Val Scholz: How Revolut Acquired Their First 10M Users: Tips, Tactics & Strategies | E1168

1. 0:00 – 0:57

   Intro

   1. VSVal Scholz0:00

      You want to go in a market where you don't have competition, so if you think about Revolut against Monzo, right? Like, the markets we grew the fastest wasn't the UK. It was Ireland, it was Romania, Poland. We went in a lot of markets where we just had... didn't have competition, which allowed us to raise more money, build better products, hire more people. There's always, like, a way you can see the market or you can segment the market, where you basically can build a product where essentially you don't have much competition, where your product is 10x better than the status quo. And I think, you know, the best founders, they find these markets, they find these unique insights.

   2. HSHarry Stebbings0:33

      Ready to go? Val, this is such a joy to do. I've wanted to make this one happen for a while, so thank you so much for joining me.

   3. VSVal Scholz0:51

      Thank you so much for having me,

   4. HSHarry Stebbings0:53

      Not at all. But I want to start, like, growth is a, a weird world, so

2. 0:57 – 2:24

   Journey into the World of Growth

   1. HSHarry Stebbings0:57

      to speak. How did you first make your way into the world of growth?

   2. VSVal Scholz1:00

      It's actually quite random. So I studied software engineering when I was a kid, selling websites, and it's quite a lot of effort to build for clients, you know, these websi- especially back in the days. That was like 2004. And so a friend of mine basically started, you know, building his own websites, and then essentially made a lot of money. So I was quite curious and interested, like, what he does differently, and he taught me basically the early signs of, like, search engine optimizations. And so then over the years, I basically learned more and more about marketing, which essentially moved me in this, uh, growth role.

   3. HSHarry Stebbings1:35

      What was the first growth role you had?

   4. VSVal Scholz1:37

      I mean, there wasn't really growth back then. Um, I was a software engineer at, uh, MindMeister. There wasn't really anyone in the company that knew marketing or SEO, and so essentially, basically, one of my projects was, like, how can you, uh, share mind maps, uh, on external websites and essentially generate traffic? I mean, we... quite a few million people, and I guess, like, that was the first time I really got exposure to, to growth.

   5. HSHarry Stebbings2:04

      You were then Head of Growth at Revolut-

   6. VSVal Scholz2:06

      Yeah.

   7. HSHarry Stebbings2:06

      ... scaling from, like, nought to 10 million in customers. What were the biggest lessons from that journey? That's quite an incredible experience to have.

   8. VSVal Scholz2:14

      I think what I really, like, learned at Revolut was that it's a lot better to do one thing, but do it really well, than doing 10 or 100 things at the same time.

   9. HSHarry Stebbings2:22

      What one thing do you think

3. 2:24 – 16:23

   Experience from Revolut

   1. HSHarry Stebbings2:24

      you did at Revolut really well?

   2. VSVal Scholz2:25

      So for example, like, 90% of the, uh, customers, B2C customers, that Revolut ever acquired came through referrals.

   3. HSHarry Stebbings2:33

      How do you do a referral loop that's so effective (laughs) ?

   4. VSVal Scholz2:36

      Couple of optimizations. Um, essentially, we thought about, like, okay, if you... Let's say I'm here at the podcast, right? Um, and I want to... You know, I, I love Revolut. It helps me, you know, when I travel, I don't have to overspend, and so I'm basically, like, telling you about the product, right? What you want to achieve is that, uh, while we're talking here, you can actually sign up and make your first payment. For example, I don't know, order something on Deliveroo. And so we optimized the product to basically make sure that enough people can go through that whole journey in less than five minutes, and so essentially, because it's so easy, so quick, we had so many people that just went to their friends, to their family, strangers on the street, that just basically got people into Revolut.

   5. HSHarry Stebbings3:22

      Do you think people do referral platforms or programs well today? We see so many, "Invite a friend and get 20 pounds." Do people do it well?

   6. VSVal Scholz3:31

      I don't think so. Um, so the, the interesting thing about referrals is that there isn't really a lot of information on the internet about how it really works, and so it took me about nine months to figure out, you know, how to actually make it work, right? So the common knowledge is like, okay, one person needs to invite more than one person, right? And that gives you an exponential growth. So the, the problem is it, it really depends on how fast that invite happens. So for example, if on average you bring three people in, but it takes three years, it's really slow, the growth, uh, um... yeah, the growth of the company. On the other hand, if you, let's say, get three people in every three minutes, you, you grow a lot faster, right? Um, so one thing we'd done at, at Revolut was essentially engineer how fast or how short it takes for n- new people to invite their peers and their friends, which actually worked really well to a point where we had to cap how many people actually sign up.

   7. HSHarry Stebbings4:32

      How did you minimize that time from successful onboard to referring a friend? 'Cause you don't want to shove it in someone's face straight away of like, "Hey, Val, you've just signed up. Now refer friends." How did you minimize that time window?

   8. VSVal Scholz4:44

      I think... I mean, first thing was the onboarding, right? And during onboarding, I mean, in the early days, like, we had maybe an activation rate of, uh... So basically, like, uh, new users that actually make a payment, it was maybe like 30, 35%.

   9. HSHarry Stebbings4:56

      Mm-hmm.

   10. VSVal Scholz4:57

       Like, when I left, it was around 90%, so, like, nine out of 10 people actually made a payment.

   11. HSHarry Stebbings5:02

       What was the reason that they weren't, and what did you change?

   12. VSVal Scholz5:05

       Essentially (laughs) , I didn't really know how to figure it out, so what I did was I sent an email to 4,000 people and was like, "Hey, why did you stop using Revolut?" Right? And the interesting thing that came back was that the majority of people didn't stop using Revolut, they just didn't have a use case for it yet. 'Cause back in the days, it was known as a travel card.

   13. HSHarry Stebbings5:22

       Mm-hmm.

