Interviews with Leaders in Fintech & Web3
Interviews with Leaders in Fintech & Web3
Mike Hudack on Building Fintech Unicorns: Lessons from Monzo, Facebook, and Deliveroo
Mike Hudak shares his journey from dropping out of high school to becoming a prominent figure in the fintech industry. He discusses his experiences at various startups, including Facebook, Monzo, Deliveroo, Blip TV and Sling Money, his latest venture.
Mike reflects on the differences between the UK and US startup ecosystems, the challenges of raising capital, and the importance of product management in building successful companies. He emphasises the need for dynamism in the UK to foster growth and innovation.
Mike discusses the evolution of team autonomy as a technology, the inception of Sling as a global payment solution, and the challenges of navigating regulation in the financial landscape. He emphasises the importance of user experience in blockchain technology, outlines potential revenue models for Sling, and offers valuable advice for the next generation entering the workforce during a time of rapid technological change.
Takeaways
- Mike dropped out of high school due to a lack of interest in traditional education and learned coding at home before taking a job at a startup.
- Transitioning to Facebook was like moving from the minor leagues to playing for Yankees.
- Persistence and learning from failures are key to success.
- Product management is crucial for aligning teams and ensuring project success. The product way of working is a form of technology.
- Timing is critical in the tech industry.
- Embracing novelty and risk is essential for career growth.
- The current era is a golden age of technological advancement.
- Learning from mistakes is vital for personal and professional development.
- Future careers will be shaped by emerging technologies.
Chapters
00:00 Introduction to Mike Hudak and His Journey
01:00 Dropping Out of High School: A Personal Choice
04:15 The Birth of Blip TV: A Startup Adventure
07:12 Transitioning to Facebook: Learning in a Big League
09:54 Moving Back to the UK: A Personal Perspective
13:17 Starting a New Company: Insights on the UK Startup Scene
17:28 Navigating the Startup Ecosystem: Challenges and Opportunities
22:05 The Role of Product Management: A Key to Success
24:53 The Technology of Team Autonomy
27:07 The Birth of Sling: A Global Payment Solution
34:38 Navigating Regulation in the Financial Landscape
37:55 Building a User-Friendly Blockchain Experience
41:13 Revenue Models and Future Growth
46:23 Embracing Change: Advice for the Next Generation
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Matt (00:01.123)
This is Matt from Work in FinTech and in today's interviews with leaders in FinTech podcasts, we're delighted to be joined by Mike Hudak.
And he's connecting the world with instant payments at his latest startup, Sling Money, where he's just come out of a $15 million Series A funding round, which I'm sure we're going to hear all about. And prior to that, Mike has a very impressive set of experiences from being the Chief Product Officer at Monzo, one of the UK's leading fintechs, the Chief Product and Technical Officer at Deliveroo, a Director of Product at Facebook, where he led the ads, products and sharing, and also founded and exited an online
video platform called Blip TV, which was acquired by Walt Disney. And alongside that, Mike's got some children I've just been learning about, which we may get a guest appearance from later on. And Mike is an active angel investor, so giving back into the startup ecosystem. So Mike, thanks for joining us today.
Mike Hudack (00:57.392)
Thanks for having me.
Matt (01:00.173)
So I guess I'd to kind of go back to the start and understand kind of how you got to where you are in some of those journeys. And I think one thing that stood out when I was looking into some of the companies that you've worked at and so on is that you actually dropped out of high school and you dropped out of education right at the start of your career. Can we start off with that? And what were the reasons behind that? And did you feel that it was holding you back?
Mike Hudack (01:25.413)
I was flunking out. I was flunking out. I didn't like school very much. I probably started skipping class and all of that kind of stuff when I was really young. And I recently got my high school transcripts. I needed to get them for getting my youngest his American passport. And I realized that my
I guess it was my sophomore year of high school. I got straight F's and they were going to make me repeat that year. And I just was like, I don't want to do it. Like, I just think it's a waste of time. I don't like it. And they had sent me to this kind of like child psychologist or psychiatrist to like figure out they were like, Hey, you're smart. Like, you know, what's going on? Like, why, why is this? I remember distinctly, he had a meeting with my
dad and with the school officials in which he said, you know, high school is not for Mike and Mike is not for high school and he's going to be fine. And you should just let him go. And I was under the legal age to stop attending and they agreed to kind of like just look the other way for a few months until until my 16th birthday or whatever. So that's why I dropped out.
Mike Hudack (02:53.782)
And I was going to go to college actually was my plan because everybody told me that I would like college more. And then I got a job offer at a startup as an engineer. And I took that instead because I was like, hey, it seems much better to earn a salary than try to get a scholarship. I couldn't afford to pay college tuition or anything. It would be better to get a salary than have to pay tuition.
Matt (03:23.819)
And did you learn coding on the job or were you geeking out at home on computers anyway?
Mike Hudack (03:29.248)
Yeah, I was kind of self-taught at home before that. My brother was really into computers and I had some old kind of discarded computers at home that I learned how to code on. Badly. I went to my first job and I had absolutely no idea what to do. I was completely unprepared and there wasn't that much of an opportunity to learn either, so I just did the best I could.
