This is Club Conversations powered by Micro Cap Club. Our goal is to give our community access to the best minds in investing and business. I'm Ian Castle, founder of Micro Cap Club. Micro Cap Club is a private community of the world's best stock pickers. Since 2011, our members have profiled 1,500 companies and over 300 have turned into multibaggers. That's at least one big winner every month for 14 years. If you enjoy finding great companies early, well before Wall Street pays attention, Micro Cap Club is where you belong. I hope to see you in our community. And now a quick disclaimer. This presentation is forformational purposes only and should not be construed as a recommendation to purchase or sell any security referenced here. Planet Micro Cap Holdings LLC and Micro Cap Club LLC are not licensed brokers nor registered investment advisors. We, our partners, contractors, members, subscribers, guests, or affiliates may or may not hold positions in one or more of the securities mentioned in this presentation and may trade in such securities at any time. We recommend you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities referenced in this presentation. >> Welcome back to the Micro Cap Club podcast. This is a club conversation with Charlie UK, founder and CEO of Sil, the buy now pay later company that now sits at a multi-billion dollar market cap. We talked about why he started over after being pushed out of his first company of sleach profitability with a fraction of the fundings its competitors raised. his hiring playbook built around IQ and GPA and how he thinks about scaling a remote common sense company in a textbook driven industry. Let's get into it. Charlie, you grew up in uh let's say middle class, built passport, exited as a millionaire, and now you're sitting up on a billion dollar stake in a company you started over again from scratch. Most people would sort of retire after the first exit. So, what made you go again? I guess >> well you know there's a unique story there. I actually had a kind of a co-ounder co-founder conflict. >> So >> I was pushed out essentially of that company and that conflict um before I even had the exit and then I moved on from that situation right away once you've basically built a company at least for me once I had done it once I was like there's nothing else I want to do. So basically the moment that conflict kind of led to that I said okay what's the next project to work on and I knew payments I reached out to Paul Paradise my co-founder and I knew I wanted to work with him and I you know we started talking about ideas and then that led to the founding of Szle and then the exit out of Passport actually came a couple years later but actually as sil hit per like we we basically hit hit the gold mine in terms of finding the right product to go after and we were scaling up and then basically I just took my exit from Passport and rolled it right into Szle as an investor because I I knew it would help fuel us and continue our path. So some of it wasn't necessarily choice. It was just kind of like the circumstances. But I will say after like you know navigating you know that that monetary exit and you know seeing where we are as a company and just living life in the meantime uh I'm I'm a relatively simple person. Um don't got a Ferrari, don't got a Porsche. I used to have like 20-year-old Porsche. Um drive a Model Y Tesla which I love. Drive a Cybert truck. Got a relatively normal house. travel a lot for work, but honestly, it's not I've realized it's not really necessarily about trying to have an extravagant lifestyle, >> right? >> It's more about doing really cool things with your life and going after things. And I think that's what I kind of realized is what drives me. It's, you know, being intellectually challenged, trying to win the game. I kind of view business as like a sport. So like if you play tennis or play golf, you want to go out there, you want to win. I kind of view business as a sport. It's like like going out every day and with our team trying to win and that's really what drives me. >> No, very very interesting. Uh for sure and I think it's very unique as well. Um can you can you sort of break down a bit what SEL does for the people that might not be familiar with with the business itself? Yeah, we're a buy now pay later company, but expanding beyond that, you know, in more recent terms, but buy now pay later, some people can think of it as like reverse layaway. Um, where you get the product up front and then pay the installments back with sle where in the past you would have to wait to pick up the product. That's that's why I call it reverse layaway. Um, it's a short-term product. It's a product that I think, you know, the customer views as a budgeting product as well. a little bit of a hybrid between a debit card purchase and a credit card purchase. It helps the consumer avoid using a credit card. A lot of our consumers have credit cards and they avoid using credit cards with our product. And I think they do that because credit cards feel unsafe. If you like you can build if you build up a balance, it can spin out of control and you end up with a bankruptcy on your hands or potential bankruptcy, which really can never happen with BMPL. I mean, you could file for bankruptcy, but I see no purpose because if you're delinquent with us, uh the balance just stops growing and you just don't have access to the product. And that's basically what happens across all the BPLs. Yeah, it's a B basically a for a short-term installment loan product typically completed in six to eight weeks and uh customers view it as a totally new type of financial services product that really fits an niche that must have been there for decades. And you know merchants when we launched the product they saw the how it hit for them. We had small merchants that didn't even have to launch AB tests. They just knew that we increased their sales because sales went up by 15% the next day and they told their friends, their competitors saw it. It grew wildly with the merchant network. Consumers were in love with the product. And then where we've evolved over time is we've gone more direct to consumer. We've moved away from not not away. We still have the merchant model, but we've gone more direct to consumer with just offering consumers anywhere premium products that let them I call them openloop products. they sign up with us, they can use BNPL everywhere. And then now what I'm saying is we're a little bit beyond BNPL because we're starting to expand our services into more financial services into more shopping tools, savings tools. And the mindset is creating a product that helps this customer this mid to low younger mid to low income younger consumer helps them save money in their daily lives both from a financial product perspective and from like a shopping discounting couponing perspective. So basically make a difference on their on their pocketbook. >> I'm definitely very interested about how you came up with this idea because it feels like it's a very like win-winwin model. Where did the model come from and does this win-win-win situation came up to you right away or was it sort of something you stumbled upon? >> No, one thing I'm really good at, David, probably is finding models that work in an industry I'm in and bringing them on board. So I can't say I was the inventor of this idea. It was invented by a company called Afterpay. Okay. Out of Australia and I knew about it because we were we launched an original product with Sle called Well, we didn't have a name for that, but it was a a checkout product that it was a product that was designed to lower cost for merchants. It was a bank payment at checkout, which is a very lowcost rail. Bank transfers are super low cost versus credit cards or debit cards. We weren't just we weren't getting the pickup that we needed as a company. And my prior company, Passport, we also launched the wrong product at the start. Got in the industry, saw what was taking flight, adopted that idea, which was mobile payments for parking and then innovated and won the space. And so basically what happened at Zel is almost a mimic to that map which was wrong product at the start, get into the space, which is retail payments. We saw Afterpay taking off in Australia. I had been to Australia for my last company. I knew that it was basically a USA South. So if an idea worked there, there's a high likelihood the idea works in the United States. And so when we saw that taking off, we were like, "No one's doing this here. It's very unique. Let's launch it." And so we pivoted the business. We launched in 3 months after the pivot in August of 2017. And from that moment forward, it was a rocket ship. And I had a prior company to compare it against. I would say there's only one detriment. Everyone came in at the same time with the same idea. There were a lot of companies. So Afterpay came over to the US. The moment we launched, they were aware of it. They started selling in the US as well. They launched nine months later and they were a multi-billion dollar company. >> We were a 25 million market cap private company. >> Um a company called Quadpay launched four months later. two Australian multi- um you know serial