Money 20/20, Fintech Innovations, and Interviewing Legends with Zach Anderson Pettet

Jorgenson’s Soundbox Episode 52: Zach Anderson Pettet

Zach Pettet is the neck that turns the head of the financial industry. Remember him? A previous guest back for a special episode.

Zach is the Director of Content for Money20/20. This is the largest FinTech conference in the world. It happened a few weeks ago in Vegas. I joined Zach at the conference, and this episode is us reflecting on what we learned there.

Join us for some laughing and learning, titters and tidbits, and giggles and goodies all centered around FinTech.

Links to Platforms:

Here’s what I learned from the episode:

Code switching is a thing in FinTech. You talk to a startup founder differently than you would a banker, a regulator, etc.
There are different industries within "FinTech" -- and they're very different from each other.
Today's cutting edge antifraud and identity verification services are mostly focused on behavioral analysis during signup.
For financial innovation to happen, we need to understand and work within policy/regulation. The most valuable content is when regulators sit down and share their point of view.
One of the biggest moments of the conference was when Rohit Chopra, the Director of the CFPB (Consumer Financial Protection Bureau) took the stage. They made a big, industry-revolutionizing announcement about open banking (reducing customer's switching costs between banks)
Adyen (a competitor of Stripe) also made a big announcement about chartering a bank.
Vinod Khosla was one of the highlights. He dropped a badass closing challenging entrepreneurs to attack and reduce the earnings of the finance industry.
One of the most important filters for FinTech is to consider the actual people impacted at the end of the day.
Money20/20 featured a lot more cryptocurrency conversations this year. And they were a lot more about use cases than prices.
OnlyFans is a lot more secure than crypto wallets or getting into bank accounts. Its the safest social media platform. But because of the association with adult content, its hard for them to partner with payment processors.
Zach has an OnlyFans.

The sponsor for this week’s episode is Founders Podcast.

David Senra, the host of Founders Podcast, is a biography-reading machine. If you don’t have time to spend 40 hours reading the full-length biography of some gilded-age entrepreneur, listening to David’s high-quality recap is the next best thing.

It USED TO BE a paid podcast, but recently David switched to Ad-based. So search Founders in any podcast player, find the podcast with the white script on black background, and pick an episode that sounds interesting.

Visit founderspodcast.com to subscribe or listen to sample episodes.

Learn more about Zach Pettet:

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Additional episodes if you enjoyed:

Episode Transcript:

Zach Pettet: There's kind of like buckets of this. Like there's inspirational content. It's like we had Serena Williams. Serena Williams gets on stage, talks about being Serena Williams, Serena Williams.

Eric Jorgenson: I just got a VC. It's great.

Zach Pettet: Yeah, it's fantastic. We had Derek Jeter on stage at the end of that day, super freakin’ inspiring. Like it was- those pieces are amazing. What from my point of view, though, the most valuable content is the content- the most, most, most valuable content is regulators sitting down and sharing their point of view with you. That's something you can't get anywhere else in public. It's really hard to get behind the scenes. And it's really, really, really hard to get them to say things even that you need to read between the lines of, much less having ex regulators come, and we had that off the record stage that you did an interview on, where they could actually be honest.

Eric Jorgenson: Hello again and welcome. I'm Eric Jorgenson, and I don't know much, but I do have some very smart friends. And if you listen to this podcast, then no matter who, where, or when you are, you do too. This show explores technology, investing, and entrepreneurship to help you and the rest of humanity create a brighter, more abundant future. This podcast is one of a few projects I work on. To read my book, blog, newsletter, or invest alongside us in early-stage tech companies, please visit ejorgenson.com. Today, my guest is a very good friend and a repeat guest Zach Pettet. Zach is the director of content for Money20/20, the biggest FinTech conference in the world. And a few weeks ago, we were at the conference in Vegas with 15,000 people, and I got to see years of his hard work come to fruition in one insane week. It's his job to filter out noise, find the narratives, and assemble a story with voices that the whole FinTech industry can learn from and benefit from hearing. It's a fascinating job. It's a fascinating perspective. And I wanted to reflect on it with him, take in that experience, and see what we could learn from it in a less chaotic place. This episode is a very casual conversation about our experience at the conference, what we've learned, who we met, but I think it's a great way to see an overview of FinTech, where we are, what's going on. And as with all my favorite conversations, it involves both laughing and learning, titters and tidbits, giggles and goodies. And before we get to the show, I want to quickly tell you about another podcast.

The Founders Podcast is my new favorite podcast. I'm a super fan of it. It is now my most listened to podcast. It used to be a paid podcast. If you heard David on our episode previously, David Senra the creator of Founders Podcast, he recently switched to ad based. So if you search Founders in any podcast player, find the podcast with the white script and the black background and pick an episode that sounds interesting. You will have an amazing experience. David is a biography reading machine. He's read hundreds of entrepreneurs’ biographies from all across history. And the podcast is just him solo talking through his notes, quotes and key insights from each book. It's extremely nutritious listening. You will learn a ton from it. It's like having a very smart, slightly obsessive friend call you and tell you everything that they learned from a book that they read that week. And he's really masterful at connecting stories between people like Estee Lauder, Andrew Carnegie, and Charlie Munger. He's an encyclopedia of knowledge. And it's hard to stay on top of all the reading of autobiographies out there. They're long, there's so many of them, there's new ones every day. So I find that listening to his really high quality recaps of one to two hours on a big great biography is the next best thing. I think you will learn a ton from listening to this podcast and enjoy it. And I really appreciate you supporting the sponsors that make this show possible. If you don't know where to start, and you're huge Naval fan, he actually did an episode on that book. So that's a really good place to start. If you enjoy that podcast, this podcast, this conversation, and you want to be a part of a community who talks about stuff like this all the time, please go to ejorgenson.com. Now, with both ears and everything in between, please enjoy this conversation arriving in three, two, one.

We've lifted, we've saunaed, we've ate. We spent an hour and a half setting up this fucking podcast.

Zach Pettet: We ran to my mom's, got more batteries, but the world doesn’t need details.

Eric Jorgenson: We found batteries. Because this is the least professional episode of the least professional podcast that has ever existed. And that's all people need to know.

Zach Pettet: And I think based on if they listened to the previous episode, they know we are friends and other than that, they don't need to know shit else.

Eric Jorgenson: Yeah, your old episode I think was a good- do you remember when we did that? It was pre Money- It was before you worked at Money20/20, yeah?

Zach Pettet: I think it was right as I joined Money20/20 I want to say. Because I think if I remember correctly, I was able to speak openly about my previous company in a way that maybe I wouldn't have had I still been there.

Eric Jorgenson: Yeah. Okay, perfect. So there's like a little more than a year probably there. And you just had the craziest week of your career, the biggest week of your career so far.

Zach Pettet: I would say year but boiling it down to a week for sure.

Eric Jorgenson: Well, I think it's like- which is an interesting pyramid, like the biggest week of your career, which was a year in the making, which was 15 years in the making, at least. And I feel like there's a couple different layers of this episode that I'm excited to do. One is just kind of like how was that fucking week? Let's talk about what happened. I was there at Money20/20 and so like part of it is I think Money20/20 recap of like I think it's really interesting to kind of like- it’s an interesting perspective to check in on the world of FinTech and just try to see where we've come, where we're going like using that one week snapshot of the biggest FinTech conference in the world and what the industry is up to, and there's no better person to talk to than you who's like behind the scenes MCing, like Hugh Jackman-ing, the Greatest Show Man-ing the whole thing.

Zach Pettet: If we're talking fitness, I'll take it, but I don't know. Like, I still haven't seen The Greatest Showmen. So I feel like-

Eric Jorgenson: There's a lot more singing than there was at Money20/20.

Zach Pettet: I sang as much as I could, but it was a lot more dancing. A lot more dancing. I mean, but the other thing is like, yeah, I was behind the scenes. Yeah, I planned the whole thing. Or not planned the whole thing. That is a way overstatement. I was in charge of the team. I am one of the main team members that builds the content. But what I would say is the most interesting place to start maybe is actually your experience because you came into it as like a little Bambi vibe of like you know FinTech to some degree because we spend so much time together, you know it because of your investing, you know it because of just being a nerd, you know it because of how deep you've gone into crypto and web 3. But you also simultaneously, as you've told me, don't know it.

Eric Jorgenson: Like I get tech but like FinTech, I underestimated the degree to which like it's its own world and how much it totally revolves around banks. Like going to that conference, I was kind of like, oh, this is like VCs and finance and investment banks and like everybody who does money things will be there. And leaving was kind of like, oh, that was all geared towards selling shit to banks of all scales and sizes. And I don't know, maybe that's like a really obvious fact inside. I think it's fine.

Zach Pettet: Let's go with it. Yeah. No, it is that. It is. It's because of the regulatory and policy oriented system that we have in the US, and this is something that I think you've really, to your point, have to be in fintech to understand. This is the thing. This is like hilarious part to me about our relationship and our friendship is like you are so- you have like pulled me with you through portions of my life. I feel like you were just further along enough in your like life development, career development, you're married, I'm not, you're a little older but not so much. But there's a really interesting kind of thread there with that that makes me most of the time while we're talking feel like God dammit, I need to read, or like shit, like what? How the fuck do you know that? And it's all stuff that I innately understand for the most part, but you're the one that goes back and says Robert Cialdini said this versus like I heard once. And I’m looking at a Robert Cialdini book is the only reason I pulled that name out. But it is fascinating how much of a differentiator that is because as soon as we start talking about the FDIC or as soon as we start talking about banks, sub-Durbin versus over Durbin versus a community bank versus a big five, like the nuances there, I don't think I ever understood how deep they were until I was able to talk about some of this stuff with you. And then like your eyes glaze over and you're like, what the fuck are you talking about?

Eric Jorgenson: Yeah. And that conference is a really interesting way to see like the whole nexus that is FinTech. Like there's regulators there. There's banks there. There's capital providers there of all scales. There’s startups. There's crypto. It's a crazy sort of mess of stuff. And it's so much bigger- It is both bigger and weirder and more of a like unique subculture of an industry where- and I was like do all these people know what the fuck each other are talking about? Or like am I the only one?

Zach Pettet: No, that’s the crazy part, no. And that's the weirdest part of my job probably is that I have to- growing up the way I grew up, I think I've just kind of always been, and I think some people don't like this term, but code switching. Like you've-

Eric Jorgenson: What does that mean?

Zach Pettet: So because I grew up- Kansas City being the incredibly- we were just talking about this actually, so I'll pull it in. So as we were going to make sure that this podcast actually worked, which I hope we're recording, the drive that we did from my house to my mom's where we picked up the batteries was two blocks. I live very close to my mom because she's my person and like I’m here to support her, yada, yada, yada, and also kind of convenient when you need batteries.

