William Hockey: How I Founded Plaid; The Ultimate Cold Email Tip; Hiring Lessons | 20VC #955

Harry Stebbings 0:00 Will, I'm so excited for this. I've wanted to do this one for a long time. We've met in London, we've met in LA. Finally, we've made it happen, so thank you so much for joining me today, my friend. (laughs)

William Hockey 0:10 Yeah, no, I, I appreciate you having me. It's good to finally, it's good to finally do this.

Harry Stebbings 0:14 It is great to finally do this. Now, I wanna start with a little bit of context. We see Plaid, we now have Column. How did you make your way into the world of startups, and what was that aha moment for you with Column most recently?

William Hockey 0:26 You know, I probably have a maybe a, a slightly less traditional than a lot of people who maybe start companies, you know? So I, I grew up on a farm out here in Central California, and I grew up building everything. Right? So, you know, welding with my grandpa, building buildings with my dad, always just liked building. I was probably less of like the, uh, the mathlete, the mathlete child genius, kinda more the, uh, more, (laughs) more the tinkerer and the builder. And, and growing up, going to college, started programming. It was kind of the only, I don't know, like socially acceptable way to build things. Um, you know, can't really do construction or welding in college. And so, and so started programming, and realized pretty quickly that I wanted to just do something. And so, started building a bunch of fun side projects with my best friend Zack, um, and we ended up starting Plaid, which is a, a pretty large financial infrastructure company these days, together my senior year in college. Um, and, and kinda throughout that process, you know, we, you know, are, are, are pretty large and get a chance to work with a lot of financial institutions, a lot of kind of fintechs, pretty much anybody building in financial services in the US is some way associated with Plaid. And so I gotta see this market at a very intricate level, and, and I would... and I realized pretty quickly that there's actually this massive market to actually start to build inside the regulatory perimeter. What I was doing and a lot of like, what 99.9% of, of, of Silicon Valley is doing is building outside that regulatory perimeter. What I realized actually is you can drive a huge amount of value if you actually jump in, be a regulated bank, and actually build it from scratch. And so, that's kinda like what we did. I've been wanting to do it for six plus years, but from a financial perspective really only had the resources

William Hockey 2:04 to do it over the past few.

Harry Stebbings 2:05 Can I ask you bluntly, and this is probably-

William Hockey 2:07 Yeah. (laughs)

Harry Stebbings 2:07 ... a very stupid question. Why does everyone do it outside of the regulatory perimeter versus inside? Is it purely a pain of regulation and cost of setup?

William Hockey 2:16 It's a pretty multifaceted question. I'll, I'll put, I'll try to give you like the high level. I, I think Silicon Valley really isn't set up to build regulated businesses.

Harry Stebbings 2:26 Oh.

William Hockey 2:26 So what we had to do is we actually went out and we personally bought a financial institution. We bought an OCC regulated bank out here in California. And if you think about the investment you have to put up front and then the time you have to spend to actually do something is pretty long. You know, we've been doing this for almost three years, and we will do this for many, many more years before we kinda get that hockey stick growth. Because it... being a regulated space, it by design moves a lot slower, and it has way more upfront build. It's not really a market that, you know, I could have started when I was 21 with Zack, right? Two kids in a garage who are really smart engineers, which Silicon Valley does very well with, they can't really build this. It's just not really structurally set up to do that.

Harry Stebbings 3:09 We're gonna get to the structural setups eventually-

William Hockey 3:12 (laughs)

Harry Stebbings 3:12 ... whether you take it or not. I, I am positively... We're gonna get to it. Um, w- uh, well, there's a pin-

William Hockey 3:16 We'll debate it. I'm, I'm down, I'm down.

Harry Stebbings 3:17 ... a pin, pin in that one. Uh, I, I wanna start with a little bit of a therapy session here. Um, uh, you know, you mentioned obviously kind of building with your, your father and your grandfather.

William Hockey 3:25 (laughs)

Harry Stebbings 3:25 Um, I believe we're all very much a, a kind of product

Harry Stebbings 3:28 of our histories. When you think about what you're running from and you are running towards Will, what are you running from? And then second, what are you running towards?

William Hockey 3:37 Do you want the drunk or the sober answer?

Harry Stebbings 3:40 Drunk, always. (laughs)

William Hockey 3:42 (laughs) I, y- yeah, yeah, I, I, I think, you know, if we're gonna be totally honest here, you know, raised out in the country, I reali- you know, very part of my upbringing and my family's as well, like work is what matters, right? You know, we, I grew up in a very much you, you live to work type, type mentality, less so of like the pie in the sky intellectual. And so, that's kinda (laughs) really what drives me, right? I, I probably am still that person today. I am gritty. I like to work. I like to build for the society that we live in. I think a lot of times we can... Silicon Valley and broader tech, we can kinda get a pie in the sky and only talk about like far off future. And I think I'm really bred as like, "Hey, let's go solve the problems that we have in front of us today." Less sexy, more pragmatic, a little bit more tangible. And so I think that really drives me. And so kinda to back that up, like, what are you running towards? I kinda see that, that similar vision, right? I think a lot of times people, you can kinda break people into two camps, right? Like, are we building for a future that is maybe gonna exist in 100 years? Intellectually sexy, super value, a lot of merit to that. I'm probably more the other camp, which is, "Hey, there are problems that we have today. We have to build and live in the world we're in." And if you dive into that and are super pragmatic and gritty, you can actually solve those in a really meaningful way. And so I'm probably a little bit more on that,

William Hockey 5:04 o- o- on that camp.

Harry Stebbings 5:05 I actually think that Silicon Valley is not that kind of intellectually idealistic build for 100 years. The proliferation of sales analytics tools and marketing automation tools, and kind of incremental innovation that we see today that Peter Thiel chastises, I, I find almost it's a rarity to see that intellectual, uh, ambition of building for the multi-decade. Do you agree with me or do you think I'm being unfair?

William Hockey 5:30 I think there's probably yes and no, right? Like I, I think we're probably building, I, I think we're probably may- maybe I'm falsely making things a little bit too black and white. I think we definitely celebrate e- intellectual elitism for sure, right? I think we, we celebrate couching what is probably a pretty boring practical problem in like large language, gonna go change the world, but like, I don't know, maybe like building like an API for like e-commerce or something like that. Um, so I, I think we definitely, I think we definitely want to be that way. Yeah, we probably are a little bit. Um, I, I do think when you think and you take what we like to talk about and we like to celebrate, I think we definitely-... talk and celebrate that future. There's nothing wrong with that. But I think as a founder, as a builder, you have to understand, "Hey, like what are my strengths and what are my weaknesses?"

Harry Stebbings 6:18 (laughs)

William Hockey 6:18 "Um, am I an idealist or am I a pragmatist?" And I think it's, it's good to kinda have that intellectual and, and self-clarification on yourself, and so you can really understand how you play and what you spend your time on.

Harry Stebbings 6:31 I, I, I wanna get to how you play and what you spend your time on. I think one thing we certainly idealize in Silicon Valley is kind of the hero founder

Harry Stebbings 6:38 and the hero leader. My first question there is, (laughs) you know, with that in mind, you know, performance as a leader i- is pretty much everything.

William Hockey 6:45 Yeah.

Harry Stebbings 6:45 How do you think about high performance today? Having led huge teams and Plaid to great success, what does high performance mean to you?

William Hockey 6:54 Yeah. I think I probably have a, a somewhat nuanced answer to this. Uh, I think, you know, being qui- being able to be quiet, grinding and building in the shadows, and be okay not being recognized, I think is the highest order of high performance. You know, the first time around, you know, when you first start building on a, like, you wanna be famous, maybe you wanna be noticed, you wanna get invited to the cool parties, you wanna make a ton of money, and so you think kind of, like, playing the angle to get that. That gives you validation that you're working at the highest level. But over time, you start to realize it's actually, like, what are the biggest orders of success, right? It's, like, how long can you grind? How, and how quietly can you do this for as long as possible without external recognition? Any company of value takes at least 10 plus years to realize. And so it's all about how long can you do that, and can you do that in the shadows? And I think the people that are able to do that, to be able to do that quietly and be very focused without that external recognition, they are operating at the highest, highest level, and they are the ones that are the most successful over time.