entrepreneurs uh and they're really talented. I still know those guys today. They're very talented. They had a good product. That's now Zip. Um and then Zip's a public company out of Australia. CLA came a few months after all this. They were a $40 billion fintech at one point. PayPal came in. Even Apple came in. So like everyone diving in. And you know, if there's one thing I'm super proud about Szle and I think is a like key tell to how strong we are as a company, as a team, is the size and scale differences that we had at that time for fundraising. But where we stand today looks pretty damn attractive. Despite that, we raised around 120 million in funding over our entire lifetime as a company. The next lowest is over a billion in equity financing. Over a billion. That's the next lowest. So we have multiple companies that raise billion 2 billion 3 billion plus in cash to compete in this space. And here says today our market cap today is 3.2 3.3 billion. Clara's market cap is 5.5 5.6. And that tells you how efficient we are as a company and scaling up what we're doing. And I think it's a testament to the team and the execution. Hm. How how is that possible? I know you said team and execution there, which probably accounts for a a big part of the success, but if you had to attribute to or like specify a bit more, how did you manage to with such a low like raise uh get a better results I would say than others? I think when you when you view yourself as like uh resource constrained, it forces you to make tough decisions that also reduce distractions. So you you tip of your arrow, you have to point in the right direction. You know, you do where if you just have money flooding in, you don't have enough time to figure out where to allocate it all and you just spend a lot of it recklessly and probably some of it a lot of it in the wrong directions. So we were forced to focus where our efforts were. early days those efforts were towards SMB merchants which a lot of other players were ignoring and they were very efficient to bring on board and to scale with. We had to change that model when Shopify launched a competitive product on top of ours and get diverted traffic from us. And then the the next product we launched was the direct to consumer model which was hyper efficient in terms of what we were able to offer. Um, so I think that's a really big part of it is the focus and forced efficiency as a company which helped us do it. And I think it also kind of shows that just these massive amount of fundraising rounds that people do sometimes it's massively wasteful. I know I don't think we're really in that date anymore except for maybe the AI companies of today, but in fintech I think things are relatively efficient. Um yeah and I I really do think it is a lot of it is still execution in your team though you know we we are very focused on what we do. We do throw you know pick like four initiatives or five initiatives that we really want to focus on each year and we really maintain the focus. I mean we'll make adjustments during the year if things have to change but we tend to maintain maintain focus and just keep on paddling with the slow and steady. We're almost a little bit of impatient and patient at the same time. We're also patient I would say. >> Yeah. >> Which I think is unusual for a smaller company. Um we will we will go with our gut instincts and the data >> and even if we don't get a quarter by quarter reward from investors in the market, we'll stick to our thoughts if we see the results that we're looking for and keep on continuing on those paths. And what sort of um big ideas or principles do you see yourself constantly repeating to the team internally or to the company? Because I know that a lot of founders I've met throughout the years are sort of trying to push uh the culture or at least like build the culture and that that builds through repetition I guess a bit. So what are the key principles you try to to push internally? >> Well, hiring standards is and using data during hiring is a huge one. I think if there's one thing >> of data, >> we have everyone go through basic IQ tests and we I don't care what age you are. We ask you for your transcript from undergrad. And the reason we ask for both of those things and more so we actually also ask you to do testing for your specific role like data where we get like a data like a number output of your skills in that area. Um but like IQ that's your horsepower that's I also think that when really smart people work with really smart people they don't get frustrated where I think if there's sometimes there's mismatches there's frustrations. So we tend to have like a very high standard on IQ in the company. Um GPA I think was even more important though because GPA especially undergrad GPA if you're top 10 percentile you had to do you had to complete projects and why I say the reason I like GPA more than most is because um in college you had to complete projects you didn't even like necessarily which happens in business and you had to complete them and do a good job to get that A. So GPA is also important but then like for coding we give people codility tests we score those as well. Um you know we give the same thing for like data analytics. Um we basically try to apply different tests and honestly you can delete the name from the profile. It goes right to all the data and that's who we interview first and that's you know we bring on. So that's a that's a big one. We do have the culture elements and I think we do stick to them. We have, you know, five core culture elements that uh are very important to us. Character character and integrity. Um fun to work with. And I always joke it's not like going to happy hours. It's like when we're in tough meetings, people want you in the meeting. They want to chat with you. They love your opinion. They love you. They love the energy you bring to the meeting. Good communicator, which is listening and and talking. Um driven to succeed. There's like the the element of sports where like you want to win and we want that for sure. and then act like an owner. >> So regardless of the role you're in, you you're acting like an owner of a company. So we definitely look to those and I think the other one that's probably really key for us is stakeholder approach to business. >> Okay. >> Which is bottom line is important. I'm all the investors out there I'm pretty sure can see that we we care about bottom line. But we follow a stakeholder approach which is identify the key stakeholders for your business and create an a score scorecard for all of them. So for us, customers, we we need an A scorecard. They got to love our product. Merchants, suppliers, our team, investors, community. We want everyone to have a high opinion of Szle. And if the viewpoint is if you can get a scorecards from all those groups, you're going to win. So I think those are probably the the elements that have really helped us quite a bit. I think we also reward the team really well, but we're also we'll actually let people go like we have a performance management is important, but both directions. Um, and I think all those things have really led to a very strong company with a lot of people that have stayed over a long period of time, a lot of talented people, which also helps. So, I think all that's kind of helped us create what we've created here. >> Before we get back to the program, I have an invitation for you. I'm Bobby Craft and I want you to experience our in-person live events. We bring many of the companies and guests you hear on this program directly to you in Las Vegas and Toronto. It's where the MicroAP community connects and great ideas are found. Don't just listen to the conversation, be a part of it. Secure your seat today. Head over to planetmicrocap.com right now to register. See you there. It's interesting that you put such a big uh weight into the GPA because I think there was a sort of a trend that founders or entrepreneurs sort of dismissed school as it's not important or all these dropouts that build big tech companies. Why do you think you have a different view on that or I guess I'm not sure if you have a different view or not, but um why do you think the trend uh went in that direction and probably now is it's going a bit more to a balance where people realize that maybe it's not exactly that way? >> Well, it depends on the scenario. I mean, um Killian Brachie on our team, he's our head of AI. He didn't graduate college, but he was an early team member. I hired him directly and this is like when you're high beta like you you and you also have to you don't have this the clout to recruit and don't get me wrong Killian's fantastic um but as you get more and more clout to recruit you can demand more of the applicant and not have to take as many you know perceived risks there you know that that example of like the killing hire I would call it high beta you know you know actually he was he was in college at the time so maybe it wasn't that high a beta we already had his track record but Having someone that didn't go to college say is high beta super smart didn't go to college high beta. Um I think but you you're right could be an absolute home run but I don't think we need like the high beta return