Eric Jorgenson: Put me on blast about the fucking batteries.

Zach Pettet: We do the two block drive, we come back and kind of start a little conversation about the weird differentiation associated with like a one block shift.

Eric Jorgenson: Kansas City, very diverse, but very segregated.

Zach Pettet: Just call it racist. I mean, it's just like inherently deeply racist and has been for as long as- all the way back to segregation. We held on to segregation a lot longer than most cities. And as a result of that, I grew up on the black side of the city, for lack of a better term. When I talk to my black friends about it, they're like, yes, that's how you say it. When I talk to my white friends about it, they're like, oh, my God, I can't believe you said that. There's no black side of the city.

Eric Jorgenson: Because you haven't been there.

Zach Pettet: You're uncomfortable about it because you have no black friends. So growing up in that situation and going to a very weird French immersion school in a very low income area with very wealthy kids but also very- like we had the daughter of a very, very successful entrepreneur who was funding part of the school, so that's why she was there. But then we also had kids that like would only make 50% of classes because they were taking care of their sister and like living in Section Eight housing and whatever. So because of that, and coming from the lower socio economic side, but wanting to- seeing an avenue out because of my skin color, seeing an avenue out that wasn't just sports, like I saw that there was a very clear way out for a certain group of people, and there was a different way out potentially for a different group of people. And I was so young, I didn't understand the racial layers to that. I was just like, oh, we go these ways. And my mom was always just kind of like pretty much the only way you're going to figure this out is business. So, by accident, when I was a kid, I realized that like I had a set of black friends, I had a set of like Mexican friends, I had a set of white friend. It's just like normal segregation of humans because of language, because of experience, because of culture. And mostly, my white friends would get really angry at me a lot of the time, especially as I got a little older, my white girlfriends would be like, you act so different around this group, you act so different around that group. And you know me well enough, you've probably actually seen this without thinking about it at certain times, like my voice changes, my diction changes, my vibe changes, like all of that. And it's actually that code switching thing is also a thing in FinTech. Because the way that you talk to a startup founder, I mean, let's like go all the way out there and be weird as shit about it. Like the way that you talk to an SPF, like in this moment, well, through bars or wherever, but the way that you talk to like that kind of a- or like Ryan O'Connor, one of our best friends who is just so goddamn smart, but you just have to understand how to ask the question to get them to the right place to make them feel comfortable to actually get to a place to have a relationship with them and to learn from them. Versus a banker is just kind of what you think they are. And especially a community banker is really just kind of what you think they are. But then like a big five bank executive is a very different person then a community bank executive. It is a very different person than a regulator. There are like 20 to 30 subsets in that ecosystem. And you have to be able to, one, communicate with all of them, be empathetic with all of them, understand all of them, and understand who should be connected to who, when, why, and where. There's layers.

Eric Jorgenson: Create content for all of them, see the interactions between them, project how that's going to affect the future of FinTech through infrastructure and consumer and-

Zach Pettet: I mean, that's the other thing is like, by accident, I'm sitting at this like nexus of all these fascinating humans and you just kind of sit- there are moments over the last year where I've sat there and have been like you don't know you. If you two came together, you don't know it yet, but you could build a billion dollar company or whatever. All it takes is an email in some of these situations. And like you and I guess have been doing that for a long time, but there's something different about like, hey, go grab coffee and like, oh, I see this piece of value, I see that piece of value, bring them together and like two plus two equals a million.

Eric Jorgenson: Yeah, it's a little bit of the perspective you have about being on top of the maze. Like you can't go so deep in any one subculture that you belong to it. You have to see sort of the connections of all of them. And it's so interesting, like, I don't know, maybe the right structure is to talk through the way you thought about content. So I know it's taken a year to sort of derive the like there's main themes, and then there's like tracks. And is that like a decent structure for sort of showing the world of fintech?

Zach Pettet: I mean, I think unpacking the world of FinTech is a thing. Should we start with like what your first impression of the show was? We started a little bit with that, but I’m still wondering if like I'm sitting here and I have no idea what Money20/20 is.

Eric Jorgenson: Alright, Money20/20 is the biggest FinTech conference in the world. There's one in Vegas which is I think the biggest. There's also one in Amsterdam. There will soon be one in-

Zach Pettet: Bangkok. Bangkok baby, 2024.

Eric Jorgenson: And it encompasses all of the sort of subcultures and people and stuff that we've mentioned like financiers, bankers, regulators, startups, everything. There's a fucking huge expo center. There's three days of content. And interestingly- four days of content, pardon me. There is also this, which is new- this scale of conference is new to me. There was like 15,000 people there or something , which is fucking enormous. The scale of that conference meant there was like this meeting culture, which I was not- I thought was really interesting and I hadn't seen it before because I mostly go to smaller conferences where you just kind of like rely on serendipity. This is like you literally count the meetings that happen. And they're scheduled like through the app of the conference, people search the thing, and I got all these emails before going of people like let's schedule a meeting, like are you crazy, I'm not going to schedule a meeting during a conference. Like you go and you be serendipitous. Like, I can't be responsible for being at table 97 at 1pm. That’s insane. But that’s 100% how this works, or for a lot for people who are like a startup trying to close banking customers or a startup trying to- a company trying to meet investors or whatever. So that was an interesting thing.

Zach Pettet: But think about the ROI. Well, that you have to do that to make it worth it. Yeah, that's the thing. It's like a lot of- the serendipity associated with like a Capital Camp or like a 200, 300 person, like the serendipity there is, one, like you're barely passing Dunbar's number.

Eric Jorgenson: You can stand in the room and be like that's the person I need to talk to.

Zach Pettet: Yeah. And like Shane and Brent you're just like I know enough of- it kind of is Dunbar's number because you know 50 of them. And then it's 150 you don't know and then you need to go meet them. And then from there you-

Eric Jorgenson: And this is like half the fucking Venetian is just people wearing these tags and like running in every direction at all times.

Zach Pettet: But to pay off your anywhere between $2,000 to $6,000 ticket, you got to take some meetings.

Eric Jorgenson: And that’s before you get a booth. So what do the booths run?

Zach Pettet: Actually, I really, thank God, don't know. Luckily, that’s something I don't have to deal with. But I mean, we're talking- we're not talking one grand.

Eric Jorgenson: No, I went in there. I was like, oh, this is cool, I'll go like find some startups and like- zero people before series A can afford like a booth at this thing.

Zach Pettet: You and I, we walked by a couple but it was like embarrassing. I think you pointed them out. You were like, is that one okay? But it was like a seed company that had like a table, like that scene in Silicon Valley. Like Silicon Valley, I think season, I can't remember if it's two or three where they do the pineapples. They go hide the pineapples around Hooli Con. Like the pied piper table is probably similar to like some of those seed stage tables. But then you saw like MasterCard or Finicity or like- Yeah, I mean, they're spending way more than most people make in a year.

Eric Jorgenson: So the Expo Center is another place that I got- Well, tell me if I think I have this right. So you walk around the Expo Center. And you're like, alright, these are the like Series B companies. They're still working on giant banks. A bunch of them are competing directly it seems like, but they kind of fall into buckets.

Zach Pettet: Yeah, it's a very good take. A lot of people don't really realize that. If they don't come from the industry, they don't see that, and you're absolutely right.

Eric Jorgenson: So the buckets that sort of formed for me are like crypto custody for banks, identity verification through like through biometrics, I saw palm, I saw face, I saw iris, but basically trying to get to the sort of like Chinese WhatsApp like scan a body part and that's your inherent payment wallet identity system with that bank or that whole payment provider.

Zach Pettet: You've kind of been paying a little bit of attention to Sardine too.

Eric Jorgenson: A little bit. That feels more abstract to me.

Zach Pettet: So that's the thing is like that whole world- the idea of biometrics from my point of view is like a little bit more the 2019-y vibe. Like if you track, I don't know how much you've talked about TripleBlind on the podcast or talked about Das or-

Eric Jorgenson: You've had a great episode with Das actually.

Zach Pettet: The audio is a little bit rough, but it's worth it because its Das. That man is just so smart. So for the background, Eric and I are both really good friends, and we can say it, and investors – we had to have a moment of looking at each other.

Eric Jorgenson: I don’t know that we can not say it.

Zach Pettet: I mean, yeah, it feels like we have to say it if anything, investors in a company called TripleBlind who the founder of was previously at a company called iVerify where they were doing iris biometric scanning, so eye scanning. And if you talk to him, he would say that like that company was sold at the right time because that technology is no longer necessarily- the technology's beatable at this point. It takes a lot of work to beat it in a way that like a fraud ring probably isn't going to try and do at this point. But interestingly enough, most of the really cutting-edge anti-fraud or IDV things are actually a lot more about behavioral analysis during signup. So Sardine and Neuro ID, as two examples, have a lot to do with just mouse tracking. Like if you're switching back and forth from this tab to that tab, like there's very like consistently, significantly- statistically significant behavior that you can crab a fraudster from, but it also increases the pull through on KYC.

Eric Jorgenson: Fraudster meaning like bot versus human?

Zach Pettet: Fraudster really meaning potentially both. So there's, I mean, at this point, like the fraud- there was a story that got written by a company that was like kind of an April Fool's joke, a company called Alloy. And they were like, this is the biggest fundraiser in the history of fintech. And it was a story about how a company had raised $100 billion, but it was actually a joke about how much these fraud rings have stolen and how they ran some math that got it up to like $100 billion or whatever. And I opened it being like, holy shit, who raised $100 billion?

Eric Jorgenson: Was this Adam Neumann, again?

Zach Pettet: Exactly. A16z again. And it was actually just like a joke about fraud rings. But fraud rings- fraud rings are as smart as the people trying to stop the fraud, in a lot of cases, smarter.

Eric Jorgenson: There were a ton of- fraud prevention was a big bucket, and then payment rails, which I don't even know what that is. But there was a bunch of payment rails people competing for banking customers, I assume. But it was interesting, like the identity verification and crypto custody to me were interesting because I think there's like, they were big ass booths, they were clearly showing traction over multiple years with banks. And I'm kind of like, oh, what's at this conference on this floor is going to be rolled out to customers in three years, give or take 18 months, by different banks. So, that's an interesting kind of like, oh, my crypto wallet might just live in my bank's bank account. Or my bank might have my fingers or palms or face or whatever, and that might be rolled out to point of sale systems.

