How to Network Your Way Into a Unicorn Startup With Varo Bank Co-Founder Roger Van Duinen

Rui: If you’re looking for stories, strategies, and actionable advice on how entrepreneurial careers start, you’re in the right place. I’m your host, Rui, and this is the Startup Journey Podcast, the show where every week I sit down with different entrepreneurs, experts, and thought leaders to dig deep into what it takes to get a startup off the ground.

Today, I’m proud to sit down with a very special guest. Roger van Duinen. Roger is a seasoned C level executive with over 25 years of leadership experience across multiple industries. Among other amazing things, Roger founded Varo Money, a fintech startup that recently raised a staggering 510 million in a Series E funding round at a 2.

5 billion valuation. Roger, thank you so much for taking the time to join me. How are you today? I’m doing great. Thanks for having me. Happy to. So, this is quite an impressive background I just mentioned, but I’m sure that doesn’t tell the whole story. Care to add anything else about you there? Family, hobbies, anything at all?

Roger: One of the things we might talk about later is balance in life. I found out, Probably too late that I was way too focused on work and started spending a lot of time hiking, actually, recently. Pre pandemic completed my, my largest hike to date, which was 196 miles over 13 days.

I hiked from the west coast of England to the east coast of England. It was quite a journey. Has me looking for the next big hike. I need to now go further, see how much I can do.

Rui: That’s actually amazing. And I come from a family that actually likes to do that as well. But we do 20, 25 kilometers at a time and that’s good enough, usually good enough to get some grams, but amazing thing right there.

So we’ll actually tap into that a bit later. I have a specific question around the work life balance. So to give a bit more context Roger. The purpose of this podcast is to bring your insights and lessons to our community of entrepreneurs so that then they can apply them in their own journeys pretty much.

So for that reason, I wanted to focus on one particular story and that’s Varo. This is a company you founded back in 2015, originally a fintech aiming at reinventing banking with machine learning AI to help people achieve better financial fitness. So we’ll go into a bit more detail there in, in a bit, but is this a good way to describe it for our listeners?

Roger: I think it’s a great way. It’s exactly what Colin and I talked about when we started.

Rui: Perfect. So I’m sure that from the moment you created the company until today with this recent 2. 5 billion valuation, you’ve learned more than a few lessons along the way that you can share. So let’s start right from the beginning.

Where did the idea for Varo come from?

Roger: It actually, I met Colin through a mutual acquaintance. We got on the phone. I remember really clearly an hour and a half long conversation. I live in Southern California. It was a beautiful sunny day, not a surprise. And I was pacing around in my backyard and we were really talking about the problems in the current banking system.

And what was really interesting is although we’ve, we both had very Experiences in our career paths. We saw the same problems. And so we really did resonate in our conversation on what we thought the problems were in the banking system. And we also realized during that conversation that it would be very hard to fix banking from the inside, just given the internal pressures that.

Existing banks have to generate profit and to generate profit in certain ways. And we also realized that modern banking didn’t really look very modern. Old platforms, not very mobile ready. And so, so that was really the beginning. I think the other things that we both understood being bankers rather than app developers was that the bank charter in the long run was the thing that would make the difference in the FinTech industry.

Because it, I, I. Done banking in the U S I’ve done. I did banking in the UK. I consulted in South Africa and Brazil and Puerto Rico around banking. And the one thing that that I understood and we understood is worldwide. There is regulatory advantages to being a bank. There are also economics, significant economic advantages to being a bank.

FinTech industry and saw that, Almost every fintech company out there is what I would think of as half balance sheet. They either did a deposit type product or a lending type product. We thought over the long run, those companies would be at a severe disadvantage. It’s hard to make money with deposit products.

It’s hard to lend at a low cost if you have to borrow the money from someone who’s expecting a return. Banks don’t have either problem. And so from the very beginning, we had in our mindset. That we had to have a bank charter. And when we talk about fundraising for Varro, that became a really interesting pivot point for which companies, VCs, which investors were interested in us and which weren’t, there was very much, at least in the U S and East coast versus West coast difference when we were pitching.

the company. But back to your question, the very genesis of it was a conversation in my backyard. I think Colin was sitting at a cafe in San Francisco outside and we just had a fantastic conversation. We were both very aligned on the problems and how we thought the solution would need to occur.

Rui: Actually, I have a bunch of followups already. I’m going to start with the way you met your co founder. So you mentioned a mutual acquaintance that actually introduced you both. Was this a random event where you actively looking for someone that could help you create something new? Or was he, what was the overall dynamic of this introduction?

Roger: Yeah. So this mutual acquaintance of ours, actually a recruiter In the financial services industry, this wasn’t a, I was looking for someone or Colin was looking for someone. This was more our friend who realized that they’re, she knew a lot of people when she originally talked to Colin. And let me just be really clear.

Most of what Varro is came from Colin, not from me. We were co founders in the company. I, it was not my, I was not the genesis and I would never claim to be. So our friend basically talked to Colin about what he was thinking and said, Oh, I know somebody hooked us up. Conversation happened. So it wasn’t, it was neither an accident nor was it planned, but somewhere in between.

Yeah. I’ve seen other

Rui: stories start like this, yes. Yeah,

Roger: And just, good lesson in that for, to remind myself and for everybody else. Make friends along the way, because you never know what those friends will, help you with later on.

Rui: It’s all about the network.

