TS Anil, CEO @Monzo: From Layoffs, Downrounds and Low Employee NPS, To $1BN in Revenue | E1254

What does that look like in terms of how Monzo fundamentally makes money?

TS Anil

A third is transaction-based revenue: interchange, FX, and so on. A third is on-balance-sheet lending, when customers take out an unsecured borrowing product from us—a loan, an overdraft, or Monzo Flex.

1. Lessons from Building the Wrong Products

The last one-third is what I describe as good fees. I say “good fees” because this is not stuff where we make money when customers make mistakes. These are not gotcha fees. They are fees from subscriptions, from the marketplace and origination of mortgages in the future, and the interest margin that we make on the savings product.

Ready to go, TS. I’m so excited for this. Listen, I’ve spoken to most of your cap table in preparation for the show, so thank you so much for joining me.

TS Anil

Just waiting to be asked. Excited to be here.

2. Taking Over During a Tough Time

Listen, we’ve had it in the calendar for a while now. I want to start with when you took over. It was a tough time: there was a 40% down round, little runway, high engineering attrition, and low employee NPS. It was tough, and you were also in the US. Why did you decide to take on the challenge?

TS Anil

To answer that, I’m going to have to back up a little bit, Harry. As you know, I’ve spent many years in different sorts of financial-services companies and banks around the world. Through it all, I had this big, unscratched itch of really thinking that someone needed to reinvent the sector—someone needed to reinvent how customers and money work with each other.

In the bigger places I had worked, I tried to do it right, but it was clear that the legacy players were never going to fix it. With the best of intent and the best of wanting to do it, it was never going to get fixed by incumbents. The history of incumbents transforming their industries is very, very sketchy, for all of the obvious reasons: legacy technology, legacy mindsets, business models to protect, and so on.

It had been a thing for me for the longest time, so it wasn’t an accident that I ended up in the conversation with Monzo in the first place. I had been seeking to be part of a team that was going to change the sector forever and ever. That commitment and belief in the mission was very real for me.

When I encountered what Monzo was, of course, you’ve talked about all of the things that were wrong, broken, or difficult. But if I looked at the hand I had to play, there were some good cards in that hand. We had found magical product-market fit with our initial current-account product, and we had found a brand and tone of voice that had really resonated across the country.

In addition to all of those problems, they were real. We were running out of capital, COVID had caused our revenues to fall off a cliff, and monetization was lagging user growth. Every version of a problem that you can think of, we certainly had that as well. But if I looked at the full hand, this was one I wanted to play.

At a deeper level, I’ve never been shy about running toward the fire. I’ve never been one to balk because something feels difficult. If anything, it feels more like, “I’m going to give this a swing, and I’m going to give it everything I’ve got. It won’t fail because of something I did not do.” There’s a deep sense of, “I’m going to try and make this work.”

What was the single hardest thing that you had to embrace in terms of those challenges?

TS Anil

There are some situations where you have to sharpen your focus and just do the one thing. This was not one of them. I wish it was—that this was the one thing we did that unlocked everything else—but sadly, it was not, because it was a set of interlocking problems.

3. Banking License vs Product Velocity

We needed to raise capital because we had limited runway and wanted to fund the ambition. But to raise capital, investors needed to have conviction. To give investors conviction, we needed to ship product and drive momentum. To drive momentum and ship products, I needed the regulators to trust us. To drive that trust, we needed to fix a set of controls to keep them commensurate with the size of the company and the size of the bank we had already become.

To do all of those things, you need the right people. Every one of these things was an interlocking problem. It wasn’t about doing the one thing.

When you look at this whole landscape of things that needed to be dug into and fixed, a lot of people and teams freeze in the face of that kind of overwhelm. We chose not to freeze. We said, “We’re going to dig in, look at everything that needs to happen, build a plan, start with a 100-day plan, and go after each one of those things.”

There isn’t an answer other than to say we dug in and owned the whole damn thing. We said, “We’re going to put our arms around this whole thing, dig in, and grind away at each of these problems.” Then you start to unlock things. The good news is that if you get a couple of things right, you start to create positive and virtuous cycles as well.

On the product-momentum element, Revolut has insane product velocity. I always attributed that to its not having a banking license and therefore not needing to be quite so constrained. You obviously have that license. Is it the banking license that prevents the speed? Is it management, the team, or the arc of time?

TS Anil

You have to get all of these things right. Sequencing matters. Should we have gotten a license later in the lifecycle versus earlier? Here’s the thing: when you’re in the early days of a company, you build the foundations of the company. You build a great tech stack, figure out the product-market fit, the brand, how you want to go to market, and all of those things.

But in a regulated business, you also put in place the muscles to operate at scale in a regulated context. Getting that right early on has meant a few things. It has meant that we’ve earned real trust from our customers. It has meant that we know how to do that and continue to scale. We know that getting it right actually creates a motor around our business in a very, very important way.

Hindsight is a lovely thing, and we could debate what sequencing is better or worse. But here we are: the largest UK digital bank, and so much more.

It’s interesting, to your point on the timing. Nik said he regrets doing it so late and wishes he had done it earlier, as you did. I did not expect that.

The mission is so core to Monzo in many ways. Did that ever prevent product build-out? I had suggestions before the show that there were products that would have been profitable for the business but that you deliberately chose not to do because they were against your mission.

TS Anil

Sure. Let’s talk about cryptocurrency trading. That’s a good one where we chose not to do it. Letting the average customer buy 100 cryptocurrencies because we could make a buck off it just felt completely off mission.