Zach Pettet: Or none of that exists. It all gets extrapolated away. And we actually do what the fuck we should do, which is take the first actual financial innovation that we've had in maybe a century, which is newer versions of the blockchain, not the Bitcoin blockchain, but newer versions of the blockchain. And we actually think about some middle ground version of like the classical TradFi version of the rails that we've had, and that, bring them together, and extrapolate away all this bullshit and this whole conversation and just actually make financial innovation happen for the first time in like an actual fucking century.

Eric Jorgenson: Don't like banks have to switch away from core providers, like does crypto have to replace the core providers for that to happen?

Zach Pettet: No. So what needs to happen is actually a lot more on the policy level, interestingly, than it is about- so there's technology and policy problems.

Eric Jorgenson: I remember our last podcast, I was like, what's the most high leverage- what's the most important thing in FinTech, and you were like regulation, dammit. But also you can feel it at that conference. Like the undercurrent or the question looming over like all these panels that you wouldn't even think have to do with regulation by the title, they're always talking about we need more clarification from regulators, we need more speed from regulators, we're not sure we can do that, or this innovation exists but we're not sure it's legal to rollout. Or it's a panel of regulators being like this is why you don't need more clarity, you just need to fucking do it. It's such a bigger part of the conversation than you would think or than it is seems like in other industries.

Zach Pettet: There's a couple of layers to that that are actually really fascinating. So I work with somebody that I perceive to be one of the smartest people in the world. Her name is Rachel Morrissey. And over the past- she's been doing her job on the Money20/20 content team that's similar to mine. It's just like stratifications of responsibility and whatever. But Rachel also runs the podcast. Like she's so sharp, and she comes from a theatre background, not a FinTech background, but is just such a nerd that she's learned this industry incredibly well. But she's come at it with this like, from the point of view of the audience sort of thing. And as a result of that, she pretty much refuses to talk about anything as regulation oriented. The most she will say is policy. But her and I both have this like Trojan horse in every piece of content for the most part that we're putting together, which is let's make this absolutely fascinating, but for the most part, it's a conversation about regulation. It's a conversation about technology. It's conversation with-

Eric Jorgenson: So you do that shit on purpose.

Zach Pettet: A million percent, a million, million, million percent.

Eric Jorgenson: That's why you were smiling at me like a wise old wizard when I said that.

Zach Pettet: I mean, it's the only way- There's kind of like buckets of this. Like, there's inspirational content that's like we had Serena Williams. Serena Williams gets on stage, talks about being Serena Williams, Serena Williams.

Eric Jorgenson: I just got a VC. It's great.

Zach Pettet: Yeah, it's fantastic. We had Derek Jeter on stage at the end of that day, super freakin’ inspiring. Like it was- those pieces are amazing. What, from my point of view, though, the most valuable content is the content- the most, most ,most valuable content is regulators sitting down and sharing their point of view with you. That's something you can't get anywhere else in public. It's really hard to get behind the scenes. And it's really, really, really hard to get them to say things even that you need to read between the lines of, much less having ex regulators come, and we had that off the record stage that you did an interview on where they could actually be honest. So, that's the best. And then the second is the Trojan horse. But go ahead.

Eric Jorgenson: We should explain- this is your brainchild, right?

Zach Pettet: I would say like a little bit because the seed of the idea was mine. Because I was always really frustrated as an attendee that I went to Money20/20 I think four times before I joined. And I was always very frustrated by going to see someone that I absolutely thought of as a hero, and then they told me, I wish money moved faster. Like no shit. We have four day settlement. We all agree. You're one of the smartest people in this entire industry. Why is this the thing that you're choosing to say to me? And they're like, I can't really say anything else because I might get in trouble. So, the idea of a stage in which yonder pouches so nobody can have access to their phone, the headphones, the silent disco headphones so that nobody can even really like interact with each other and react. Like you're just kind of listening in your own little world. And the piece where you're totally blocked in and they wouldn't let anyone in. All of that adds some layers.

Eric Jorgenson: It is a fun stage to be on. You're in the corner. Everybody's phones locked up. Like you're very specifically not recording those sessions. And that was a brilliant thing to get. I have been to many conferences where it's like you put somebody- they’re fascinating, but you put them on stage, and they just become so defensive or can't share the sort of candid stuff that you would get in a one on one conversation and especially with regulators where you are like, man, this is the person making the decision. Like, I really do want to know what they think. How does this progress? How do we unlock this thing?

Zach Pettet: Yeah. Did you- I think you were there for that CFPB announcement. I can't remember. Did I make you MC a stage or something? I feel like I made you do a bunch of shit on Tuesday. And I don't know if you're actually able to see that.

Eric Jorgenson: Can't remember, Tuesday I blacked out. Tuesday was a blur.

Zach Pettet: I think, well, the wild part about this year is I think, from my point of view, the biggest moment was actually a 20 minute – I don’t know about the biggest moment, that's a hard one. But the moment that got me just going, like fucking going, was the director of the CFPB, Rohit Chopra getting up on stage-

Eric Jorgenson: And what is the CFPB?

Zach Pettet: The CFPB is the Consumer Financial Protection Bureau, which is a regulatory body. It's across regulators. So they're kind of- they're a bizarre regulatory institution because their ability to kind of do anything in terms of- I don't want to overstate it in terms of their lack of power, but they have a lot of directional power and a lot less, prosecutorial is like the wrong term, but a lot less of an ability to if you break the rule hold your feet to the fire.

Eric Jorgenson: It's not an enforcement agency, they like-

Zach Pettet: Enforcement is the word I was looking for, thank you. Yeah, they set a road for you to walk down. And if you pick a different road to walk down, then one of the other regulators at that point will probably step in. So, the Consumer Financial Protection Bureau was a Obama invention post 2008 as a result of maybe not protecting consumers the way that we should have been at certain points. Just a thought. I don't know. Subprime was fun. We had a good time.

Eric Jorgenson: The mortgage brokers did anyway.

Zach Pettet: Well, we love a good derivative. Now I'm thinking about 2008. Where were we going? So the CFPB was put in place in 2008. There's a really interesting thing that happened recently, which is the Fifth Circuit, I think in New York, basically not cut their funding, but they're- I don't want to say cut, or I don't want to put a term to it, but their funding is in interesting place. And as a regulatory institution, not necessarily understanding the future of your funding is a fascinating thing. So, there's like a hypothetical world in which 5, 10 years from now, I don't know, I don't know all the details of it, maybe they don't exist. I don't know. Who knows. Anything can happen. And with this specific regulatory institution that was invented 13 years ago, 14 years ago, 13, 14, we'll see. The likelihood that it exists as long as the FDIC does, I don't know. I would be kind of shocked. But a lot of it depends on the next administration. And like, yeah, Republican administrations are not a fan of the CFPB because they view them as overbearingly regulating.

Eric Jorgenson: So what was their announcement?

Zach Pettet: So the announcement was about open banking, which basically- which the UK already has, most of Europe already has. It's basically the ability for you to say, okay, I'm a Chase customer, and I want to not be a Chase customer anymore, I want to be a NBKC or like a lead bank customer, or I don't know, I want to move to Bank of America, whatever. This ruling, rule 1033, would, as it actually becomes real policy, would basically say, one, that you have the right to be forgotten. So you can say delete all my data. And if you don't delete all my data, and if I don't have proof there of basically, which is hard to prove, but if you don't do that, then you're out of compliance, and you are violating a financial rule.

Eric Jorgenson: And you'll get a class action lawsuit probably. Or regulator inspection.

Zach Pettet: There's no chance that they're doing it to just one person, probably. So yeah, it would end up in a class action, I would imagine. That's pretty much the only way that shakes out. So that's one piece. The second piece is making it easier to actually make the move. That's what the UK has figured out. They've actually done a pretty good job of figuring out and building ramps, off ramps from this bank, on ramps to this bank, in a way that makes sure that consumers are actually able to end up in the right financial products with the right financial institutions and not getting totally fucked. That's just kind of an expected thing over there now. They also have a very-

Eric Jorgenson: How recently recently did that happen?

Zach Pettet: 5, 6, 8 years.

Eric Jorgenson: It's not like they've just always had this right.

Zach Pettet: A lot of it really came as a result of the neobanks. So the other thing about the UK is that Revolut, Monzo, like those groups are actual banks.

Eric Jorgenson: Like neobanks worked there.

Zach Pettet: Because they're actual banks. That's the thing. And neo banks worked here. They just worked in a very different way because of the necessity of the sponsor banks behind them. So when you're leaving a Revolut in London, or whatever, when you're leaving a Revolut in Europe, through an open banking system, you're actually leaving a bank to go to another bank. Here, if you left Chime as an example, you would be leaving Bancorp not Chime. Chime is a technology company. Bancorp is the bank. So you'd be leaving Bancorp to go to Chase or to go wherever. So it's a- in terms of the FinTech piece, it's interesting. The thing though is it was mainly 20 minutes of signaling about what the future holds for consumer protection. That's what it all comes down to is like if you're getting fucked at Bank of America, because if you have less than $2,000 in your checking account, they charge you $12 a month for an account maintenance fee, that you should have a very easy ability to shift to a different bank. Like it was 20 minutes of that. But in our industry, reading those tea leaves and reading between those lines is a really, really big deal and also market moving information. It was, I think I was telling you this a little bit earlier, but it was like the most wild three hours of maybe the whole show. Because we had booked the director to speak. And we knew that he was going to be saying something. But because of the nature of the information that he was going to be sharing, we didn't know what it was until about 6:30, 7am the morning that he was going to be speaking at I want to say 10, something along those lines. So, my morning started with like, I think it was Tuesday, so I was MCing this day. So for me, that's a light day. It's just I have to get on stage every 30 minutes, 40 minutes, whatever and dance monkey dance and get the crowd excited and pull people in for whatever's next kind of thing, no big deal. But finding out at 6 or 7am information that the entire financial industry has wanted to know for at least five years, maybe a decade, because we've been talking about this for a while. And all of a sudden, I have a four page speech in my inbox that I have access to, that is going out three hours, it’s under embargo. But for about three hours, myself and Rachel had access. And I mean, after I brought the rest of the team in because it basically turned into crisis comms. It wasn't a crisis. But it was oh, holy shit, this is a much bigger deal than we realized. I am a nerd, so I had a hunch it was going to be 1033. Rachel had a hunch it was going to be 1033.

Eric Jorgenson: 1033 is what?