Matt (03:57.687)
So you worked for a couple of years in other companies and then you decided to take the plunge yourself and create a startup back in the day when video was still quite new. What problem did you think you were solving at that point to make that jump?
Mike Hudack (04:06.436)
Yeah.
Mike Hudack (04:15.161)
Well, I remember, I mean, there's like personal motivation and then there's a world that you're living and all that kind of stuff. So one of the kind of companies I briefly worked at was this company called, pseudo that was broadcasting. I don't know, back in 99 or something like that, everybody had 28, modems and 56 K modems at home. And pseudo is broadcasting like 10 channels of live television on the internet.
using real video, like real networks, real player and all this stuff. And you'd watch it home on your dial-up connection and the pixels would be so huge. And they had this channel called like 88hiphop and all these kind of like niche things. And it was super cool. It was amazing. And way ahead of its time, it was predicated on this idea that everybody would have like cable modems at home and be able to watch this stuff in high quality.
But it showed me the potential of all of this kind of stuff, you know, that media was going to totally change and it was going to be really dramatic. And I got together with a bunch of friends and we decided we really wanted to start a company. wanted to build something new. And we used to get together at my apartment every Sunday and we would code all day and then play Halo on Xbox in the evening. And we just hacked on stuff. And one day we discovered
Somebody had uploaded a video to the internet and you could watch it and it was cool. And we said, well, we should just build a thing so that everybody can do this and we should make it really easy. And so that's what we did.
Matt (05:57.307)
So you ended up selling that company. that kind of planned? Was there like an exit kind of planning at some point or did that just happen?
Mike Hudack (06:03.655)
yeah. I don't know. It happened. I don't think it really worked. I think we didn't really know what we were doing. We were onto something like really cool and really fundamental. And there are all of these cliches that we learned. mean, we were super young. And I think there's a Bill Gates quote that changed. Essentially, it's that.
Change is always more profound than you expect, but it takes a little bit longer. So I think that the world that we expected to happen happened a little bit later than we expected. And we made strategic and tactical mistakes along the way that meant that we didn't build the thing that we wanted. It wasn't as big as we wanted. It didn't make money the way that we wanted it to. Bandwidth is expensive and all this stuff.
I think we all learned a lot, but I don't think anybody really made any money. It was kind of like a, here's a place that this thing can be, that it can live, but it wasn't a huge event.
Matt (07:12.323)
So going then from this startup where you were flying by the seat of your pants at the beginning and kind of building it as you're going along, then jumping into Facebook, which probably would have been a pretty big company at the time, still only what would have been five, six, seven years old, but rapidly growing. How was that transition and why did you decide to go and work at a big corporate, well, a startup, but bigger, right?
Mike Hudack (07:37.903)
Well, it was a few thousand people. At the time, think the entire product engineering team fit onto two floors of one building. And now, I don't know. It's like,
A friend of mine had been trying to get me there for a long time. And, you know, we had made a decision to keep going independently with Blip, but, you know, we probably had an opportunity to sell, you know, to Facebook, which would have been a great outcome. I ended up going just myself. And it was just like an incredible opportunity. You know, we were all in New York doing this.
And we all thought we knew what we were doing. And then got to the Valley and realized that it was a completely different world. And I got to play for the Yankees. And that was a really incredible experience. And they hired me as a product manager. And I didn't even know what a product manager was. I had zero idea. And I started working on some stuff on an identity team.
building new things with an incredible team. And it really felt like I had gone from this very American expression, but from a farm league team to the Yankees kind of overnight. And I just learned so much so quickly. It was really incredible. And it felt like a very small company, actually, and a very flat organization.
to make really good decisions. And you measured everything. So you knew whether or not you were right pretty quickly. It was an amazing opportunity, an amazing learning experience.
Matt (09:33.077)
And so you went from New York over to San Francisco and you were there for quite a few years. But then you've kind of like me as a UK entrepreneur, we're always trying to move from London to the US. And you've actually made the journey the other way. Why was that?
Mike Hudack (09:37.295)
To San Francisco. Yeah.
Mike Hudack (09:54.383)
Well, my wife is English and I met her in New York and she agreed to move to San Francisco with me. And then I remember very well having this conversation with her where she was just like, I don't like it here. You know, it's too far away from home. Everybody does the same thing. We were both at that point working for Facebook. Like she joined a little bit after I did. And it felt like it was our entire world and we were taking the bus, you know, up and down every day.
I think she wanted to change, wanted to have kids, wanted to be near her parents and all that kind of stuff. And so we decided to move, try it out.
Matt (10:35.68)
So how long ago was that?
Mike Hudack (10:38.233)
Well, my oldest daughter is nine. And so it was about nine and a half years ago. Yeah, about nine and a half years ago. Maybe a little bit longer.
Matt (10:49.175)
So as a representative of England, how do you find it so far?