Harry Stebbings 8:01 It

Harry Stebbings 8:02 takes a very egoless person to not need that external validation. How do you think about your relationship with your own ego? And how has it changed from starting Plaid with Zach many years ago to today?

William Hockey 8:13 (inhales) Yeah. I, I think everybody's vain, right? And so, anybody that tells you that, like, they don't need that, myself or otherwise, they're lying to your face, right? Everybody, everybody craves that. And so I think it's just about, you know, how do you balance that? I mean, it's ironic that I'm sitting here saying that, like, on your podcast (laughs) , right?

Harry Stebbings 8:30 (laughs)

William Hockey 8:30 But, i- i- and so, and so, you know, we'll take that at face value. But I do think over time, when I've seen the people around me that I think make the biggest difference and have honestly accumulated the, th- the most amount of capital, they aren't necessarily the ones that are gonna be on the front cover of Fortune or the front cover of Forbes, or the ones that are, you know, getting invited to the coolest parties. They're probably doing stuff that you don't really understand that's kind of complex, it's really boring, it's behind the shadows. And I think those are the ones that I try to follow. I'm, I'm far from perfect and I definitely, you know, we all need some level of external reco- uh, recognition. But idealizing them over the ones that maybe, you know, everybody else does is something that I've really had to force myself over time to do.

Harry Stebbings 9:17 Identity. I, I tie my identity to my company. It's very much-

William Hockey 9:21 Mm-hmm.

Harry Stebbings 9:21 ... me and who I am, which is why I hate going on holiday because you are suddenly detached from your identity.

William Hockey 9:26 Mm-hmm.

Harry Stebbings 9:26 And it's like, "Who, who the fuck am I and what the fuck am I gonna do?"

William Hockey 9:29 Yeah.

Harry Stebbings 9:29 How do you think about, like, your own identity and detaching it from what you do in your company?

William Hockey 9:35 Y- That's a, it's a very deep question. I, I, I think it's something that I think honestly is probably one of my superpowers. I think I'm actually, um, uh, quite good at, you know, I stepped away from Plaid at its very, very peak to start something that was very high risk and, um, and much smaller, and now people are like, "Oh my gosh. How? Why?" And I think I, I've had a couple benefits. One is I've had this, this really strong group of friends that I've had way before I was successful, and we still are all, they're all still my best friends. I think a lot of people only hang out with founders or people that are kind of ab- like their economic caliber or whatnot. And the moment you do that, really, you, you start to build your identity and your self-worth around wealth, fame, brand, your company. And those things are super ephemeral. But what they also do is if you're so focused on keeping that, you're never gonna take the big risks. But if you have a base that you can really fall back on and that kinda loves you and your friends with you and hang out with you irrespective of kind of who you are to the outside world, I think that makes you way more secure and it le- it actually le- enables you to take much bigger swings.

Harry Stebbings 10:43 I know you only hang out with me because of my wild cool.

William Hockey 10:45 (laughs)

Harry Stebbings 10:45 It's fine. It's fine. You just admit it. It's cool.

William Hockey 10:47 I only hang out with you for your hat. Let's be real. (laughs)

Harry Stebbings 10:50 I mean, listen. You're only human.

William Hockey 10:51 (laughs)

Harry Stebbings 10:52 Uh, I, I get you, but I kind of don't. Like-

William Hockey 10:55 (laughs)

Harry Stebbings 10:55 ... you know, the family and the friends, and they provide security to allow you to take the big swings. Yeah, but so does the wealth, bluntly. Like, I take b-

William Hockey 11:05 Yeah.

Harry Stebbings 11:05 ... bigger swings

Harry Stebbings 11:06 now. How do you think about your relationship to money? And, and e- especially, how do you think about the relationship between money and risk, and risk appetite?

William Hockey 11:15 Yeah. No, I th- I think it's a good question, right? I, I, I think I'm able to kinda take a bigger second swing 'cause I've had validation in, in the first company before. Like, 100%. Have to be intellectually honest there. Um, I, I think what it enables you to do is I think it enables you to buy time and work on things that have a much, um, maybe longer shelf life, that ha- that can, the, the, the reward and the return is a little bit more elongated. 'Cause I, I think, you know, far from, you know, far from, far from liquid but I think wealth, it does enable you to, you know, hey, maybe take some time. I can work on a problem without having that, like, sense of urgency of like, "Hey, I need a job right now. I need to feed my family," or something like that. And that, the kind of intensity and that fear, I think definitely drives much more need for immediacy. And when you remove that, you just bring more thoughtful over time.

Harry Stebbings 12:14 I

Harry Stebbings 12:15 totally get you. Can I ask, d- like when you think about changes in your leadership, I think one of the big ones for me was when I started my own fund and I was kind of like, "Oh, shit. I've got to grow up." (laughs) Um-

William Hockey 12:26 Yeah.

Harry Stebbings 12:26 ... and like, s- (laughs) like really, it's on me now.

William Hockey 12:29 Yeah.

Harry Stebbings 12:29 Were there like specific one or two moments where you were like, "Wow, I really had to change as a leader and as a person with this event"?

William Hockey 12:39 I, I, I think leadership is prob- I think it's probably slightly more linear than like steps down, and so I don't think that as a leader I'm like fundamentally different than I was two years ago. I think it's probably more of a gradual increase as you mature, get older, have more experiences. I think more so what's been a change from that leadership style is, I think at Column compared to Plaid, you know, Plaid, very, very successful, has a lot of money. It was started kind of a- and ran in the boom, and I think we're in a different world right now, and we're completely self-funded and employee-owned, so I think we work in a world of constrained resources. And so I think having a leadership style where you have much more constrained resources when you have much more resources is very, very different. You have to be, right, slightly more ruthless, a little bit more pragmatic. I think you have to focus on delegating a lot more. So I think there's a lot of kind of nuances, but I think it's h- probably more towards that resources issue necessarily as just like, "Hey, it's a second company," or something like that.

Harry Stebbings 13:37 So when you think about like comparing Plaid and comparing Column, like what did you decide to do very differently this time other than the funding? Obviously with Plaid you took venture funding, right, and here you didn't.

William Hockey 13:49 Mm-hmm.

Harry Stebbings 13:49 Like are there any other things that you were like, "I really wanna do it differently this time"?

William Hockey 13:53 Yeah, there is. So I think if you look at a lot of the most successful companies in Silicon Valley, they are, I'll put this nicely, they are abstractions around complexity. So if you look at Stripe or if you look at Twilio or you look Plaid or something like that, right, what are they on? They like identify this big problem then they're like, "Hey, look at all these systems. They suck. It's really hard to use. We're gonna write an abstraction on top of this, and then we're gonna make it really to e- easy to use said system." Right? This is a huge amount of Silicon Valley stripes 'cause it's a great market, um, because you can start it with relatively limited capital. If you're-

Harry Stebbings 14:33 Yeah.

William Hockey 14:33 ... just like a smart first principles thinker, good engineer, it's a relatively approachable problem set. However, what it doesn't totally do is it doesn't totally fix like the systemic issues, right? Sometimes what you do is you are putting a little bit of lipstick on the pig. And I think what we get to do the second time, when we were doing it at Column is we're saying, "Actually, let's go all the ways down. Let's go like all the ways down below to the turtles and say, 'Hey, what's at that very bottom?'" And you actually get to build from that bare metals, and so you don't have to worry about kind of abstracting all the complexity. You got to push all the complexity away and go all the ways to the bottom. That's really what we're doing at Column. But it, but it, I don't think I could have done that when I was 21. I don't think I could have done it with the resources and capa- pa- capacity and capabilities I had at the time. You can only really do it later on. And so I think that is something I've been very lucky to do. And I'm not saying, you know, maybe one's a better business model, but it's just a different way to approach a problem.