   14. VSVal Scholz5:22

       And so what we realized is, like, people don't see Revolut as an everyday banking card, so we started changing the way we market the product, you know, position it in the market, but also making sure that there's no technical issues. Like, for example, people try to, uh, verify their identity at night and then you use a flash, and so suddenly the software can't detect, uh, your identity card. Or, I don't know, you know, in Italy we had a weird problem. Um, people don't have MasterCards or Visa-... so they can't do an, actually online payments, which we used traditionally to top up your account. But then also, like, Italy is a bit backwards in terms of their banking system, so you couldn't make, uh, international bank transfers from your bank account.

   15. HSHarry Stebbings6:06

       (sighs)

   16. VSVal Scholz6:06

       So we had to figure out, uh, basically how we get users to actually get money onto their account.

   17. HSHarry Stebbings6:11

       Did you have lessons in terms of what referral kind of rewards were attractive to people? Like, does the size of the money matter if it's £10 or £50? D- Does it ... Is a voucher better than cash? Were there any lessons on what is attractive?

   18. VSVal Scholz6:26

       Uh, yeah. I mean, basically, the more money you pay the more attractive it gets. Um-

   19. HSHarry Stebbings6:30

       And you really see that clearly?

   20. VSVal Scholz6:32

       Yeah. You can see that. Uh, the problem is, like, you don't want to have a CPA of, you know, 200, right? (laughs) . It's, um ... So I think back in the days, we had a CPA of around £9.

   21. HSHarry Stebbings6:47

       Mm-hmm.

   22. VSVal Scholz6:48

       Which was like, compared to banks that had like 250, it was quite low.

   23. HSHarry Stebbings6:52

       It's pretty good. And then if you have a 30%, at that time, uh, person who sends their first payment, then you ... Essentially it's actually like a £27 CPA, no, if you think about it? If one in three actually converts to, like, a converted customer-

   24. VSVal Scholz7:06

       Yeah.

   25. HSHarry Stebbings7:06

       ... in that respect. It's like a 27%-

   26. VSVal Scholz7:08

       Also in the early days, we didn't offer any money. So in the early, early days-

   27. HSHarry Stebbings7:12

       (laughs)

   28. VSVal Scholz7:12

       ... uh, basically we just gave away a free Revolut card. So it was basically like ... And we were always quite cash stripped at Revolut, right? I mean, basically in banking you need to have a lot of cash actually on payment accounts.

   29. HSHarry Stebbings7:23

       Yeah.

   30. VSVal Scholz7:24

       Um, to make sure, like, let's say if customer is going into the negative, that somebody can cover it, or if there's fraud happening. So, like, a lot of the, the fundraising, uh, went directly back into product, engineering, but also, like, uh, in payment platforms. So, like, we always had very aggressive acquisition targets, but we never had really money to spend on things. So we had to become creative and, like, "How can we still give value to people, uh, but still hit our targets?"
4. 16:23 – 19:36

   Why Traditional Marketing Methods Are Outdated

   1. VSVal Scholz16:23

   2. HSHarry Stebbings16:23

      I want to start on, you know, people love to throw around PLG.

   3. VSVal Scholz16:26

      Mm-hmm.

   4. HSHarry Stebbings16:26

      It's like, it- it's been the kind of hot word in our industry for years now.

   5. VSVal Scholz16:31

      Mm-hmm.

   6. HSHarry Stebbings16:31

      But you said to me before, there's traditional marketing methods that are outdated, uh, and you were brilliant in when we chatted, like just dropping these one-liners that I was like, "Great. Thanks for expanding." Why are traditional marketing methods outdated?

   7. VSVal Scholz16:45

      I think it's just like, it's just the market is so saturated, over-saturated, um, that it's just... I mean basically traditional marketing means like it's not scalable, right? Like essentially it only scales with human output. So essentially if I want to have twice as many people coming to my website, I need to hire twice as many people. Which becomes, you know, as I, the company grows, it becomes more and more expensive. And then typically teams would get less efficient, so I need even more people. I think, you know, if you look at growth, which is essentially, you know, you- you build software that does marketing for you, uh, it basically scales exponentially. So, um, I need less and less people in the future to get bigger and bigger results.

   8. HSHarry Stebbings17:28

      Build software that does marketing for you is an interesting way of describing it. Referrals is one. What are other innovative cool methods that you think people should look at instead?

   9. VSVal Scholz17:39

      For acquisition?

   10. HSHarry Stebbings17:40

       Yeah.

   11. VSVal Scholz17:41

       You can do a paid marketing loop. So essentially I think Uber did it quite well, where they offered money or actually like PayPal in the early days, um, you offer m- someone money to sign up and essentially, like, as long as they bring in more money, like the whole loop is working.

   12. HSHarry Stebbings17:57

       Mm-hmm.

   13. VSVal Scholz17:58

       We have content acquisition. So for example, YouTube is a great example, right? Like, uh, somebody signs up to YouTube, uploads, um, a video, and then other people are gonna watch it. They share it, I don't know, on other platforms or-

   14. HSHarry Stebbings18:11

       Did you find paid marketing at Revolut effective?

   15. VSVal Scholz18:14

       We didn't use it.

   16. HSHarry Stebbings18:15

       You didn't use it?

   17. VSVal Scholz18:16

       No.

   18. HSHarry Stebbings18:16

       Wow. Why?

   19. VSVal Scholz18:18

       Uh, it's just you don't build anything sustainable. If you turn off the money tomorrow, it's just gone.

   20. HSHarry Stebbings18:25

       Huh.... okay. (laughs)

   21. VSVal Scholz18:28

       I mean, you want to, you want to invest in something. For example, if you build search, right? Um, let's say Canva, for example.

   22. HSHarry Stebbings18:34

       Yeah.

   23. VSVal Scholz18:35

       It's really hard to get rid of Canva, right? Even if they don't spend anything anymore, even if they don't improve anything anymore. Because, like, for nearly everything you're gonna search around marketing, graphic design, uh, PowerPoint presentations, like, Canva's the number one spot. So I think Canva nowadays is much larger in terms of volume generated to the website than Adobe. So it's really hard to, you know, you know, disrupt them.