And actually I see that each day, I believe in that more. And that taps into the second thing I wanted to talk about, which is here in this set of follow ups that I have, which is the industry expertise, right? Because you can be obviously a technical genius, but we see often that.

Both entrepreneurs working with us that end up raising money and being still alive after a couple of years, which is quite rare in the startup industry that they usually have some sort of industry expertise, 10, 15 years working in a given industry, they detect an inefficiency and then they want to build a product to solve it.

Usually this is the roadmap that leads to success these days. And it’s not only because of how much they know about the industry is because By spending 15 years in an industry, you will inevitably build a network, right? You will build a pool of resources that will then put you in a much better position to succeed.

So having this industry expertise and you mentioning that both you. And your co founder and Colin coming from a financial background, although very different, it makes a lot of sense to me because this is what usually we see as the right recipe for founders being technical or non technical, having that expertise because of also the network and the resources to build is super it’s super important in the end.

Then the last one is the banking problem, because I find it interesting that I’ve had, again, similar conversations there. And one of them just recently was with Wade Irely, who as you may know, was the actually Genesis of subscription based flying. And he disrupted the aviation industry, right?

Simply because the model his young brother couldn’t find a job, but here I got a similar vibe, which is. Yes, banking is very traditional, conservative, and the problems can’t be solved from the inside. So you simply go there and you reshape the way we think about banking. So it’s quite an endeavor, right?

Because talking about it now, it seems like it’s something that you can do. Not easy, but that is obtainable, which is not something that I would think from the get go. How was it when you started thinking about, okay, we’re going to move this forward. How did you think about validating this idea?

How did you validate the first version of this of the VARO concept?

Roger: Yeah I obviously I saw the question that you sent and gave it some thought. And it’s a really interesting question for us because we didn’t Once we began to build the app that became Varo, we certainly got a lot of user input, right?

And as anybody should, is developing an app with features to make sure that customers understand it and can use it and that we’re not creating. Friction in the user experience that we hadn’t intended conceptually, though, the approach to how we were going to go about building this new banking experience other than, as you said we all had extensive networks.

So we went out and talked with friends and colleagues in the industry, tried to get their sense of whether we’re heading in the right direction. We did not go out to the user market. To ask people, are you interested in this? And for a couple of reasons, one is that we had already done some research and we understood that there was a gap in the marketplace and I’ll try to explain it.

Hopefully I’ll do a good job. If you go out into the world and ask a hundred people, what are the five things that concern you the most in your life? You’ll get health, you’ll get relationships, and you will get money. Those are universal. And so we know that, that money, managing money, having enough money is a universal desire.

Now, if we go out and we ask those same hundred people to give us a list of brands that they love the most and brands that they dislike the most. At least in the U S banks and cable companies are vying for the bottom of the list. So we have this sort of very interesting situation in the banking industry, where you have a product that people desire as a product to help them alleviate anxiety, help them plan for the future.

And when they look at the brands that exist, they hate them all at best. They coexist. But there’s no love, right? So I’m an older guy. I like lived in the banking industry for many years as a consumer. I know how to avoid fees. I’ve got enough money that I don’t worry about not having enough money.

So I’m privileged in that sense, but a lot of people aren’t. And those are the people that the banking industry, I hate to use the word pray. When a bank needs to generate revenue, the easiest way to generate revenue is to raise fees on. Mistakes. And mistakes tend to happen to younger people.

They tend to happen to poor people. And that was the, that’s the driving need that we saw. So, so validating the idea, we didn’t do a lot of validating our approach to delivering the idea. We did a lot of validation. In fact, one of our earlier hires was a researcher. Who specifically focused on that user research that helped us build the app, helped us understand features, but the conceptual business model, the strategy, how we thought about our product roadmap, that was something that we agreed on.

without user interaction. And I think in our case, given our experience, Kala and I both lived in consumer banking, we felt fairly secure, I don’t know, skipping that piece, that’s probably the wrong word, but not spending as much time on that as maybe others might have.

Rui: Yeah, absolutely. And building this, there are many ways to skin a cat, right?

There’s no perfect approach. And we know that there’s no one size fits all and clearly for the success from the success of the company, this was one way to do it. Obviously, whenever you have that validation from your users, there are other concepts that then come into play, right? Because people, we could also talk about customer intent versus customer action and all of those things that can play a big part in there, but by being so.

inside the industry and by building it almost with the industry, you were in a good position to, to build a successful solution. Yeah. You had a bleeding problem that, that for sure, which is, which was the money. And then you had all the information you gathered the information to make data driven decisions, which was also pretty smart and helps explain some of the success.

I have a question there because looking at the website, Varro’s website now, It’s completely mission driven, right? This story about having access, giving access to better terms for everyone. This is clearly part of your DNA. Was this there because you just stepped into that. I wanted to ask, was this there from the get go?

Or was this a strategic narrative that you built after creating the product? Because and both are viable. Don’t get me wrong.

Roger: Yeah. Really good question. It was there at the very beginning. I think like all mission driven organizations, the wording we use the language, the imagery has changed over time.

But that initial conversation we both understood that the thing we were really trying to change was this idea that banks do well when their customers do poorly. In fact, I grew up in the, I grew up in the credit card industry as a banker. I remember conversations in rooms with CEOs and myself and others where we literally talked about the fact that our best customers were the ones that were delinquent, but didn’t.