Harry Stebbings 15:30 No, I, I totally get you, and I, I find it fascinating when you look at businesses which are only available or possible to a certain type of founder or people because of the success before. Do you know what I mean?

William Hockey 15:40 (laughs) Yeah.

Harry Stebbings 15:40 Um, I have to ask, in terms of like y- that was change, in terms-

William Hockey 15:44 Mm-hmm.

Harry Stebbings 15:44 ... of the same, what really worked? And you were like, "You know what? I've got to carry it across. This is, this is really important and worked well." Anything there that was important?

William Hockey 15:54 Yeah, I'll give kind of like a trite answer, but I think it is, it is important. I think at Plaid, what my co-founder I think is excellent at this, Zach, I think we had a really good philosophy around this, is you have to be very patient on hiring, and you have to be willing to deal with a huge amount of pain, even if it hurts your business. And so one of the things that we had like a very clear ethos at Plaid was around like, "We are gonna wait until we get to that A candidate. Maybe it would take 12 months. Maybe it would take 24 months. Who knows? But we're gonna put everybody through a lot of pain and short term hurt the business because we're gonna wait for the right candidate." And everybody talks about it, but 99.9% of companies in Silicon Valley, they don't do it. Right? They, they don't wait for the great candidate, and having that just exceedingly high bar is something I think at Plaid we did excellently, and I think we have definitely, you know, tried our damnedest to do that at Column as well.

Harry Stebbings 16:40 Can I ask you though, I don't think that you can a- If you think about like truly A star people, the point is-

William Hockey 16:45 Mm-hmm.

Harry Stebbings 16:45 ... they are the 1%. And if you think about scaling a company to 500 plus people, the very definition of 500 plus people is not 1%.

William Hockey 16:55 Mm-hmm.

Harry Stebbings 16:55 Like it, and so at some point you have to have B team players or C team players even, and so I guess my question is like do you think it's possible to maintain such high standards at true scale?

William Hockey 17:07 Well, it depends, right? I think most companies shouldn't be 500 person companies, right? I think as we're learning and have learned that most companies that are over 1000 people, you can probably do the same damn thing with 100 people. And so they've got to probably push back on the premise that like you need that many people to solve a lot of the problems we're solving today. But I do understand your point, which is like, you know, as you get to a point, you know, not everybody's going to want to be... Like the top 1 percenters aren't going to want to be employed at like 1200. And so I think you, there you just kind of have to be very introspective on yourself and say like, "Hey, I need soldiers and generals. Like is this role, do I need a soldier? Or do I need that 1%?" And yeah, like not every, not every role needs that A+ player. Sometimes it's actually the opposite, right? If you get an A+ player and they're in a role, they're not going to be super happy. They want to move quickly. You're gonna have attrition risk where they'll want new responsibilities in nine months or something like that. So sometimes actually better to have that B player that's in it for the long period of time. But I think especially in the early days, you do need a lot of those As, and a lot of times we fool ourselves in thinking that, "Hey, the person right in front of me is one of those," and they're really not.

Harry Stebbings 18:16 I, I, I totally get you and I totally agree with you. (laughs) Can I ask, like, you know, when we think about th- those A players, I think, I've s- I've said this before, but a lot of people have said to me, "Fine, Harry, but that's a luxury. I've got runway that's decreasing fast and I've got VCs putting pressure on me." How would you advise founders with runway that's going and VC pressure to hire and to execute at speed?

William Hockey 18:40 Yeah. I, I think it's, I, I think it's a really hard pickle, right? Life is full of trade-offs and so, uh, you know, I'm not in their seats and so I don't know where you're gonna do. I think I've always kind of built companies that probably need that. I don't know. If you, if you, you know, if you're building, like, a photo app for puppies or something and maybe technical complexity or go-to-market complexity is not, like, the driver to that, yeah, maybe it's actually okay just to go run quickly. I do generally think that this desire for speed and this desire to, like, move quickly and hire a lot is a little bit of a false lie. I think companies can be built much more slowly than people think. As you look about a value creation over a five to 10 year period of time, I don't necessarily know if the math adds up.

William Hockey 19:33 And so if-

Harry Stebbings 19:34 So I a-

William Hockey 19:34 Okay.

Harry Stebbings 19:34 I always say speed of execution is everything. Help me out, understand why I'm wrong. Why is actually building slowly more advantageous?

William Hockey 19:43 Depends what industry you're in, but I think being thoughtful upfront, I think, actually takes a little bit more willpower because you have so much pressure on top of you. I think we also hear, like, I've, I've been, I've been bred in financial services and infrastructure software and stuff like that where you have hundreds or thousands of people relying on you, and so actually pushing out features every single day doesn't really move the needle. Pushing out the right ones the right way is much more of a, um, a- an exponential move. I don't know. If you're, if you're, you know, BeReal or you're a, a photo sharing app that's, like, on the bleeding edge and you have Instagram right on your back, yeah, maybe that's a different execution strategy. But I think you have to understand where you are in the market and what level of execution you need to deliver at and at what pace.

Harry Stebbings 20:32 No. I, I, I do totally agree being very dependent on market there. Kind of speaking kind of depending on what model you have-

William Hockey 20:39 Yeah.

Harry Stebbings 20:39 ... I kind of disagree with what you said earlier. Sorry. We can do this-

William Hockey 20:42 Yeah. Hit me.

Harry Stebbings 20:42 ... 'cause we're friends. (laughs) Um, normally I'm not, you know, so direct. Um, but like, you said, like, "Ah, it's kind of not the traditional venture funding business-"

William Hockey 20:50 Yeah.

Harry Stebbings 20:50 "... given like the upfront cost and given the duration and not having..." I disagree with you. A c- business like Column is what venture was, uh, actually designed for. Incredibly innovative businesses, but takes a lot of upfront capital, has long duration. This is what venture is meant to fund, not the SMB payroll management system that can be spun up with no code in a weekend.

William Hockey 21:16 Let's just be clear. SMB payroll is great and you should all use Column for all the SMB payroll companies out there.

Harry Stebbings 21:20 (laughs)

William Hockey 21:20 However, you know-

Harry Stebbings 21:21 (laughs)

William Hockey 21:21 ... to a- answer, answering-

Harry Stebbings 21:22 Oh yeah. No. That was a bad example. (laughs)

William Hockey 21:26 ... your point ... (laughs) Yeah. I, I, I, um, I maybe agree with you philosophically. Um, I think we have to look at it pragmatically that's not really happening. I think the main reason is, is because Silicon Valley kind of venture broadly likes businesses that I think are relatively easy to understand, but most importantly where great technology and great engineering is the main determinant for success. And if you look at something like Column, right? Technology and building great developer products and being great developer infrastructure, yeah, like that is a critical, critical component, but it's one of many. Right? Building really great risk management, building really great regulatory strategy, knowing how to kind of sh- sh- throw some of the nuances in a lot of this regulatory move, those are just as important as the technology. And the problem is those you don't win by throwing more capital. Those are not capital starved problem areas. They're kind of time and expertise solved problem areas. And those is in areas that I think a lot of people don't feel comfortable with, because I think when you invest, right, you, you do have this 10 year payback period, right? And ev- and what is everybody looking at right now? Everybody's like, "Oh my gosh, Deal. It's like the fastest company to get to 100 million ARR ever." Right? Like, that's like the new metric. That's not gonna happen in this space. It's not gonna happen in my space. I'm gonna be the slowest company to like ever get to $100 million in ARR ever, but I think if we look at it from a 20, 30 year perspective, the ability for us to generate 10, 50, $100 billion I think is very, very real, but it's gonna be a slightly slower ramp to get there. And the determinant of that is not necessarily purely just technology. And so maybe it is, right? So maybe venture i- is a decent model for that, but I think for me at this stage, I think the longer you can de-risk that and the larger you can do it yourself, I think best sets me up and my employees up for success.