type of risk and reward in our hiring practice right now because we have the clout to require the best. So why take the risky endeavor that could lead to a very good result when we can just take the more standard route which you're right less people are focused on which >> I always think that leaves more room for us when people are kind of against these trends we just use common sense we use our gut instinct we'll look at but we don't necessarily adopt a trend if I think a trend is a dumb idea or our team thinks it's a dumb idea we don't do the trend we just do what makes sense against us. And here's what I know. When I talk to people in the company that we're hiring, when we've been focus, we've been focused on this high IQ, high GPA probably for 5 years, the amount of wicked smart people in the company that I talk to every day, I'm I'm really impressed. And so that I I love surrounding myself with this cohort of people of that kind of caliber. And I've seen it pay off. You know, another kind of analogy to that whole concept is credit score. You know, we're in a lending space. credit scores apply for, you know, applying for a home, applying for a car. Is the C credit score always 100% correct? No. But there's a reason it exists because it's pretty damn good. But you can get a person that scores like a 600 credit score that could be an awesome payer and act like an 850. and you can get 850 that acts like a 600, but the data and the history and the continued path will show you that you know you're way better odds of having a good payer in the 800s than you are 600s. That's and that's true, too. So, we stick with the credit score approach is our thoughts. >> No, makes makes perfect sense. And I guess on average, you'll you'll do much better. >> Exactly. And probably yeah uh you're you're right that there is more talent going to you now that people focus more on the like soft side and I think you mentioned in another interview that can you can always figure out the soft side after a couple of months of having the people on board. >> I've never seen anyone successful including myself at figuring out the EQ softside model in an interview. >> Not a chance. You got to get people under pressure. um not you know plan pressure but it just naturally happens on the job. See how they treat other people you know see how they handle it. See how they manage their own stakeholders. You can't figure that on an interview. No way. >> Yeah. Another interesting thing for such a a young company is that you're very very profitable. Uh and so can you tell us the story of when you had to sort of pivot to profitability? I think it had something to do with a zip deal uh or something like that. Um >> it's around that time period. Actually, what happened to us is we went public in Australia first because investors not really understood understood the product. That's where we raised 120 million I spoke about. Um but as we were public in Australia, I would call them archaic US laws. you know, SEC's act from the 19 early 1930s said if you have over 3,000 investors, you have to file in the US Q's and K's quarterlys and and annuals. And I I always joked around like when they wrote this in the early 1930s, they probably didn't perceive they didn't put USA investors because they didn't really think that, you know, almost 100 years later, you'd be getting investors from other countries. But I guarantee the SEC's mandate is not to care about Australian investors, but whatever. So we had over 3,000 Australian investors. The wording in the SEC mandates did not say USA investors. So we started filing in the US cues in case. Well, we weren't public in the US. So we said, okay, might as well go public since we're already doing all the work as a public company. We might as well go public. Well, the way you go public and back then we were burning money. We're like, let's fund raise. So backdrop, we went public in Australia in six months. the US, we were already filing accusing case. I was like, this can't take long to go public. We did it in 6 months over there. We're already filing all the filings over here. We should be able to fund raise very soon. So, we held off on all fundraising to wait for the IPO because we didn't want the fundraising on the Australian exchange to mess up our fundraising on the US IPO. Well, the US IPO took forever. The SEC is much lower than I expected and it took almost two years to get final approval. We missed a fundraising window. We had probably like 13 14 months of cash and I like to run with three years of cash when I'm burning cash as a company. So, we said, "Okay, we got to get to profitability." And this is before the zip combination. Um, we're going through some M&A um plans as well because we're like, you know, we have this troublesome issue right now. we missed a fundraising window. Maybe we should go, you know, look at M&A as well as an option. Um, we eventually chose the path to merge with Zip. The idea being, which which was a valid idea, if we cut shared OPEX, like overlap and opex, we could get profitability right away. Again, the the next problem was SEC. They were the next problem because we had to get through the SEC to merge the companies. and I already been through a process that didn't get completed through the SEC. So, as we learned how was that was becoming a sticky wicket, we said, "Let's push apart." All that time, we already kind of planning what we needed to do to get a profitability. And we did it. Basically, the moment we broke free of the merger with Zip, we enacted all of our cost cutting, which was getting out of Europe, getting out of India, getting out of Brazil, doing a a a riff in the United States, but I would call it more of like a performance riff, but you know, cutting our team by 10% in the United States. And then after we did all that, we started launching some initiatives on the revenue side. And within six months of our parting ways with Zip, we were profitable. And that changed everything. So it was almost like David, it was almost like um branding iron in the rear end that time period cuz I can deal with a lot of stress and my co-founders can deal with a lot of stress. We dealt with it in the past, but that was the most stressful thing I'd ever dealt with in my life because of everything we were navigating. And it literally was like a branding iron on the rear end. And we've never forget forgotten that time period. And then at that point we decided we had a very low market cap. At one point it got down to like 35 million as a market cap despite the fact that we were making 7 million and growing in net income. So people were ignoring us. And we just said field of dreams like Lee's phrase Lee Braden our CFO his phrase was field of dreams. If we build it they'll come. We put our heads down. We just kept on building and growing. And that created a mindset of just growing profits, growing revenue, growing profits. Profitable growth company. And I don't think we've really missed out on anything on the growth side. I think we've done everything we wanted to do and we've done it very efficiently and very safely. And uh I tell you what, it helps you go to bed a lot easier at night when you know you're making a lot of money because you can kind of ignore the market swings and um or in some cases when you have like you know company buybacks going on, take advantage of them and you know show your support for the company and show your support for other investors by implementing buybacks. There are so many uh places I want to take this conversation namely the how do you made it from micro cap to sort of graduating that space and I think there's some interesting uh stories about how you made yourself sort of um public to the to the fund and stuff. Maybe you could speak about that a bit. Um or was it all like just focusing on the fundamentals and then eventually people kind of recognized uh the the value of the company? >> What we did is is both it was both David. So what we did is we kept on focusing on the fundamentals and building a great business which we've never changed like that's maintained. Um what we did was we basically my my my background is in startup world. So venture capital rounds and you know seed round bridge rounds, A round, B round, C rounds. So basically we said let's think of the public company space in the US as like venture capital. So we we we said seed series A. Where were we at? We had a 35 million market cap. We were seed. We were seed series A. So what we decided to do was instead of trying to do silly things like issue stock to get coverage to get exposure there's we said no chance in hell we're going to issue stock at these low levels. I remember investment bankers coming to us and saying hey you should issue stock and I was like investment banker imagine you have a million dollar house and someone comes up on your lawn and says hey I'll buy it for 25,000. What are you going to tell them? You're going to tell them get the hell off your lawn. That's what we're telling you. get the hell off our lot. We're not selling our house for 25,000 when it's worth a million. Um, so we just said, "Let's put our heads down." And then what we did, we tried to go to conferences. Tough to get invites, but we tried to get to