Zach Pettet: Oh, it's like it's the specific number associated with- Yeah, with open banking policy, the ruling, when it actually does become a rule. So we had a hunch that was it. Like the only thing that could come out of the CFPB that would be like very interesting would be him coming out of left field and just dropping this at Money20/20. We had a hunch, but it's really hard to prepare for a hunch, especially when you're doing 250 other pieces of content with 400 speakers, and yada yada yada yada. Like I'm not going to focus on this thing I know nothing about. So as soon as I wake up that morning, well not as soon as I wake up, I get into like the staff meeting. And I get in and Rachel's just looking at me with these really big eyes. And I'm like, oh shit, like either someone died – it is either great news or terrible news. And she just hands me her phone and it's the speech. And I start reading it. And we have like a new director of PR, who's from Sweden, and like had not understood me yet, not understood like the way that happens and not understood the way that we communicate as when Money20/20 behind the scenes, especially, because we have to move quickly, we're candid, and we're very tight as a group. So at the end of the day, we know that we're all good, but we might cut each other off, we might- it's a little bit- the closest thing I can describe it to is kind of like an open outcry trading floor back in the 90s just based on videos I've seen. Like it's the only- it's the closest thing I can come up with. Because at one point, I'm standing between three people, I'm answering three different questions here. I've got my PR person over in the corner. They're asking me questions. I'm literally simultaneously- I'm going like bang, bang, bang, bang, bang, bang, answering this question, running over there, answering that question.

Eric Jorgenson: It's like Aaron Sorkin fucking scene back there.

Zach Pettet: I mean, yeah, a little bit. I mean, had a camera- at a point, there was a camera following me but had a camera been following me, it was pretty- you would have been walking in circles. You're like did we just see this hallway? But it was wild. So we spent the first like 30 minutes to an hour just unpacking this. And as I'm reading it, I'm like- I read the first paragraph. And as you saw, because you were there, like I, one, put a lot of my emotion into this, two, it's exhausting. So, I'm kind of on the verge- yeah, I'm on the verge of either crying or complete elation, or like crying and elation. It's all just like, it's all wild. And I needed a cup of coffee. So, I was reading. I get through the first paragraph. I get to the second paragraph. The first paragraph, I think I said fuck three times. My PR director was freaking out because I think she was like, oh, God, is it bad? Because she doesn't know me. So get to the second paragraph. And if I remember the sentence correctly, it was something along the lines of: And this ruling will drastically change the way that the financial ecosystem is regulated going forward. Which for a regulatory body, that's laying a deck on the table. That's putting it all out there. That's a bold fucking statement. That’s wild really. And I got to that moment, I got to that sentence. I stopped. I looked up. And like we hadn't had- at this point, we hadn't gotten the whole team together. I looked at my new director of PR who hadn't started yet, and I said, I need you to get our entire external PR team. I need you to like get everybody at a table within the next 10 minutes. I'm going to step out, I'm going to read the rest of this, and then we're going to have to react to this preemptively to be able to act react to it post-emptively. Like we need to prepare our reaction to after he says the words to put it out there. So, for whatever, we were in like a half hour me actually explaining to non FinTech people what the hell was going on and why it mattered and started writing the press release and all this kind of stuff. And then for about three hours, we were running a conference, running a show, with a ticking bomb. Just like for three hours I had market moving information in my head that I just had to carry on. Like all I did was- the wildest part, man, was directly after the Rohit announcement was Zach Perret or Perret, depending on how you want to pronounce it and depending on how much you want him and I to fight because our names are exactly the same. Him and the chief legal officer for a16z were getting on stage directly after, and Plaid, Zach's company, is kind of, especially in the US, the open banking company, like the open banking company. So we have a gigantic ruling, or a gigantic signal, in the direction of something fascinating happening. And then directly after that, we have the CEO of one of the most important companies in the space expected to get up there, get interviewed by one of the most powerful lawyers in the United States and react or not react to everything that just happened. So, I was like sitting backstage as the director was talking between Zach and Jay, watching Zach's face as he reacted to this. It was like a roller coaster. I mean, it’s Zach, so he's like very stoic. He's CEO. He's a very, very successful, very smart individual, so he doesn't overreact. But you could tell that he was kind of inside of himself having a moment. And you could tell that Jay was watching him trying to figure out how much of a moment it was, trying to understand what direction he wanted to take the conversation, because Zach was so focused on listening to what he was saying, that he- and he's maniacal. I mean, he's one of the smartest people in FinTech, in my opinion. He'd studied physics. He's a Das. He's that level smart, kind of talks like him too, actually, has some of the same things. So you couldn't get Zach's attention for 20 minutes. I was like, hey, dude, how are you? Like, haven't seen you in a minute. What's up? He's like- and I was like, oh, he's in that mode. So I just went into like service mode. Like he still had his badge on. He hadn't gotten anything stage ready. I took the badge off of his head. I had to grab a person to come mic him up. So he could keep watching instead of having to leave the green room. It was just a wild, wild few hours. And then the media machine just took off. Like, it was probably the biggest announcement that happened, biggest like media or PR coup. It was wild.

Eric Jorgenson: And that's not expected. Like it's not like there's reporter showing up to Money20/20 expecting breaking news really, is there?

Zach Pettet: There's- I mean, yeah, yes and no.

Eric Jorgenson: Bill Harris announced his company there. There was somebody else.

Zach Pettet: Adyen that night did a really big announcement that they had chartered a bank. I mean, so Adyen in a lot of ways is, I think I got to be careful about what I say about Stripe, but based on the corporate culture that has developed there, as they've grown and scaled and-

Eric Jorgenson: You said, you have said Adyen is like Stripe’s direct competitor, like the incumbent, which most people in tech I don't think would know off the top of their head.

Zach Pettet: Especially in the US. if you're abroad, if you're not in the US, you're probably very- you're more familiar with Adyen probably for the most part, and that's really not true. Stripe has just done such a good job of branding – Stripe press, Stripe everything, the simplicity, just everything about them.

Eric Jorgenson: Did Adyen come from tech? They just like kept their heads down. Or do they just sort of come from somewhere other than the Valley?

Zach Pettet: I really think it's just that. I mean, they're not a US company. Their CEO is based in Amsterdam. I don't know technically where their corporate base is. I mean, assuming I know anything about the space, it's probably like Ireland or something for tax reasons. But their CEO is in Amsterdam. Depending on when you look at the numbers, there's been times when they were doing more volume than Stripe. There's ways that you can make an argument about Adyen being a better business in some ways. Volume, I think, at this point is much higher on Stripe, but it kind of comes down to the value investment you want to make and things like that. But the hype machine because of the Collison brothers and because of YC and because of just all of- I truly think that Patrick Collison could never say another word and be considered, Sam Altman be considered, Vitalik be considered- I mean, he just has done that.

Eric Jorgenson: I mean, I think he's fucking brilliant.

Zach Pettet: He is brilliant, but he could just never say another word and still have that be his legacy. I mean, he is one of the smartest people that has ever graced this industry. And we need more of him. So please, Patrick, talk more. But that being said, there's something really interesting that happens around these comms teams as they get bigger where they- I almost have this theory that at like 50 billion in terms of your valuation, or like 30 billion or 50, I don't know what the number is. But I almost think there's some point where you develop this like incredibly professional marketing and communications team, and they then carry on to run the company. Maybe not run the company in terms of revenue, maybe not run the company in terms of a lot of the company, but they definitely run the ability for the company to tell a story. They definitely shoot themselves in the foot 25 times before they get out of bed out of just sheer fear.

Eric Jorgenson: Well, you become more- you become defensive. Like you have something to lose. You got less- you become Goliath instead of David. So there's no- you can't punch up at anybody and so you can’t punch, so you just stay- like there's interesting things around this. Like I remember, Warren Buffett got asked about some of his personal political views. This was in Omaha at the meeting, and he's like-

Zach Pettet: Was this this year?

Eric Jorgenson: No, I think it was last year. Maybe it was this year.

Zach Pettet: I think I was sitting with you during this.

Eric Jorgenson: He's like, I have them. But an interesting thing about being a CEO is you can't speak as yourself. Like you represent the interests of the company, you represent the company, you represent the shareholders. You can no longer separate your person as an individual from your person as the CEO of this company, and you sort of lose the right to, or the ability, I suppose, to speak about those things. And so he's like, I just learned not to. And Collison, they may be going through that same thing. And JK Rowling was like an interesting thing about being this famous, like, I cannot whisper, everything I said is the same volume, and I lose agency over the context in which it's delivered immediately, so it's hard to do. But the other direction to take this is the Balaji version, which is like all comms teams are like embedded journalists. So they don't actually work for the company. They worship the media structure, not the entity that they work for. And so they still serve the sort of interests of the media, even though they're inside the company, which I'm sure does not apply to everybody.

Zach Pettet: I think that's entirely the correct way to handle it, but rare. Think about the amount of value because I- we can move past it. But I think that- I wonder if that’s shifting.

Eric Jorgenson: Well, the places that are shifting are the people or all of the people that are going direct to the media. Like Elon fired everybody on Twitter comms and was like, I'll just tweet whatever I want. Like that's how we'll communicate with you. He has not had- I don't think Tesla has PR. It did at one point and he let them go. And even people that keep their PR teams, like Zuckerberg is going on Rogan and going on Lex, and they're just making many more efforts to communicate directly either through, whatever, social media, podcasts, wherever. It's very interesting. What were the other like craziest moments where- like it was such a concentrated thing that it- I mean, you were like front row to Posty, Post Malone show like three hours after you fucking interviewed Vinod Khosla, which is like an hour after you interviewed- it just went like on and on and on like the life highlight moments that happened like five times in a day are just like insane.

Zach Pettet: I can tell the Monday story, that's probably the- Monday was the craziest day.

Eric Jorgenson: Bring on Monday.

Zach Pettet: So Monday was- I think my favorite part about Money20/20 is that like you can just like take a snapshot of any stage for the most part, you can take a snapshot of any moment between-

Eric Jorgenson: There's like five stages happening in parallel

Zach Pettet: Five, six depending on how you count it. You can't get to all of it. It's too much. The volume’s overwhelming and it's wild. And also, it's broad enough that you probably don't care about all of it. But so Monday we had, what I would say, if you took a screenshot of Monday, just on our main stage, or our main stages, you could put that up against any FinTech conference in the world over the last 10 years, and I think that we would- there wouldn't be a big competition. Like, it was an absolutely, absolutely wild day. So we think about- I think I kind of said this earlier about inspiration and these different kind of buckets of things.

Eric Jorgenson: I'm not sure we finished naming the buckets, but whatever.