Harry Stebbings 23:25 I, I understand and s- uh, in, in many ways that I think really what you're saying is you, you want Harry Stebbings' money and actually 20 of-

William Hockey 23:33 (laughs)

Harry Stebbings 23:33 ... these people

Narrator 23:34 Got it.

William Hockey 23:34 (laughs)

Harry Stebbings 23:34 I, I agree. Very different-

William Hockey 23:36 If I took money-

Harry Stebbings 23:37 You would totally go-

William Hockey 23:37 ... I would take it from you, Harry. How about that?

Harry Stebbings 23:39 You are so... I would even give you a hat then. Um.

William Hockey 23:42 (laughs)

Harry Stebbings 23:42 I have to ask, speaking of like, you know, capital deployment-

William Hockey 23:45 Yeah.

Harry Stebbings 23:45 ... uh, one thing that I think a lot of people love to hear and it's helpful, you know, it's an employee owned and, you know, you've obviously invested a huge amount into this business, when you think about kind of wealth planning for yourself, how did you structure your personal portfolio construction? You know, you've got cash, uh, property, you've got directs, funds. How did you think about the right construction for you?

William Hockey 24:07 Yeah. I- i- it's an area that I'll- I'll be very candid, I'm not like uber thoughtful in. (sighs) I- I think I'm a, I'm an engineer by trade and I'm relatively single-focused. I like to go deep in one thing. (laughs) I think my ability to go broad in a lot of things is relatively weak, and I'm not an asset manager and I'm not an investor. I- I- I'm good at ... I think I'm good, I hope I'm good at building companies. And so 99.9% of my wealth is in Plaid and Column. That's kind of it. You know, I've done some stuff and, you know, invested in, you know, great funds like yourself, a little bit on the edges, but I'd say that is very much the- the, um, the long tail, not the majority. And so I- I probably don't think about portfolio construction. I didn't care if they did too much, if I thought about that too much, I probably would just have taken that money and throw it all in some, like, str- structured credit vehicles and made like, I don't know, compounded 8% or something, and that would make more money than investing in Comm over a five to 10-year period. However, I think investing in yourself, as you think about from a 10, 20, 30, 40-year perspective, that's probably gonna be the highest IR I can do, even if it means you're probably gonna, you know, have way more risk. And I think from a five to 10-year horizon,

William Hockey 25:14 it's probably not gonna be as successful.

Harry Stebbings 25:16 Do you believe the best CEOs are the best resource allocators?

William Hockey 25:20 Probably not. (laughs) I- I think-

Harry Stebbings 25:23 (laughs)

William Hockey 25:23 I- I- I- I think CEOs probably are a little bit too risk-on, and then, um, I think if you think about just pure financial allocators, maybe the public company CEOs are that come from more of an investment background. But if you think about pure tech CEOs, I think we're all a little bit like risk-on, let's go build. And I think during these kind of tr- tumultuous times in the market, that strategy doesn't always work out if you're just a pure financial allocator.

Harry Stebbings 25:50 A final question before we move away from kind of you and company-

William Hockey 25:52 Yeah.

Harry Stebbings 25:52 ... and move to the space. So one thing that just struck me when I hear about kind of your patience and willingness-

William Hockey 25:57 Yeah.

Harry Stebbings 25:58 ... to wait, it's hard sometimes to imbue that with employees who want to see milestones, who want to see growth, who wanna see momentum. How do you imbue that patience and willingness to wait in a team that is naturally ambitious and wants to see progress?

William Hockey 26:15 Yeah. I- I think it's a great question. I think the one thing is we don't hire a lot of new grads. (laughs) Like, I think the youngest people on our team are like 26, 27, and the average age is over 30. And I think that's probably less so by design, I think it's more (laughs) outside of like self-selection. I think after you see a couple companies boom and bust, you start to recognize that coming out of the gate too strong can actually be a potential negative, and actually real value is created over a longer period of time. And I think you start to realize that probably in your mid to late 20s. Um, but also, you know, we, pro- there's probably some self-selection. I think we're a very specific type of company. We focus a lot on size. I think we focus a lot on, hey, we're gonna do things the right way over a longer period of time, and that really, really resonates for a category of people, and that really does not resonate for a category of people as well. And so I think, you know, over time we've been lucky, we have found amazing people and we have a phenomenal team. Um, but, you know, it's-

William Hockey 27:17 it's not for everybody.

Harry Stebbings 27:18 I wanna move like a step away from you and your leadership to kind of Column in the industry that you sit in. You've said to me before about the money supply chain problem. (laughs) I didn't really have anot- a good question following up-

William Hockey 27:31 (laughs)

Harry Stebbings 27:31 ... other than can you expand on this? I googled money supply chain problem. Fuck all. Fuck all.

William Hockey 27:38 (laughs)

Harry Stebbings 27:38 So can you expand on this? What is the money supply chain problem and wh- why- why is it important?

William Hockey 27:44 Yeah. So may- maybe it's helpful to start, I realize we actually haven't talked about what Column did, and so I can maybe talk about, before I handle that, like what we do, and I think maybe that can lead into this next question, right? So at- at Column what we are is we're a bank that directly offers APIs to anyone, from developers, enterprises, to move, hold, and lend money. And we can do that 'cause we're a regulat- regulated bank. You know, prior to Column, let's make a little history here, any business that wanted to offer financial services, whether it's a startup that's rethinking credit cards or a, I don't know, Fortune 50 company that's, I don't know, reimagining their payment systems or something, they had to work with this kind of, all of these archaic middleware providers that wrap this old school bank. So to do something as like, I don't know, move money between two bank accounts, the developer would have to work with maybe a dozen vendors and write like a shit ton of spaghetti code. It was kind of a, it was kind of a mess, but it- it existed this way for decades because no matter how many times you rethink or you rebuild the technology into something slightly better, you actually aren't fixing the fundamental problem, which is the financial institution itself, the bank. Because what you're doing is you're building outside this regulatory perimeter, and so no matter what, you're kind of putting that lipstick on. You actually don't fundamentally control the protocol, and you don't control the risk decisions at the bank. And so you can never actually truly reimagine what it looks like. And so what you end up doing is you keep just adding more middleware providers. So what we did is, you know, we went out and we actually bought a bank, took on that regulatory heft, and we think that's really the only way to actually truly innovate in financial services. So kind of going back to your question, which is, okay, what is that money supply chain, how do you solve that? Which is, let's- let's take a lo- like the- take a look at like a traditional supply chain problem, right? So like, I don't know, take whatever T-shirt you're wearing, right? So say you're wearing some Hanes shirt, you know, maybe you got that thread from India, they assemble it s- someone in Vietnam, they ship it over to China, they make your T-shirt, goes through a port in Germany, and now you can buy it at Target and it's a Hanes-branded shirt. Everybody thinks, "Oh, cool, like Hanes made this shirt." Actually, not really. There was like probably 20 people or 20 different businesses it took to construct that shirt. Money is actually not that different, right? Kind of what I said is if you wanna move money, what happens? In the end, you know, turtles all the ways down, the Fed just moves money from one account to another account. That's actually moving money.... but in order for that to actually hit your bank account, it requires a huge amount of intermediaries 'cause a bank is not a technology company. So, let's go with that example. If you want to move that bank accou- that money from one bank account to another, you actually need an inordinate amount of bank vendors and mid-war providers to do that, probably five to 10 on every single side of the transaction just to move that one thing. The reason is-

Harry Stebbings 30:35 Why?