Mike Hudack (10:56.559)
Well, it's a very different place. And I think that one of my kind of like high level views is that the UK, the US optimizes for dynamism. And that means that you get like a lot of outcomes which are better and worse. And the UK, I think, optimizes for stability. And both of those choices
know, have advantages and disadvantages. And when I first got to the UK, I thought, wow, this is like one of the best run places I've ever been. Like when I thought about the way I moved to Hackney in London, in East London, and you know, the government like was so well run, like everything just worked, trash was picked up properly. It was a huge change from San Francisco, which was like a kind of chaotic place with...
trash on the streets and all sorts of things, you And I found it unbelievably impressive. You know, and then Brexit happened, COVID happened, all sorts of things. And I lived through all of those things here. I almost went and worked on some COVID stuff for the government during lockdown and everything. You they like appealed to my sense of patriotism and my, you know.
second country or whatever and all of this stuff and I think that you know recently unfortunately something has broken in the UK that needs to be fixed and You know part of the problem. I think is too much optimism for optimizing for stability not enough dynamism And I think that when that happens you you stifle growth because growth relies on some amount of dynamism and Unfortunately when growth goes away
Everything fails. So like the train that I take I live out I I live outside of London by about an hour You know the train that I take into London now is cancelled about I think it's 16 % of the time it's only on time 60 % of the time and You know, it's very hard for a country to operate like that and it really needs to be fixed
Matt (13:17.229)
Well, I guess I don't want to jump straight into talking about your latest startup just yet, but talking about the UK, what were you considering then when you're forming a new company? Is that a UK limited company or have you set it up outside of the UK? US company.
Mike Hudack (13:33.689)
No, it's a US company. It's a US company and we have people in the US and we have a Dutch subsidiary as well and so we have people in the Netherlands and I live here and a lot of the team lives here and I really like it. For all of what I just said about the current state of things, I think that the UK has a level of social cohesion and care about community and communal outcomes and all of these things which is really wonderful.
And it's a better place in many ways to bring up children, I think. You know, you don't have to worry about school shootings like the food is better. There's so many reasons to be here. And, you know, one of the things that's become very important to me is I really want this place to work better. I want it to be a great place to run a company. want it to be a great startup scene. You know, and I think that there are.
So many unbelievably talented people here who are great engineers, great data scientists, great designers, great everything. And there is actually a lot of entrepreneurial zeal and a lot of people want to build things. And it feels to me that there's like a 10 % adjustment that could be made that will unlock an incredible amount of growth. And the thing that I like,
really want to do is help encourage that. I think that the government now really cares about growth, which is great. I'm not sure that they fully understand startups. And I think that most of the growth here has to come from startups. But I really want that to happen. And I like this place a lot.
Matt (15:20.801)
Yeah, I mean, there's always been a very good early stage startup scene here because there's some good tax breaks, know, your SEIS and EIS and the like, and that's really helped foster the real early stage. But then I think you've always got that problem here when you're getting big enough. There's not enough investors around that have got the big ticket checks of when you're raising hundreds of millions of dollars and around, there's not many, you know.
Mike Hudack (15:27.696)
Yeah.
Mike Hudack (15:48.099)
I don't know. I think that access to capital is not. I know that that is like a big narrative that people have. for me, it's a little bit different maybe because I was in California and everything. all of our investors in Sling at the moment are, almost all of them are American firms. And it may be that I have more access to that than the average entrepreneur here. I mean, Sequoia's opened an office. Excel is here. And Griesen.
There are wonderful early stage funds and wonderful late stage funds. And if you want to, you know, I was at Deliveroo, we raised hundreds of millions of dollars, you know, from T. Rowe Price and all of these different people. It's true that there's like a really big systemic problem, which is that the UK pension funds don't invest in startups and the growth, like British growth capital in that way does not exist. I think that's more of a problem for British retirees than it is for British startups.
I think that the problem is probably more one of...
not having enough people who have done it before, which I think is changing. And I think part of it is just like the government, not understanding startups and not understanding how to regulate them and how to encourage them and all of that kind of stuff. you know, thinking about tax breaks and saying, we're done or, know, but the immigration policy is important. All of these things really, really, really.
And it should work. And I don't think that capital is the biggest problem.
Matt (17:28.449)
I think the startup machine or startup factory piece is it should make it more interesting as we're going forward. Cause obviously Revolut is doing so well, know, and Klarna is just about to IPO. So there's, there's going to be lots of people probably similar to yourself, know, you know, very technically experienced plus, you've got experience of growing a company who then go out on their own and do stuff. So, so I guess let's, let's, let's talk about some of those companies then that you've worked for because you know, Deliveroo,
Mike Hudack (17:38.756)
Yeah.
Mike Hudack (17:52.037)
It's most important thing. Yeah.
Matt (17:58.373)
they were both, they were in those categories, they're the big leading technology companies in Europe. So when you said you were at Blip, you were kind of figuring it out because you were just young, right? And then you worked in Facebook and you had to kind of, I need to learn product management now. And again, you learned it as you were going along. How did you then take what you learned in those companies then to be a chief product officer in major technology companies?