Zach Pettet: I'll name them as we walk through the story. We will identify the buckets as we walk through them. So we kind of decided Monday was going to be like open inspiration and close on inspiration. So Monday morning was- we had this thing that happened Sunday night called Sunday Night Live, which was supposed to be our biggest stage. It had 4200 seats. I think at one point, it really was full Sunday night. But Monday morning was Serena Williams. And turns out, Serena Williams is a little bit bigger of a draw in certain ways than Adyen announcing they're banking as a service and embedded finance tooling plus chartering a bank, which from my point of view is a lot of news, but Serena Williams is Serena. So we had I think like almost maybe 5, maybe over 5000 people in that room.

Eric Jorgenson: It was standing room only. It was fucking packed.

Zach Pettet: Where were you in that?

Eric Jorgenson: I was standing.

Zach Pettet You're standing in the back?

Eric Jorgenson: Yeah, I got there right before it started.

Zach Pettet: Yeah. So I think that if I had to have like one highlight of- FinTech crowds are hard. You probably felt this as you were there. Like, you walk out, you're like, how you doing everybody? And they're like- that's a hell of a reaction actually. They just kind of look at you.

Eric Jorgenson: Yeah. And then they're not even like- it's not like they're all looking at their phones. They're just like looking at you, demanding enthusiasm from you and flatly refusing. We're here for the information, please.

Zach Pettet: This is a one way relationship. But if it's not entertaining, we'll also dock you on that. It’s really either way. So I think this was for me the coolest way-

Eric Jorgenson: If you ever go into stand up, you're going to fucking- like you can't- Just because if you can handle a FinTech crowd, if you can bring up a FinTech crowd, like any comedy bar, any comedy- You can lift any room if you can lift 5000 FinTech hungover FinTech people on a Monday morning.

Zach Pettet: Well, I think that's why it was so crazy and I think why that day started on such a good foot, it was the first time in my experience as an overly exuberant, won't shut the fuck, up on stage, yeller at crowds to get them going, also just known as, I guess, an MC, that I walked out, and there was energy before I got out there. There was a group of 40 people in the front that were actually going to get to go meet Serena afterwards. So, I think they just like jumped out of bed. They were there, baby. Like it was a standing ovation. And like a few, a couple of them were from Kansas City, so I saw them in the crowd. It was really cool. So I walked out and my job literally was just to like pump up the crowd before my CEO came out to show a video that we got Jamie Dimon to do from JP Morgan, which also like I actually literally cried tears of joy when we got because it was a big fucking get. It was really cool. So I walked out. And the weirdest thing happened. People were cheering. And I actually had to take- And this was like the first- normally I walk out and just go. You've seen me. I actually took a second. I like took a breath. And I'm comfortable on stage. It's not like I don't take breaths on stage. But it's rare that I take that big of a breath before I say something because there's usually just silence. But I took a breath and people were clapping and screaming and like excited to be there. Outside of the story I'm going to tell about the end of this night, it was maybe the highlight of- it was the highlight of my public speaking life. Like the fact that people were that excited, it just felt so fucking good. I think I was on stage for like 30 seconds. And I don't remember at all what I said. But it felt so good.

Eric Jorgenson: And it's not even- like from my perspective of seeing you put this thing together for the year, it's not even just like the crowd was good, they got to meet Serena. It was like you got Serena there, you had built the sort of whole outline, the whole content, like created this moment that you got to stand inside. And like that happened over and over again the whole week, but that might have been the one where it's like this is a long time coming. And I get to appreciate it like in this instance.

Zach Pettet: So to your point, I said a couple words. I got off stage. I listened to Tracy, my president CEO say a few words. I watched the Jamie Dimon video happen just because the size of those screens and just needing to like watch it happen in person. And then from there, I had to run to the other stage. Well, so from there, I had to run, pick up Vinod Khosla because I was basically his body man for the day.

Eric Jorgenson: Is he heavy?

Zach Pettet: I mean, not at this point. He's been- he skis a lot and he had a surgery on his knee recently so he's lost some weight. But I had to like go find him, bring him to the right place. I had one of my best friends from work actually go get him from the car because I was in the middle of introducing Serena, so I couldn’t go get Vinod, like the whole thing was so weird. And then I'm just like getting off stage from fucking introducing Serena Williams. I walk over and I shake Vinod Khosla’s hand. Well, he's still elbow bumping. Little things like this are just kind of fun for the world to know I feel like. He walked in with a mask on and is still elbow bumping. And I don't think he's irrational. I think it makes total sense. I think he had like three other speaking spots that day. Like after I interviewed him, I introduced him to Serena, put them in a room for like 45 minutes. Went took him to meet a startup and then he left to like go speak at fucking Davos. I don't know, wherever.

Eric Jorgenson: Also just smart, because he's how old? In his 70s, yeah. And COVID was very much present.

Zach Pettet: Yes. Oh, a million percent.

Eric Jorgenson: So, yeah, fucking don't get COVID, Vinod Khosla.

Zach Pettet: But yeah, it just it stuck out to me because he was the only one in like the whole show that did it.

Eric Jorgenson: That’s a contrarian, baby. I mean, just willing to make sane decisions.

Zach Pettet: It was just so on brand him too, like contrarian and stuck with it. Long-term contrarian, and probably for good reason and making other people feel awkward about it. Not really, but just like so many people went in to shake his hand as I was like- I was trying to like Sherpa him so people didn't see him. But people would see him and they’d come over and try and shake his hand and he’d be like, nah, bitch, here's my elbow.

Eric Jorgenson: The People's Elbow.

Zach Pettet: The People's fucking elbow.

Eric Jorgenson: Can we- I want to- I don't know if you want to talk about like what he talked about in the interview. I got to listen to some of that one, and it was fucking legendary.

Zach Pettet: Tell me what you thought. I blacked out.

Eric Jorgenson: I only got to see the end of it. I think I was on the other stage.

Zach Pettet: It takes 10 minutes to get him going. So I think the last 15 were probably most of the value.

Eric Jorgenson: I remember his like closing remark was this like very well thought out sort of math based approach of like finance is the most profitable industry in the United States. It's like by percent of corporate profits of public companies, it's like on the order of 30%. And he's like, that's wrong. That is not a sign of a healthy economy. That's the sign of like regulatory- that is rent seeking behavior. Those profits should live in other businesses, in other industries, in small businesses. And my challenge to all of the entrepreneurs in the crowd is to attack and reduce the percentage, the earnings of the finance industry. And I was like- I was literally clapping and cheering. I was the only one in the whole crowd who was like, whoo, fucking a. Everybody else is like shit, God dammit, we got to- it's just like that is such a gangster thing to like go out and say on a stage at a FinTech conference.

Zach Pettet: I’m pretty sure I was clapping with you.

Eric Jorgenson: I don't know, what a badass, what a VC, what a legend.

Zach Pettet: What a unique VC, like just the vibe of that man. You know what's weird, I've never been less nervous to interview someone.

Eric Jorgenson: You guys had a great rapport. Is that your first time meeting?

Zach Pettet: Yeah, and we talked for five minutes beforehand, because I was trying to solve the Serena thing. Also, in the midst of this, I lost my laptop. So I like-

Eric Jorgenson: I forgot about that. You were just like a fucking yard sale for like four days. There's like something falling off of you at all times. It’s hilarious. How does someone get- how do you get Serena Williams on stage?

Zach Pettet: Alright, so we talked about things we can talk about and can’t talk about, but it's not something I can’t talk about. It's just like so straightforward it's almost uninteresting. Turns out, costs money. That's literally it. Like anybody can get Serena Williams onstage as long as you're not like- I bet she would say no to Adam Neumann right now. She might say no to SPF. She might say no to Trump. But she's capitalist.

Eric Jorgenson: But only very few, like almost no- the numbers of speakers at Money20/20 was wild to me.

Zach Pettet: In terms of high or low?

Eric Jorgenson: Well, one, it's a shitload of speakers, like hundreds of individual speakers.

Zach Pettet: Over 400 this year.

Eric Jorgenson: Out of how many applications?

Zach Pettet: I think- so the other interesting part is that we're not- So the application number is interesting. We get- this year, I believe we got 1500 applications for pieces of content. But that one piece of content could be one person up on stage delivering a 10 minute presentation, or it could be- and we're, I like to think, good at our jobs, so we generally don't let five people on stage at once. But it could be a four person panel with a moderator. So if you think about the average, probably three people for each submission. So three times 1500, 4500ish people, something like that. Maybe more. I would say around 5, probably around 5000 humans applied. But then you think about like you didn't apply.

Eric Jorgenson: Yeah, that's true.

Zach Pettet: Vinod didn't apply. Serena didn’t apply turns out. Derek Jeter didn't apply. Brett Harrison, the ex president of FTX, didn't apply. Like, most of our- probably 30 to 35% of our agenda was folks that I or we went out and hunted. So that's the other thing, like 5000 apply, of those 5000, I bet of those 400 speakers, 2-250 maybe. I would say 200 were through that process. So it's like Harvard-ish, I think, if I’m thinking about that correctly.

Eric Jorgenson: I'm sure the ROI for presenting is enormous. Like, that's got to be- and I know- How does it feel to like hold those keys for lack of a better term?

Zach Pettet: I don't know. I feel like it should feel heavier. The reason I took this job is because of the heft. Like, the reason I took this job is to be the neck that turns the head of the financial industry. So I take that shit super seriously. Like the idea that- I've heard and felt and seen the impact of like, oh, we heard this on stage at Money20/20 last year, so we're going to lean into crypto this year. Or like, we heard this at Money20/20 last year, so we're going to make sure that we're working with two other banks to prevent fraud rings. Like, I don't know, whatever, stuff like that. But that shit happens. And it's not to be taken lightly, I don't think. Like, putting a bad piece of content on our stages is at best not harmful, and at worst, not harmful, but uninteresting, and at worst incredibly fucking harmful to the industry, and to average Americans and to people that are underbanked and to- like, so many people walking around Money20/20 are like, oh, look at the- because it's so overwhelming that you're just like, oh, let's talk about APIs. Let's talk about KYC. Let's talk about IDV. Let's talk about acronyms. But what about like Felicia? What about fucking Henry? What about the actual person or business owner at the end of the day that is impacted by this shit? And if you don't keep that filter on through the whole thing, like you have to put on a good show, and you have to keep people inspired, and you have to keep learning. But you have to- the other non regulatory Trojan horse is doing the right thing. The like, having conversations in the direction of how building sustainable businesses actually come from making the right decision for your consumer or for your client or whatever.

Eric Jorgenson: That was an interesting thing, too, listening to a bunch- I mean, I MCed a bunch.

Zach Pettet: Yeah, thank you, by the way. Eric did literally everything I asked him to do for four days. And he knew about 1% of it when he got to Vegas.

Eric Jorgenson: I was like half coffee boy, half MC. It was a wild week. Whatever it takes baby.

Zach Pettet: You were my Jesus, turned water and MCed.