   24. HSHarry Stebbings18:59

       It's the most brilliant SEO play.

   25. VSVal Scholz19:01

       Yeah. It, I mean, it's amazing, right? And I think it's, it's similar in, in other firms, where, I don't know, let's say WhatsApp or, um, Revolut, in a way. Um, you know, because Revolut is very incentivizing for others to join, because, you know, at some point, it becomes ... You're basically uncool if you don't have Revolut. You get the group pressure to get Revolut. Um, so let's say you go on a, into, I don't know, you play Paddle. One pays for the whole group. If one person doesn't have Revolut, everybody else will push him to get Revolut, because it's more convenient to

5. 19:36 – 22:43

   Content Marketing Lessons for Customer Acquisition

   1. VSVal Scholz19:36

      get paid.

   2. HSHarry Stebbings19:36

      Any lessons on content marketing as a customer acquisition channel?

   3. VSVal Scholz19:40

      I think there's two ways to, to make it work. Um, either you have user-generated content, when, let's say, uh, Pinterest, YouTube, uh, you can basically then c- create content or topic clusters, where you basically create hierarchy of, like, how you create dynamic landing pages. So essentially, software creates landing pages that match the keywords that people are searching for.

   4. HSHarry Stebbings20:00

      Huh.

   5. VSVal Scholz20:01

      So that's, like, if you have a lot of user-generated content. I think often, nowadays, uh, if you look, for example, at Canva, what they've done is they created content. So they ... You basically have crazy big in-house teams that generate content for you so that you can create these topic clusters. Um, which I think is actually one of the most exciting things that I've learned in the last two years, because I've never seen it before, or probably haven't understood it before.

   6. HSHarry Stebbings20:29

      In terms of the topic clusters created by internal teams?

   7. VSVal Scholz20:31

      Yeah.

   8. HSHarry Stebbings20:32

      Hmm. Is there anything that startup founders can learn from that?

   9. VSVal Scholz20:36

      I think in the early days, right, people built a, a two-sided marketplace, where essentially you had to control or grow both supply and demand. I think what a lot of companies nowadays do, they control both supply and demand.

   10. HSHarry Stebbings20:47

       Yeah.

   11. VSVal Scholz20:48

       So essentially, it, it's a lot easier, because you can just, you know, rather than having to convince people, you know, to basically use your software and be super engaged, you can just pay someone for it. Uh, they ge- generate content for you, and as you build more content, you generate more traffic, which then generates you more revenue. So I think, like, uh, ultimately, like, if y- ... I think what's nowadays happening is that ... Because people understand kinda like the tactics to grow the channels, whether it is SEO, referrals, um, you know, paid. Like, they execute a lot faster, and you basically, like, usually bring things first in-house, because you have more control. And then as you grow, you b- may- maybe, you know, shift it more towards user-generated, so basically you cut your cost.

   12. HSHarry Stebbings21:36

       When you look across the channels, most founders I speak to have one that really works. They're like, "It's great. We've got ... Yeah, it's working, but we need to diversify and we need to make sure that we're not too concentrated." Do you agree that you need to diversify early, or when you have one working, do you say, "Just double the fuck down. It's hard enough to get one working"?

   13. VSVal Scholz21:55

       I would double down on the first one.

   14. HSHarry Stebbings21:56

       And just continue?

   15. VSVal Scholz21:58

       I mean, I would still do some other channels. You know, it's ... But it's, it depends, it depends on the size of the company, right? I think, uh, a pretty big mistake is to go too early in too many channels.

   16. HSHarry Stebbings22:10

       Mm-hmm.

   17. VSVal Scholz22:11

       'Cause you know, like, in the end of today, like, you rely quite heavily on data to understand what works, what doesn't work, and you really need to understand it, right? Because otherwise you can't replicate it. And the problem is, like, the more channels you have, the harder it is to measure directly the impact of a specific channel, because there's obviously, like, you know, a lot of noise coming in.

   18. HSHarry Stebbings22:33

       Yeah.

   19. VSVal Scholz22:33

       And then, essentially because you have more noise, your decisions gets worse, and which makes it then a lot harder and slower to actually, you know, really nail one channel. For example, to generate a million new users

6. 22:43 – 25:21

   The Best Time to Hire a Head of Growth

   1. VSVal Scholz22:43

      a month.

   2. HSHarry Stebbings22:44

      I, I, I totally get you. You said there about, kind of, the importance of getting that early data. I'm always struck on the timing of, like, hiring a growth head-

   3. VSVal Scholz22:52

      Mm-hmm.

   4. HSHarry Stebbings22:52

      ... a growth person. In terms of that timing, before we get to the person, I've had people on the show say before, "You need a head of growth to get the data in." And then I've had people say, "That's ridiculous. You hire a head of growth post product market fit, when you have something to scale."

   5. VSVal Scholz23:07

      Mm-hmm.

   6. HSHarry Stebbings23:08

      Which side of the table do you sit on, and why?

   7. VSVal Scholz23:10

      I think a head of growth m- makes sense once you've demonstrated product market fit.

   8. HSHarry Stebbings23:15

      Do they not help you get the data to get to product market fit?

   9. VSVal Scholz23:19

      I think it's really hard, because once there's a head of growth, you expect it to grow. And that basically means you need to show month-on-month growth. The problem is if your company didn't have ... I mean, there's obviously a lot of tactics, right? It's one o- other big lesson I learned is like even if you don't have product market fit, you can sell a business for 400 million. You know, because if you're just good enough to generate constantly more traffic, and it's cheaper to, to generate or buy traffic than the money you're making, the business is still growing. It's probably not the best business, because you're losing the customers in six to nine months again. But it's still working, right? So if you just sell early enough, everybody, or nearly everyone is happy.