That and ultimately paid us back like profit wise. Those were our best customers. They revolve big balances They missed payments. We got to charge them fees, but ultimately we got our money back and that was the thing that for me was the driver here for colin as well like his story You know is he needed to generate, Fourth quarter earnings and how are we going to do that?

We’re halfway through the fourth quarter just raise fees a little bit and those fees get charged to those people So so this basic idea that banking hurts the people who can least afford it Was there at the very beginning? It’s changed its tone over time and that’s fine. But that initial mission was there from the beginning.

It was the driving force for why we wanted to do it. Yeah. Is it great to create a startup? Sure. Is it great to create a startup that’s worth a couple of billion dollars? Yes. But fundamentally the driving force wasn’t we want to make a bunch of money. The driving force was let’s see if we can do something different and better.

And that was just fun. I was at a point in my life where I, like I didn’t need the money. Colin, I think is in the same place. And it’s let’s go do something that’s going to make a difference. That’s. Where we were at and that’s been there since the beginning and it’s been you can see it more than ever as a driving force.

Rui: Yeah, and I get it. And this is actually a sensible topic for me because I’m originally a marketer and I spent my whole life in B2B marketing. So as you can imagine, I’ve had to help. Many companies during my career, building their own stories or extracting their own stories. But what I see is that often success comes from the ones that are mission fueled because of all of the reasons, right?

And even me as a marketer, for instance, when I joined Haltar a few years back, we are a product house helping entrepreneurs and our strategic narrative, all I had to do was convey it because no one was talking about it, but the strategy was already there. All the founding team, all the managers had startup experience.

They had either their own startups or being early employees. So that DNA was already there. And we were acting much more like an extended team of co founders than actually just a supplier. And then creating the resources to share with the world that we are in a good position to help entrepreneurs as that tech strong arm, which was really easy for me, and I believe that for all the reasons.

If your marketing team is happy because their work is made for them, you are in a good position, right? Because it’s, you’re already doing the right thing. So,

Roger: And I would say in addition to that, like as a company, I don’t want to sound too Machiavellian about it, but it’s way easier to recruit good people.

If it’s not just about, hey, you’re going to, work on some cutting edge technology, that’s awesome for a developer to know that they’re going to do that. Actually, Varo isn’t using much cutting edge technology in our coding at all it may have changed, but we’re using coding in Java, and who does that anymore?

But what we offered, Was an ability for people to buy in and believe in something that they were accomplishing and You know if you go out and talk to like most people want to do good in the world And if you give people a clear path to how they’re accomplishing that It’s great. It makes recruiting easier.

It makes retention easier. It, it drives energy in the workplace. So even if, even if we didn’t believe it, it would be a good tool to have, but the reality is that like I said, from day one, this concept of. Building a business that succeeded when our customers succeeded was the primary Driver

Rui: makes perfect sense to me.

Now let’s go back a bit. Otherwise we’ll end up discussing human psychology. I’m already seeing where this conversation is going. I’m going to just step back a bit to ask you one question. Both you and Colin were non technical. I assume because of what you said, given your backgrounds, how did you build the actual app?

Did you recruit and did you build it internally? Did you recruit developers to do it as CTO or whatever? Or did you go? With an agency, what was the overall path?

Roger: Everything you said. So, one of our, one of our, we had four ultimate, original co founders. One of them, Kolya was our CTO and had a deep history in financial services technology.

And so he was really, The architect of things like data security, things like how we structured APIs, things like how we were going to deliver into the, we started with an iPhone app, how that was going to work. So it was call you in a very small team internally, and then an external company that I’d actually worked with previously.

That delivered the technology and that sort of partnership over time, we extended our team as we brought in, as we raise money and we’re able to hire and felt comfortable hiring full time and then over time that external agency, got, I think they’re still working with Varo, but in a much smaller capacity.

So we started with, and they brought app expertise and like yourselves, had done a lot of work around mobile app development. And so that, that really accelerated our ability to deliver, but behind all of that, Koli really designed this overall architecture that’s still in place today that allowed us to.

Be comfortable that we had a very secure platform, high performance, all the things that any app wants as they start to, scale.

Rui: Yeah, which makes sense actually if you can have a technical co founder or a CTO from the get go We actually advise that every founder goes straight for it because it makes a big difference in communication in managing the overall process

Roger: If I could just add to that though what I would say for myself And I think this is important for any leader in an organization.

I had always made it my business to know as much about as much as I could. So although my background, I guess in reality, I have a computer science, electrical engineering degree. So in some sense I always been a little bit technical, but I never really went into those fields. I was in Okay.

Business by the time I graduated, but it gave me a basis to be able to have conversations throughout my career with technical people, and I just made it a mission to learn so that I could always have conversations on other people’s terms as opposed to making them have conversation online. So if I understood what an API is, we weren’t wasting time.

I taught myself what Docker was and I taught myself a lot just so that I could have productive conversations, move things along faster. It always seemed to me easier for me to learn than for someone else to translate.

Rui: Yes, makes perfect sense, actually. And although, so we don’t recommend or advise that a non technical founder learns how to code.

Himself or herself Simply for, because it the time it will take them to get to a point where they have enough knowledge to build something meaningful. The opportunity is already gone. But they do need to understand at least basic concepts around tech. Otherwise, they will, they may see themselves in a position where someone is enforcing a specific tech stack because it’s the only one that they master or any other.

thing like this that can really hurt the overall viability of the product. So 100 percent agree that knowledge makes sense. But also, as I was saying, having someone technical by your side, it’s important understanding the basics of it. It’s also important. It will also help you do your due diligence, both for hiring and finding a supplier, but we also believe being a former entrepreneurs or entrepreneurs ourselves, we also believe that you should internalize at some point that every founder, as long as they have.