It was clear to us that if we wanted customers to trust us, do what was right for them, and protect their long-term financial interests, we were going to have to take them on a journey. The goal was that we would offer all sorts of asset classes in time, but really build it around helping customers understand what they were doing. We chose to walk away from that.

I’m just playing devil’s advocate. Is that not assuming that consumers don’t understand crypto well enough to trade it?

TS Anil

You tell me, Harry. Of the millions of customers investing in cryptocurrency, ranked number 75 because they saw a tweet. Does that sound to you like a customer who understands that currency and the reasons why that particular currency has a tailwind of growth?

No, but I’m as far-right free-market as you can come, so I think you can’t be the arbiter of consumer knowledge, saying, “You are smart enough, but you’re not smart enough, and therefore I’m not going to let you do it.”

TS Anil

I don’t disagree for a minute. This is not about us being paternalistic. This is about presenting the customer with information to help them make a good decision. If I want to have them invest, I think we should give them the tools to make good investing decisions.

Do you think it was the right decision on crypto?

TS Anil

If it wasn’t, and we had relitigated that, we would have launched it in the time since. It wasn’t a one-off decision or a point-in-time decision. We’ve chosen not to do it yet.

How do you think about stocks with that in mind?

TS Anil

As I said, ultimately, in my mind, we want to give customers a full range of asset classes to invest in. I think it’s just about sequencing it. I’d rather have it as part of a broader investment proposition. I think we should make all of the choices available to the customer.

How do you think about that sequencing? I’m sorry for this brilliant schedule—maybe not such a brilliant schedule, given that I’m so interested in this—but how do you think about the right sequencing, given the many options you have in front of you?

TS Anil

With investing, as with every other product that we’ve built, we went deep in understanding what our customers wanted. What we learned from customers was that the 2 reasons most British customers stay out of investing and keep their money in cash—which is one of the largest savings-versus-investments markets in the world—are, first, that they think it’s only for rich people, and, second, that they don’t understand it.

If you take those 2 insights, what we did with the product, and the reason we’re on this journey, was to say, “Let’s start by solving those 2 problems.” We made education available to customers in the app. We demystified it. It’s not terms and conditions or disclosures; it’s, “Let me tell you what you need to do to make a good decision here.”

We also said you can start investing with as little as £1. The idea was to solve for getting this vast majority of people—we have more than 10 million customers now—to get started on making long-term decisions with their money.

4. Balancing Product Innovation and Strategic Trade-offs

We started with unit trust funds, and in time we will do ETFs and all sorts of other asset classes. To your point about sequencing along that journey, the other asset classes will come at the right time. In the meantime, we’re not chasing just a fast buck.

How do you think about that trade-off? Everything is a game of trade-offs, which is what’s so hard about managing businesses and product strategy. How do you think about the trade-off between new product innovation, such as investing in different stocks and crypto, versus mortgages and student loans?

TS Anil

The quick backdrop is that we intend to meet all of these needs for a customer: budget, borrow, spend, save, insure, invest—all of that in a single place. That’s what we’re building.

The sequencing is driven by many things: when we feel ready in terms of everything we need to do to launch that product, where it fits into our journey of building out the economics of the business, and what customers are saying they want right now. A bunch of different things inform that particular sequencing.

Mortgages are an example. I don’t think we will ever do them on our own balance sheet, but we already are making mortgages visible to our customers, even if they’ve taken one from somewhere else. In the app, leveraging our technology, a customer can actually track their mortgage.

A Monzo mortgage is good business?

TS Anil

Let me reframe that question: what part of mortgages is great business? The problem to be solved is at the front end of the customer journey, and we will solve that problem. We will originate for other balance sheets.

There are enough large balance sheets in the country with lots of lazy capital and liquidity that will happily distribute mortgages through us to our customers. I want to play in the front-end portion of that because I think that’s where the customer sees pain.

Let’s solve that problem, make the capital free, offer high-margin fees, and give the asset to someone else. Mortgage origination for us will be a 90% margin, 100% margin business, versus using our balance sheet, which is lower-margin. The front end is where we can differentiate.

Is there a loss-leader product in this suite—one that you need to have but that isn’t a great business and is important for the rest?

TS Anil

The challenge is going to be defining what’s a product versus what’s a feature. But we don’t seek to monetize every product and feature.

As an example, take the gambling block. I don’t know if you know about this feature that we built. A few years ago, coming out of customer feedback about someone who had spent too much money gambling online the night before because they kept topping up that account, a customer-service agent who was talking to them had the idea that maybe we should give them the ability to block those transactions.

Customers can set up a gambling block on their account, which says, “Don’t let me top it up.” If I choose to unblock it, I have a 24-hour cooling-off period. The staggering number is that more than 600,000 customers have turned that on.

It’s not something we seek to monetize. In fact, we went and lobbied the government, saying every bank should make it available. That’s an example of a product feature that we’re not doing for the sake of monetization. It’s good for the customer, and we’ll do a whole bunch of budgeting tools for free. We don’t price those.

The thing we have to get right—and I can see the skeptical look on your face—is that we have to reject this false binary: are you mission-oriented, or are you a great commercial business? I think of that as a false binary because I think, done right, both of these things reinforce each other.

By talking to you about our mission, what Monzo is really good at, what we stand for, and what we invest in every day, what we have built on the back of that is a business where, of course, we are the largest UK digital bank—not just in terms of the number of customers or revenues, but in the quality of those customers.

The engagement that we get from those customers, tracked in weekly active users or daily active users, is off the charts and leagues ahead of our competitors. The commerciality of it is that we add more than 200,000 new users a month, and the vast majority of those are word of mouth.

In an industry where people spend £100 to acquire an account or more, the engagement level means that the propensity to buy every new product from Monzo is off the charts.