conferences, talk to people. I still remember the first conference we went to in the US was KBW, and we only talked to one investor, and uh, he didn't even invest, and I remember that one. But um and then and then what we started to do is just basically go I would say like mpaw high net worth individuals. So I live down in Puerto Rico and there's a lot of high netw worth individuals in my community. So we just basically started like explaining the company to members here like team member you know club members here. I'd tell them about what I did and they'd be interested and I'd say yeah you download our financials and they'd have awareness. They knew me. a lot of people down here in Puerto Rico started investing. That created liquidity, that created some growth in the stock price. Then in Minneapolis, I remember we had a couple early uh meetings with funds, some smaller funds. And I remember during those meetings, you know, basically those funds were like so blown away by learning about our market cap and what we were accomplishing and our growth rates that they were buying like almost immediately. And and then basically what started happening is we started slowly walking up our market cap through these just you know, venture capital like series rounds and that increased liquidity. At the same time, we're having great quarterly results. So, we have these kind of compounding on each other. >> We have the increase exposure and then once you have these investors joining your company, just like happens in venture capital, they start telling all their friends. So, you had the high net worth individuals telling their friends. You have, you know, these funds in Minneapolis telling their friends. Then we start going to more conferences. I I'd say it was just like a virtuous cycle like we started going to conferences these these funds started introducing us to other funds and then we started to get some coverage we started to you know reach over a billion market cap and then just it keep on kept on going to sense and obviously you you had to sort of back that exposure up with fundamental improvements u which is always very important of course and I want to speak about Minneapolis So for a fast growing like tech company, it's not very typical to be yeah born in Minneapolis and just the the head I'm not sure if the headquarters are there or not but um yeah does it have anything to do with the success or what sort of makes you different um because of that? >> I think so. So my first company Passport was founded in Charlotte. Well, it founded in Minneapolis and then I moved down to Charlotte to get my co-founder on board. U so we scaled it up in another non-traditional city and then Minneapolis was for Szle and I think you know sadly in the venture capital space there's a little bit of this like club where it's like all the they think all the smart people live in New York and California. It's just stupid. I mean there are smart people everywhere. Um, so our view is like more pragmatic like there are smart people here. We can scale up a business here. And actually once you get past, you know, it might maybe you can like if you're having drinks out in California and you run into the right person, you can get a, you know, big fat seed round check for $5 million where ours were like, you know, we got a seed round to like 1.8 in Minneapolis, which is still pretty good for Minneapolis. I think that was the start of our efficiency journey. we were just way more efficient as a company. We always thought about being efficient with our spending. Um where I think if you get trained on this like bigger check process, you have a big hard time going the reverse. And I remember seeing that like in what I call a tech apocalypse in 2122 when a lot of these nonprofitable fintexs and startups were struggling is like they didn't even know how to get to profitability. They didn't know how to be efficient. um they've been so extravagant in their extravagant in their spending they didn't know how to change where for us when we went through that time tough time period we'd always been um you know relatively miserly with our spending and for us to get back to that I was like okay we're used to this I think it helps you from that perspective um quite frankly we generally try to avoid hiring in the highost areas in the United States California and New York Washington because my view is that you can find talented people everywhere, but all you're doing when you hire someone in California or New York is paying for their cost of living, not a better result. So, we generally avoid hiring in those areas. >> And I I know you also hire like outside of the US. Do you think that's that's an advantage? And and how do you make sure like the culture sort of travels with you to the places you you go and hire? Yeah. So that's been a part of our journey too. So like we do have a headquarters in Minneapolis. I wouldn't call it much of a headquarters anymore because after COVID we went fully remote. Well, I would say fully but vast majority remote. We still use the headquarters for like meetings. Um but not much else. I mean I was there on Friday and I was it was me and one other person in the office. You know it's not that much of an office. And but so we we realized that you know no one's coming in. we're remote. Let's look elsewhere. Like, you know, we we don't have to. And we told our team in the United States was don't take this as any sort of threat as like we're gonna create layoffs. I just don't play that. I think that's another benefit we have in the company. We're human beings. And I think you have social contracts with people that are, you know, unspoken, which is like, you're on my team. You join the company, you are on my team. Does that mean I'm going to have to hire the next person in Minnesota? No. Even though you're in Minnesota? No. But I what it will do is if you help the company keep costs down, I can pay you more. I can give you a bigger bonus. I can give you more shares because we're keeping our opex down as a company. And then we're creating a universe of seslers that are not just in the United States. They're in Eastern Europe. They're in South America. They're in Central America. They're in India. they're in Indonesia. We can hire everywhere across internationally and the United States and Canada as well. But by doing so, we're able to keep our cost structures lower and then make all the ses, which is our country, our universe. We can make all the sorlers happy by keeping our cost structures lower, which is what we do. And then in terms of like culture, we have the same hiring standards. So if you're in Colombia, we still require top 10 percentile GPA, top 10 percentile IQs, top 10 percentile codabilities, etc. And then uh English speaking of course, which is you know maybe one of the more difficult things, but you tend to find people that have gone through good schooling in any country tends they tend to know English and then it's just a remote world and you know we get together you know we had a off sites in Bogota where you know a lot of the team members are based. We've, you know, done some events in, we've done an event in Turkey. Uh we we go to events in Canada and Toronto. Uh we do the same thing in Minneapolis. We do some off- sites as a company. We have gettogethers and even the teams themselves have get togethers. And I just I feel like we have a really strong culture. Like the teams, they love to get together. When they get together, they go out and have fun. Um and I think there's very strong camaraderie which speaks if you look at our well maybe we don't have public numbers on this but I would just say like people's tenure with the company tends to be long. >> H and so you mentioned you are fully remote at the moment. Yeah, >> that's so crazy. Like no, I I mean it makes perfect sense uh as you said from an OPEX perspective, but all the other companies reversed like the COVID trend of um yeah remote and so what what do you think makes you special and why has it worked for you and not for others? We adopted it and embraced it and then adjusted how we managed systems for it and I saw the benefits. you know, I was living in Minneapolis and team members were moving to Texas, Colorado, Nashville, um, and asking for permission and we said, "Yeah, it is what it is. Will it happen?" Um, that's why I triggered me to move. I'm like, "If we're letting everyone else do it, I'm I'm going to move, too. I'll look for a better work life balance uh sort of situation health-wise." Um, and then once we started doing it, we realized this actually works pretty well because, you know, give you an idea, we have we have a decent number of people in Bogota. Bogota's commute is brutal. Hour, hour and a half, two hour commutes. What a waste of time and life honestly stuck in a car. Um, we save that time for everyone in our company. And the basically the ask is because we're doing that, can you basically share some of that save time with the company and share some of with your personal life? And we got a win-win-win situation going on here. And I think that's really worked well for us. Um, yeah. I don't know. I think sometimes other companies, and I'm I'm not talking about our industry. I'm thinking about this