   10. HSHarry Stebbings24:01

       (laughs)

   11. VSVal Scholz24:01

       Uh, I think, you know, the difference is, like if you look at really, like, companies that really nailed product market fit, whether it's like OpenAI with ChatGPT, WhatsApp, Instagram, Facebook. Um, they had very early proper product market fit, and my assumption is that, similar to the story about Nick, is that the best founders, they have a very unique view on the market. They have very unique insights, that they know something that just other people haven't seen yet, or-... known yet. For example, Nick, uh, Nick's case is the-- basically that there's no fee on, uh, FX, which is basically what you needed to understand, you know, okay, people travel all the time, people send money all the time, right? So why does everybody pay 7, 8, 9% on this? Um, and I think it's similar if you look at, um, probably Apple, you know, that had unique insights around, like, electronics, and, like, how people use these computers. Um, I think, you know, Kittl, for example, the founder, like, one of the founders was a graphic designer selling his typefaces. And essentially, what they realized is, like, people didn't want the typefaces, people wanted the assets that they used to market the typefaces. But then the softwares that were in the market, like, they were either too complicated for the audience or they

7. 25:21 – 28:06

   Key Traits to Look for in a Growth Hire

   1. VSVal Scholz25:21

      couldn't do it.

   2. HSHarry Stebbings25:22

      So if we agree then that it should be post product market fit because you-

   3. VSVal Scholz25:25

      Yeah.

   4. HSHarry Stebbings25:25

      ... expect it to grow when you have it, what's the right profile then? Like, you're an advisor advising me a founder-

   5. VSVal Scholz25:30

      Mm-hmm.

   6. HSHarry Stebbings25:30

      ... an early stage founder who's just got kind of early signs of product market fit, should I go for a super young person who prob- w- hasn't been a head of growth before and scale them into that role? Should I go for a head of growth? Like, what should that profile be?

   7. VSVal Scholz25:44

      I personally always believe it's better, like, to have someone that grows with the company.

   8. HSHarry Stebbings25:48

      Mm-hmm.

   9. VSVal Scholz25:48

      You know, that's... I mean, they're rough diamonds, but they're ambitious, they're hardworking, they wanna prove themselves. To be honest, there's not many growth people that want to do it again. I think it's just like, uh-

   10. HSHarry Stebbings26:00

       (laughs) Why is that? Just 'cause it's too hard?

   11. VSVal Scholz26:02

       I think it's just super stressful. I mean, it's basically like-

   12. HSHarry Stebbings26:05

       What's the most stressful thing about being a head of growth?

   13. VSVal Scholz26:07

       You need to hit every week metrics. (laughs)

   14. HSHarry Stebbings26:11

       (laughs)

   15. VSVal Scholz26:11

       I mean, it's quite, like, uh, black and white, right? Either the company is growing or it's not. It's, it doesn't really matter why it's not growing-

   16. HSHarry Stebbings26:17

       Uh, yeah, w-

   17. VSVal Scholz26:17

       ... but it needs to grow.

   18. HSHarry Stebbings26:18

       When we chatted, you said that most companies kind of fail at hiring. I did wanna touch on this 'cause this is like a universal process that every founder has to go through.

   19. VSVal Scholz26:28

       Mm-hmm.

   20. HSHarry Stebbings26:28

       Why do you think most founders or companies fail at hiring?

   21. VSVal Scholz26:31

       Probably two things, like, A, you don't test people for enough. So, you know, you may t- maybe have a conversation, you don't dig deep into, like, let's say they talk about a certain project or, you know, some past incident, but you don't ask follow-up questions. You really need to understand context, right? Like, did they contribute towards it or did they lead it? Like, can they explain in detail what was the problem or not? So I think, you know, the best founders, they really, like, they really dig deep in understanding, like, "Okay, what really happened? Do I believe that that person actually made that impact? Did they understand enough to make that impact?" And then the second thing, which is, is essentially, if you look at sports, for example, um, you know, Michael Jordan, Cristiano Ronaldo, Kobe Bryant, you don't have to motivate these people. Doesn't matter what they will do, they will always be the best. It's just their attitude, it's their, their mindset, right? The... And I think, you know, like, you want to see the same thing in the people you hire. You want people that are hungry, people that are passionate.

   22. HSHarry Stebbings27:33

       What do you think Revolut did well when it came to hiring?

   23. VSVal Scholz27:35

       I think that was the main thing. I mean, uh, I think we mentioned before, like, Alain or Chad, I think myself, I think Nick, Nick basically looked at, or looked for very young people, very driven people, and very smart people. That was basically the main requirements, right? The thinking was kind of like, you know, "We, we can teach people skills. We can't, uh, teach them, uh, the right behaviors or attitudes or mindset." So either you want it, um, or you don't.

8. 28:06 – 32:20

   Revolut's Hiring Successes & Mistakes

   1. VSVal Scholz28:06

   2. HSHarry Stebbings28:06

      What were the biggest mistakes you think that you made in the hiring?

   3. VSVal Scholz28:09

      Probably just not, um, assuming too much. Like, basically, (sighs) I mean, it sounds a bit harsh, but, like, for example, not checking whether people want to work hard, right? Like, just, I don't know, you talk about it, but not directly asking like, "Hey, do you work weekends? Do you work evenings?" And so, you know-

   4. HSHarry Stebbings28:29

      (laughs)

   5. VSVal Scholz28:29

      ... I think, you know, like, people try to be too nice or maybe politically correct.

   6. HSHarry Stebbings28:32

      For those that don't and don't want to, do you think they admit it?

   7. VSVal Scholz28:36

      I think so. I think it's, I mean, if you present it in a way like, "Look, this is the culture of the company, right? So we're looking for these people," um, I think it also gives the, the other person opportunity to see whether it's the right thing for them, right?

   8. HSHarry Stebbings28:51

      Yeah.

   9. VSVal Scholz28:51

      It's a bit like dating, right? Like, if, if, I don't know, some people, I don't know, m- me at that point, I wanted to prove myself. For me it was like, "Hey, I wanna learn, I wanna join a small company. It should become the next, I don't know, Facebook." Um, I just wanted to see what's different. And so for me it was like, "Hey, yeah, I wanna work weekends. I wanna work long evenings. I really want to learn." Right?