Do you care about it being the primary account?

TS Anil

Of course we do. Not for its own sake.

I had Antoine (likely Lellouche), who was the head of growth at Revolut, on 20Growth. He said, “We’re like snackables. Try it, and then over time…” We don’t necessarily care about the first bite. Do I care about the first bite?

TS Anil

No, I’d like to get that first bite. I’d like people to come and bring their whole relationship to Monzo in the first instance, and many large segments of customers do.

People who are new to banking, coming of age, or new to the country often don’t have another bank account in this country. They bring their entire relationship to us, and that’s amazing. But I’m also fine if someone wants to try us out and use us for more and more, because the unit economics of that make commercial sense, and it’s a great way to make sure more people touch and find Monzo.

The reason the main bank matters is not just the fact that you get more share of wallet and higher ARPU. You can get that same ARPU even if someone isn’t using you as their main bank but takes out another, bigger product from you.

It’s because when more of the relationship comes into Monzo, the ability for that customer to manage their money better, and for us to add value by connecting the dots for them inside the product, is massive. Most customers’ anxiety is driven by the fact that their wallet is fragmented. They borrow here, save there, invest here, and insure there. That creates high anxiety for most people and doesn’t let them optimize or make good decisions.

When you consolidate that and bring it into a single context, there’s so much you can do on the back of it.

Can I ask what the ARPU is today?

TS Anil

£145 on the retail side and £55.50 on the small-business side.

Okay, great. On the retail side, I want you to pause for a second, because those numbers are part of the proof point about the idea that mission and business can coexist.

How does that compare to a traditional high-street bank?

TS Anil

A high-street bank, which has a disproportionate revenue contribution from mortgages, will probably be at £3,400 on the retail side.

5. How Monzo Makes Money

Wow, but that’s mortgages. If you capital-adjust, risk-adjust, and expense-adjust it, it obviously thins out very quickly.

When we break down your £145 on the retail side, what does that look like in terms of how Monzo fundamentally makes money?

TS Anil

There are 2 answers. The first is what the revenue mix looks like. We’re targeting, and are very close to, a third, a third, a third.

A third is transaction-based revenue: interchange, FX, and so on. A third is on-balance-sheet lending, when customers take out an unsecured borrowing product from us—a loan, an overdraft, or Monzo Flex.

The last one-third is what I describe as good fees. I say “good fees” because this is not stuff where we make money when customers make mistakes. These are not gotcha fees. They include fees from subscriptions, the marketplace and origination of mortgages in the future, and the interest margin that we make on the savings product.

I’m always interested in things that you’ve learned from things that maybe didn’t go right. We’ve mentioned some of the amazing products you’ve built. What did you build that you reflect on and think, “We shouldn’t have built that”?

TS Anil

One of the products we were really interested in building out was energy switching, and we shut that down a year or 2 ago. A few things happened.

We thought it was a logical extension of the financial-control centre, helping people get good choices and make good decisions. It was also an amazing origination business. But the market turned when caps and energy costs came in, and that market changed. We prioritized it lower.

We may get back to it if it becomes a thing again, but it never quite worked out.

What did you learn from that? How do you reflect on it?

TS Anil

The big learning is to make sure that you stay close to customers and are solving problems that they’re seeing, rather than something that you think is intuitively right.

You have to constantly learn and iterate fast. There’s also the recognition that we’re operating in a very dynamic market, so you have to roll with it.

6. Accelerating Product Velocity

You said “iterate fast,” and you spoke earlier about product velocity. I spoke to Anu before the show, and she said one of your many achievements has been the unbelievable acceleration in product velocity that you’ve been at the centre of. How do you accelerate product velocity, as specifically as possible?

TS Anil

We can take this back to 2020, in the early weeks after I started. It was important to do 2 or 3 things.

The first was to have high conviction in the 3 things we were going to do, focus, and make sure we got those across the finish line. Number 2 was playing across different horizons.

The first horizon was the stuff you could ship in the next 6–8 weeks. Then there was the stuff you knew had longer lead times but that you needed to get started on now if you wanted to meet the launch date 3 quarters from now.

You need to build a clear view of how you play across these horizons and get going. The subscriptions product that we launched in early July 2020 had been through many internal attempts, and it was still spinning without having crossed the finish line.

That was one where we said, “We’re digging in. We’re going to ship this in 4 weeks. Let’s figure out everything that we’ve learned, make the right decisions, and crack on.” We did. That was a 4-week-horizon thing that we were going to get done.

A longer-horizon example was our borrowing business. We had already launched loans and overdrafts, but as COVID kicked in, it was clear that we needed to hit the pause button and really build that for scale.

That meant investing in world-class underwriting tools, understanding how the customer journey would work much better, and putting in place all of the controls associated with building a borrowing business at scale. We said, “Get started at an intense pace,” knowing that it was 9 months away from when we could ship it.

You need to invest in those longer-lead-time things as well if you’re going to get them done. If you only prioritize what you can get done quickly, you’ll forever be in a tactical mode without building out the business that you’re setting out to build strategically.

That year was also about things that were not visible to customers from a shipping perspective. Product debt and tech debt are well understood in the industry, but we defined this idea of controls debt.

When a company is scaling as fast as we were, you need to make sure, again going back to the point about being a regulated industry, that the controls scale alongside it as well. You don’t want to pick up debt on the control side.

7. Life of a CEO of a Bank

Tom said on the controls side—I’ve known Tom for years—“I hated being CEO. I just spent all of my time with regulators.” Is that the life of a CEO of a bank?