whole like back to the office thing in general. I think some of it is I think these companies look for they're they're not willing to do the hard things like performance management the hard way. So, they look for other way less efficient ways to do performance management, which is like, we're going to force you back to the office and if you don't come back, you're going to lose your job. Well, this the bad slash stupid thing about that is the people that are the best in your company probably have the most likelihood of getting a remote job. And so you actually just made a decision to cut staff that might have cut majority good staff and you kept your bad staff that can't go anywhere or your less lower performing staff I should say that can't go anywhere as easily as the high performers. So I think some of those ideas are technically backwards and I think they've led to bad results for companies. >> Do you think there is like I have an hypothesis. I think it also might have worked well because you're sort of hiring for these criteria that you mentioned before like GPA and grades. Usually people are highly independent and they they sort of don't like to at least from my observation of uh people like that uh don't like as much to waste time on stupid things. maybe small chatter and and stuff like that. So maybe working from home is exactly what they want. Um so yeah, >> yeah, there's a little bit of that too there. To get those high GPA, they had to be independent. They had to be able to like just put their head down and get stuff done. And then in many ways, they were probably in the study carols and not chattering all the time. And working at home work's great for that. >> Very unique for sure. And um yeah, so we we spoke about the hiring process, the profitability, uh the the fact that you're based everywhere actually, not not just Minneapolis. Uh I want to ask you about what you have learned from peer CEOs and founders. I know you you get along well with with them. Uh any friendships that have developed or just lessons you may have learned from from competition? Yeah. I mean the probably the most interesting evolution for myself was when I was a founder of Passport, the first company. >> Yes. Um I was co-CEO there. And we had a mentality when I I was younger, younger 30s. And I remember our mentality was just destroy everyone. Everyone was the enemy. We're going to destroy them. And we wouldn't talk to them. We wouldn't even like want to talk to the other companies. And I realized afterwards and I think one of the investors in our company at that point said it. He's like, "You're not going to destroy the other company. They can only destroy themselves. You can outpace them. You can, you know, outstretch, you know, strategize and out maneuver, gain market share, but you can't destroy them." And I realized that was such a stupid way to approach business when I started sil I basically put on the opposite viewpoint which I think maybe for some of the other coast CEOs in the space was maybe unusual but I would just reach out and chat with them. I was like you know we grab drinks or grab dinner and and meet. You know I don't do it all the time but we do. I know all the other CEOs in the space pretty much or you know to some extent uh some more than others and I'm more than willing to go you know meet them up and talk with them and I think that's just smart because there's a little bit of an element where you're somewhat on the same team because you're in the same industry and if your industry can go well you're going to probably all do well which is a little bit of that's happening in PMPL but then also having really good relationships with the competitors in the space or even not just competitors But other people in fintech, I mean, it's it's really powerful. I've learned how much power powerful it is later because, you know, as you're hiring for roles, someone might have worked at their company, you can call them for a reference and it's just because they're just like a contact acquaintance friend and you like call like, "What do you think of this person?" >> Um, and then you can also, you know, is there's like there's like things you can all band against like fraud. It's an enemy of all of our companies. What can we do to, you know, fight fraud together? um how are you guys handling regulation you know things like that those are kind of universal concepts which you can discuss and and then eventually at some point if there's ever M&A on the front on the table having great relationships is also helpful because that's like one of the scariest parts about M&A is you don't even know the other team or anything about them but if you have a pretty good relationship breaks through a lot of that so I think for all those reasons it makes sense and by the way yolo Oh, you only live one life. Enjoy it. Like why why have this like fighting attitude when you can actually have like a let's enjoy life? Let's grab dinner and and meet. Yeah. And and definitely like it doesn't help if you're going to merge with a company that was sort of your enemy before. Um so that that makes a lot of sense. And I want to take a step back because one thing that when I listen to you speak and how you operate, it feels like you operate from like common sense, but it's also a very intentional sort of way to to go about things. Uh the model, how you hire and how you think about culture and so on. So what do I need to understand about yourself as a person or as a kid or whatever influence might have built you that way? Um to understand how you operate. Yeah. I don't know if there's anything like I can point out from my childhood or anything that would make me seem like common sense. I think I just learned it. You know, I've been in the the battlefield, the arena of startups for 16 years now, you know, and first company, we took tons of lumps like we we did a lot of things the wrong way, like riding a bike and, you know, fell down a lot of times. And then sle, we gone through a lot of items, too. And I think just over time, you just you gain more and more confidence in yourself, know how to maneuver more. And more and more you go through some of these things, you you do the non-common sense things a few times and you're like, well, that was stupid. I should have just done what made common sense. And then you just start realizing, I mean, David, common sense isn't isn't as common as you think it is, I think, is one saying that's out there, which is true. But yeah, most of the stuff we talk about, we're like, this is not rocket science. We're not doing the Manhattan project over here building an A- bomb. Like, this is nothing like that's crazy. Um, let's not try to act it like it is. Let's use our common sense and let's act on it. And, um, it tends to be the right way. I mean, you're right. I don't know what I explained like anything like uh significant in my past that's made that the case, but I think it's probably just all like the wars we've been through as as my in between my two companies that have made me realize how much common sense just makes sense. >> Yeah. And common common sense. >> Yeah, it is. >> Yeah. And why do you think other people don't operate that way? >> I don't know. Oh, I think you know some people like they get trained in this like high fallutin like management society of like you go to Harvard or Yale or something and this management textbooks tell you have to do AB and C and you better do AB and C because that's what the consultant guide says to do. Um those those schools wouldn't have accepted me so I didn't have to worry about learning that stuff. But I you know I think that we don't we don't really do that kind of stuff. If we really just think about like first principles, you know, Elon Musk kind of calls that kind of stuff out, first principles. We think from a first principles perspective on, you know, how to go about things and uh, you know, I think some of the stress and strain we've had on the company from like lower amounts of funding have also forced us to be more kind of common sense thinkers as well. Um, I don't know. I think those are kind of the things that have kind of boiled up into it. >> H And switching gears, what what sort of inspires you going forward um that makes you excited or something like that? >> Winning really winning and winning our space, you know, because I view it as like competition like like I want to I want to be the most dominant player in the fintech space in the United States in 5 to 10 years. >> I was going to ask you to define winning. I guess that's a pretty clear definition. >> And then and then not just the way you get there is winning for the consumer because then the consumer if you're winning the consumer is like telling their friends why don't you have this app, you know, like you're silly not to have this app, you know. I do like a little bit of fun like um props bets or whatever like Kelli. Kelly's kind of got that going on in like you know that space where it's like don't you have Kelli if you like like place a bet on a game or something like that. Um, so I think that's where where I want us to be is like people mid to low income, heart of America, we can help them save money. We can help them with better financial products