   10. HSHarry Stebbings29:14

       Did you find the majority of people said, "Yes, I do want to work weekends and evenings"?

   11. VSVal Scholz29:17

       In interviews?

   12. HSHarry Stebbings29:18

       Yeah.

   13. VSVal Scholz29:18

       No. But, uh, we probably didn't hire them.

   14. HSHarry Stebbings29:24

       (laughs) Do you think it's a game of just meeting as many people as possible?

   15. VSVal Scholz29:27

       Part of it.

   16. HSHarry Stebbings29:28

       How do you do sourcing? Is it-

   17. VSVal Scholz29:29

       It's a bit like a funnel. Like, you know, you probably have a gut feeling of what you're looking for, right? Like, maybe a benchmark of companies you find really attractive.

   18. HSHarry Stebbings29:39

       Mm-hmm.

   19. VSVal Scholz29:39

       So let's say, I don't know, operations, right?

   20. HSHarry Stebbings29:42

       Mm-hmm.

   21. VSVal Scholz29:42

       Okay, Uber has really excellent operations, so you would try to find people, okay, maybe people that work two years, one year at Uber, right? People that maybe want to do the next step. Um, you can target these people on LinkedIn. And then essentially it's just you basically message everyone that basically fits that criteria.

   22. HSHarry Stebbings30:01

       You didn't use recruiters?

   23. VSVal Scholz30:02

       No, we used tech. We used recruiters to schedule call, close contracts.

   24. HSHarry Stebbings30:07

       Yeah.

   25. VSVal Scholz30:07

       But, like, sourcing, um, yeah, screen calls, CV screening was usually done by hiring managers.

   26. HSHarry Stebbings30:14

       Anything on CVs that you'd be like, "Ah, look for or be wary of"?

   27. VSVal Scholz30:19

       If people don't use metrics. So if you can't clearly see, um, what the impact of someone was. If people use vanity metrics. For example, a marketing manager or head of marketing that basically says, "I managed a 30 million budget." It's like, "Okay."... maybe you generated one dollar revenue, maybe a hundred million. I mean, how does it matter?

   28. HSHarry Stebbings30:38

       It's like managers who brag about how much money they manage, you know?

   29. VSVal Scholz30:41

       Yeah, or, like, somebody, like, "Hey, I had a team of 20 people," and so? (laughs) I mean, what does it mean, you know? For us, it was trying to, like, looking for red flags, um, or looking for the attributes we're looking for. I think, like, seeing that somebody goes to the right unis or... Essentially, I guess, to reframe it, we wanted to see that people learn very fast and learn faster than the average person, so, you know, uh... For example, I went to uni, but I dropped out. But, like, I still was kinda, like, you know, progressing very quickly in my career.

   30. HSHarry Stebbings31:16

       Again, I'm really using this for myself.
9. 32:20 – 35:16

   Interview Process

   1. VSVal Scholz32:20

      science.

   2. HSHarry Stebbings32:20

      Did you do take-home tasks in the interview process? What are some lessons on that? 'Cause that's a interesting element.

   3. VSVal Scholz32:27

      You want to make them as hard as possible and as close to reality as possible.

   4. HSHarry Stebbings32:34

      Are they on your company? So they're on Revolut?

   5. VSVal Scholz32:36

      Yeah, so what we typically did was we took a past problem that it was really hard to solve, um, we basically messed up the data a bit. So essentially, that A, we couldn't use it, but B, also that our clients didn't have our data. And then, essentially, you would try to see how they solve it. So for example, at Revolut, like, if you wanted to become a product manager or operations person, uh, you had to analyze, I think, a million datasets, uh, and figure out, like, what's the problem in onboarding. Uh, it took us three months to solve the problem, um, so it was a good test to see.

   6. HSHarry Stebbings33:15

      And so you give it to them and you give them the hardest possible. I doubt any of them solve it, correct?

   7. VSVal Scholz33:22

      Not completely. I mean, that's not the point, uh, but you-

   8. HSHarry Stebbings33:24

      What are we looking for from it?

   9. VSVal Scholz33:26

      You want to look for the people who have a structured approach at solving problems. So essentially, realistically speaking, just from analyzing some data, you will never know for sure whether it's the right or wrong path, right? But you want someone that is very structured, like, thinks about, like, "Okay, what could be the root cause? How can I get insights about that?" And, um, ultimately, like, you want someone that has an approach on how to solve and identify a problem. And because then it's rep- you can replicate it, right? Like, it doesn't matter which problem I give you, you can basically use the same approach to solve the problem again. If someone maybe just solved it in the past, but has no clue about, you know, how to do it again, it's a bit useless, uh, yeah, in, in a, in our environment, let's say.

   10. HSHarry Stebbings34:12

       How quickly do you know if you've made a good hire or a bad hire?

   11. VSVal Scholz34:16

       I think you have a gut feeling pretty quickly, (laughs) probably a few days. Majority of people after a week, um, you're basically like, "Okay, that's not gonna work."

   12. HSHarry Stebbings34:25

       Do you, do you get rid in the first two weeks then?

   13. VSVal Scholz34:28

       I usually try to make it work for, like, three, four weeks.

   14. HSHarry Stebbings34:32

       Yeah.

   15. VSVal Scholz34:32

       But if I can't make it work after four weeks, yes.

   16. HSHarry Stebbings34:34

       What were the signs that it wasn't working?

   17. VSVal Scholz34:37

       I guess it's because either people didn't clearly listen or pay attention, uh, so they didn't fully understand what you expect of them when you give them feedback, for example, or give them a task. And then, ultimately, as a result, they didn't really progress quickly or learn quickly, so. You know, if you would see, like, okay, maybe the person is not perfect right now, but he's picking up pace really quickly, so in, like, two months, he will be there, I think you're fine, because it will take you longer to hire a replacement.