TS Anil

It’s one part of the life of a CEO of a bank. Here’s the way I think about it, though. If we were running an e-commerce business that we wanted to run at scale—if we wanted to build Amazon—and we sat around wringing our hands and complaining about warehouse logistics, saying, “Oh my God, the supply chain is so difficult to handle,” then you don’t have a business.

You want to do it.

TS Anil

Exactly. If the business you’re in requires you to own the whole value chain, own it and get great at it.

I just did a show with Jason Citron from Discord, and he said that empowerment and alignment are 2 of the biggest BS words in management. Do you agree?

TS Anil

No, I don’t agree at all. They may be the hardest, most annoying, and most painful things, but sadly, they’re not BS.

How do you run a business and build it to scale if your team is not aligned with what you’re trying to do? How do you run a business where the people who are closest to the decision and closest to the customer are not empowered to make that decision?

How do you build that? I get that they’re big and annoying words, and they’re bandied around all the time in the same way as “strategy” and “synergy,” but they are fundamental.

8. Where Was the Team Most Misaligned on Product & Strategy?

Where was the team most misaligned—in terms of product decisions or strategic decisions?

TS Anil

There were 2 things that we needed to build real alignment on early, at the more senior levels.

There was this false binary of, “Are we a tech company, or are we a bank?” I say that’s a false binary in the same way that I wouldn’t expect the world’s best e-commerce companies to say, “Are we a retailer, or are we a tech company?” You’re both.

You don’t frame a false binary that results in saying, “I like this, but I don’t like that.” That was one area of misalignment at the senior levels.

At more junior levels, there was misalignment about the idea of a mission and a business plan. I would say that a mission without a business plan is a bumper sticker. Anybody can write a strapline.

Our mission is powerful because it goes back to the business plan: “Making money work for everyone.” It’s simple and ambitious. But standing alone, without a business plan to make it happen, it’s just a strapline. You and I could write 5 more in the next 2 minutes.

With a business plan that reinforces it, it becomes incredibly powerful. We would have this debate. I remember that we were launching a new fee that we were going to charge customers for something, and we were doing it the Monzo way—wickedly transparently, so customers knew exactly how and when we were going to charge it.

I remember someone asking me in one of the meetings, “TS, doesn’t this seem like it’s off mission? We shouldn’t be charging for this, and charging a fee feels like it’s not on mission.”

I remember saying that if we choose not to charge for things where we are transparent with the customer and believe we’re adding value, and if we see that as somehow being the mission-oriented thing to do, then we’re effectively saying, “I’m doing charity at the cost of the VCs.”

9. What Will Drive Future Monetization?

I shouldn’t take any credit for that. I’m taking the VCs’ money and building and scaling an unprofitable business to be even more unprofitable. There’s no good that comes out of that.

What do you not monetize today that will be the biggest monetization lever in the future?

10. Quick-Fire Round

TS Anil

I still think transaction-based fees will be the biggest thing we do, but it’s already there, so it’s not as though it’s a new thing we’re building out. I still think it’s going to be a big thing as we expand the ways in which people pay and get paid.

That’s probably still going to be the biggest thing we do. But I think the subtext in the question you’re asking me is, “Is there one thing?”

When we’re building a product that is about meeting all the needs that your wallet has, it’s by definition going to have diversified revenues. That’s a high-quality business model because it isn’t hostage to economic cycles, credit cycles, interest-rate cycles, or any of that. You build it like a quality business.

You mentioned the fees and transparency around them. Do you think Revolut is transparent with its fees?

TS Anil

I’m not a customer.

You can’t blame me for trying.

TS Anil

I can’t blame you for trying.

11. Monzo's UK Success & Global Expansion

You have 10 million customers in the UK and half a million small businesses—and half a million is a very important addition. How big can Monzo get in the UK, and when do you think, “We really have to internationalize now”?

That was the biggest question segment everyone had: when do we go international?

TS Anil

I think the answer to when we go international is now. We’re public about the fact that we’re investing in building out a strategy for Europe. We’re also public about the fact that we have a small team in the US building a product for the American customer.

You’ve had that for a while?

TS Anil

Not really. In the first iteration of the US, what we spent our time on was applying for the banking license. We pulled out of that process when it felt like the US regulator was unlikely to grant fintech players licenses.

Was it the right decision to pull out?

TS Anil

Absolutely. Nothing has moved on the regulatory front in the couple of years—or even 3 years—since we pulled out.

Why would going in now be different?

TS Anil

Because we’re not looking to go in with a banking license. The US fintech industry has this well-established model of a partner bank, or sponsor bank. Most of the US fintech industry operates with that model.

That’s what we’re doing: working with a partner bank and building out a product for the customer. We’re focused on the things that we do really well, which is working closely with the customer and nailing what will help them make better decisions.

Why has no one won the US yet?

TS Anil

I’ve spent a lot of time looking at and talking to different US fintech companies, and I have a couple of hypotheses.

One is that there was too much cheap capital chasing US fintech. What that did, I think, was create a context where most fintech entrepreneurs felt they were being incentivized to grow users.

The number of businesses we look at in the market that have a mediocre product fueled by CAC marketing dollars is staggering. The actual product doesn’t resonate, it isn’t doing what they wanted it to do, and the monetization is coming from early wage access or some other single piece of the business.

There’s another reason. US fintech has been a developed industry for a while. In being a developed industry over the last couple of decades, you have really great fintech companies that have solved thin slivers of needs.

For P2P, there’s Venmo or Cash App. For point-of-sale lending, there’s someone else, and for something else, there’s someone else. It’s a very fragmented fintech industry, but that’s where we see the opportunity.

The idea of bringing it together in a single place for the American customer seems very attractive.