Eric Jorgenson: Hearing who, to your point, treats- Who thinks of their customer as who. There's some people who go on stage and revere innovation sort of in the abstract. Like JP Morgan had a big spot. And they talked a lot about pushing innovation, pushing technology, investing in their groups, but they didn't talk about Henry and Felicia. But there's other people who talk about the banks as the customer. Like, we're here to serve the banks. We're here to like-

Zach Pettet: For them, that's true. And much less inspiring from my point of view, not something I want to get out of bed every day to actually do but important.

Eric Jorgenson: And I bet for most of the companies there, the banks are the customer. That's really like the person you have to care about. The banks are there to like- I didn't appreciate the extent to which banks are just like an assemblage of vendors. Like when you're walking through, you're like, oh, these are all the component parts of a bank. And a bank is like a brand and a regulatory moat that gets to like shop this batch of vendors and cobble them all together and serve them to Henry and Felicia.

Zach Pettet: You literally just- that is the best Mainstreet explanation of a bank that I maybe have ever heard actually. It is entirely true. Outside of the top 10, top 50 banks in the US, which we have 4500, like, the other 4000ish-

Eric Jorgenson: Which are what you call the community banks and stuff?

Zach Pettet: I mean, there's tiers to it. Basically, community to regional to like community, sub regional, regional to like large regional, and then you get into the B of As kind of thing.

Eric Jorgenson: Is regulatory the reason that that dynamic exists?

Zach Pettet: Yes, I mean, the answer to that question about basically any conversation you have with me about FinTech or finance is yes. But yeah, so the reason is a- one really clear example is like the reason that Chime or any of these consumer facing FinTech banks, the reason that I had a job when I was in NBKC was because these consumer facing FinTechs want to be able to- every time you swipe the card, if they have Bank of America behind them, this is incorrect math, and the math itself is so convoluted that it doesn't matter. But let's say every time you swipe the card on a $100 purchase with a Bank of America as your bank behind you, because of the way the interchange rules work, aka like the amount that you can take out of that that the merchant pays, you make, again, incorrect, but let's say you make out of every $100, one cent or half a cent.

Eric Jorgenson: You the bank.

Zach Pettet: You the bank. Well, so the bank and you together. It's fucking confusing. This is why this industry is what it is. So you and the bank together, let's say, maybe make 15 cents. That's even wrong. That's wrong. Five cents. All of these numbers are incorrect. I don't want anybody to think these numbers are correct. I'm just trying to like think about the ratios in a halfway decent way. So of the $100, you and the bank make- let's just say $1 and make it easy. I know I'm confusing everyone. Let's say $1 to make it easy. Of that dollar, that 1% interchange rate, if you have a big bank behind you, you as the FinTech are probably going to make 20% of that, something like that. And you would have to have decent volume to make that 20%. So you'll make 20 cents.

Eric Jorgenson: And the bank still makes 80 cents. Because the bank has the regulatory charter.

Zach Pettet: The bank spent how much on marketing? The bank spent how much to acquire the customer? And then if you think about-

Eric Jorgenson: They're just the only ones who are allowed to move money in the US. It's regulatory capital lend money in the US.

Zach Pettet: Exactly. Regulatory capture, 100%. But if you think about community banks, and this is why I moved to $1 instead of my previous bullshit. If you spend $100 on a community bank card, a Chime card backed by a community bank, the community bank and the entity together make about $3 instead of $1.

Eric Jorgenson: And that works for the consumer or doesn't matter?

Zach Pettet: Doesn't matter, doesn't matter. It's the merchant is paying the fee. Remember, I think we were standing at Woodside the other day and we were talking about like card not present versus card present. So a lot of people don't know this but if you dip your card versus if the cards not there and you use your phone for Apple Pay versus if you swipe the card versus- like all of those actually have different interchange rates. That's why if you want me to get even further down the rabbit hole, I won't. Not going to fucking happen. So, you'll make- if you're a consumer FinTech and partnered with a community bank, that $100 swipe happens, you'll make- they make $3. Let's say you make 45 cents instead of that 15 cents or whatever it is. You make like three times as much. That's because of a policy, well, a regulation put in place called the Durbin Amendment. So under the Durbin, basically it's banks under this level of assets make more interchange because we want small financial institutions in the US to be able to compete with these big banks. So banks were too big to fail in 2008. As a result of that, we want to create a regulatory kind of prop up for the smaller banks to create a little regulatory benefit to them, especially as Fintech is happening, to give them an ability to ride this wave in the way that the group that has $12 billion to put into innovation doesn't. So that's how a lot of this competition has happened actually. It all comes down to the regulation, like BBVA, as an example, shut down their banking as a service business.

Eric Jorgenson: Because they couldn't compete with the community banks.

Zach Pettet: There's a lot of reasons. But if I had to read the tea leaves, I'd say it just comes down to the most of the way that you make money in this industry is interchange. And if you're too big, you don't get to make as much interchange. It's that straightforward.

Eric Jorgenson: That's so fucking wild. Like that can't have been the most efficient regulatory policy for supporting.

Zach Pettet: I mean, Dodd Frank happened, the Durbin Amendment.

Eric Jorgenson: I’m super far out of my depth on that, and I'm sure these are much smarter people than I am like working on this kind of shit. It's just interesting.

Zach Pettet: I'm also oversimplifying. It wasn't just like, oh, let's change interchange rates. There's a lot more to it. Capital requirements also changed as a result of these.

Eric Jorgenson: Is that why entrepreneurs or founders or whatever are just like straight up buying their own community banks? Because that actually is the ticket to play the game. And then you can innovate with all kinds of cool business models on top of that because you actually own the charter.

Zach Pettet: You just completely put it together. A million percent. So one of the companies that we were supposed to have, which speaking of shit that's gotten interesting, one of the companies that we were supposed to have speak at Money20/20 is a company called Column, which Column Bank is actually what it's called because they went out and they bought a bank. And this is a fascinating, I think, wonderful human named William Hockey, who was the ex founder, co founder with Zach at Plaid. So billionized, rebillionized, billionized again, and went out and bought a bank. And him and his wife are the co founders of this bank. And they're literally building it into a banking as a service bank. The wild part about it is that this whole industry has talked so much about digital first banking in terms- but that just means like a better mobile app so you can deposit your check without going to the bank. That's not fucking innovation. Like, so much of this is just lipstick on a goddamn pig. And none of it's actually about like moving money faster or anything like that. Like remote check capture is good. It's inherently a good innovation. But now I take it for granted. So I'm like move on to the next one, bitch. Anyways, so this is what I would call like a tech first bank, where all you have is the charter. And instead of going out and buying, to your point, that core system from FIS or Finastra or wherever, or Fiserv, and picking your own KYC vendor and going shopping, you build it.

Eric Jorgenson: They're building all of it.

Zach Pettet: They build it. I mean, I would imagine that they're probably partnering on certain pieces. There's certain pieces of- it's like there's certain pieces that are- it's incorrect to say that they're like AWS, but it's like if you don't just- like it's already built, let's just buy it or like open source use it, whatever. So I'm very certain that they're not probably doing their own KYC in terms of- they probably have multiple vendors. Because there's a world now where if you stack like three of these KYC vendors, you're pretty much covered to the point where like that actually should be a product that someone puts together. But the core system is tech first, which means money moves faster, which means on ramps, off ramps.

Eric Jorgenson: They are building their own core provider. Is that even legal? I thought you had to be on a core because that was like where the-

Zach Pettet: Bank of America builds their own core. Yeah, it's a matter of you need to be able to build- you need to be able to have a core that is auditable and compliant. And that is hard. Yeah, it's fucking hard to do. And there's multiple strategies associated with this too. So there's the William version of going out and buying a bank. And buying a bank and building it in a tech first manner and like just stripping out everything. Basically, he bought- he went to a bankruptcy auction and bought a bank at a bankruptcy- like the same way you would a car.

Eric Jorgenson: For a charter because it takes 25 years to get a charter.

Zach Pettet: It takes time. Not 25 years necessarily, but it takes time. And they stopped granting them for a long time to the point where the only way you're going to get a bank is buying one.

Eric Jorgenson: Taxi medallions, baby.

Zach Pettet: Exactly, exactly. Very similar, but to the point where now taxi- because Uber didn't work in this industry or is still getting built in web 3, whatever.

Eric Jorgenson: I would say still getting built. We talked about that a little bit though. The like peer to peer stuff is like dubiously legal but there's end runs around some of the charter things, and whether that is good or not is totally-

Zach Pettet: You can run really fascinatingly good for consumer businesses, like solo funds, until they get to a certain size, I think. And I think there's still a way solo funds can work. There's still a way all these businesses can work. Like, I'm never going to be the person to say never. But inherently, even if you're doing something that's good for the world, if it breaks a regulation, once you get big enough, you're going to have problems.

Eric Jorgenson: Yeah, or you go the like BitTorrent route, and it's like- I mean, they ended up with problems I guess eventually anyways, but like-

Zach Pettet: And that's the thing, like if you're doing something good for the world, you shouldn't have to go the BitTorrent route. Like Travis is, speaking of solo, to go to that example, Travis is one of the best people I've met in my life. He's so fucking smart. He's so driven. His heart is completely in the right place.

Eric Jorgenson: You got to assume the regulator's heart is in the right place, also. This is like the Uber- The Uber metaphor is decent here because that wasn't legal when they started either. They just got so big so fast and drove so much consumer demand and organized this amazing sort of like groundswell of support that they changed what was legal. And you hope- and regulators, I think, to their credit, realized, oh, our goal with a taxi medallion was to make it like safe and predictable and tracked and create a good experience for consumers so that they don't get like robbed, murdered, and otherwise cheated. And Uber does what we were trying to do with taxi medallions, but in real time with perfect tracking. Like, yes, it's centralized a little bit through a service, but we're accomplishing the goals of the regulator with technology, and you would- you got to give people the benefit of the doubt. I assume the regulators are not just like- what rent are they seeking? Like they want good things for consumers. They should hopefully see- it's just like that dance of can you get big enough fast enough and drive enough consumer demand and show the regulators who you are and what you're accomplishing to change the system. Because everything's malleable. Like, we tend not to think of the regulations as malleable, but they are. Pardon me while I murder my thirst. I know you're trying to get sponsored by Liquid Death.

Zach Pettet: Oh, yeah, just pop as many of those as you can. Actually even before you even drink that one, just open two more. So I think, so I agree. I agree. I think it is a good analogy. But the other thing about it is Travis Kalanick. And if you separate, like think about who Travis Holloway is as a person and who Travis Kalanick is as a person. People listening to this do not know Travis Holloway, so I will explain. Not a maniacally driven, insane person that's-

Eric Jorgenson: Willing to make a kamikaze run at the US government.