William Hockey 30:35 ... is because banks aren't technology companies, right? They are simply just abstractions on top of the Fed. And so what, how I've really thought about it is what we are doing is we are simply just solving the supply chain. We're saying there's 20 things to solve this one very basic problem, which is building on top of the Fed, and we're just gonna collapse all that in one, and we're gonna go straight to the Fed and do it ourselves.

Harry Stebbings 30:58 Okay. So you've got Fed and you've got consumer, and then you've got intermediaries in the middle, say five each on each side, yeah?

William Hockey 31:03 Yeah. Yeah.

Harry Stebbings 31:04 Uh, and then with you, you're saying, "Hey, let's have Fed and consumer and, shh, bring this together and get rid of all intermediaries in the middle."

William Hockey 31:13 Exactly.

Harry Stebbings 31:14 What do the intermediaries say?

William Hockey 31:17 You know (laughs) , I think they are ... there's so many and they're so disparate, I don't know if they have a unified voice. Um, I- I don't think I've really h- heard a, a, a coherent problem statement yet. Uh, I, I don't think I've heard people say that there is a big industry. I think people have generally resonated with this problem, which are saying like, "Yeah, actually this is right. Like, building inside this regulatory perimeter is correct." I think, you know, if you're a big bank or something, you know, you have so many different domains, right? You are, you are solving, you are solving a consumer's life from kinda cradle to the grave, right? They're gonna offer you your first checking account, but they're also gonna do your corporate debt offering when you're a massive corporation. And so I'm not quite sure they totally get how big of a paradigm shift has happened in financial services. But I think probably in five years or something like that, when we're a little bit w- more well-known, I think they'll probably speak more with a unified voice.

Harry Stebbings 32:11 And so just so I'm r- what's the problem? The problem is the fees that the intermediaries bring? 'Cause actually the process of moving money-

William Hockey 32:18 Mm-hmm.

Harry Stebbings 32:18 ... I, I don't know, for me it's, it's not a problem, and I move quite a lot of money (laughs) .

William Hockey 32:24 (laughs)

Harry Stebbings 32:24 Um, like, uh, so what, what is the problem? Is it the fees? Is it the time to move money? Why is this a problem?

William Hockey 32:31 Yeah, I think it's a, it's a great question. So I think, one, it's around how developers build. I think we are going to get innovation in financial services both in the US or the EU or Pakistan or wherever because people are gonna wanna build new companies and financial services, and you do that by lowering the barrier de- to entry. However, any time you build in financial services, you have to build on top of a bank. And to do this right now, it takes 9, 12, 18 months, it is extremely painful, it's extremely expensive, and you can only probably ship 10% of the products that you want, right? That inhibits a huge amount of growth and innovation. And so what happens is there's two things that happen, right? People just raise a bunch of money and deal with the pain, or what do they do? They build outside the regulatory perimeter. They go build crypto exchanges in the Bahamas, they go build crypto exchanges in China, and they go work outside of the regulatory perimeter, and end up causing a lot of consumer harm, and they end up kind of blowing out because they're building outside of the regulatory perimeter. And I think what we are saying actually is there's actually a nice middle ground, which is we can be a bank, we can be that regulated entity, we can make sure everybody's building in a very safe and sound way, but you also get to move super quickly, you get to have great developer infrastructure, you get to do that at a really low cost, and that is actually gonna have a massive boom in really safe, fast-moving, really innovative financial products because-

Harry Stebbings 33:57 But just so I get it, like the consumer experience problem is then it's an inhibition of product expansion on financial services? (laughs) Like, what, what is the problem for the consumer experience that we're solving?

William Hockey 34:09 So if you think about our business, right, I do not work with consumers, I do not work with businesses. The only people that we work with are people building new financial s- financial services, right? So maybe they're building a neobank, maybe they're a vertical software company that wants to offer payments and lending to their customers, right? Maybe it's a big enterprise that wants to do treasury management differently. I don't know what the killer consumer product is, right? 10 years ago, it was, you know, Venmo and Square Cash revolutionized peer-to-peer payments, Chime reinvented, you know, Gen Z... Square Cash and Chime reinvented Gen Z neobanking, right? Wealth management went through a big boom, right? There were different sectoral areas that innovate and build in financial services. If I was super smart and I knew what the, like the next thing was, I'd probably be doing that (laughs) . The only thing is I know is it will happen, and the trick for me is how do you build that plumbing, how do you build that infrastructure so the next iteration they can do that faster, better, and cheaper? 'Cause the moment you lower that barrier to entry, consumers just get way more options and way more flexibility. And also they get to do it in a relatively safe and regulated way, 'cause when you actually build inside the US financial system, you get a lot of inherent protections, and so it's really important that we allow people to build inside of that in a very safe and efficient way. The moment you build outside of it, crazy shit can happen.

Harry Stebbings 35:30 I totally get you in terms of building that sort of plumbing and infrastructure to allow people to build on top and that kind of being the, the primary. It, it, it takes me to something that you've said to me before though, where again I was like, "Oh, sounds good. No idea what it means."

William Hockey 35:43 (laughs)

Harry Stebbings 35:44 Um, you, you said,

Harry Stebbings 35:45 and I hadn't done my reading 'cause it was not so obvious. You said, "The US financial system can be a protocol, um, or can function like a protocol..."What, what did you mean by this, in that how does the US financial system potentially function like a protocol?

William Hockey 36:00 Yeah, this is something I feel very passionately about. Maybe kind of a niche thing to feel passionate about, but there seems to be this ge-

Harry Stebbings 36:04 It's amazing that you, you know, have a girlfriend (laughs) and you're mar- you're married now, aren't you?

William Hockey 36:08 I, I am married. It's, it's a pretty short thing, yeah. (laughs)

Harry Stebbings 36:10 U- Unbelievable. I w- I wonder why she leaves you. (laughs)

William Hockey 36:13 There seems to be this general consensus that we're at a decline in the US financial system and the US dollar, right? If you look at the crypto community, the EU, China, everybody has kinda made these compelling arguments that say in order to keep innovating, we need to burn the system down and build something from scratch. And I think ... I agree that there's a lot of aspects of the US financial system that are broken and they aren't working for a majority of people. However, I think what people miss is actually what's broken is the implementation of the US financial system that's flawed, not the underlying protocols and product. It's like, "What do I mean by that?" So you hear all these tropes in financial service about like, "Oh my gosh. Everything's built up, built in, like, Cobalt," or, like, you know, "We have, like, super slow payments in the US. It's built on this rickety infrastructure." The- what they are talking about, they're not actually talking about the underlying protocols at the Fed or TCH, or kinda like, the really bones of the US financial system. What they're talking about and complaining about is the outdated implementation of these protocols by all of these legacy banks. And every- all of this is so entrenched, and previously, there were no alternative, so we came to conflate big banks and the implementation of the financial system as the financial system. And so what we're doing, like what I feel passionate about, if you rip all that crap away and you go all the ways down to say, like, "Hey, what is available to a- to you as a bank? What are the services that the Fed offers? What can you do here?" Actually, it's quite powerful. You can actually accomplish, I'd say, kinda 90, 95% of what crypto wants and what people want by actually building this from scratch, by actually looking at the protocol layer and not getting distracted by how it's been implemented. Right?

Harry Stebbings 38:02 Yeah.

William Hockey 38:02 There's no Cobalt at the Fed. There's no Cobalt at Column. You can build this entire thing from scratch in a really newly- new way that actually, I think, meets a lot of the requirements of what people want.

Harry Stebbings 38:14 So- sorry. Just so I, like, understand, when you say we could do 90 to 95% of what people expect and want from crypto, kind of by innovating on the protocol layer, what, what does that actually look like in reality? I'm sorry. It ga- it sound- you could be a VC almost. (laughs)

William Hockey 38:28 No, it's great. S-

Harry Stebbings 38:28 It sounds incredibly intelligent, but I'm like, "Huh."