How do you think about the importance of the right anchor product or entry point? I know Vlad at Robinhood very well—he’s been a friend of mine for a long time. I don’t really get stock trading; he’s going to kill me. This is such a bad friend award.

But stock trading as the entry point for product expansion seems difficult to get my head around. How do you think about the right entry point?

TS Anil

The honest answer is that we’re still in a bit of discovery mode on that.

Why will they come? Is it not the same as in the UK? Is it not a current account?

TS Anil

No, I don’t think so. It’s a very credit-hungry market, and it’s a market where a lot of people have been trained to apply for credit. That’s the hook product.

Ultimately, we think about it across 3 questions: why will they come, why will they stay, and then how do we make money? We’re still early in pounding the table and saying, “This is a high-conviction answer to that question.”

Let’s dig into that. Why will they come in the US? You said we’re still in the ideation phase, or that we’re figuring it out. Where do you think it is, and what is it?

TS Anil

Credit is the obvious hypothesis, as I said. If you look across the fintech industry, both in terms of how people are monetizing it and what’s driving user growth, credit and its adjacent products, such as early wage access, seem to be a big part of the industry.

That’s what we’re working on and getting our heads around: what the real thing is there, and what the best product for the customer is in that context.

Size of market and odds of winning: where are the first 1 or 2 markets that we go to with Monzo in Europe?

TS Anil

It’s too early to answer that question. But I’ve also been public about the fact that we’re choosing Ireland as our beachhead into Europe. That’s the regulatory region we want to work with, and that’s where we want to domicile.

When you look at the size of the market and ARPU potential, I wouldn’t have put Ireland in the top 5.

TS Anil

When I was answering those 2 criteria, I was answering in the context of where we want to enter and win, and where we want to domicile. Ireland is an attractive market. It’s not the biggest market, so of course we want to do more than that. We’ll start there.

What will be the biggest challenge in expanding across Europe?

TS Anil

Exactly what I said: it’s different countries with different makeups. What attracts customers? What is the real pain point they feel? What segment is more attractive or more underserved?

Getting those nuances right is not trivial. If we were playing an alternate product strategy—building a thin-layer product with thin ARPU, scaled to lots of customers, but fundamentally meeting a very narrow need—you could do that much more easily.

But what we’re looking to build is a business with high engagement with customers, extraordinary economics up and down the P&L, and alignment with the mission that we have. You end up at a different place in terms of how you think about the strategy.

You don’t think about planting vanity flags. You think about how to build a business of scale everywhere.

12. Why Engagement Is a Core Metric for Success

Why is engagement a core metric for you? If you think about your relationship with your money, sometimes people would say that the less you think about it, the more frictionless it is, and that less engagement would mean more success. Why do you think about engagement as a metric of success?

TS Anil

Two things. The way we define engagement is usage. I’m not defining engagement as how much time you spend thinking about your money. I’m defining it as how much time you spend in the app looking at your balance.

Engagement is how much you use Monzo. We don’t look at it as merely revenue-active. You could have a lazy balance with us and be making money from Monzo, but I don’t think of you as an active customer. Are you using the product?

Why is that important? It’s correlated with the high ARPUs that you see. You can imagine what the highly engaged customers within the base look like when you disaggregate those ARPUs. Engagement drives greater economics for the product itself and the ability to buy more products from Monzo.

Here’s an example. We’ve talked about investments a lot today. When we launched our investments product, I did 1 press interview, and by that evening we had 150,000 customers add themselves to the waiting list for the Monzo investments product.

Distribution is everything.

TS Anil

Distribution is everything, but your distribution is the outcome of something. It’s the outcome of engagement and trust with us.

It’s not that I could have said, “This is why I love it, though.” When people say, “It doesn’t get easier with time,” it absolutely does. It is so hard to get 100 people to care about you in the early days. You get 150,000 when you have an incredible customer base like you do.

But that incredible customer base is not an accident. That’s the point. It has come about because we’ve built that love and trust.

Warm, fuzzy words like “mission” are not warm, fuzzy words for us. It’s about saying, “How does it actually connect with the customer? What’s the real problem we’re trying to solve? How do we stay maniacally obsessed with that?” It drives all those second-order effects.

To go back to your question about engagement and why it’s important, greater engagement means greater economics, ARPU, and so on. There’s a second piece of this.

What we’re effectively building, Harry, is a consumer platform where engagement is measured in the trust that customers place in Monzo and the love that they have for Monzo. By the way, here’s a trivia question: do you know how many times more likely it is that a customer uses the word “love” when writing a review about Monzo?

Seven times more likely than anybody else?

TS Anil

Seven times more likely than anybody else, in the context of an industry where love and banking, or love and financial services, just don’t go in the same ZIP code.

We’re building this consumer platform where engagement is measured in trust, love, and doing more with Monzo. On the back of that, we earn the right to do so much else for customers.

There are some tropes in startups that are commonly repeated. I’m intrigued by how you feel about them. You said that 150,000 people joined the waiting list. “Build it and they will come”—agree or disagree?

TS Anil

Disagree. This is a difficult industry. If the only thing that mattered was the product, how do you reach customers? You have to create the virtuous cycle.

In our case, that virtuous cycle is the virality of it and the tools that make people want to talk about us. You have to build a great product so that you create the love, but then you need things to happen around that. It’s not just about the great product being first.

It depends on the industry?

TS Anil

Sure. There are some sectors where that’s probably true.

Do you think it’s important that you’re first to market in the markets you’re entering?

TS Anil

We’re 500 years late to banking. There’s nothing first about that, and yet here we are.

What are other BS tropes of leadership that you often hear but, now that you’re in the seat, think, “That’s just crap”?