The concept is proven, right? You have your product market fit, so you can start bringing in those resources because it also facilitates the operation from all standpoints. So crystal clear on that. So Roger, I’d like now to transition to go to market. What was your strategy to secure the very first clients, the early adopters?

I know that you delayed your go to market quite a bit because you didn’t start iterating on top of right the first version, but I’d like to dig a bit deeper on that.

Roger: Yeah. So, so I’ll probably mix a little bit of product and roadmap and a little bit of go to market because they’re so intertwined.

We, when we first. Laid out this concept and started figuring out What do we want to deliver out to the market? How do we start? We basically we’re running two races at the same time one around Starting to do some marketing to understand, you know What messaging worked what customers were interested in feature wise?

And starting to bring people to our website to sign up for an early version And so there were efforts And that helped us really tune. Knowing what we were building, who was interested, right? Cause we knew ultimately being starting small, we weren’t going to be out there with TV advertising and sort of general marketing, we’re going to be out, on Google with AdWords and other online tools, Facebook and others in a more targeted way.

So. We had to figure out, given what we’re building, who was interested. And so we did a lot of testing there. Plenty of people can talk about that more intelligently than I can, but bidding on search terms, bringing people in, seeing what the economics looked like, iterating through that process. At the same time, though we had conversations about our product and product roadmap and we very much had a, had an MVP mentality about this.

And so we asked ourselves the basic question, which is what should our MVP be? And in our world, where we’re essentially starting with a, a debit card product, similar to simple, similar to chime at the time, what do you need? You need a way to put money into an account. You need a way to use the account.

You need a way to know how much money was in the account. Other than the regulatory pieces that came with it, those were the three basic things, right? And so we went about building a product that essentially did just those things. So the only way to put money in the pro Product was to ACHN. The only way to use the product was to go to an ATM or use it at a store.

And we had a very simple kind of statementing process was actually like the initial product. I don’t even know if we gave people a way to look at their, transactions other than as a. A generated paper statement like it was very basic and so as we were identifying our market and building this product, we started bringing them together and so we created two things that I think were fantastic.

One is we created a, I think it was about 1000 people we brought in as our beta users. We didn’t charge them anything. It was because the product was just so basic, we would disclose that up front. We’re like, this is beta. It’s barely going to work. We can’t guarantee it’ll always work. We didn’t want people to put a lot of money in it.

We just wanted people who were willing and interested in figuring out with us how to build this thing. And then locally. We started out with a smaller, I think it was 30 person kind of consumer council. And there, what we really wanted were people who were willing to sit down with us, which is why it was local to the Bay area, walk us through things, come in, give us the truth.

As we started thinking about building new features and they would sit with the, with the basic kind of skin version of it. And yeah, I think we were doing like. Design in a app called flint. Oh, so we weren’t even in an app and they would look at it and give us commentary on design and all of that.

So we had real people who were potential users giving us that kind of feedback. And so that just went through time where we had this sort of leapfrogging. Effort of adding features to the product bringing in new people into the platform and it just went faster and faster as we got better and better, but early on, it was very slow, was very clunky, the stuff we were building, like some of the design features we had early on when we, when I look back at him now, I’m like, how could we think that would be helpful?

And the stupid even like the stupid navigation stuff where you want, like consistency of, oh the arrow to move to the next screen is always in the upper right hand corner. Like we couldn’t even keep that consistent early on, when it was just. It was almost who was it? I think it might’ve been Reed Hoffman at some point who said, if you’re proud of your product, you brought it to market too late.

And in our case that, that was very much the case that we were not proud of the product. I, every time I sat down with customers to talk about feedback, I was embarrassed. But it just painful. And some of those people walked away and they’re like, you guys don’t know what the you’re doing. And it was just and it hurt every time that happened.

But now actually when I talk to entrepreneurs, I’m like, you have to embrace that. You have to know you’re not gonna make it. Good. The first time you have to know, customers are going to look at you. Like you’re just the biggest idiot in the whole world. Like, how could you even do this, even with all the disclosure, even with the, it’s an MVP and all of that.

So, it’s, it was quite a journey. I think this idea though, of lining up the go to market. And understanding that along with the product development and figuring out, whether it’s a sprint cadence or how, however, the natural progression is for your organization. It’s that you’re constantly leapfrogging on go to market and product.

And the two are just so intertwined. You really can’t think about doing them separately. And I think the last thing I’d say about that, it clearly then having a strong product management mentality within the company, because that’s the place where the sort of go to market and the technology come together and having good product managers.

And a good, chief product officer who really understands how to do that especially in an app environment, which we were in that’s just a critical role To fill and having someone who can juggle all of that who can deal with the personalities internally, you know at that point We’re a small organization.

The way that I just think about that is you’ve got we had four fairly experienced co founders all like sitting on top of the same stuff. And so Colin’s interested in product. I’m interested in product. Colia is it’s just, there’s too little space for too many. Personalities and having a really strong product person who can hear it all somehow decode it all, turn it into a road map and a backlog of features and then work with the technology team to deliver.

It becomes absolutely crucial.