William Hockey 38:32 Let's take something like, um ... Let's take something like, you know, interday, 24/7 payments, right? Something that people always talk about, right? A lot of what people lock about Ethereum, right, is you can send it 24/7, 365. Um, you can s- send it at, like, relatively low cost. And so you can settle with all these intermediaries. You know what? You can actually do that on top of the Fed, right? A lot of this, like, "Hey, I can't send a wire past 4:00 PM," that has nothing to do with when you can actually send a wire (laughs) at the Fed. It's all about when the bank is open for you to send that wire. And so you start to kinda look at all these tropes that people complain about, and you realize that actually, that's the implementation by the bank. The underlying thing is actually quite strong. And so as we think about, you know, proof of ... you know, proof of verification of reserves, as you think about intermediaries, you think about counterparts, you think about faster payments, all of that stuff, you can do. People like it in crypto, but you can also do it inside the- in the US financial system, which I think is something people really miss. You can't do it right now with a lot of the banks. That's a flaw of the banks, not a flaw of the financial system.

Harry Stebbings 39:42 Is it on the chain?

William Hockey 39:44 (laughs) You know, you know, it's not gonna be on the chain, which is probably that, you know, 5% of what people think about, but when you look at it-

Harry Stebbings 39:51 (laughs)

William Hockey 39:51 ... from a problem side, I don't think that's necessarily- necessary.

Harry Stebbings 39:55 I just think of Wedding Crashes.

William Hockey 39:56 (laughs)

Harry Stebbings 39:56 Then we're gonna put the picture on the line.

William Hockey 39:59 Yeah. Yeah.

Harry Stebbings 39:59 (laughs) Uh, uh, y- why do you guys sign? You go to a restaurant in the US and people sign for things. It's like with doing scrolls in kind of ancient Greece. In the UK, we have contact lists.

William Hockey 40:10 Yeah.

Harry Stebbings 40:10 Is this implementation layer?

William Hockey 40:12 Once again, implementation layer. That's it.

Harry Stebbings 40:15 It's total shit. Um.

William Hockey 40:18 (laughs)

Harry Stebbings 40:19 (laughs) Really, uh, the US

Harry Stebbings 40:20 financial system always makes me laugh. Um-

William Hockey 40:22 (laughs)

Harry Stebbings 40:22 ... uh, I ... But, you know, we, we sp- (laughs) Do you e- do you know what would be bizarre? Uh, who's got the best financial system? Which country are you like, "Yes, they've done it well"?

William Hockey 40:29 I think there's, there's ... There's different pieces. And so, you know, the US has a, a massive ... Like, the US has the dollar, right, which is probably the strongest implement, and so that probably inherently, bar none, makes the US the best financial system, but it's really because of our currency. As you think about a lot of the technology, I think China has innovated on the financial system very, very, very quickly. And so I think there's probably a lot of stuff that you can take away from that and we can learn from. I don't think we want the Chinese financial system, but I think you can recognize that they're a part of it that's quite interesting, um, and we could maybe apply it to the US. But I think each country kinda has their own pros and cons.

Harry Stebbings 41:08 What do ... I don't know anything about the Chinese financial system. What, what, uh, what can we learn from the China- Chinese financial system, do you think?

William Hockey 41:14 I think the, the decision-making process in the US is, is quite slow. Uh, there's some benefits to that. It's a little slightly more democratic and ... But there's a lot of players in, and I think things move at a relatively slow pace. And I think China, as we think about payment systems and think about regulatory and stuff like that, there's only a couple decision-makers. And so the p- the, the pace at which they can move and adapt to kind of a changing world order is pretty incredible. And so I think we obviously don't want that top-down authoritarianism in the US, but I think we need to recognize that from a regulatory standpoint and a systems standpoint, in order for us to keep pace with China, something probably has to change, because they are making leaps and bounds on-... a financial system perspective that we probably are

William Hockey 42:02 sli- a little bit slower to adopt.

Harry Stebbings 42:04 Is there a way that we can do this without fundamentally reinventing-

William Hockey 42:07 (laughs)

Harry Stebbings 42:07 ... the political system and structure in the US?

William Hockey 42:11 Yeah, I, I think we are-

Harry Stebbings 42:12 Like, if you could have your way, what would that look like? I give you keys to the kingdom, Will. Go.

William Hockey 42:18 (laughs) You know, this is gonna be kind of more of a nuanced policy answer, but I, I think there is this trope in, in, in the US, right, is we have a lot of regulation and we have no regulation, right? Democrats are like, "Let's go regulate everything." The Republicans are like, "Get rid of all regulation. It's bad." I think what we really need is you need, um, you need to find balance, right? Because we need regulation to be light enough that people actually wanna innovate inside the regulatory perimeter. Right? I think crypto's a really good example for this, is the US has in many ways kind of punished crypto companies like Coinbase or whatnot that are trying to innovate inside the regulatory perimeter, but what happens?

Harry Stebbings 42:55 Yeah.

William Hockey 42:55 95% of trading actually just goes overseas, outside of kind of that protective umbrella, and ends up blowing up. And so what's actually happened is that that kind of punishing regulation has actually caused more consumer harm. But if we have absolutely no regulation, then it's the Wild West and it's really bad. And so what the regulators need to focus on, hey, how do we allow people to actually move quickly so we can attract people to build inside the financial system, which makes everything stronger and safer, but not go too far in the extreme where we just kind of push everybody to the gray and the black? I don't think we've found that balance. I think the FTX blowing up will probably, hopefully push us in the right direction there. But I think we do have maybe a little bit of ways to go.

Harry Stebbings 43:38 How do you think it... Sorry. How do you think that pushes us in the right direction? Does it not actually just increase the bureaucracy and increase consumer protections because of the awareness of what can happen when things go wrong?

William Hockey 43:50 Yeah. Yeah. I think you've... I, I, I don't, I don't have a, um... I'm not a fortune teller, so I don't know what's gonna happen. I'm probably a hopeless optimist. But I think what it shows is actually if we don't allow the good players, like a Coinbase, et cetera, to move quickly and actually be able to innovate, those people, like those people are gonna go somewhere, right? People want this stuff, and so then they're just gonna go to the sketchy black market stuff, and that's actually gonna create a lot of consumer harm. And I think the regulators can potentially get some egg on their face, because then people will be like, "Hey, you didn't protect me." And so that's an optimistic take on it. Yeah. The other, the other take is, you know, it swings so far in the other direction, no innovation happens or something like that. But then I think you'll start to see more things just go to the black market and more stuff blow up over time. And so I think over time we have to figure that out. Whether we fig- like, figure that out in a five-year time horizon, I don't know. I hope so. I think there's fabulously smart people in government, and so I think

William Hockey 44:47 they do understand this. And so I, I'm optimistic that they'll figure it out.

Harry Stebbings 44:50 What do you think happens to Coinbase today? Like, you look at the stock and it's like, "Oh, my heart bleeds for Brian." But then I'm like, "Ooh, FTX." I'm like, "Oh, God. Poor dude. His week's getting worse." Um, what, what happens to Coinbase?

William Hockey 45:03 I don't know. I, I hope they do really well, 'cause I think what they have tried to do very well is they've tried to embrace regulation and they've tried to do things the right way. They've tried to do things that are right by the regulators and they're right by consumers. And in many ways they've gotten punished, because what's happened is there's been all these other players that do not play by the rules that can move so much quicker and do so much stuff. And so consumers are naturally gonna go to that one, like FTX and whatnot. And that's, I think, bad. That's, like, really scary. And so I think for the health of the US financial system, for the health of people like me that are trying to innovate and trying to do things in the right way, I hope they do well, because that will be a big determiner, I think, a lot of the success of the industry.

Harry Stebbings 45:45 I do wanna ask, kind of forward-looking, and then we'll do a quick fire. Let's project ourselves 10 years out.