Mike Hudack (18:25.978)
Yeah, well, guess one thing that I think is really important that I feel like not enough people really, I guess, especially considering the audience that we've got here, right? My personal view is that nobody really knows what they're doing. And everybody kind of has to learn as they go. I suppose if you could choose a job where
you know, you have a repetitive motion and you learn how to do the repetitive motion, whether it's like, you know, screwing two panels together on a vehicle or delivering the mail or, or, you know, every morning being on the BBC and announcing a, you know, the news or whatever. and you can choose to do that and, and, and, and get real mastery at that thing and do the same thing over and over again. You go through it, you know, there's like very clear path of like,
I'm gonna go through a training period and then I'm gonna do it for a while and then I'm gonna get so good at it that I can do it in my sleep. And I'm just gonna do that over and over again. And that's like a very valid life path and a lot of people do that and it's great. There's another life path that you can take where you end up in what I call the competency trap, which is that you just continually do things that you need to figure out as you go. And you, you know, within a...
an organization within a hierarchical organization, this might mean that you just keep getting promoted as you figure out how to do the previous thing and like the next thing becomes harder and harder and harder until you just fail. And then, know, great people when they fail in that situation, pick themselves up and learn from the experience and go again and keep doing it. And I think that most great things in this world have been achieved by people who are kind of outside of their comfort zone and outside of their depth at any given point.
And doing that takes a lot of, I don't know, ambition and self-confidence and all that kind of stuff. it is sometimes deeply, deeply uncomfortable. But the thing that can make you feel better about it, I think, is knowing that everybody else is doing the same thing. I've worked with some amazing people who have accomplished a lot of things, are household names and all this stuff. And they're all just regular humans who are like,
Mike Hudack (20:47.076)
figuring shit out as they go. you know, that can be you as easily as it can be them. And honestly, like one of the greatest advantages that you can have in doing that, or one of the most important things in doing that, is the knowledge that everybody else is doing it too. And that it's okay not to know the right answer, but to find it and feel your way through it. And I think that one of the really big mistakes that I made early in my career,
and that I hope I don't make anymore is this belief that I needed to know the answers or this belief that I was like a static person and that if I didn't know how to do something or I wasn't good at something, I could never be good at it. And it turns out that's just like not true. You can like kind of learn how to do anything if you work hard enough at it. And lots of people around you will give you advice and...
you'll have some things that you've learned how to do that they don't know how to do, and they'll have some things that they've learned how to do that they can teach you to do. And that's a great gift. And that's been really my whole career. And sometimes when I was younger, probably not realizing it, not appreciating it enough. And then the older I get, the more I understand it and realize it and appreciate it.
Matt (22:05.069)
So persistency and consistency, and just getting out there and bouncing back and learning from your failures. Yes.
Mike Hudack (22:12.546)
and being comfortable feeling and knowing that that's just like part of life. Yeah, absolutely.
Matt (22:18.349)
So on the product management side, because you always hear about someone being a product manager is someone who's well-versed then to actually run their own company because you're facing off to so many different areas within a company in a product role. you talk just about...
products and product management because I think if you're a student or a graduate you might not be that aware of product management roles if you're studying a conventional kind of course. It's not something that's really covered. So could you just talk about that?
Mike Hudack (22:39.939)
Yeah.
Mike Hudack (22:51.076)
Sure. It's not taught. Yeah, for sure. Well, I I think the role of product management varies a lot from organization to organization. I'll kind of describe it in the kind of classic tech company Valley sense, which is a product will be built by maybe between seven and 10 people. And maybe four five of those people are software engineers. Maybe one of those people is a designer. Maybe one is a
data scientist and maybe one as a product manager. And it's the product manager's job to say, you know, some version of like, this is who we're building this for. This is a problem that we're solving. This is our goal and how we know whether or not we're successful. And then to align everyone around that objective and truly get them excited about it. And if they're not excited about it, figure out why. Build consensus.
be plastic in that description until you've built that consensus and then help manage and organize a day-to-day work to get there. And that might involve ordering pizzas. may involve, you know, doling out tasks and keeping track of progress and deadlines. It may involve, you know, talking to marketing people, you know, working on the launch lawyers. You do kind of like finance, you work with everybody to
get this thing ready and launch it and hopefully make it successful. And you are.
individually probably more responsible for what is built and its success than anybody else but the best product managers make that a shared responsibility where it's on everybody's shoulders together in the team.
Matt (24:39.595)
And so is that approach of looking at products. So obviously Facebook is very different to Deliveroo, which is very different to Monzo. Is it kind of your agnostic really to all the underlying product or services?