Rui: Absolutely. And you tapped into so many things in there that I believe that this answer you gave this last two to three minutes could actually be a standalone in an entrepreneurship Bible because it was really packed full of advice. And there are a couple of things I’d like to deconstruct.

First of all, The MVP mentality, because as I said, the lean methodology is something that I personally believe in that we as a company believe in as well. And focusing in the right set of features only and nothing else. It’s the only way to build meaningful products. We believe also de risks the whole thing, right?

You if we think about Instagram starting as bourbon, they actually, their go to market was catastrophic because they had too many things happening. And then for actually they found out that. The photo sharing feature was actually quite successful in the middle of that mess. And they had to tone it down, reduce it to just that features.

And that was how they started their roadmap to success. So focusing on the main things to prove the assumptions you have is super smart and we believe in it 100 percent in something that we talk about a lot as well. Then not charging for your early adopters. That actually makes perfect sense to me as well.

And it’s something that. We often have to talk about both with clients and with people that, that seek us out for advice. Your early adopters aren’t necessarily buying the solution. They are buying the vision, right? So they are willing to adopt this new thing, this new way of thinking about banking because they can see In the long run, what this may turn out to be, right?

So they are there to be in it with you for the process. And if you start by saying, Hey, this is going to cost you 100 from the get go, you may be losing those almost that extended team of co founders. So, not only. To be able to get critical mass, because that will also help you get some traction and then eventually be more appealing to investors as well.

But even for the product development itself, I believe it makes a big difference. So for sharing. One thing, one thing,

Roger: one thing that I would add to what you’re saying is, and as a marketer, I think this will resonate with you is you have to understand every time you interact with a customer, there’s a trade, right?

We, you give something, you get something. And so the thing that we are always cognizant of is the trade that we’re asking for at any point in time with a customer equitable. So, so we’re, we want to bring in beta customers and our mentality on the inside, when we caught ourselves a lot of time, it’s like, who wouldn’t want to be part of this fantastic thing?

Nobody in the world knew what our fantastic thing was. Varro, like people still can’t pronounce Varro, but. But at the time, nobody even understood it was a banking app. Nobody understood we’re trying to do something different. And so you bring people in, you have to give them something for what you’re asking for, and it has to be a fair trade.

And so, and I’ll just clarify, we didn’t charge fees for anybody, right? What we gave those customers was no fees ever. So if they stuck with us and we actually made it, these people that were original, and I know there are still some of those originals left, like we’ll never get charged a fee for anything.

And that was, we thought that was a reasonable trade for their initial group of customers to just say, thanks thanks for dealing with worrying that you’re going to deposit money and maybe never get it back again. Which never happened but as a consumer, like if I were doing business with bar, I’d be worried about that.

And they were. And so we gave guarantees around that. The one other thing that I will say that was really critical in that part of our business’s life. And it wasn’t for the thousand initial beta users. There wasn’t actually an earlier group that was like a hundred is we split them up between the founders.

And so I had 25 of our original beta users who had my cell phone number and they could call me. Whenever they wanted about a problem about a thought and we each had those people and they knew we were co founders and they knew and they were fantastic. Like they didn’t call unless it was something interesting or they thought was interesting.

And we just always answered and it made for a really cool interaction with customers. I met people that I didn’t know, like I learned about their lives. Like it was a real cool way to interact with customers. And so I think that initial stuff, but the point I want to make is there has to be a trade.

It has to be a fair trade and you have to understand that your product as an MVP is going to suck and it’s not worth much. And so you better be willing to give a customer something of value to to deal with what the mess that you’re going to put out as an MVP or a beta product. And it’s only fair.

Rui: Absolutely. And actually this is probably one of the most valuable lessons for anyone starting in the world of entrepreneurship, which is. the user at the forefront, right? Because what this tells me is that from the get go, you actually had the use the right mindset regarding the user, right?

You were not looking at them as a three of money that you could simply go there and get some bills. You were actually incentivizing them, treating them well enough that they would Because actually, if nothing else, they were giving you their most valuable resource, which is time. They were investing their time in the platform.

So giving them free fees for life and having this direct contact with the founders, it makes perfect sense to me. And having, being user centric is actually probably the most relevant factor these days, right? We could circle back to your reasoning on product and the importance of product, which was by the way, a beautiful answer, answer transitioning from marketing to product.

We believe it 100 percent and product is actually the core of our value proposition as well. Not only because of the impact it has on an overall, the overall success of a pro of a company, but also because the user is not the same as it was 10, 15 years ago, right? So there’s the competitive landscape.

Internet has matured into the competitive landscape. It’s much fiercer, which means that if you get load times or screens that don’t make sense, that costs you three, four seconds, I’m out. I’m back to the app store looking for a competitor’s app. So product is incredibly important. We believe in the same, both for products in marketing when, so who was tackling this at the early stages, because you mentioned that you had both, all of you had interesting products.

But you need, at some point you had to bring someone in that was able to grab that information and digest and produce something out of it. When did you, so at the let me rephrase it at the start, who was responsible for marketing and for product? And when did you bring in resources that could take this over from you and do a, let’s call it a better job?

Roger: Yeah, so we I would say early on Colin spent a lot of time on product. I spent a lot of time on marketing But he was involved in marketing and I was involved in product as well So I would say, I was probably 70 on marketing 30 or 40 Percent cause nothing adds to a hundred percent in a startup on product.