Harry Stebbings 45:50 Like (laughs) pretty unfair thing to do. Um, but like, how will the next 10 years for fintech look different to the prior 10 years, do you think?

William Hockey 45:59 S- so one, one of the things that I do know is the, the financial brands that we think of are, are changing. And we talked about this a little bit before, but the idea of these large banks that are going to service a consumer cradle to grave I don't think is going to happen. It's not going to succeed over the long term. I think what tech has taught us over the past 20 years is if you go solve a niche problem and you do it very, very well, you will win in the long term, right? Like Salesforce builds excellent software for enterprises. It's hard to imagine over the long term that they aren't going to be the dominant financial brand selling to enterprises, 'cause they know that audience, they know how to build that really, really well. And so I think what's gonna happen is-

Harry Stebbings 46:44 Sorry, are you ta- are you talking about bundling or unbundling? 'Cause th- the way you started, I thought you were talking about delivering a superior product to a niche audience. But then when you think about Salesforce, like, it's actually many products to a s- actually relatively increased audience now, a very increased audience. And so it's kind of... Are you doing unbundled or bundled?

William Hockey 47:02 Maybe, maybe Salesforce is... Maybe Salesforce 10 years ago is a better example. But let's look at something like Procore, right, or vertical software, right, which is you have these people that are building, hey, I know this audience. Maybe it's a construction person, it's a gardener, it's a plumber, whatever. I know their needs really well. And so what my specialty is, is building software directly for them.

Harry Stebbings 47:23 Mm-hmm.

William Hockey 47:23 And think about financial service, it's a relatively commoditized thing. And so I think long term, they're the ones that are going to... They have that consumer, they have a low CAC on that consumer, they already have them in their pipeline, and so delivering ancillary software, if you view financial service as a software, which it kind of is, they are the ones that are gonna win that vertical over time. And so I think just, like, you know, Square Cash or Chime or whatever, like, they know their one audience quite well. They will win. And so I think over the next 10 years, the new financial brands that will win over time and that will be that dominant player are already probably brands today.... they just aren't financial services brands. I think what will happen is these large banks that you and I have heard of, will probably, you know, kind of dissipate behind the scenes. And 'cause they will provide a much more behind the scenes role, like me. And there're banks that cannot adapt to playing behind the scenes, will probably cease to exist.

Harry Stebbings 48:22 What I say ... I've got two questions for you. One is, what do you think is the difference between people who are able to make a niche product superior but then transition out into a much more broad services play with many different products? What's the difference between a niche product that delivers superior like service and sells to one of these big brands and big platforms, versus one that becomes one itself?

William Hockey 48:46 Yeah. It's, it's a good question. I think, you know, one of the things that I believe is that technolo- both technology and financial services are becoming increasingly commoditized, and so building software is cheaper and easier than it's ever been. And so what's most important is to have an audience and to know that customer. And if you have a lock on that customer and you know them, you have a relationship with them and you know how they make decisions, you are best set up for success long term. 'Cause whether you're offering them financial services or you're building them a SaaS app or something like that, those things have become commoditized and they are cheap.

Harry Stebbings 49:22 Mm-hmm.

William Hockey 49:22 And so that is the most valuable. I think I'm slightly more bearish on the people that like, "Hey, I have this broad portfolio of products and I'm gonna go sell this to a broad portfolio of audiences." The people that know their audience, know their swim lane and do really well, those are the people that I think are gonna win over the next 10 to 20 years.

Harry Stebbings 49:42 Do you think that these, um, potential incumbents of the future, do you think that they will be able to acquire, given the tightening regulatory environment around competition, and I think we're gonna see a real constriction in terms of the amount of acquisitions that happen of these niche providers. Do you think that they will be able to consolidate in the way that you kind of discussed?

William Hockey 50:05 Yeah, I think it's probably less consolidation from an M&A perspective. I do agree with you. I think, um, a- acquiring is probably gonna be much more challenging over the next 10 years, and so I think you'll probably see these people just build more in house, right? It's kind of why I exist is, you know, a lot of my sales pitch is like, "Hey, financial services can be a commodity service. Like build on top of us, you get to build in this regulatory perimeter and you can offer this service cheaper, better, faster, stronger to your consumer and it can 10X your revenue." Right? Like that pitch is, I think quite compelling and I think you will see that trend more. I think it'll be less of a roll up, you know, there's three people that dominate an industry and it's gonna go to two to one. Uh, I think the FTC and the DOJ, especially if, you know, the, the, the executive branch stays where it is, I think that will kind of s-

William Hockey 50:49 you know, diminish, for good or for bad.

Harry Stebbings 50:51 And, uh, final one, I promise you. Um, (laughs) you said there about kind of vertical specialist, like you mentioned Procore, that which is a brilliant kind of vertical specialist. Do you think we'll see that over Apple have long suggested towards and, you know, had kind of financial ambitions, over the aspirational beautiful brands which consumers resonate with?

William Hockey 51:11 Well, I'd say Apple is actually like the original vertical specialist, right? Is, what do they know? They know consumers really well. One of the reasons that Microsoft I think is always troubled in the consumers, Microsoft knows enterprise well, Apple knows consumers well. I think Apple just happens to have the largest vertical play out there. There's kind of a reason, right? Like you don't see a lot of Apple products in the enterprise, right? You don't see Apple servers or something like that, right? They don't really know that market. They know the consumer market super well. And so, you know, they happen to play in the largest vertical, but I kind of view Apple as a specialized player, just like Procore is, just like AppFolio is or something like that.

Harry Stebbings 51:47 Who do you think will be the largest bank in 10 years that isn't around today?

William Hockey 51:54 Well, I think we'll probably be the largest bank out there (laughs) . I, I think some of these large vertical software companies will probably be the dominant financial services players over the past 10 years. I don't think they'll be regulated banks. I think the banking functionality will still be offered to banks. I think you can see Goldman and JP Morgan move very aggressively into this. I mean, that's kind of where Goldman's strategy is going forward, which is pretty similar to mine. And so I think the banks right now that understand that, I think are gonna do very well. I think the banks that kind of view themselves as still like, "Hey, we know our consumers and we know our businesses. We're gonna offer you cradle to grave," I think they're, um, I think they're dead on arrival.

Harry Stebbings 52:31 Well, I mean, that's Goldman if SBF doesn't buy them, which according to him is a very possible likelihood. Um... (laughs)

William Hockey 52:39 (laughs)

Harry Stebbings 52:39 Maybe not. Um, uh, now I wanna move into a quick fire, my friend.

William Hockey 52:43 Yeah.

Harry Stebbings 52:43 So I say a short statement, you give me your immediate thoughts. Does that sound

Harry Stebbings 52:46 okay?

William Hockey 52:46 Stressful. Okay, let's do it.

Harry Stebbings 52:48 Uh, it's, it's totally fine. What books are you reading that you love or that you recommend?

William Hockey 52:54 I, I love and I'm obsessed with commodities. Uh, I think there's a big, there's a, there's a great book that was written in the '60s called Merchants of Grain. Um, it's wonderful. Um, not super approachable. Kind of a, maybe more approachable version to that is, is a recent book written by a Bloomberg reporter called The World For Sale. Um, it's, uh, it's kind of the story of commodity traders. It's a phenomenal book.

Harry Stebbings 53:15 Huh. I've never had either on the show before.

Harry Stebbings 53:18 Uh, I-

William Hockey 53:18 (laughs)

Harry Stebbings 53:18 ... knew you weren't gonna do a hard thing about hard things. So, uh...

William Hockey 53:22 (laughs)

Harry Stebbings 53:22 Um, tell me, what do you believe that most around you disbelieve, Will?

William Hockey 53:26 I don't know if most disbelieves but like, cold emails save lives. I, I think kind of, you know, n- no matter how powerful, rich or famous you are, I think just skipping the warm intro and going straight to a cold email and following up three times is like the most valuable skillset you have. I've kind of built my career on just like cold emailing people a ton and, and bothering them, and I think it's phenomenal. I think a lot of times people wait too much to try to find an intro or try to network their way into something, and if you just bombast somebody, they're usually gonna respond.