Zach Pettet: That. Yes, thank you for filling in the rest of that blank because I wasn't sure how I was going to phrase exactly that. He's not that. And the problem with that is that he is- the definition of most of the people that are going to come into financial services and innovate in a positive way, most of them aren't run through walls kind of people. They're really good people. And most of them can- like Jimmy Chen's a great example. Actually, he's a good and a bad example. He runs a company called Propel, they basically have built a FinTech layer on top of the food stamps/EBT system and allow people that are on EBT to- Is it even called- am I not supposed to call it EBT anymore, or what's it called, Step? It's called something else now that I can't remember what it's called, but when I was a kid, I could have. Anyway, that allows people to actually run their lives whilst on that public benefit in a way that feels like they just have a bank account. So Jimmy is a great example of somebody that is an amazing human, obviously, he's from Overland Park. So that's a very key thing. But also, he's so soft spoken. But I also know him to be somebody that would literally run through- like he would, he would not- this is the difference is like he would run through walls, but he wouldn't murder his dog or like murder his mom, or like I don't know. I've never met Travis Kalanick. But the way that he is portrayed and like the way that that level, like even the way that people talk about some pieces of Elon or talk about some pieces of, I mean, definitely Zuck, like some of the stories that I've heard about the Zuckerberg backyard barbecues, like sounds wild. That I don't think exists inside of like financial wellness FinTech and financial wellness FinTech is the groups that actually give a shit of what we're talking about, which brings me fucking full circle to regulators and policymakers creating the need for everyone to do that. And then all of a sudden, Travis Kalanick has to come into this industry because we have 30% of what- the Vinod stuff and build something gigantic but do it hopefully somewhat compliantly. It's a hard thing.

Eric Jorgenson: So is it going to come from like the dark recesses of web 3 and we're just going to have to build- I think it's a really interesting future to imagine. Like there's a whole track on web 2.5 at Money20/20. And I don't know how much credit they deserve in 2022 for paying attention to crypto and defi and web 3, but there was not a shortage. Like if anybody's curious, there's not a shortage of people in traditional finance paying attention to blockchain and crypto companies. Like they are entering the mainstream, even though you don't see it really anywhere yet.

Zach Pettet: So that's the interesting part. The web 2.5 thing this year was like really my baby. And it took a lot of thought. It was one of the weird things that took a lot of thought and not as much work because actually so many people, to your point, are paying attention to it. The weird thing in retrospect was that last year, we were coined as like Crypto20/20 in 2021 instead of Money20/20, like the post emptive, like the post show feedback was like, oh, it's crypto. Crypto was everywhere. Because I think Bitcoin was at 50.

Eric Jorgenson: Everybody's talking about it everywhere.

Zach Pettet: Because of prices. It was just because of prices was all it came down to. And this year, I would say that we had drastically more cryptocurrency oriented conversations, a lot more cryptocurrency oriented conversations. We just pivoted it so it wasn't about Ethereum and it wasn't about Bitcoin, and it wasn't about what weirdly has become gambling asset classes. It became about the rails. It became about the blockchain. It became about like the way that on ramps and off ramps from tradfi to defi, like that is something- Exactly. Yeah, use cases. And I think that is the thing that resonated with people this year in a way that they were like, oh, that felt kind of- like the fact that people don't think that was that out there makes me so happy.

Eric Jorgenson: And yeah, seeing that scene and like that, it changed a little bit. That was a new thing for me to see. Like, previously, I sort of- whatever, I had my head sort of wrapped around like web 3 and crypto world and I sort of had my head wrapped around FinTech, mostly thanks to you. And I just did not understand how they- how and where they interacted at all, if they ever would. I was like crypto either won't exist because it will never be legal or not it won't exist but will never become useful in mainstream because it will never figure out how to interact with the only legal way to move money around, which everybody has to eventually comply with to some extent for most of the purchases that they make in life. It wasn't obvious that finance would figure out how to incorporate that. And now, like coming away from Money20/20 it's like, oh, that's going to happen. Like, those two, there is a seam- a big like place where they're trying eagerly to understand each other and work together. And there are founders bringing crypto with custody solutions and utility and platforms. And there are banks that are showing up to that conference and hunting down companies that are like, I know crypto is important, help me figure out as a bank how to deliver what my customers- deliver something new to my customers and show them something they might want. Can I get faster transfers? Can I get streaming payments? Can I have a wallet where they have private money? Can I help people custody things in places that they- whatever, all of the things that are cool and come with that nationally and internationally, like a ton of developing world use cases too which was really interesting.

Zach Pettet: It was- I mean, one of the things we hoped that people took away from this year was that it was an international show. Because this industry, this is not a US industry. I mean, if anything, like look at what's been- and I have been avoiding the news as much as I can, so I don't know everything about this story right now. But even just looking at FTX, they're fucked outside of the US. They're not fucked here because of our regulatory system. And it's really interesting how it just keeps keeps keeps keeps keeps coming back to that. And as much as the world was upset about Gary Gensler, like he's anti this, a lot of the regulation that was put in place that really pissed people off is what protected FTX US and what protected FTX US shareholders, like them being okay is because of our regulatory system, not because of like the FTX team deciding to do something differently in the US out of ethical or business reasons. So, it's just, it all comes back to that. But yeah, the only way that we actually move in a direction of remittance businesses and money movement across different countries, like actually that working is it has to be on a blockchain, I think. Or we actually have to just agree on a global standard, which is not going to fucking happen.

Eric Jorgenson: Yeah, it was a very international- It was more international than I was expecting. I heard a bunch of different languages, and there was like a panel on African founders. Like all kinds of interesting stuff. And I know your interview with, was it Mariana?

Zach Pettet: Yeah, that was part of that Monday. Should we circle back to Monday? Okay, so we did the Vinod, finished with Vinod. The second interview of that day was me- Was these guys.

Eric Jorgenson: OnlyFans. Zach reached behind his OnlyFans sweatshirt to pull out his OnlyFans throw pillow.

Zach Pettet: I’m not wearing my OnlyFans sweatshirt.

Eric Jorgenson: You just took it off.

Zach Pettet: I took it off before the show. I mean, they make nice swag.

Eric Jorgenson: You just started your OnlyFans account today.

Zach Pettet: Yeah, the world doesn’t need to know that.

Eric Jorgenson: Subscribe now for TBD.

Zach Pettet: I don't even know what I'm using it for. Like it might be for my podcast. It might be for, I don't know. We'll find out.

Eric Jorgenson: They were on- you interviewed them, their CEO.

Zach Pettet: I interviewed their CEO and their CFO on stage that same day. So that was the second one.

Eric Jorgenson: What was the story that they had to tell the world of FinTech?

Zach Pettet: The story, I mean, the fascinating part, it's really interesting. So, to your point, I have an OnlyFans now. There's still nothing on there because I got it like a few days ago and also because I don't know what I'm going to use it for. But also because the actual reason that I signed up and the actual reason that I'm doing this, did this, was because I wanted to go through the KYC process. One of the things that I've been most fascinated by is this idea that OnlyFans is a bad thing for the world. Or like they’re porn, their bad. Like whatever, if you're part of the whatever religious sect that is anti porn, okay, have that conversation over there. But this idea that OnlyFans is a bad thing or horrible for the world because they have children on the platform or whatever, now I think I disagree with that idea vehemently. Have they fucked up in the past? They have rough moments, a million percent. Did shit happen on that platform that never should have fucking happen? Probably. I don't know all the stories, but based on what I've heard, seems like it, and if you read the right news, they fucked up. But there's a reason they have a new CEO. There's a reason that a lot has changed there. And one of the people that I talk to a lot is their CFO. And we talk, I mean, we're friends, but we talk about a lot of like IDV stuff, we talk about payment processing, we talk about-

Eric Jorgenson: IDV?

Zach Pettet: Identity verification. Because the biggest issue they had or the biggest issue they want to make sure the world does not think they have is under 18. And I will tell you with very, very strong conviction that shit was hard. Nobody would go through what I went through to get this OnlyFans account to get a bank account. There was 14 layers. I mean, not actually, but there were I think three layers of facial recognition, three or four different ID checks, selfie with the ID that you took a picture of. You have to share multiple other social media accounts so that they can verify that you're you and that you've like been posting like an actual human. And also, when I say they go verify, I actually mean they go verify. Like they have an actual team. A lot of it is automated, a lot of its machine learning, but they also have a team that is associated with going in and actually running pieces of manual KYC to make sure you are who you say you are. When you look at it, you're like this is two times safer than what I need to get into any of my crypto wallets. This is four times safer than what I need to get into any of my bank accounts. Like this shit is wild. And they have a payments layer in it. So there's two pieces of the conversation. One is we're safe as shit. We're safe as shit. We're safe as shit. We're safe as shit. That's the first piece. The safest social media platform. Which I agree with. It feels like marketing talk, and it is, but I agree with it. Two is because of – and this is where you just get nerdy – because of this association with adult content, they have a hard time partnering with payment processors. So in the same way- or banks. So in the same way that like if you're a gaming, not gaming like Modern Warfare but gaming like DraftKings, company, or if you're a cannabis company, or if you're OnlyFans, Patreon doesn't really have this issue, but because of the association with OnlyFans, they have this issue, you have a really hard time getting those partnerships because of a lot of things. One is reputational risk. Two is actually fraud rates and returns and things like that.

Eric Jorgenson: More expensive for the payment provider to work with. There’s the social risk and the financial risk.

Zach Pettet: Exactly. But the financial risk I think is the interesting part, because there's these things called merchant category codes. So if you run a restaurant, that's a specific merchant category code, and you will generally get x amount of returns, x amount of disputed transactions, x amount of fraud. If you're in this merchant category code, aka the adult content merchant category code, those numbers are very different than if you run a restaurant for a lot of somewhat obvious and somewhat unobvious reasons, actually, but that's a whole different thing. OnlyFans has the lowest fraud rate, lowest pretty much everything in their merchant category code because of all of this technology that they've built and the fact that they're really a tech first creator economy company. So they still with these numbers, with this volume, they've done $10 billion in fucking creator payments since their inception. 10 billion. I think they did-

Eric Jorgenson: How old are they?

Zach Pettet: I think they were started in 2020.

Eric Jorgenson: No shit.

Zach Pettet: Google it real quick.

Eric Jorgenson: I mean, keep talking; I'll look it up.

Zach Pettet: I think it was 2019 or 2020.

Eric Jorgenson: I can't imagine they're more than 10 years- $10 billion.