that make more sense for them. Or they're just telling their friends like, "Don't you have sle?" Like, you know, almost like a no-brainer. That's where I want to take. If you do that, I think you're at the point where you have millions, you know, maybe 10 plus million active users and then you're winning big. So that's my like in my mind my goal and mission what I wanted us to accomplish as a company. >> And what sort of things are you working out uh are working on right now that you think will move carry the most weight to get you to that intended destination so to speak? >> Yeah, we're working on cash management products. You know, basically our customer mid to low income getting more access to cash. Um that's an important one for us. Um we have a couple bank account products coming out. uh checking account with some cash management aspects to it. Um >> when you say cash management, what does that look like in practice? >> Well, for that checking account, it's the idea that you could go into overdrafts on the checking account. No, small amount, maybe $150, $200, but like basically, you know, you hit a pinch point in life, we'll let you do it. Where a lot of, you know, people don't realize this in the United States, there's like 10,000 plus banks. Some of these banks treat people horribly. We see it because we're on the other end of it, debiting accounts. You know, for example, we'll try to debit account, let's say $30 for their installment. The customer will call us and say, "Sezle, why'd you try to debit me 40?" We're like, "We didn't." They're like, "On my bank statement." They sent it to us. On my bank statement, it says -40. Sle. And we're like, we look at the date. We're like, "Your bank told us they didn't have the money that you didn't have the money. We got no money from your bank on that day. So your bank didn't send us money. They charged you $40 and they put sle as the reason trying to deflect the blame from them taking the $40 for doing nothing. For doing nothing because they didn't let any money leave their bank. They charged the customer $40 for a database entry. This is the kind of stuff that happens at some of these banks. Um, we want to offer a cash product that into a bank account where that company, we would have serviced that that $30 request if you had ability to go into, you know, the overdraft side of things, we would have serviced that for you. We would have applied a fee for it, of course, but we would have actually serviced it for you to help you. Um, so that's an example of that kind of cash management tooling that we want to add into our account. And then we have a savings account product launching which I think is going to have some really unique features that incentivize savings which is really important for this customer base. We also want to kind of help you know sleup we've got in our BMPL product that helps reporting. It's free and optional and it helps report to the bureaus to help it build credit scores. We've also got a savings account product. I don't want to go into the details yet cuz we want to launch it, but we have some like tooling in there to we think will incentivize this customer >> um to want to save, which is a good thing for them. >> H yeah. Uh that that looks a lot win-win again. Uh and on the other hand, like how do you make sure like these customers pay? Uh and how do you manage like how much they can spend so to speak? what's your criteria on that? >> Yeah, so we have a model uh that gets updated, you know, much more frequently than it had in the past. We just updated it last in uh August. It's, you know, updates planned in the near future for the next model iteration. Um but basically it looks at the data of the customer's interactions with SIL and that's the key driver of how we adjust limits and access for the customer. Um and then in terms of how do we make sure we get paid back? Well, you can never make sure, but it's you run models with, you know, probabilities. Um, and then based on those models, we adjust limits the customer has available to them based on their performance. Again, so between those, you know, two elements that helps quite a bit. I would say the other element that helps quite a bit is the nature of the product. And what I mean by that is if you're not current on your sle payment payments, you can't make another purchase. So that makes the customer realize like I got to fix this because I like using this product so I got to catch up and fix it and then they fix it they can start using the product again. So the the nature of the product I think helps the uh repayment abilities or what we see for repayment too. And what do you think is the sort of most misunderstood thing about sle from the investor's side? >> It's always interest rates. >> They think that they think that if interest rates rise by a quarter point sle is damaged in some massive amount of you know at least you see it in the stock price. And um I think people don't understand that it's a short duration product a very short duration product. So, and when you take an interest rate, an annual interest rate, like let's say our duration is 30 days, which it's about, you divide that interest rate change on the federal level by 12. So, a 25 basis point change in the Federal Reserve is a two basis point change in our cost of funds. It's nothing. I mean it might affect is it'll affect the DCF models more than it affects our our unit economics by far but people act they kind of group us with other lenders that have longer term nature where that does affect that lender more but as well not much at all. That's one that's misunderstood a lot. I think there's an another element of like scale. I think a lot of um investors out there think that because we're one of the smaller players that we don't have a chance because that's again this is like one of those Harvard Business School, Yale Business School like textbook items that people you know instead of using their common sense they just go sle doesn't have scale they'll never they'll never make it. So uh that's where they you know that heruristic I think that's another one that I I think is kind of silly whenever I say >> well your margins speak against that I guess. >> Exactly. Exactly. And there's common sense versus textbook, >> right? >> Yeah. And um I want to ask a bit about the founder mode mentality and and how do you actually scale something? Uh what are some of the principles that have you have helped you scale this the business as fast as you you have and what were some bottlenecks u to scale that you you found and sort of fixed? I think focus I think sometimes um management teams try to do too much try to accomplish too much at the same time and we generally have the idea of we want to pick like one main product or two main products we want to focus on. Now with AI you can maybe do a little bit more because it makes it it does make it easier to launch products but if you look at our history I think we launched anywhere in 2022. No that was premium sorry we launched premium in 2022 anywhere in 2023 on demand in 2024. you know, like we basically like kind of like like almost like one major product launch per year. So, focus, make sure you kind of nail uh product launches or initiatives. I think we're very good at that. I mean, founder mentality, I think, also helps you cut through bureaucracy, which just it's always like a disease that's growing in companies is bureaucracy. And I think when you have like founding team kind of elements, you can just slice right through or not allow it to even get created, which I think helps you get things done. I think there's also an element of like um when you hire management teams to come into a company that already exists, I I think it's always about incentives. Um and I'm not trying to knock these people, but I mean I explain my situation. I live in a normal house, Model Y, Cybertruck. I'd live a pretty normal life. I think maybe a little bit nice, but not like crazy. Um, I'm trying to do this because I just think it's interesting, exciting. I think sometimes you get a CEO that's hired into a public company that already exists and they're making5 to$10 million a year, which is the most they've ever made by 10x in their lives. They're running to run the business to not make a mistake. I'm running the business to win. And I think that's a huge difference in attitude and approach and what you accomplish and what you do when you have those two mindsets. One is protecting the kitty that's coming into your pocket and one is not giving a about the kitty going into your pocket and actually giving a about making something cool. >> I think he just described uh 90% of the public companies out there. Yeah, you tend to see some uh uh incentive alignment issues that create issues. No doubt about it. Which I get again incentives someone gets that kind of a payday, you can you can understand why why their incentives align in a certain way. And they'll never tell you that. But again, common sense will tell you that. >> Mhm. Yeah. And how do you think about incentives internally? What sort of incentives are you trying to pass along? Well, we want to make sure the joke I've always had is like with, you know, founding companies is we've always tried to