TS Anil

Let me think if I can think of a favorite one. This has been about IPOs.

How do you think about when you’d like to go public?

TS Anil

We have the luxury of time. We have the gift of time because we have plenty of capital to build out our ambition. Not only that, we have extraordinarily supportive investors—patient but also supportive, in the sense that they would give us more capital if we needed it.

It’s not a thing for its own sake. We know we’ll make a great public company one day, and we’ll get there when we get there.

Why would you go public soon? By that, I mean that you have very supportive, deep-pocketed investors and are getting a lot of scrutiny brought to your company when you don’t need it.

TS Anil

Two things. We already know how to operate in a highly regulated context, so the gap between a tech company like us and another tech company that doesn’t have to deal with scrutiny is pretty wide. The gap for us between here and becoming a public company is not enormous, so let’s start there.

But why become a public company at all? You and I could come up with 5 names of great brands and great companies that we respect that are not public. I feel that at some point it’s good for the business, good for investors, and good for the brand to eventually become public anyway.

There’s always a “why now?” There’s an extended window of privatization, with larger and larger funds moving earlier and earlier, meaning that you can be private in perpetuity.

TS Anil

Sure. I guess the question is “Why ever?” rather than “Why now?”

Would you go public in London?

TS Anil

I knew you’d ask that.

Of course. It’s the question you need to dig into. The London Stock Exchange asked me to come and do a show with them because my question is, “Who would go public in London?” You can’t go public in London.

TS Anil

It’s too early for us to call it, Harry. I could paint a picture of why we would go public in London. This is a home market, we’re a huge brand in the UK, and there are lots of reasons to think it would make sense.

There’s no institutional support at scale that would provide the liquidity needed. I know that both the last government and this government are doing a bunch of things to improve that.

13. When To Go Public?

TS Anil

There has been no dearth of policy changes that have come about, and we have the gift of time. We also have the gift of choice. We’ll wait and watch. There will be a time when we need to make that decision, but it’s not now.

You asked me about tropes. We could go back to that. That was a better one.

TS Anil

Let me get back to it. I genuinely don’t think I have a better answer than to say that we don’t have to make a decision today, and we’ll make it when we need to make it. That’s the honest answer. I could say it in longer ways, but that’s the heart of it.

On the tropes, you asked me earlier about common misconceptions. How about founder mode?

Come on, hit me.

TS Anil

It’s all the rage, that debate about founder mode and so on. Is there survivorship bias in the analysis and in how people talk about it?

Here’s how I think about it: to build a great company at scale for the long term, a leader has to be good at a few different things. You have to be really good at setting the ambition for the company and a product vision to get there.

You have to be able to operate close to the product and the user experience, and close to the way value is created. Then, third, you have to be able to scale execution, which means building the right leadership, team, and culture that allow you to continue to scale at bigger and bigger numbers.

You have to be good at all 3. Some of these qualities get dubbed as one thing or the other, but a debate about one being the only thing feels like a trope. I think of it like a triathlon: you have to swim, bike, and run if you want to win this at scale.

Any discussion that feels like, “All you need to do is be great at swimming,” feels like it’s completely missing the point.

14. Leading as CEO in a Founder-Centric World

Is it difficult coming in as a CEO when there is such idolization of founders today?

TS Anil

I’m sure it was difficult in some ways early on, but only in the sense that I was an anomaly in that context.

As I was building relationships with the Monzo team and the investors, most people, investors included, were used to seeing a 20- or 30-year-old person in founder-pitch mode. In that sense, it was hard because there was an expectation of what they expected to see, and then I showed up and it was different.

Earning credibility and trust takes a different path. It was easy to see me as someone with lots of experience in big companies and a safe pair of hands, but would I 10x the company? The team needed to believe that, and investors needed to believe that.

It was hard in that sense, but what’s life without taking something like that on?

How many rounds have you raised now as CEO?

TS Anil

3 rounds.

The last one was at 5.9, correct?

TS Anil

Correct.

Which was the hardest round, and which was the easiest?

TS Anil

The first was easily the hardest.

Why?

TS Anil

The first was the hardest because, as you opened with, we raised £250 million, and that was pretty soon after I came in. We did the down round within weeks after I started—about 3 weeks after I started—and then topped up that down round over the next 6 months.

Is everyone affected by a down round? Whenever you have a down round, everyone proclaims the damage that down rounds do. Is that wrong?

TS Anil

It’s not wrong. In an industry where everybody likes to talk up valuations—the interim valuations, in particular—of course it’s a thing, and you need to manage it. You need to explain to people why.

Importantly, as a leader, you have to see through the storm to the business you’re building on the other side of it. This was a storm, and we needed to know that we would right the ship.

Really, this is not about being a safe pair of hands that rights the ship. It’s about building the business that you’re going to build on the other side of it. Of course it’s hard, and to pretend otherwise would be silly.

The point is that you have to play the long game and have the conviction as a leader that you’re going to get it done, because everybody is picking up on your energy and the cues of your conviction.

What was the easiest round?

TS Anil

The last one we did.

How much was that?

TS Anil

$650 million.

Why do you think that was easier?

TS Anil

Anybody looking at our story by then could see that we had been on a doubling-our-revenue trajectory for a while. Anybody looking at the business could see that everything we talked about in terms of customer engagement and love wasn’t warm, fuzzy fluff. It meant that our ARPU was significantly higher than any competitor’s.

The stickiness of revenues was higher than anybody else’s. You could see the dynamics of the business. You could see that we were growing users as aggressively as we were, but not because I was burning cash—it was because people were recommending us.