And he was flipped where he spent a lot of time on product and less on, on other things. And that was I don’t want to say it was by committee. But I think we wanted to have our best thinking, and so we spent a lot of time together as a team arguing and debating and working things out.

So there was no real one person driving it early on. About six months in, we did. Brought in a chief product officer. By then, we had already actually brought in one or two product managers who were starting to take sort of ownership of pieces. And then the chief product officer was able to sit on top of all of that and really focus on Product and design of the app.

And that’s where things started to really take more of a clear shape in terms of how the final app was going to look and feel and operate. There were some sort of design philosophies and product philosophies that kind of got brought in at that point. That helped to bring it all together.

And that’s also the point at which we brought in our mark, our researcher on the product team who could really then start working in a way in a far more productive way with those beta users in our customer council and really start extracting more valuable insights from them. Like we had plenty of meetings where we brought people in and fed them and had great conversations.

What she was able to do is to really focus that in on, on very specific feedback on very specific points that we needed to understand. So I think there was a lot of work and then Around that six month mark, we started realizing we needed that kind of more professional approach to our product management.

And that’s when that happened.

Rui: Makes perfect sense to me. And also goes to, to, to a point I was, I wanted to make, which is at the start, the founders have to do everything themselves, right? You need to be dealing with hiring and product and, marketing and dealing with investors selling all the time.

So to your point then after six months, when you were at a certain threshold, you brought in the Calvary to help you go further in, in this departments, which works for me. Tell me something, did this coincide with a funding round or you guys raising money? Cool, so you actually built the first version, you got some traction, you went to an investor, you raised some money, and then you brought in these resources.

This is the overall roadmap, right?

Roger: What I would say is close. We were pitching Varo the whole time. So I think if I recall correctly, we pitched probably 45 times before we got a yes. Yeah. And so that took a long, so, so with, we were doing that,

Rui: it’s not better at all.

Roger: Yeah. We were doing what we could along the way with friends and family money and all of that to get ourselves to, to keep moving it forward. But our goal was, had been from day one to raise money. So it’s just a question of timing. That, that we finally, and it was, I would say the difference between pitching someone who didn’t understand our strategy and someone who did it was phenomenally different and Warburg Pincus was the group that initially invested in us when we sat with that group and pitch them, it was a fundamentally different kind of meeting.

Because we essentially were pitching the white paper that they had written internally about the FinTech market. And so we were, in fact, one of them at the end was like, did you get a copy of our white paper? Because you basically just told us everything that was on it. We’re like, no, this is the way that we see FinTech rolling out.

These are the problems. These are the opportunities. So When it clicked, it was magic. Everything up to that point was just I guess, practice. I don’t even know, but it just took a while, but when it clicked. And they were the, maybe the best company that we could have hoped for to be an initial investor.

Rui: So this is super interesting because often we talk about money versus smart money, right? Getting money just for the sake of money or getting money from people that actually have industry expertise and can help you go further. There’s a compound effect in there, but this is even more, right? This we’re talking about philosophical alignment almost, right?

So I’m assuming this was very important. Can you share other Important lessons you learned on dealing with investors, especially early on.

Roger: Yeah. Maybe some that are not earth shattering, important lessons but nonetheless important. So a couple of things that I observed along the way, and what I would say is I’m now an investor.

I’m part of a local VC fund. Now I sit on the other side of the table. And so part of what I’ve learned isn’t just what I learned with Varo, but what I know today. And so I’ll mix it all up, but I still think it’s valuable for someone who’s starting a company. So one thing that I will say. Is that as a, when we pitched Varro, I had no idea what investors were thinking now as an investor and having talked to a lot of other ones, I understand that I completely misinterpreted what investors were doing while we were pitching and in the best possible way, what I would say is most venture capital companies probably listen to a hundred pitches for every one that makes.

Down the funnel as an investment. And so the easiest thing for an investor to do is to get rid of companies as opposed to focusing on which one will be successful. So, so investors are typically looking for reasons why a company will fail as opposed to why a company will be successful, at least at the pitch stage.

Once they get to diligence, it’s about can this thing really work? But when you pitch what you’re pitching against are all the reasons that your company will fail. The reasons that companies will fail are fairly consistent, right? The product can never make money. The market doesn’t want it. The people pitching couldn’t manage their way out of the paper bag.

There are some fairly consistent things, but the advice I would give any entrepreneur, take yourself out of your enthusiasm for. For however long you can look at your business, your product and yourselves very critically. Think about all the reasons your company can fail and counter those in your pitch.

So it’s not to say like your pitch is going to be my business could fail because of market. No, the point is understand the reasons your business can fail, address them as positives in your pitch. Here’s why our market loves us. Here’s why our I. P. Can be protected. Here’s why the founding team will be successful because you’re going to accomplish two things doing that.

One is you’re going to address the questions before they’re asked. And the second is because you’re addressing questions before they’re asked you actually appear to be smart Which i’m assuming most founders are but one of the things of any investors looking at Is not just the idea but the team and if you as a team come across as thoughtful Understanding the where you’re operating and can address questions along the way as a team.

You will appear to be much stronger You Which is always a positive. So that’s one thing I would say about pitching that I learned. The second thing is never believe you’re going to get the time that you’re going to get. So I would say 80 percent of the pitches that, that I was involved in, we got less time than we thought, Oh, you got a half an hour, but the partner walks out after 10 minutes.