   18. HSHarry Stebbings35:03

       Yeah.

   19. VSVal Scholz35:04

       But if you feel like, you know, you're giving him a lot of feedback and it's just not getting better, you're basically like, "Okay, I mean, it's not gonna get better than in two months or three months," right? So that, that's kinda, like, what

10. 35:16 – 42:38

    Good Culture Perspective & Revolut's Environment

    1. VSVal Scholz35:16

       I'm looking for.

    2. HSHarry Stebbings35:17

       Do you think you had a good culture at Revolut?

    3. VSVal Scholz35:19

       It depends how you define a good culture.

    4. HSHarry Stebbings35:21

       Mm-hmm.

    5. VSVal Scholz35:21

       Um, I think what a lot of people forget is that Revolut is like that company that is at the 0.01%. You know, it's like a SpaceX, a Facebook, uh, a Meta. Um, I think all these companies are very similar.

    6. HSHarry Stebbings35:38

       What do you mean by that?

    7. VSVal Scholz35:39

       Even if you look at, like, something like sports, right? Like, the top clubs, like Real Madrid or, I don't know, Bayern Munich or, I don't know, Manchester City, they just expect more of you. It's, it's more cut-through environment. Like, either you perform or you're out, because, you know, there's a reason why they are, like, th- the lead clubs. I think it's similar in startups, right? Like, if, if you like, uh, uh, Facebook in the early days, Apple, Microsoft, you have to win, you know? It's the mentality of the founder, it's the... You want to be the fastest-growing company, you want to be the dominant force in your market. So if people, you know, don't fit that environment, if they can't contribute, it's not that people are, like, n- necessarily bad or that in general they wouldn't be successful somewhere else. It just means in that environment, they're not a good fit.

    8. HSHarry Stebbings36:32

       What are your biggest lessons on how to train people effectively? It's hard to do well.

    9. VSVal Scholz36:37

       Sounds very counterintuitive, but essentially spending more time with them, (laughs) um...... so (laughs) I have, like, uh, Oleg is now, he's a good friend nowadays. Uh, he was, uh, the lead product designer at my team at Revolut. Very creative designer. Very unstructured, unfocused. And so, Revolut expected you, like, every week, you need to show progress, right? So every week, we have a design sync with Nick, and you just had to show like, "Hey, we're making progress," right? Like, that's basically what you work on the whole week. And Oleg basically, like, he, he spent so much time just optimizing one screen, right? So basically, we had 20, 30 variations of one screen, but we didn't have, like, a user journey. So, when we had the review, um, essentially there wasn't much progress to be seen, right? We didn't really understand how this, you know, how the solution would solve the problem of the customer, and it took him, like ... I mean, in the second, in the second week happened, right, same problem, and I was like, "Okay, this is not gonna work." You know, if, if, you know, I need new user flows in like maximum two, three weeks-

    10. HSHarry Stebbings37:45

        (laughs)

    11. VSVal Scholz37:45

        ... because otherwise, like, engineering doesn't have anything to do.

    12. HSHarry Stebbings37:48

        Dude, I've got 40 of the same screen now. (laughs)

    13. VSVal Scholz37:50

        (laughs) Yeah, so basically, so basically what I was like, okay, I mean, ultimately I have a choice, right? I can try to do it on my own, um, or I can, you know ... but that's probably putting more load on me, it's not a sustainable solution, or I, I need to try to make it work with him, right? Um, and so basically what we did was, like, I had four catch-ups a day. Um, so he had to give me an update every two hours, and he got tasks on what he needs to change in the next two hours. After three weeks, it was just, I don't know, he, somehow, he figured it out and he knew kinda like what you expect of him. Which then essentially we could also just have once or so- a week, a catch-up, um, about, yeah, what's, what's going on and, and, and product design.

    14. HSHarry Stebbings38:36

        How important do you think it is to have re- the reviews? You said they're about design reviews, but in, in growth maybe in particular, how do you think about growth reviews, syncing as a-

    15. VSVal Scholz38:45

        Mm-hmm.

    16. HSHarry Stebbings38:46

        ... team on progress? How often? What should be involved?

    17. VSVal Scholz38:49

        I think in the end, like, I think it's, it's you need a feedback cycle, right? You need to kind of s- see like, okay, I try A, is it good? Is it bad? What's good? What's bad? What could I improve? I think the more frequent you have these things, the better, because essentially you learn faster. I mean, it's kinda like imagine like every cycle, every time you get feedback, it's a cycle. Um, every time you basically complete a cycle, you learn. So the more cycles you have, the faster you learn. And so often what managers do is basically a performance review every three months, right? It's not okay. Like, basically that means, like, it's very slow that you develop, because if you do something wrong, if you don't think the right way, you know, if you focus on the wrong things, like, you get feedback after three months. So I think probably doing it daily is too extreme. But, like, I think once a week was kinda like what we found optimal to move really fast, but equally like have time to really work.

    18. HSHarry Stebbings39:42

        For the whole team?

    19. VSVal Scholz39:42

        Yeah, so we had, like, in every function, we had once a week an update. And so for example-

    20. HSHarry Stebbings39:47

        Is Nick there in every one?

    21. VSVal Scholz39:48

        Not in every one. Um, but like Nick, for example, had 70, 80 one-on-ones a week.

    22. HSHarry Stebbings39:55

        (laughs)

    23. VSVal Scholz39:55

        So basically like, uh, every product team sync, Nick was in it. Every design team sync, Nick was in it.

    24. HSHarry Stebbings40:03

        Did that make it better or worse?

    25. VSVal Scholz40:04

        I think it's the reason why there's so many talented people coming out of Revolut.

    26. HSHarry Stebbings40:09

        Why? Because they benefited from his wisdom-

    27. VSVal Scholz40:10

        They all worked with Nick, you know, quite intensely. I mean, it kinda like it's his way of thinking, right? Then, I mean, it's basically like if you, if- it's kinda like if ... L- imagine you're spending, uh, every week with Elon Musk, half an hour, right? And every week you get feedback from Elon Musk about, uh, you know, what you could do better, right? How he thinks, how he sees things, you know, what you didn't consider, uh, what you could do better, you know? Like obviously, you know, you're gonna learn a lot from that.