The dynamics of the business were clear. Things we’d been saying for 3 or 4 years were not just narrative; they were visible in every way you cut and looked at the business.

Our focus was on getting quality investors. It wasn’t just about the color of the money. It was about who we wanted on the journey with us.

Which investor do you not have that you’d most like to have?

TS Anil

We’re at the cusp of the next round. Whenever we do it, we’ll get the big institutional investors.

Right now, we have a few institutional investors, including GIC and others. But looking ahead, our journey is not about VC names. It’s likely about Ontario Teachers’ Pension Plan and CPP Investments.

15. Spicy Questions

You have a very fun round.

TS Anil

Your face is saying, “Oh, shit.”

Because you have this—

TS Anil

Let me grab my hands and get into it.

This is not from me. This is purely from your friends.

TS Anil

Fire away.

We’re going to do this new round. I don’t know the questions here, but I’m given them on these cards. Are you ready for this?

TS Anil

Look at that—red lights and everything.

Which current product would you close down if you could, and why?

TS Anil

Energy switching is probably the best example of one that we’ve already closed down. Nothing else today.

Who is your least favorite investor on the cap table?

TS Anil

You really want to kill me.

These are your friends. This isn’t me. This is genuinely your existing cap table. Who suggested this? Let’s have some fun at Anu’s expense.

TS Anil

She knows it’s never going to be true. She’s an old favorite. She’s the reason I’m here at Monzo, actually.

Really?

TS Anil

Yes. She was the one who first connected me with Tom and Jonas.

Wow.

I’m going to do a quick one that’s less interrogative than that. What do you believe that most people around you disbelieve?

TS Anil

When you’re building a business with as much ambition as we have, there are always naysayers.

The journey of people disbelieving in the early days of Monzo was, “This company is never going to make it. We just have to look for an easy way to sell the company and get out.” Then there would be things like, “It’s going to be a great and cool app, but really, you’ll have a few million customers and that’s it.”

Then it was, “You’ll have customers, but you’ll never make money.” Then, “You’ll have revenues, but you’ll never make profits,” and so on and so forth.

It’s been fun proving each of those naysayers wrong. Even now, when I say that globally there will be only a handful of companies in the next decade truly doing this business at scale—managing people’s money and transforming the relationship that customers and money have with each other—and building businesses with extraordinary economics and growth, we’re playing to be one of them.

When I say that to you, there will be people who naysay lots of parts of it. It will be fun to prove that set of people wrong as well.

I agree with you. I think the composition of global banking changes entirely from regional players to 5 global players.

What’s the hardest element of being CEO of Monzo? You can’t say time.

TS Anil

I could, but I think the trope about it being a lonely job is real. I’m surrounded by the best people and have an amazing village, and yet I think any CEO role has an element of loneliness in it.

What would you do if you knew you could not fail?

TS Anil

I’d aim to build a global fintech company that was extraordinarily mission-oriented—a generational company that was not just amazing for customers and amazing economically, but also amazing for its employees.

But wait a minute. That is what we’re doing.

What’s the heaviest thing?

TS Anil

I heard this quote the other day and thought it was amazing: “The heaviest things in life are not iron or gold, but unmade decisions.”

An unmade decision for me is whether I should have moved to San Francisco when I was 18. It would have been a very different life and a very different career.

It sounds like that decision was made.

TS Anil

It was made, but it’s an unmade decision in the sense that I think about it.

What would one of yours be?

TS Anil

This is not one that weighs on me or anything, but it’s obviously one that I think about and am learning more and more about. It’s the IPO decision.

It’s an unmade decision: timing, location, all of it. We know we have to make it at some point. It’s not one that weighs on me, but it does require us to think diligently about it in the coming months and years.

What’s your favorite consumer brand, and why?

TS Anil

The honest answer is Monzo.

It can’t be Monzo.

TS Anil

Let’s move past that one. It’s clichéd but real: Apple. It’s magical design meeting magical functionality, along with an extraordinary business at scale. It’s the most valuable company in the world, and still a brand that inspires intimacy and trust with everyone.

You asked me about my Apple Watch when I came in. I’m in that ecosystem, and I love being in that ecosystem. It connects across my life. To your point about an operating system, it does so much in the background in terms of protecting my data and making me feel like I can trust it.

What concerns you most in the world today?

TS Anil

Judgment without kindness. Opinions without curiosity.

Do you think we’re too opinionated without curiosity as a world?

TS Anil

I think we are. It’s become easier to shout out an opinion and harder to say, “Tell me more. Let me learn more. What do you know?”

What do you know now that you wish you’d known when you joined Monzo?

TS Anil

That it would take us 2 years to get a really good coffee machine in the office. I would have just brought my own early on.

What would it actually be?

TS Anil

There’s not much in that bucket, Harry.

It’s been a heck of a journey so far. You were in San Francisco with a family.

TS Anil

I was.

You had a family. COVID hit, you took this job, and you were working with a set of—

What did your wife say?

TS Anil

Respectfully, she thought I was crazy. She wasn’t sure which was the bigger question: why I was doing it or how I was doing it.

I would start my day at 2 or 3 every morning, which was already 10 or 11 in the morning here in London.

Did it feel nuts?

TS Anil

It totally felt nuts, and you kind of loved it at the same time. I had this thing that I would joke about with the team and everybody at the time: the idea of type 1 fun and type 2 fun.

Type 1 fun is when you’re having fun in the moment—a great concert, a great party, or whatever. Type 2 fun is like that camping trip gone bad, which you know is going to be an amazing story later. You know it’s going to be fun when you look back at it, recount it to yourself, and remember that you lived through all the craziness that happened.