layer in stock. We definitely like to, you know, make the stock kind of an element of incentive because the idea is if you succeed as a company, I always joke around, you don't want to be like on a the boat party by yourself. >> Yeah. >> Kind of a party is that? So, you want to make sure that the people that uh had a hand in building the company and scaling the company up, you're designing systems and incentives and rewards in a way that you're all having a party together at the end when this thing wins. >> I think we're already there and I just feel like we've created such camaraderie at this point that even the team members that have succeeded to a great extent and have had some of those big paydays, they still just like being on the team and coming to work now. So >> yeah, I was going to ask about about that like uh if you're too successful then maybe your employees will get too rich and then they won't they won't want to to work I guess. >> Yeah, there's some there there always can be that kind of a situation I think. >> Yeah. >> But I guess it's a good problem to have. >> Yeah, it's a good process. It's a good problem to have. >> And if that you're that case, I I love continuity. I love working with the same team members. Um, but if that happens, you're probably so successful, you probably hire someone pretty good >> if something opens up. But again, we I I love continuity. I love it. Especially at Suzle, we've had good continuity. >> And what sort of metrics are you I know you're a numbers guy. What sort of metrics are you using to incentivize people or how do people actually get the reward? >> You know, it's funny. We don't do stockbased performance stock. I just feel like it's I don't like tying things to numbers for that because otherwise I think you get people that like you might change an initiative mid year and they don't want to follow along with the initiative because their incentive aligns with the old initiative and now you got to think about how to change incentives. It's like I think we are a little bit more subjective with that one. >> You have company overall initiatives like themes that we want to see people go after. We we have initiatives within terms of goals and we do look at that. Um we also look at feedback for departments from other departments in terms of like measuring bonuses. Um but we tend to like you know I think we've designed systems in a way that the team members in the company that do a really good job at least I hope they feel like they're getting a really good performance you know output but we don't we don't do performance shares yet as a company and I've I've always been really hesitant to do it because it's just I think it's so trapped with potential problems. >> Right. Right. Makes sense. And uh I want to speak about AI a bit. Um how are you leveraging AI? And again, what's most exciting about it right now in your unique business? >> Oh, that's amazing. It's amazing. You know, I I'm not a big believer in some of like the BS initiatives that have been out there in the past. Like I call it crapto. You know, it does no value to anyone. I think in my in my in my view someone can con convince me otherwise that they can show a use case. Um but the two eras in my life that I saw some really amazing things happening was the age of the internet >> 1998 99 2000 2001 2002 holy crap that was amazing to be a part of I was I was like young individual at that point and then I think AI is the same. I think we're in the same like another golden age that this tool is crazy good and basically our view is that we we basically mandating that everyone using the company. I don't think we have to really mandate too much because everyone's kind of understood how important it is and we just support it and support it and support it and support it now. Um but software development team right now my understanding we're trying to do even better tracking at this. My understanding is that um 80% of the code submitted right now is written by AI and reviewed by team members and probably by AI again. Um so that's going on. We have a chat support bot that's diverting 70% of tickets and with a higher customer score like success score from the customer than our human agents like because it just answers faster, answers more consistently, less you know overall mistakes. Um so like that's a pretty cool one. We have our shopping AI assistant that's launched. Um, we're implementing AI and legal compliance to speed up processes, to automate. We're basically just injecting it everywhere. And our view is that, you know, I've seen some companies out there. I think another good example of excuse to do layoffs is AI. They, you know, companies out there use it as an excuse to do layoffs when they were just totally >> inefficient, bloated companies. >> Um, and they didn't want to do the hard things ever. So, they use an excuse to to get away with it. Um, I think our approach is completely different. Our approach is we're not going to cut team members. Our approach is that we're going to use AI to become incredibly productive and turn a team of four or 500 into a team of four or 5,000. That's what our view is. Use it as a tool to become incredibly productive. Yeah, there there have been some views uh and reports out there that make like catastrophic scenarios of how AI may just break the economy because no one will have a job and stuff. I want to hear your take from firsthand. Yeah. Founder that employs a ton of people and leverages AI. What do you think about that and the future of the job market for software developer developers and yeah overall the job market? >> I don't think it does any of that. I'm a optimist on this and I think we've seen this from our past technologies. I think actually what it ends up doing is as long as government doesn't get involved and ruin it. I think what it does is it makes humanity hyperefficient and we're able to like enter like literally like another golden age. I think internet put us in a little bit of a golden age uh as a maybe not little a real golden age. I think AI can do the same thing and I'm a big optimist on it. I think what's you're going to find is that companies just produce better high quality faster hopefully government agencies do the same thing. I saw Jeff Bezos talk on this once which was spot on. It's like when you submit your plans for like an addition on your house or something. Why isn't that automated? Why isn't that AI just looking at your plans and checking against regulations and giving you an answer in five minutes? And what does that do? That speeds things up. Now I'm able to hire the the crew to build my project faster. Instead of waiting 9 months, I'm able to answer hire them tomorrow. >> And what does that do? More people are getting hired. More jobs are completed. More progress faster, faster, faster, more innovation. And I think that's all it's going to do for humanity. And um I think it's just going to speed things up and and throw us into another golden age. >> And what sort of skills are sort of more protected from commodization? >> Intelligence number one. I mean just like I think AI is a it's exponential on intelligence. And there's other problems here because you know there's this whole like wealth gap that's talked about and AI probably is going to increase the wealth gap. There's definitely going to be that because but the reason I'm being is I think that you have someone that's very highly intelligent and I've seen the data out there they tend to use AI even more which creates an exponential result which you know further widens wealth gaps. Um, so I think high intelligence helps you quite a bit. Um, I don't know just I I think it's the right attitude though more than anything because I've seen this even in the company. Some people have like fought AI and say no no no well some of them are no longer worth the company. Um, and there's some people that like say like this is cool. I'm going to embrace it and I'm going to use it and I'm going to be more efficient and that's what gets high five to the company. And so I think it's the attitude of the individual as well. If you have the right attitude and become an embracer of the product, you can you can advance. You know, my my first company was in the parking industry. My analogy and maybe it's a crude analogy, but back in the early days of parking, it was like there was just parking attendants that would take cash and give tickets. Probably fraud was fraud, by the way. Think about it. Person taking tickets and, you know, taking money and giving tickets. Um, but the ticket spitter got invented. Ticket, it's automated ticket machines and ticket acceptance machines. You could have been the parking attendant person that is like that piece of junk machine over there. It's useless. It doesn't do the job right. It's always gets jammed. Forget what a junk. Yeah, I'm never going to lose my job. Or you could have been smart enough and saw, wow, that thing's going to take my job. I better learn how to operate on that thing and fix it and make sure it doesn't jam. And I guarantee the latter person probably has a very high paying job in the parking industry, probably managing 20 lots or 30 lots for some parking operator and the first person doesn't have