So, so make sure in the pitch. And I’m a, I’m, I help other companies build pitches. Now I have two pieces to every pitch. The first is a very simple story. So within 90 seconds, can you convey as a company what the problem is, what your solution is and why your solution will make the world better, not the world in a big way but solve that problem, because if an investor’s 10 minutes, 15 minutes into your pitch and still doesn’t understand what your business is.

You’ve lost. You will never get to diligence. So you have to communicate very quickly. This is what I’m all about. This is the problem, the solution, and why it’ll work. Then, focus on the most important things first. So whatever you want to say over your half hour or however long your pitch is, or however long you’re given, you have to order your thinking from the most important to the least important, because you never know when you’ll get cut off.

And the last and the thing that as a pitcher you will hate to have happen Is I got cut off after 10 minutes, but the most important thing was the next thing I was going to say So the nice thing about thinking about ordering What you want to say from most important to least is whenever you’re cut off You’ve at least with the time you had you said the most important things you could say And then the third thing I would say is You And I saw this very clearly with the work that, that Colin and I did and the rest of the founders when we pitched VARO.

It’s as much about what the VC is about as it is about your idea. You will pitch it and they won’t get it. Doesn’t mean your idea is bad. It just means it’s not a good fit. You will pitch it and it doesn’t match their thesis in that market. You will pitch it and they’re like, oh. We’re only a sass subscription business and you’re opening up pizza restaurants, right?

It’s just not a, it’s not a good fit has nothing to do with your business. And I would say we pitched it 45 times. I would say 40 of the 45 knows or 44 knows we’re just, it wasn’t, we weren’t a fit for that. Particular fund, it had nothing to do with us, nothing to do with our idea. And so you have to, as a entrepreneur, when you pitch somehow separate, the nose into reasonable categories of Hey, we just weren’t a good pitch.

No. Oh, they asked a question. We totally fell on our face. Let’s make sure we know how to answer that next time, which is, the positive benefits of a no. But you just got to keep at it until you find that click. It was for us, it was Warburg. It was like, like I said, it was like magic when it happened.

So those are my big takeaways having been in a couple of startups pitching and also now as an investor, listening to pitches, how I think about, getting a little bit more success out of the process.

Rui: Love it. Highly tactical advice here. So super valuable. Thanks for that.

So as a, to sum it all up a hard look at yourself, understanding where your weaknesses are and what can go wrong. And anticipating almost how to address those questions related to that. Then, assuming that you will have less time than expected. So always count with that, bringing the value first, so the more important things come first in the presentation.

So you at least have said that at the end of the engagement, and then putting a grain of salt in all the no’s you will get, because at some point you need to look at the right fit and not see rejection just as a problem with that. You or the product or anything else. Sometimes it’s not just the right fit.

Love it. Thank you so much. So what was, how was the day in your life back then? How many hours a day, how many days a week were you working and how was your focus split? You already mentioned being. somewhat divided between marketing and product, but can you expand a bit more on that?

Roger: Sure. So, so I so I live in Southern California, borrows up in San Francisco.

So I was unique among both the founders and most employees that I, I would spend a week at home working from home. And then a week up in San Francisco. And what was really interesting is that when I was up in San Francisco, because I was disconnected from my family. And at that time I had, two kids in school, in high school.

And so there was a lot going on on the family side. When I was up in San Francisco, I could be a hundred percent. Focused on borrow. And so I was up early, did, went to the gym, got to the office at seven or seven 30 and left the office at seven or seven 30. I’m very focused on it when I was at home because I had no commute.

I could roll out of bed, head up to my office at home and work. I was able to create a bit more of a balance in my life. And for me, that was really important. And I’m. Old enough to realize that while we can push 110 percent and put a hundred per 10 percent of our focus against one thing.

You can’t do that forever. And so where it was required, we did it like there were plenty of late nights or plenty of like night before we wanted to launch a new feature where everybody was in the office testing and making sure that it was ready to go all hands on deck. And there were plenty of times where as a individual, I, I.

We go through a slow time and I would take advantage of that to work a little bit less, spend a little bit more time at the gym and with my family. And so for me, that balance was really important. One of, one of the things that I would say is we also On when we were starting to recruit our development team, we had a very interesting strategy in that we recruited against healthy work life balance.

We were, we tended to recruit developers who were a little bit older, a little bit more established, where a healthy balance in their life, but still being part of a startup was really attractive. And that allowed us to. To talk to people and say, look, you’re not going to have to kill yourself to be successful here.

You can leave at five, five 36, go home, spend time with your family. You don’t have to sleep under your desk. And part of that was because it was important to us as co founders. Part of that was because when we did raise money, like our first round was 26 million. Like we didn’t have a 2 million seed round.

When Warburg. Decided to invest, they understood that for us to get done, what we needed to do, like they actually pushed us for, to put more money in. I think when we went out and pitch, we were pitching at like a 10 or 15 million range, they pushed us to put more in because they were experienced enough to know we weren’t being realistic about what it would take.

And so that allowed us though. To take a different mentality around that startup time to recruit really solid developers and employees who maybe were a little more experienced and would value that. And we’re frankly, in a lot of cases, we’re able to trade salary for lifestyle. And so economically, it was good for us.