Every day was some combination of type 1 fun and type 2 fun. Every single day, I’d keep score of how many face punches and body blows we took, because when you’re in an existential time for a company, all of that is happening all the time.

How do you deal with the body blows or the face blows?

TS Anil

Quite literally, the way I said: this idea of type 1 fun and type 2 fun. For me, it would be, “That’s definitely going in the book. That’s going to make a great story.” It feels like shit right now, but you abstract yourself from that moment and actually look at it with hindsight.

What’s the best story of type 2 fun?

TS Anil

Oh dear God, there are so many. There was an investor I had spent months working on in 2020. They were that close, and I knew it was going to be pivotal for us. It would change our story, because on the back of that I would be able to raise more capital.

Then they didn’t pull the trigger. I would just be like—

And it’s all personal.

TS Anil

It is personal. There are plenty of those in any capital raise, especially if it’s—

That’s not type 2 fun, I mean that in the nice way. There’s no fun about that. I’ve been rejected many times too, for fun, and it’s like—

TS Anil

Not for public record, but many of those are great stories that we actually recount and tell ourselves. We remember them, and then my team will say to me, “You should never have gotten out of bed for that call. You should never have gotten out of bed for the size of that check.”

I’d say, “The question would be what would I get into bed for, not what would I get out of bed for,” because you just had to do what you had to do.

No event in isolation may feel like type 2 fun, but that phase does—the phase when the whole world is crashing around you, there aren’t many believers, and yet you have this conviction that you’re going to build this thing with this amazing team around you.

As I was saying earlier, you see through the storm. It’s an extraordinary privilege to have an experience like that.

Monzo has always been characterized as having a nice culture and a work-life-balance culture. Do you buy that, and is that something you want?

TS Anil

There’s a false binary in what you’re saying. There’s this belief that a values-oriented culture can’t also be a high-ambition, high-growth culture. I reject that binary.

I think it’s a specific value that rejects that. Work-life balance is part of an overall value system. Ultimately, I believe that if you hire amazing people and put them into a culture that really values them and is inclusive, people work incredibly hard against that mission.

It’s a lot of things that add up to this culture where you care about customers—not because they’re a number, not because they’re an ARPU, and not because they’re a stepping stone or a vanity metric, but because you say, “Okay, let’s build it.”

If you get that magic right as a company and as a team, the outcomes are the quality of the business we’re building. The proof points are here. If I was saying this to you 4 years ago, you would have been right to be even more skeptical and say, “What the hell? That’s never going to happen.”

But look at where we are now: from £40 million to a billion in revenue, and profitable.

Are you proud of yourself?

TS Anil

I’m proud of the team. I inherited some amazing people that I got to partner with: Jonas, the co-founder who stayed on as CTO; Sujata, the CCO who joined us right after I started; all of the amazing people we’ve hired since then; and the amazing original Monzonians who are still here building out the dream.

I’m insanely proud of all of us. The odds were stacked against us, the naysayers were having a field day, and it’s amazing to actually build what we’ve built.

How has the way that you lead changed in 4 years?

TS Anil

You’ll have to ask the people around me to tell you what’s changed.

A lot has changed, but it feels to me like it has not changed in the sense that the size of my ambition for what Monzo will be has not changed. If anything, it’s only been amplified.

At each point of inflection in the business, what we’ve done as a team is bend the curve upward. This is why I hate visions. If you stick to a vision, you put an artificial glass ceiling on yourself and downward-deflect the curve of what it could be.

Then you turn the next page and say, “Whoa, success. I wouldn’t have guessed that.”

You have to have a really clear sense of the scale of the ambition. You have to have a really clear sense of the product vision that you want to build out. But on the journey to getting there, you hope like hell that you only inflect toward raising the ambition.

It’s like rock climbing. You always focus on the next ledge. You know you want to get to the summit, but your focus is on the next thing and the next thing. That’s exhilarating.

It’s fun to take stock for a minute and see how far you’ve come, but what you’re really thinking about is the next thing.

Final one for you. What question have I not asked?

TS Anil

I feel really guilty about this show, dude. I’m so sorry.

Tell me a song or a track you’d recommend I listen to now.

TS Anil

I wish people asked me that more often. I always have music playing. I always have music playing in my head, so there’s always a track there that’s looking to get out.

What’s your favorite track? If I put on 1 track—the 1 track that’s going to get you dancing—what would it be? I’ve never asked that question in all my time.

TS Anil

I’m a cheap date with dancing. You could play 500 different tracks, and you wouldn’t have to convince me to get on the floor. Talent is not correlated with the desire to be on the floor, or with enthusiasm, so that’s a low bar.

I don’t think there’s 1 track. You could play any of 500 tracks that would do it for me. But a different question is: if there’s a track that touches my soul, that’s different.

There are a few, but I’ll go with Eddie Vedder and Pearl Jam. He did this in collaboration in the ’90s with Nusrat Fateh Ali Khan. Do you know who Nusrat is?

Nusrat is a Pakistani Sufi music singer, probably one of the best musicians of the 20th century. I don’t say that lightly. Eddie Vedder, a grunge rocker from Seattle, and Sufi qawwali singer Nusrat collaborated on an album that was the soundtrack to the movie Dead Man Walking.

There are a bunch of tracks on it that are amazing. “The Face of Love” and “The Long Road” are both insanely beautiful tracks that never fail to uplift me.

TS, I’m really sorry. I’m going to make you listen to this after this.

TS Anil

No, you can. I’ll listen after this.

You’ve been amazingly patient and kind. Thank you for putting up with my pressing questions. I really appreciate it.

TS Anil

Thank you very much for having me, Harry.