Mike Hudack (24:53.314)
Yeah, yeah, yeah, for sure. And I actually think that like this kind of product way of working and there's a lot of elements of this of like talking to customers, collecting data, you know, the way of organizing a team such that everybody feels like they have some sense of autonomy and agency so that the decision made by the team is better than if it, you know, if it's like a dictate coming from on top. I actually think that that way of working is a technology. Like if you go back,
There's a great book written by this guy, Peter Drucker called the Effective Executive, which is about management in the kind of like early information age, you know, like in the the 60s. And it's really striking how he talks about the job of a manager or an executive back then and describes it. And you realize that he's describing a technology like a way of working, which is itself a technology.
And I think that the kind of like product way of working now that we have is a technology. And I think that you see it, you know, actually in aerospace where SpaceX works in this new way and Boeing does not. And so Boeing has failed where SpaceX is doing well. And, you know, Monzo and Revolut work in this way and Barclays is trying to learn how to
You know, and you can see from their growth numbers the impact of this technology this way of working and I think it's almost but not entirely universally applicable and You know if you had asked me about this a year or two ago I would have said it's not applicable in pharmaceuticals and pharmaceuticals the correct model is you know a bunch of scientists sitting in a quiet room You know thinking or whatever But I actually think it might be
pretty much universally applicable now because I pharmaceuticals are being changed by modern information technology at such a rate that a product way of thinking and a product way of working is actually superior there too.
Matt (27:07.885)
So let's talk about sling. You've learned a lot over these different experiences that you've had. Can you talk to us about, I suppose, why sling? What gave you the idea? What was the problem that was really annoying you that you wanted to solve for?
Mike Hudack (27:10.585)
Yeah.
Mike Hudack (27:24.984)
Yeah. Well, you know, when I was working at Monzo, Monzo is a neo bank in the UK with, I don't know, it's like 13 million customers now, which is a lot in the UK. And we always wanted to expand globally and I really wanted to expand it globally. And one of the ways that we could have done that peer to peer payments were really the biggest growth driver for the bank and very powerful and a great experience. And, you know, there was this idea.
we could maybe expand Monzo globally using peer-to-peer, but there are lots of reasons why we couldn't do it or it wasn't the right thing to do at that time. And so that's like a little bit of backdrop here, right? And then the other bit of backdrop is that a few years ago, four years ago or something, I started getting interested in blockchains and I didn't understand them. I had bought Bitcoin and stuff back in the day and everything, but I didn't understand blockchains. And I went and...
I listened, Andreessen Horowitz has this like crypto startup school series. And I listened to all of those walking up and down the beach in Norfolk back in the day. And I read everything that I could. And I started like experimenting and writing code. And I really found religion. was like, you know, these things are amazing. Excuse me. I like really came to believe in this kind of like distributed computing future.
And it seemed obvious to me that this was like a superior technology for a lot of things, not all things. And I actually ended up wanting to start an identity company, because I had worked on identity at Facebook and there were a lot of things that we wanted to do that we couldn't do because people didn't trust us enough. And one of the really cool things about modern blockchains is you can build like a decentralized identity service where everybody owns their own identity and they can do selective self-disclosure, they can be completely in control of their data.
into zero knowledge proofs so they can say, I'm over 18 without revealing anything about themselves. And the recipient of that information can know with certainty that the person on the other side is over 18, but not know their name or anything about them. It's just cryptographically proven. And I got really excited about this and wanted to start an identity company on top of this technology. And then a friend of mine pinged me and said, I know you're getting interested in this stuff.
Mike Hudack (29:46.542)
I'm going to buy some land in Montana and I'm going to digitize it and we're going to create a decentralized autonomous organization to own this land. Do you want to participate? And I said, sure. And to do it, I had to send him a few thousand dollars of stable coins on a blockchain called Solana. And I live in the UK and he lives in San Francisco. And I did it and the transaction was instant and free.
And everything else about that transaction really sucked. the know your customer process, buying the actual stable coin, the UI of all of the tools that I used was not very good. It really felt like I was using an old Linux computer back in the day, or typing on a terminal in this very geeky way. But the fundamental thing is that the money moved instantly and for free from London to the UK. And normally that takes a few days and costs a ton of money. And I said to him, I was like, we should just start a global Venmo.
we should just build global instant peer-to-peer payments on top of this technology. And he had actually written the first check into Venmo as an angel investor. And he was like, why are you the money now? And I was like, wait, don't do it yet. Let me do some work first. And I spent the next six months with my co-founder Simon talking to everyone, talking to early cash app people, PayPal people, Venmo people, Wise people.
to try to understand why nobody was doing this. And at the end of six months of doing that, I just couldn't figure it out because it seemed like this was an obviously superior technology, a better way of doing things. Difficult for sure to build a consumer product and all those things. But so clearly better. And this was now probably like two and a half years ago. Crypto was not a popular thing at the time. Blockchains were not a popular thing. Governments didn't like them. People thought they were gambling. It was a bad brand.
But the way that that works is there's this thing called the Gartner hype cycle. it was just like, it's a very normal thing. People get very excited about a technology, and then they get very disappointed by it because things don't happen fast enough. It was like online video back in the day. And when you've seen that pattern enough, you know that it's going to come back up again. And we just said the world would be a better place if you could send. If everybody in the world could
Mike Hudack (32:12.86)
but send money to anyone else in the world instantly and basically for free. Like that is an incredible thing where you realize, you take a step back and you say, well, we've connected the entire world with media. can send photos or text or video to anyone in the world instantly and for free and it's changed the world for better and worse. But like ultimately I think for better. And you start asking yourself, why haven't we done that with money?