a job in the parking industry anymore and they're working somewhere else. So I think it's all about a lot of it. It's about attitude. >> Yeah. The right attitude. And uh if I was a fly uh sort of uh besides you, what ways would I see you using AI on a day-to-day basis as a multi-billion dollar uh CEO? >> Well, I use it for like legal compliance questions before I bother someone. You know, I I try not to bother people on the team. I you know, I people think that's weird, but I think that, you know, we have our initiatives, we have our um like goals and our themes of what we're trying to do. We try to set those and then try to get out people's way if we can. So, you know, honestly, I really try not to bug people. So, if I can ask a question to AI, I want to do that before I try to bother someone. You know, Sarah Hill, our head of product, she's super busy on all of her initiatives. I don't want to bother her. Um, so I'll ask questions to AI about regulatory or legal or how we're approaching things to understand it better before I talk to her. Um, things like that. We've actually built an internal AI data like a knowledge hub to also help with that. So basically we've created a a knowledge hub first where all getting all of our data repositories in the same place and we've created NC MCP servers to help the AIS interact with our data hub. And now I can actually ask questions like hey on our checking account product how do the surveys look like to the consumers out there? What have consumers thought about this product? And we can cl you can plug in I'm not sure we're here quite here yet but soon to come like ability to ask claude Gemini chatpt all that same question they connect to the NCP server go into our internal knowledge hub and then give me back thoughts and analysis and I don't have to ask Sarah for that total distraction for her if I ask her for it because she thinks oh Charlie's asking I got to go jump and do it. I don't want to make her jump and do it because she's got a lot of important things she's working on. So, if I can ask all those important questions to this AI knowledge hub now, I can understand it. I might got I might have got my answer. I'm done. I don't need to bother her at all. But then, even if I do have to talk to Sarah about something and, you know, I might bother her a little bit, I'm way more educated. So, now we're talking about higher level things rather than, hey, where's that survey? Did you do a survey? you know, we're talking about like, hey, I read the survey. This what do you think about this? This is pretty interesting. And she'd be like, oh yeah, I looked at that, too. Alignment. Okay. Or no, we're we're difference. You know, we have we have to debate something, you know. So, I I think it just takes you to the next level type of um interactions in your company and speeds up processes for me too. So basically AI becomes ever more efficient or useful as it has more access to your personalized like individual data and so how do you think about like security in those situations because basically AI has a bunch of data on your company and I'm I don't I'm not a hacker but if someone would would hack into it I don't know if it's possible or not they would get a lot of information. So how are you thinking about that? uh for like AI and giving and access. >> Yeah. So we're working with you know obviously the top teams out there in terms of AI but they're these ones I mentioned they have enterprise solutions where our information in their design is walled off from the world and yeah hacking there's always a possibility of hacking and someone succeeds and you know gathers your data and puts it out there but at the same time David I also do say like we're not working on the I always like kind of an internal joke like we're not working on the Manhattan project here. Like most of this stuff is common sense. If some if some of the ideas that we had in the company leaked, we don't want to because we always love the competitive advantage. But if some of it leaked, it's not like it's end of the world. I don't think in terms of like you because the things we're doing are common sense. We're running surveys. Look at the survey. Here's what it says. This is what we'll do. >> I almost like again like a sporting analogy. It's like if someone saw your playbook or they heard you what the next play you're calling. Yeah. They might have that one advantage for that little bit of time, but then you you know the that closes and you're just running along. And again, I mean, sometimes when you're watching football or soccer or whatever, you know the play they're going to do, you still got to stop it, you know. So, so I I think some of it's a little bit overblown, but but that being said, we do follow processes where we work with these um AI companies that wall our data off. >> And what's your like ultimate competitive advantage uh with your competitors and maybe also uh substitute offerings like credit cards and do you think we'll you will ever like displace the credit card industry? >> No, I don't think so. I think credit cards here to stay. Um, I think competitive advantage for the company is our team, our and our hiring practices, our culture. I know that's like again not a textbook answer from Yale and uh, you know, Harvard, but I don't care. I know I know it's competitive advantage for us. It's our attitude. It's our team strength. Um, and then what that's led to from the the product side is I think that we just because of this never- ending drive towards improving the business, improving the product, I just feel like it's a race. It's an innovation race and we're just innovating and pushing faster and harder than anyone else in our space. And with the right products and you keep on doing that over time, you're going to create a really big winner. And I think that's all it is is just time, pressure, smart decisions compounded. And you do that enough, you're going to have a lot of success. >> Yeah, makes makes perfect sense. And again, common sense. Um, I think that was a big theme for for this conversation. And my last question before we we wrap up, you're you're still very young uh founder and CEO. Uh, actually, you've gotten younger. Uh, I I've seen some of the of the old interviews and you look younger now. Um, how do you think about your own stock? Um, like philosophically, how do you think about it? Do you ever plan on selling? because you've seen your position like your stake grow from as you mentioned uh 44% of 30 million to 44% of uh 3 billion or something like that. So yeah, maybe you can impact that a bit. >> Yeah, I would say never say never. Um but I just never had a big itch that I needed to sell. Um, I have a loan out against my stock that gives me some access to, you know, a little bit of a more extravagant lifestyle. Um, but again, like I said, it's nothing crazy. Um, and again, I think it's just patience. Do I, you know, I think that returns in the markets are nonlinear. I think people, like I said, one of the things they say is scale. Well, you get this, you might think you got the scale thing right because you read a Harvard textbook, you know, a while back, but what does the scale solution tell about, you know, tell about sle doing the right thing for the next 10 years and having great returns. Where's szle scale in 10 years? And then now you're getting the scale benefits along with the returns and consistent returns. So, I think it's nonlinear when you like hold the stock and grow. And I don't know, that's kind of how I viewed it. >> And it's it's also not very typical to have a a loan against your own stock. So, why did you decide to do that instead of like selling a couple shares? >> Well, I think uh my view is it was undervalued. We're doing buybacks right now. I mean, how like, again, common sense perspective. How backward would it look if the company is doing buybacks and I own 44% of it and I'm selling? That makes no sense, right? It's you're walk the walk, talk the talk. We believe in buy the buybacks at these levels. Why am I selling? So, there's some of that. Um, and then in terms of the loan size, it's like minuscule. You know, here's some of my mindset and how I think about it. Um, my current loan amount that I can borrow up to, it's out there in your file document. 20 million. 20 million on 1.5 billion. What is that? 1.3 1 4% leverage. I don't know at the top of my head. Super low percentage leverage. But then that's not how I look at it. I actually look at it as our net income numbers. So net income for the first quarter, 51 million net income. I own 44% of the company. 44% of 51 million. Um, what is that? 23 20 24 million. So, I made 23 million pratta in the first quarter. I'm only borrowing max 20. So, I I make more per quarter prata to me than I'm borrowing, which I think is a very safe level. That's a very safe way to look at it because they say the world comes crashing down. Worst case scenario is we something goes wrong, we stop making money. That's for sure in terms of like the leverage. Um but if the stock just comes down, we're still making money. We're buying back. If you enjoy this conversation, I'm sure you'll love microap.com and subscribe if you'd like to follow along. Thank you so much for listening.