Harry Stebbings 53:54 I remember when I was 18, I cold emailed Jack Dorsey when I was in San Francisco and he responded and I was like, "Wow,

Harry Stebbings 54:00 this works. Yeah. There we go."

William Hockey 54:02 (laughs) Yeah.

Harry Stebbings 54:03 Well, so I totally agree. What's your biggest strength? What's your biggest weakness, Will?

William Hockey 54:07 You know, that can be a strength or a weakness. I think I'm a hopeless optimist. I think you kind of have to be a founder, um, but I tend to always believe that things are gonna work out. Uh, I think the other thing is I have an extremely high pain tolerance, (laughs) um, and I also have the ability to go super detailed on really boring-ass problems. I think on the weaknesses- (laughs)

Harry Stebbings 54:26 There's one... Sorry, yeah, go on the weaknesses side.

William Hockey 54:29 I think on the weaknesses side, uh, I have actually pretty massive social anxiety. I can fake it for a bit and pretend I'm social, but I'll probably end up running away by the end of the night.

Harry Stebbings 54:40 Wow, I did not know that. Huh. You bring such great energy.

William Hockey 54:43 Yeah, I'm like an extreme introvert, like on the extreme.

Harry Stebbings 54:47 Wow. Uh-huh, I did

Harry Stebbings 54:48 not know that. Um, uh, this isn't in the schedule, you- your wife is your co-CEO, correct?

William Hockey 54:55 Yes. Yes. Yes, she is.

Harry Stebbings 54:56 What is the best thing? What is the worst thing?

William Hockey 55:00 I, I, I think the best thing is... Or you have aligned incentives. I think incentives, you know, they, it's- it's kind of the cause for most of our decision-making framework, and when you start it with a spouse, you have perfectly aligned incentives, and I think that's super, super important. Um, I, I think the worst thing, right, is you don't really have too much of a balance between your personal and professional life. And it's something I've never strived for too much, but I think it can definitely be taxing over time when kind of work is a dominant, dominant part of your life 24/7.

Harry Stebbings 55:31 Uh, what's the most painful lesson that you're also pleased to have gone through?

William Hockey 55:35 You know, when, um... We almost sold my, my previous company Plaid to Visa, um, at a pretty good time in the market back in 2020, and it ended up getting blocked by the Department of Justice for antitrust issues. It's kind of like the first part of that phase. Um, I think it was super painful and I, I, you know, there, there's some pros and cons for not to go through, but I think what you realize is that things can still happen even if they aren't correct or rational, and the government is, in the end, the decision maker, and that changes a lot of ways how you think about life and how you think about p- product building, right, is you have to view any government and stuff like this as a static entity that's probably not gonna change, and I think you need to build with that knowledge in the back of your head. And I think that was a good... It was a really good lesson for me, right, is I don't think it was fair, I don't think it was correct, but it doesn't... My opinion doesn't matter. Is, you know, the government is a decision maker at the end of the day.

Harry Stebbings 56:30 Ca- Sorry. How do you continue to motivate people who see a massive windfall coming and then it's like, "Oh, nope, not happening."

William Hockey 56:38 You know, you raise a triple evaluation nine months later. (laughs)

Harry Stebbings 56:43 (laughs) I mean, that, that helps. Um-

William Hockey 56:45 Yeah.

Harry Stebbings 56:45 I, I get that. Um-

William Hockey 56:48 (laughs)

Harry Stebbings 56:48 M- m- moving away from something rather, uh, you know, transactional-

William Hockey 56:52 Sorry.

Harry Stebbings 56:52 ... uh, your children. Uh, children-wise, what do you want your children to adopt? Three traits.

William Hockey 56:57 Uh, I think a love of reading. Um, I, I think... I, I read quite a bit and I think it's probably one of my superpowers. I, I think ruthless pragmatism, um, is one, and then the other one is kind of the willingness to bet on yourself and kind of having that self-confidence to do that.

Harry Stebbings 57:11 What's your biggest investing miss and how did it impact your mindset?

William Hockey 57:16 Um, you know, s- speaking of, speaking of, of S&P Payroll, actually, you know, I had a chance to invest, um, at the seed round deal, ended up, you know, paying up a little bit for the series A round deal that ended up, you know, being a phenomenal outcome. Um, but I- I think, you know, it's okay to admit when you're wrong and be like, "Hey, I missed this." And then if you see it again and it's, you know, way more expensive, it's okay to pay up the second time around.

Harry Stebbings 57:38 Do boards really add value?

William Hockey 57:40 (laughs) I think I'll give a cop-out answer there. Uh, yeah, I think it's stage and, and director dependent. Um, I, I think having a great board and great investors is definitely not good enough to be a good company.

Harry Stebbings 57:53 If you could only have one board member, who would you have?

William Hockey 58:02 Depends what space I'm in. I, I think somebody who I have aligned incentives with.

Harry Stebbings 58:05 Column. Column.

William Hockey 58:07 I think, I think somebody who I have aligned incentives with, right? The moment you have misaligned incentives with the board members, I think... Like, you know, I'm always lucky to have phenomenal board members both at Plaid and Column, but I think I've seen some friends go the other way, um, with board members that maybe are in it for something different, and I think that can be pretty, pretty problematic.

Harry Stebbings 58:25 I'll take the seat. It's okay. I'll do it for free.

William Hockey 58:28 (laughs)

Harry Stebbings 58:28 For- for the love of- for the love of Will, I'll do it.

William Hockey 58:30 (laughs)

Harry Stebbings 58:31 Um, uh, what would you most like to change about venture, penultimate one?

William Hockey 58:35 Oof. Um, yeah, I'd say the same thing about founders. And so I'll just kind of talk about tech as a class. I think generally as a whole category, we're sycophants. Um, I think generally, we need to remember in venture that like cash is green, and I think everyone should just admit that venture is just capital allocation and private tech, and, you know, it's more like m- uh, being a mutual fund manager than an operator, uh, maybe present company excluded. But I think pretending otherwise is probably anything but a distraction. I think money is necessary and it's necessary to create massive businesses so it's a necessary part of the supply chain, but I think we should treat it what it is and maybe, you know, not as much as we do right now.

Harry Stebbings 59:17 I say to founders at the start of pools, "Listen, we sell cash for a living, which means we get very good at selling."

William Hockey 59:21 (laughs)

Harry Stebbings 59:21 Don't take any of the selling bit, uh, really at all.

William Hockey 59:25 Got it. Right.

Harry Stebbings 59:25 Just fundamentally optimize for in 10 years time-

William Hockey 59:27 (laughs)

Harry Stebbings 59:27 ... do I still want to hang out with this person and do I still like them?

William Hockey 59:30 Yeah. Yeah.

Harry Stebbings 59:30 That's number one. That's all that matters.

William Hockey 59:33 Yeah.

Harry Stebbings 59:33 Um, so I, I don't disagree with you. Uh, final one. Next five years for you, what does the plan look like. In 2027, where are you and where's Column then?

William Hockey 59:44 I'll, I'll give my personal answer, right? You know, I probably I'll have four mental breakdowns, and I'll probably be doing the exact same thing I'm doing right now with way more gray hair. Um, you know, I think we should recognize that, like startups are fucking hard. I've never found (laughs) anything more fun, uh, but the world probably moves, you know, slightly slower than we think.

Harry Stebbings 1:00:02 Will, I've loved doing this. Thank you so much for putting up with my increasingly, like naïve questions as the interview went on. But, uh, I've loved doing it, so thank you so much for doing it with me, man.

William Hockey 1:00:11 Harriet, thanks for having me. I do appreciate it. Thank you.

Harry Stebbings 1:00:15 You're a star, my friend.