And there's no good reason. There's no good reason. And the technology to do it exists now. And I think that when you're when you see that and you see the size of the change that can be made and it feels like, you know, at that point, it felt like almost like a secret. You can't not do it. You know, and so it's just really clear that we had to do it. So we raised we raised five million bucks and got to work.
And it's two and a half years later now, and we're 23 people. We've built a product that works. can download it now from the app store. It's called Sling Money. you can send money instantly from any... We have 76 countries with instant payment connections. So the other day, this was a really amazing thing, one of our users tweeted that...
He was just like, sling is so cool. It works everywhere in the world. You know, you can buy somebody in Kenya a beer with it. And this guy in Nairobi, who is also a sling user, replied to his tweet and said, buy me a And guy in Amsterdam did it. He sent him shillings from Amsterdam. And the guy in Nairobi replied and said, I've got it. I've got my beer. And the guy in Amsterdam replies and says, send proof of beer.
And so the last post in this thread is a photo of a Guinness in Nairobi. And the guy in Kenya was like, that took 60 seconds. know, from like that tweet to having a beard paid for in Nairobi. That is like magic, you know? And of course it should work that way. How could it not work that way once you see that that's possible? So it's been a real joy to build, you know.
Matt (34:38.211)
Yeah, that must have been great hearing that story. What are the, probably going back to what we talking about at the start about the UK focusing on stability. There's a lot of regulation in Western countries in particular and everywhere really. Is that kind of a hindrance to your kind of go to market strategy?
Mike Hudack (34:40.614)
Great.
Mike Hudack (35:01.264)
Well, one of the things that we realized really early on was that one of the reasons why people hadn't built this yet is because anti-money laundering and counter-terrorist financing and sanctions enforcement in blockchain environment is hard or at least novel and different and people hadn't really figured out how to do it well. And we actually saw that as like one of the first problems that we needed to solve. And so we hired
some really amazing consultants to help us write our first financial crime policy and procedures to figure out, you know, from first principles how we were going to do this properly. And we put a tremendous amount of work into that policy, that set of procedures, into a ton of software for performing KYC and transaction monitoring and SAR filing and all this stuff that you, you know, I only knew how to do because I learned it on the job at Monza.
And I realized how deeply important it was. And I think that that experience and that knowledge has been tremendously helpful for us because we've been able to invest in the things that governments care about and society cares about when it comes to technologies like this, and legitimately so. And I think that that made all of the conversations with regulators, you know, much easier because we could really prove that we were coming at this from a like,
mature, responsible place where we were truly trying to do the right thing. And, you know, I think that when you're operating in a space like this, that is just extraordinarily important.
Matt (36:43.711)
So just looking at some of things you said, we'd set it up sling, was your regulation and anti-money laundering, all of that side is super important, that needs to be solved, which looks like you've done. And I suppose ongoing, ongoing forever as well. Not done done.
Mike Hudack (37:00.037)
It's an ongoing, I was going to say it's a forever project. Yeah, yeah. No such thing as solved. Yeah.
Matt (37:05.857)
Yeah, and another part is abstracting away the complexity of everything that's on chain because the UIUX is much better now than it was a few years ago. It was horrific before. But that side of it you've looked at. And then the third part, can you talk about the stable coin part of what's going on? And if there's any other parts as well, we could hear about.
Mike Hudack (37:25.585)
Yeah, yeah. So the way, yeah, for sure. Well, the way that Sling works is that we combine a self-custodial Solana wallet, which sounds like a lot of jargon and a very complex thing, but we do it, as you say, packaged in a consumer product that feels like you're using Facebook or Venmo or WhatsApp or Monzo or whatever. It just feels like a normal product. You don't have to look at wallet addresses or know what a key is or anything like that. We've made it very easy. And then,
We combine real-time payment networks, are mostly new around the world with a stable coin so that transactions are instant and inexpensive. And so the way that it works is like if you're in Amsterdam and you're buying, what you do is you like buy a stable coin and you can do that with like a debit card transaction or like an open banking transaction, like an instant open banking transaction. Then you get the stable coin on your wallet.
In Solana and all Solana transactions are basically instant. take a second. It cost like a 20th of a penny a tenth of a penny And so then you can like send the stable coin to anyone else really in the world, you know in total really we support like 145 countries about 76 of them you can take the money out instantly with a real-time payment network in another 75 you can do it with like a crypto exchange So that's like a less user-friendly way of doing it, but you can send it to basically anyone
And that transaction is basically instant. And then if you're buying somebody a beer in Kenya, they can get the money out into their M-Pesa in Kenyan shillings basically instantly. So the entire time that the user experience time from the first tap in Amsterdam to the last tap in Nairobi to get that money into M-Pesa under a minute.
