah, thanks for having me.