    28. HSHarry Stebbings40:44

        Does he lead through fear?

    29. VSVal Scholz40:45

        He read a book called Principles, um, which he really likes, uh, apparently.

    30. HSHarry Stebbings40:50

        I know. He said it on the show.
11. 42:38 – 46:37

    What Breaks in Rapidly Scaling Companies?

    1. VSVal Scholz42:38

       we can do?

    2. HSHarry Stebbings42:38

       What breaks with scale that fast? When you're scaling that fast where it's like, you know, metal cards are going out faster than you can make them literally. What breaks in a company?

    3. VSVal Scholz42:49

       Everything. (laughs) ... everything. Um, you kinda had to re-- rebuild everything in-house every few months. Like, I mean, for example, um, I went there when we were, like, 80 people. I left when it was two and a half thousand. That's two and a half years. Like, my team went from two people to, uh, over 150 in, like, nine months. Like, e- everything breaks, you know? Like, the way you communicate doesn't work anymore, the way you ... I mean, uh, I don't know. Like, uh, we had, for example, we ran out ... We couldn't upgrade to a bigger database anymore, right? Like, basically, Google didn't have bigger databases, so we had to split the databases and sync them somehow. Um, yeah. I think it's just like ... Uh, I can't remember. Like, was it 7, 800 million transactions that we processed in one single month at the end, before I left?

    4. HSHarry Stebbings43:53

       (exhales)

    5. VSVal Scholz43:53

       And which, which is growing every month with hundreds of new, uh, hundreds of millions of new, uh, transactions, you know? It was just mad. When we did referrals, for example, when we launched it, we went from 15,000 new users a day, uh, and we only launched in one market.

    6. HSHarry Stebbings44:10

       15,000 new users a day?

    7. VSVal Scholz44:12

       Yeah. But when we launched it, we went to one market, Romania, from 2,000, and after three days, we were on 64,000.

    8. HSHarry Stebbings44:19

       In Romania?

    9. VSVal Scholz44:20

       Just in Romania. We just launched in one market because we didn't want to break the whole system. We then had to turn it off because we grew too fast, and suddenly, I was-

    10. HSHarry Stebbings44:28

        And that was just with referrals?

    11. VSVal Scholz44:29

        Yeah. And so, basically then, basically what happened was, like, suddenly KYC times, right, went from three minutes to ... Or a minute, right, to suddenly, like, two weeks. Customer support waiting lines went from, I don't know, 10 minutes to four weeks. So, I think that was ... You know, that's what was the challenging part, right? That it's just not one system that you have to scale up. You have to scale up every system internally in the company with rapid pace.

    12. HSHarry Stebbings44:59

        Was how you grow different in different countries?

    13. VSVal Scholz45:03

        Um-

    14. HSHarry Stebbings45:04

        Compare, uh, Germany, France and Spain to, uh, Romania.

    15. VSVal Scholz45:08

        Not really. I think nowadays, it's probably you need to attract new markets, so probably, you know, they started doing more TV advertising, uh, these sort of things, so you also, you know, attract people in their 50s, 60s, 70s, and so on.

    16. HSHarry Stebbings45:21

        There was always a big thing. Uh, you know, I remember Tom at Monzo being on the show, and he was like, "The big thing that everyone said was, 'Ha! But you'll never be able to be the primary bank account.'" And that was always the thing. Like, "Oh, Revolut or Monzo, it's great, but, like, it'll never be the primary bank account." When and how do you feel you cracked that?

    17. VSVal Scholz45:40

        J- I mean, I use it as my main bank account.

    18. HSHarry Stebbings45:42

        Totally.

    19. VSVal Scholz45:43

        So already for, like, seven, eight years.

    20. HSHarry Stebbings45:45

        Did that impact your product marketing?

    21. VSVal Scholz45:47

        It ... That I used it myself?

    22. HSHarry Stebbings45:48

        No, that you wanted to be the primary.

    23. VSVal Scholz45:52

        Um, I think that was the interesting thing. Like, we never thought about it that way, right? Um, I think from the early days, it was always like, "We don't want to build a bank." So, I mean, we even had on our website, right, "Better than a bank account," and bank was crossed out. Like, I think it was always, like, the clear message, like, "Look, banks are broken. Banks rip you off. We don't want to be a bank. We want to rebuild and build something better than before." And I think it ... For a long time, we really wanted to distance ourselves from the entire banking system, right? We didn't want to rip off our customers the same way. We want to build better services, faster services, new innovative products, and I think it, it helped us to basically build something that the competition, like Monzo, N26,

12. 46:37 – 50:34

    Conventional Data Strategy Wisdom

    1. VSVal Scholz46:37

       never done.

    2. HSHarry Stebbings46:38

       We've mentioned data so many times-

    3. VSVal Scholz46:39

       Yeah.

    4. HSHarry Stebbings46:39

       ... so final topic before a quick fire, but you said before that there's conventional wisdom around data strategy.

    5. VSVal Scholz46:45

       Mm-hmm.

    6. HSHarry Stebbings46:45

       What is the conventional wisdom, and how do you think about it?