As a result of the way that all of this works and through that entire process, know, we're doing our transaction monitoring We're doing our KYC. We're doing all of the compliance activities and the the value is moving in a stable coin, which is a token on a blockchain Which is backed one-to-one by money, which is held but with a regulated custodian a stable coin maker and in our case we use a stable coin made by this company called Paxos, which is a
Mike Hudack (39:45.626)
trust company in New York that's regulated by NYDFS, New York Department of Financial Services, which is one of the toughest regulators in the world, which I think is important. Same reason why we picked the Dutch actually as our regulators in Europe, because they're strict and well respected. And so the token represents that money, which Paxos is holding, and can move on the blockchain basically instantly, a lot faster than traditional fiat money can move. Because traditional fiat money,
if this makes sense, the money in your bank is held in a database maintained by your bank. And then the other person's bank has its own database, which is built using probably totally different technology. And they're not compatible. And we use kind of like weird email-like messaging systems for moving one database entry in one bank to another. And maybe domestically, you know, in the UK, that's done with something called faster payments, which
might take up to five minutes or something internationally, that's basically done by email. And it can take days. And sometimes it has to go through multiple banks with multiple incompatible databases. But what a blockchain and a stablecoin does is it introduces compatibility across the entire stack globally, where it's one shared database that everybody can access. And that's one of the things that makes it so much better and so much faster.
Matt (41:13.855)
Two technical questions. One on the stablecoin piece. So someone like Tether owns and has to hold a large amount of money market funds and short-term treasuries and so on. Do you have to do something similar with stablecoins? And the second question is on the essentially with your stablecoin, the Paxos then. So you're just replicating wherever the dollar is versus the currency exchange rate when someone's taking the money out. Is that right?
Mike Hudack (41:42.021)
Yeah, that's right. So in terms of the prudential aspect, like the holding of the money backing the stablecoin, we really prefer to work with prudentially regulated stablecoins where there's a regulator like NYDFS, which is making sure that like every dollar is accounted for like you would with a bank. know, Paxos is a trust company and that's the way that they're
Regulate and I think that's very important and know NYDFS will have standards for how much of that has to be in cash How much has to be in treasuries where they can be held and all that kind of stuff? and that I think is extraordinarily important and the quality of us there's varying degrees of quality of stable coins out there and You know using a good one is very important and this is I think an area where regulators are gonna get better and better at you know separate is saying well, you
like the European Union now has like pretty comprehensive stablecoin regulation, which I think is a great thing. And, you know, some stablecoins are going to be legal in Europe and some aren't based in part on, you know, their prudential quality, the quality of their their reserves. In terms of the foreign exchange, that's exactly how it works. So we do real time effects against the dollar. Everything moves at a dollar linked stablecoin right now. And so if you want to send 200 shillings and you're in Amsterdam.
we figure out how many US dollars that is at this moment, and how many euros that is at this moment. And then we pull the right amount of euros from your account, turn it into the right number of dollars. The right number of dollars basically move to the person in Nairobi who then can get the right number of shillings for it. And it turns out that, in M-Pesa, and it turns out actually that pretty, you know, all of the most liquid foreign exchange markets in the world are against the dollar.
and it's the best payer for everything. And so it's like a very nice, very efficient, very good way of doing it. But we will introduce other stable coins. So we'll have a euro stable coin. We'll have a Canadian dollar stable coin. Because I think that people, if people store money in the wallet, they want to do it in the currency that they live in. And I think that's very important.
Matt (43:55.829)
And so does Sling make money through a commission or the FX spread or how does Sling get paid?
Mike Hudack (44:03.996)
Well, so we think that there's like a 10 % chance that we can build Sling in a way that we can offer these kind of instant transfers all over the world for free for a long time, free to the user, you know, as they say at the NHS, free at the point of service. And there are three revenue streams that we believe may allow us to do that. One is we do make like a revenue share from the stablecoin maker because the stablecoin maker, you know, has dollars, which is backing that stablecoin, which is making interest or, you know,
Yield from treasury bills or whatever and so they share a little bit of that with us as a distribution like revenue share And then we're going to add a debit card and so we'll make money from debit card interchange And then you know the mid market rate the foreign exchange rate that you see when you go to google or whatever It's called the mid market rate And of course there's trading that happens to the right of the mid market rate. So, you know, sometimes if you go to like an airport
currency exchange or you use PayPal for an international transfer, they charge you 2 or 3 more than the middle rate. of course, if you're moving in bulk and have the right things set up in the right counterparties, you can get rates to the left of the mid-market rate. And so we believe that at scale, can also we can offer people the mid-market rate, which feels free, but we were able to source those shillings because of scale at a lower price.
And so those are three revenue streams that if everything works perfectly would allow us to offer these payments for free. I don't know whether or not that'll be the case yet. Like we need to watch consumer behavior. We have to see if people hold balances. We have to see when we ship the debit card whether or not people use it. We have to see if we really can get that FX spread. If we can't, one of the really cool things about building this on top of a blockchain is not only do you get better speed and all of the other benefits that we've talked about.