Those experienced. And it wasn’t just the developers. It was also on our product team and other places. They’re just able to get more done in less time because they knew what they were doing. And so I don’t think we had to trade. Output in that equation because we hired people who can just come in, crank out code, crank out their roadmap, do the marketing they needed to do because they knew what they were doing.

And so I think we took a very different mentality towards that whole sort of work life balance. Not to say it wasn’t a shit ton of work. It was, but we also recognize the human in that. And I think that’s just been consistent along the way.

Rui: Yeah, love it. And actually I couldn’t agree more with the comment about senior resources because actually here’s pretty much the same.

Our teams never go over two, three developers at most. And even for data heavy, complex projects in, in, in fintech. Because we believe in that it’s that efficiency, that ability to manage process from A to Z efficiently. So thank you for that. Roger, this wrap ups, wraps up the. Story questions, let’s go for a rapid fire round on on some advice for entrepreneurs.

Is that okay? Perfect. So what would be your main advice for an entrepreneur starting now?

Roger: Put the right team around yourself. Doesn’t matter how smart you are, what you can do if you don’t have a good team, you’re going nowhere.

Rui: Love it. Can you share one key lesson learned on product?

Roger: I think I already said it, but it’s never forget that you’re building a product for your customer, not yourself.

And if you leave them out of the equation, you will fail.

Rui: Love it. Can you share one key lesson you learned on marketing?

Roger: You can’t always get who you want. So, expand. Like we had a very specific market in mind. We were never able to effectively target that group. And so we, at some point we had to look at who was interested.

And adjust our product for that. Two basic philosophies in life. You either hold your product and look for the market and hope for success. So you find a market that’s interested in build your product for them. You can’t fence it on that. You have to choose one or the other. There’s no one right answer.

Rui: This is super smart advice. Actually, this is a super smart lesson. And something that in the future I may come back bothering you again for a new conversation because this is really crucial. Okay, one key lesson you learned on people or hiring.

Roger: Go as long as possible. In a startup, before you hire your first asshole.

Rui: That’s super cool. I need to do a follow up. What then can you do with that hassle?

Roger: Get rid of them as soon as possible. I think the culture that you create as a startup it’s fundamentally the people you hire and. You will never be successful long term in not hiring an asshole. And I it’s really the language that I have to use to describe it.

Someone who’s disruptive, too selfish doesn’t recognize whatever we all know someone. Yeah. And we did that by making sure that everybody talked to everybody before like we. The, we recruited people, but everybody had to give a thumbs up. And we really were like, there was an expertise test, but there was also a very much a culture fit.

Everybody had to feel good about a person that was being brought in. It’s so disruptive. Like it’s hard enough to get done. What you need to do to have to also deal with someone who’s not on the same page and disrupting that it’s just, it’s too much to just don’t hire. Yeah.

Rui: Yeah, that’s it. And actually there, there was, I was listening to an episode, masters of scale from Reid Hoffman the other day.

And I can’t remember who he was interviewing, but the conversation went along the lines of the first 150 employees in the company being your cultural co founders and it’s so true. Because the values that you bring into the company is what fundamentally the company will turn out to have as values in itself.

So thank you for that as well. Now, one resource that was invaluable to your success, and this can be a book, a podcast, a mentor, whatever.

Roger: Wow so, so, it’s a very personal thing, but I had a, someone I worked for early in my career who spent a ridiculous amount of time with this young analytic intro, introverted guy teaching me how to present to people, how to stand up in front of a group, how to know my material.

How to understand how to anticipate questions and how to deliver a message with a certain amount of confidence and ability, it changed the trajectory of my career, allowed me to stand in front of VCs and pitch. It allowed me to stand in front of employees and as best I can inspire them around the mission and vision of the company, I would say to all the Introverted entrepreneurs out there, you can actually do these things.

There are ways to build confidence around getting in front of people and sharing what you have in your head. And that for me was really important. Like I said, it was pivotal in my ability to move through my career and now my ability to get up in front of people to do a podcast like this. I teach a pitch course at University of California Irvine near where I live and I’m up in front of people.

I actually enjoy it now where I used to be terrified. So that skill, however you can get it.

Rui: That’s amazing. Thank you for sharing that also because that’s the whole. at least one of the purposes of this podcast, which is to show that yes, you lay the foundations of a company that is now worth over 2.

5 billion. It doesn’t mean you’re not human, right? It doesn’t mean you didn’t struggle. It doesn’t mean that it was a straight line from the start to, to, to success. So thank you so much for sharing that. Roger, thank you so much for taking the time out of your busy schedule to sit down with me and share your story.

I don’t know if you have any closing thoughts.

Roger: First, it’s been my pleasure. Great to get to know you and talk a little bit. For your audience, if there are people who are listening who have not started up something before, do it. It’s, One of the, like I spent most of my career in big companies and I spent so much time doing things other than what I wanted to be doing, moving a business forward.

Doing a startup is so concentrated and so pure an effort. It’s really a joyful thing. Whether it succeeds or fails, the effort and the focus of doing the work is more rewarding than anything else I’ve ever done and probably other than raising kids, which is its own sort of startup because you never know what you’re going to get there either.

Just do it. Don’t let the fear stop you. There’s far too many rewards, even in failure, personally, you empower yourself, you empower people around you, you move towards changing the world, even in a small way. It’s way too rewarding to say no. Perfect. There you go.

Rui: Just do it!

For you listening, I hope you found this chat useful. I know I did. for joining and I’ll see you again in the next edition of

the startup journey podcast.