    7. VSVal Scholz46:48

       I think typically companies use, um, event-driven, uh, data infrastructure. Mixpanel, Amplitude, didn't really change for, like, probably 15, 20 years, um, which usually creates most of the issues in a company. Um, I actually think that if you look at Uber, Airbnb, Meta, they don't use events, or at least not in the early days. Um, we didn't use events at Revolut. I think the problem is often that engineering doesn't really have access to data or doesn't use data much, so they may be a bit scared of the topic. Um, then the... Traditionally, data people weren't very technical. It was, uh, usually companies that had a data team had data analysts, not data scientists or the data engineering. And then essentially, like, product managers or businesspeople wanted certain insights, so people went to Mixpanel, went to Amplitude because it was easy, right? Just one line of code. I think then over the years, what people still were ... Some companies realized is that actually you don't get a lot of insights because, you know, you have some payment data in Stripe, right? Um, some people churn, never come back, right? You have payment issues. So, even though it, it, it should ... You should generate revenue, you don't, right? Because, I don't know, some weird authorization issue in, I don't know, Brazil. Um, you have different campaigns, right? Um, that, that cost you different money, right? And so you want to understand, okay, which campaign actually generates how much revenue? Like, how efficient are they? So, how do you connect suddenly, like, Google Analytics data with Stripe data and, like, Mixpanel data? And then I think in certain industries, like banking, it gets even harder, right? Because we can't just expose every transaction of a customer and their details to, like, a third-party tool. What happens if they get hacked? I think for us, it was like, okay, every software that's built, and even, like, any third-party software you use, has a database, and the database contains all the valuable information, and that's your source of truth. Because if the database is wrong, I mean, the whole application is wrong.... and so basically what we started doing is, like, combining the various data sources in a centralized data warehouse, um, connecting everything through a user ID, and then had, like, a very, uh, we could then segment the audience the way we wanted. If we wanted to look at only people in Austria at a certain age, we could do this, and we could see how much they cost us, how much money they generate us. What's the unit economics?

    8. HSHarry Stebbings49:23

       What was the single best growth decision you made?

    9. VSVal Scholz49:26

       I think the quickest way to get a lot of growth for us was, I think it was a Monday afternoon, um, Chad, me and Tom, and then I think Alan, basically set up a referral campaign, wrote an email, uh, some Ts&Cs, and enabled free cards to Revolut customers. Uh, and that generated, like, 180,000 signups in a week. And I think back then, Revolut grew around 10,000 signups a week.

    10. HSHarry Stebbings49:56

        What was the worst growth decision you made?

    11. VSVal Scholz49:58

        For whatever reason, I thought that you can acquire a lot of customers with P2P payments, and so I spent four weeks trying to make it work that people can pay someone that's not on Revolut. Um, I just didn't do anything. (laughs)

    12. HSHarry Stebbings50:16

        I can see that mindset though, where it's like, it's like the WhatsApp idea, which is like, "Invite them to WhatsApp."

    13. VSVal Scholz50:21

        Mm-hmm.

    14. HSHarry Stebbings50:21

        And then it gets that, like, linked message which you send to people and it's like-

    15. VSVal Scholz50:24

        Yeah, I think people thought it's like fraud or something.

    16. HSHarry Stebbings50:26

        Yeah.

    17. VSVal Scholz50:26

        You know, they were like, "Heh? Someone wants to send me money on a random platform?"

    18. HSHarry Stebbings50:30

        Hmm.

    19. VSVal Scholz50:30

        "Probably doesn't really work." Yeah.

    20. HSHarry Stebbings50:32

        Yeah, I get that. Uh, I wanna do a quick-fire.

13. 50:34 – 58:15

    Quick-Fire Round

    1. HSHarry Stebbings50:34

       So I say-

    2. VSVal Scholz50:34

       Yeah.

    3. HSHarry Stebbings50:34

       ... a short statement, and then you give me your thoughts. Does that sound okay?

    4. VSVal Scholz50:37

       Yeah.

    5. HSHarry Stebbings50:38

       So what's the most common irreversible mistake you see founders make?

    6. VSVal Scholz50:42

       They get too hands off. They don't use their product on a daily basis.

    7. HSHarry Stebbings50:46

       (laughs)

    8. VSVal Scholz50:46

       Astonishing.

    9. HSHarry Stebbings50:47

       Uh, what's the most dangerous myth floating around about growth?

    10. VSVal Scholz50:51

        I don't think you can... It's really hard to build a product-led business if you start with paid marketing.

    11. HSHarry Stebbings50:56

        Hmm. I totally agree with you there.

    12. VSVal Scholz50:58

        Yeah.

    13. HSHarry Stebbings50:58

        Uh, how does growth change in a world of AI?

    14. VSVal Scholz51:01

        I think in the n- short term, you get spammed even more.

    15. HSHarry Stebbings51:06

        Yeah.

    16. VSVal Scholz51:07

        Automated, uh, partnerships managers-

    17. HSHarry Stebbings51:10

        Outbound becomes infinite.

    18. VSVal Scholz51:12

        Yeah, I mean, we are thinking, we are looking into, like, um, automating partnership manager-

    19. HSHarry Stebbings51:17

        Yeah.

    20. VSVal Scholz51:17

        ... negotiations. Because suddenly you can scale it up to a million partnerships managers. I think more spamming. I think at some point, probably goes back to first principles, like, who really offers value? What's old school traditional ways, kinda like food and noise, to reach people.

    21. HSHarry Stebbings51:35

        What would you most like to change about the world of growth?

    22. VSVal Scholz51:38

        Getting founders to build better products, or generally building better products. I think it's... Yeah. I think it's really hard to sell a product that doesn't really add value to people.

    23. HSHarry Stebbings51:48

        Do you think Revolut was a better product than Monzo?

    24. VSVal Scholz51:51

        Yeah.

    25. HSHarry Stebbings51:52

        Why?

    26. VSVal Scholz51:53

        I think Monzo's just a, it's a, it's a more modern bank. Like, Revolut is a financial ecosystem. I mean, if you think about it, right, like, you have, I don't know, 50 million B2C customers.

    27. HSHarry Stebbings52:06

        Mm-hmm.

    28. VSVal Scholz52:08

        Uh, I don't know how many million businesses. So suddenly, you can just stay in the Revolut world. No more Visa, no more MasterCard. It's just something completely new.

    29. HSHarry Stebbings52:21

        What was the biggest lesson from working with Nick?

    30. VSVal Scholz52:24

        That he can be very creative, very analytical, and very logical at the same time. (laughs)

Episode duration: 58:16