It's also in many ways a lot easier to build with fewer people. So we're only 20 people and we've built this kind of global product. And so we have much lower costs to cover than a more traditional money transfer company. And so we believe that even if all of those variables don't line up, we can still offer all of these services at half the price of everybody else or maybe less.
Matt (46:19.363)
Interesting. So.
In terms of the skill set that you've learned along the way, it kind of sounds like it's very much learned by doing. And then if you win or not win, you're learning from both. And it also sounds like timing has been an interesting kind of element to what you've been doing. Because with blip...
Mike Hudack (46:35.066)
Yeah.
Mike Hudack (46:47.675)
Very important.
Matt (46:51.745)
It was probably a little bit too early, but you had the right idea. And whereas what you're doing now, you've kind of embraced blockchain, probably, know, but only quite recently, but actually spotting something where no one's addressing this market yet. So if, and like you say, if you can keep yourself very lean, you know, you've got enough money in the bank that you can afford just to be at the right place at the right time when everyone starts adopting it, right?
Mike Hudack (47:18.275)
Yeah, and I think we picked the right time to build a stablecoin company, which was really nice. I think, you know, with Blipp, we were both early and just made mistakes. We weren't responsive enough to user needs. We didn't watch what everyone else was doing and figure out what we should do. You know, so many things that you learn as you go and learn as, as, as you build. And I think, you know, I, I remember sitting, I was on the last row of a Delta plane flying cross country once in the U S.
And I sat next to this really lovely lady who had turned out was a poet laureate of the United States. And we talked for the entire flight. we told each other, she used to be a teacher in New Hampshire, I think, before she became a full-time poet. And we were talking about dropping out of high school and all this kind of stuff. And she was like, you're an autodidact. I didn't even really know what that was. It just means you're self-taught.
I think that one of the real gifts in life is being open to just like learning all those lessons and reflecting on those things and, you know, not feeling bad about having made mistakes. And I mean, I've spent plenty of time beating myself up for having made mistakes, too. You know, don't get me wrong. But, you know, I've learned that that's actually the only way that you learn. And you have to approach things and say, you know, I'll just figure this out. If I'm wrong, I'll go again, you know.
And I just think that's incredibly important. And then timing, yes, is also very important and so easy to be too early or too late. And that's something that you just get a feel for, you know, as you do stuff.
Matt (49:00.887)
So there's lots of people listening to this at the start of their career or maybe just about to embark on their career and you yourself have got some young kids. What advice can you give to people about the future and kind of looking forward?
Mike Hudack (49:17.677)
I mean, I think that we live right now at one of the most exciting times in human history. We are at a point of like massive technologically driven change and everything in medicine, in, you know, like we are on the verge of curing cancer. are, we are, you know, about to go, about to go to Mars, you know, we are,
about to make global instant payments, instant free. All of these things are happening at the same time, artificial intelligence, quantum computing. We are living through an incredible golden age. Unfortunately, technological golden ages and times of change like these also come with massive amounts of political upheaval and trains that don't run on time.
You know, polarized politics that are deeply uncomfortable. And I think historically that is, you know, so far those things have been inseparable. You know, when the book was invented, when the movable type was invented, I mean, we just got an unbelievable period of political unheaval. That's just the way it is. But, you know, if you're young and going into your career now, this is like one of the coolest times to be doing that. And I would say just
You know, seek novelty, seek new things. Don't go to work at Goldman Sachs as an analyst doing the same shit that everybody else is doing and everybody has been doing for the last 60 years. That job probably won't exist. You know, by the time you're 40 or whatever, you know, that job will not be there anymore, or it'll be like unrecognizable. You should go into like the development of, you know,
medicine with artificial intelligence or ways to drive better financial outcomes for people using more modern technologies and CBDCs and all these things that you look at today and you're like, they don't exist, they will. And they'll probably take less, they'll probably happen a little bit slower than you expect.
Mike Hudack (51:35.685)
But the magnitude of the change will be much greater than you expect. And you should embrace that and get as much experience with new things and novelty now so that when you're in the prime of your career, when you're in your 30s or your 40s, you have been working with those things for your entire professional life. And you will thank yourself for doing that. Take a little risk. Do new things. Go to work at startups. Go beyond your level of comfort, out of your depth.
and learn and be comfortable with failure. And you will do well.
Matt (52:10.067)
Great advice. So, Sling Money, people can download it on whatever app store. How can people follow you? Are you active on any particular platform?
Mike Hudack (52:15.951)
Yeah.
Mike Hudack (52:21.111)
I tweet a lot, I still call it Twitter. I'm on twitter.com slash MUDAC, M-H-U-D-A-C-K, and I've got UDAAC.com, H-U-D-A-C-K.com, which has links to a bunch of stuff, and sling.money.
Matt (52:37.993)
All right, thanks for joining us today.
Mike Hudack (52:40.175)
Thanks for having me, Matt. Really appreciate it.