Zach Pettet: They did 4 billion last year.

Eric Jorgenson: Oh my god.

Zach Pettet: Yeah. So they-

Eric Jorgenson: 2016.

Zach Pettet: 2016. But I think the inflection- Okay, yeah. Yeah, that makes total sense, founded in 2016. But if you look at the revenue curve, COVID. That's when the shit hit the fan. And that's why- it's like, oh, I'm locked at home. I wonder what I could do to make some money. Na na na na, oh, I'm naked. Alright, here we go.

Eric Jorgenson: I mean, is that an accurate characterization?

Zach Pettet: I don't think so.

Eric Jorgenson: Do you have any idea what percent of their stuff is actually-?

Zach Pettet: They're careful about sharing it. I mean, the other thing to be honest about is like, who cares? It's a fucking- it's a platform.

Eric Jorgenson: It's just one of those things where like as soon as it's associated, it’s the only thing people think about.

Zach Pettet: And that's why they come to Money20/20. People are so confused about why they come. They come to tell the story about their numbers, and they come to talk about the fact that they're protecting creators, and there isn't that much of an issue when it comes to that. So anyways, I don't know what that distribution is. But I want to say that they said over the last two years, two or- I think over the last two years, it was 8 billion.

Eric Jorgenson: That's a lot. Is it bigger than Patreon?

Zach Pettet: Yeah. I mean, Patreon has like cornered comedy, cornered podcast. The paywall podcasting thing, they've cornered it. But also Whitney Cummings just moved over on to OnlyFans, and she's moving her podcast over there. And the reason that I have an OnlyFans account, it started with they wanted me to put my podcast gated content on there. And I might do that, I don't know. But anyways, they wanted to come tell that story and get more payment processors to work with them and get regulators to understand that they're different and have those conversations and build those relationships. They came to Amsterdam, which was less than a year ago, and between Amsterdam Money20/20 and Money20/20 US, I can't remember the number exactly, they actually I think said it on stage, but I want to say they got like two or three more payment processing partnerships. And because they're so international, they need a lot of them because of the interoperability and everything else. So it's super fucking hard. It's super, super hard. And OnlyFans is simultaneously like the easiest company to build I feel like because it's just like you build a piece of thing, and then like- it's the ultimate jobs to be done kind of conversation. It's just like you build something and then what they do with it, you don't know if it's the milkshake, you don't know if milkshake’s for breakfast. You don't know if the milkshake is for enjoyment.

Eric Jorgenson: All you know is the milkshake brings the boys to the yard.

Zach Pettet: Yeah, exactly, exactly, exactly. I wonder how many people track that.

Eric Jorgenson: If I know my audience, everyone. Absolutely everyone. India's probably confused but everybody in America has got it. I know a good part of your thought and your job goes into the overarching story that Money20/20 tells. Like, of these 500 speakers and tracks and talks over four days on multiple stages, it all ladders up to a story about the FinTech industry that you see from your kind of perch. What was that?

Zach Pettet: Okay, so I'll give you- the hard part about this is that the reason that this story exists, the reason this story exists is because I had to come up with a story, my team and I had to come up with a story to tell that helped people orient around those content applications we talked about. And classically, events and conferences have themes. So if you're- and the easiest industry to think of when it comes to that is maybe like fashion. It's this is what's hot this fall, here's the themes. Like it actually makes sense to have themes. But it's kind of like you do a software conference. What are the themes as software's eating the world? Like that's- maybe that's the theme.

Eric Jorgenson: And when it's finance, which underlies everything.

Zach Pettet: The world. And when you're combining it finally with software, and you're combining it with embedded finance, which is actually like providing checking accounts to Uber drivers. And like FinTech is eating the world. So the actual story is FinTech is eating the world. But the story that I told this year, the story that we kind of continuously told this year to the public, kind of rooted around four things. So one was vulnerabilities. It's been a fucking vulnerable few years, coming out of COVID, inflation, stagflation, who knows what's next. Like, it's all, we're all unsure. A lot of us lost jobs, a lot of us lost income, family members. I mean, it’s fucking nuts. Out of that comes, especially in the financial industry, two ways of positioning yourself. One is defensive. And you stop lending. You just lock it down. You lay off part of the staff, just surviving, we're going to survive. The other side, which is really fucking hilarious now because the main group that I would use as this example was FTX, is to go on the offensive and to go and to make acquisitions and to invest- Exactly. And at the point that I was telling this story, I was like, FTX is a shining example of exactly what to do. It’s fucking hilarious.

Eric Jorgenson: Well they did it from- they levered assets that didn't exist to do it, instead of having a very conservative balance sheet knowing or waiting for the tide to turn to play from a hand of strength. So like not quite the way Munger would have done it, but like- I like the strategy of being offensive when everybody- Yeah, the greedy when everyone else is fearful.

Zach Pettet: Yeah, from the outside, if you don't know the balance sheet.

Eric Jorgenson: And if it worked, it still would’ve looked brilliant.

Zach Pettet: Very true. That's kind of how that works. So then there's the offensive stance. And that can lead to a whole bunch of things. But the other thing interesting about the FTX thing is that the third pillar of that story is chain reactions and ripple effects, unexpected ones specifically. So if you go on the defensive and you stop lending, or if you go on the defensive, you lay off staff, something all of a sudden happens, you need to- like all of these different things, the impacts of where we're at, actually, with FTX now, like there's all, especially in the financial industry, the impact, not just the impact-

Eric Jorgenson: You stop lending, but your revenue goes down, so you invest less in innovation and so, yeah.

Zach Pettet: It's a flywheel, but it's also unexpected and unintended consequences in random areas that you probably never would have guessed. There's just random shit that happened this year that I don't think people saw coming. Like it was just weird. So that was a piece of it. The end piece of it though, and I think the most exciting part, like I was talking about lipstick on a pig earlier, the most exciting part is experiences and actually finally having a shift into disruptive technology. So, this is the thing, like as I would explain this to people that didn't understand the actual definition of disruptive technology, I wouldn't say this because it was too complicated, and I would just say experiences are getting better. But actually, what I mean is the experience with setting up your Metamask wallet, connecting it, buying your first NFT, all of that is so bad that we're finally at a point where experiences are going to get better. Like the disruptive technology is here. It sucks. And give it like three years, and the whole world's going to change. So that's actually what I meant by experiences. And then this next year, I think we've already kind of figured it out over the last three weeks. But I think it's- Well, I think when you put together, it was Rachel's idea, but when you put together everything that happened over the last year, it kind of is just like the beginning of a hero's journey. It's just like a protagonist kind of-

Eric Jorgenson: We're entering the other world.

Zach Pettet: Exactly. Yeah. So I won't say anything more. But I think the story this year is going to be very hero's journey-ish.

Eric Jorgenson: Love me some Joseph Campbell, baby, let's go. It's going to be great. Very exciting. All right, thank you for the overview. Do you want to add anything, any other like last highlights or dangles or moments of beauty?

Zach Pettet: Let's finish Monday. Okay, a few more things. After the OnlyFans interview, I interviewed Mariana van Zeller, who is the host of a show called Trafficked on National Geographic with the CEO of a company called Socure, which focuses a lot on IDV but also relates to money laundering. So this woman is an absolute hero of mine and- she's a fucking animal. If you haven't watched Trafficked, audience, if you're listening, I cannot recommend this shit enough. It is the best show to understand dark markets and it is the best show to help you understand the human impact of the fact that we don't catch money laundering and the human impact of these dark markets. So amazing show, also just scary as fuck, like you will literally sweat through the whole thing. And meeting her was maybe the highlight. I mean, she was fucking- and meeting Vinod was really cool. Having a conversation with Serena was really cool. But Mariana is an unbelievable human and one of my favorite journalists of all time. So that was dope. And then from there, I finally allowed myself to have my first drink of the whole show. After that, I think I went and got drinks with my boss and just like debriefed for a minute, and then proceeded on to a private 300, 350 person Post Malone concert where I literally got to stand in the front row with some of my favorite people on Earth and have just like the most elated, wild dopamine rush of a fucking hour that I've had in my life.

Eric Jorgenson: Feel like a rockstar. Congratulations. Going psycho.

Zach Pettet: I mean, you keep saying all this, I’m going to like you. So that was the day. That was the end of Monday.

Eric Jorgenson: That's a crazy day. And no wonder Tuesday was a blur.

Zach Pettet: And then we went on to make actually a difference. That's that.

Eric Jorgenson: What an amazing- it was so cool to see you go through that, like go through that week and just at minimum survive it was fucking crazy. It was like all of the biggest days of somebody's life sort of in a row. And I was like, damn, it's going to happen again next year too.

Zach Pettet: No shit, that’s the wildest part of the whole thing. What about you? Do you have any closing thoughts?

Eric Jorgenson: I was listening, in the limited prep that I did for this conversation, to some of our previous podcasts. And there was a line in there that you had said as you moved through like sort of the finance industry and your career that your definition of success for your career had changed, and it had become to leave the industry better than you found it and know that you had an impact on doing it. And I know that’s your goal for your whole career. But it was so clear watching that happen, watching that week, knowing the year that you had put into it, and then seeing sort of the trend of this happening for maybe years at a time. And I think the way you put it in this podcast was really good, like being the neck that turns the head of the of the FinTech industry.

Zach Pettet: Big Fat Greek Wedding quote, but yeah.

Eric Jorgenson: Perfect. And just knowing you the way I do and knowing like the unique mix of awareness, broad worldview, ambition, and like deep human give-a-shitness. And I'm just like so glad that there is you or someone like you in this place doing this job and that that head will get turned by a neck that is very, very deliberate. And that's a really- like, I sleep easier knowing that and it's just like really fucking cool to see. And I hope that all these other industries that are ridiculously important and have incredible crazy confluences of regulators and parties and downstream effects on millions of people that will never even approach grokking the complexity of the system that serves them has somebody who gives a shit about them and is working hard on the same stuff. It's just a- it was a beautiful sort of machine to peek inside for a week. And I'm really glad I did. And I'm glad you're in there doing your tinkers, making it all happen.

Zach Pettet: I appreciate it. I mean, truly pieces of it could not have happened without you. So I appreciate that a lot.

Eric Jorgenson: You got it. It was beautiful. And I can't wait to see how much of these sort of like predictions or to see if like what we peek at plays out in anyway the way we think it's going to or the way we hope it's going to. I think it's really interesting. And I think like we talked in the last podcast and this one about the ripple effects that these decisions make, have from the policymakers or the founders or the entrepreneurs or the banks and how it all plays out for normal people. It's just really cool to see. What a wild world.

Zach Pettet: What a wild world. From breakfast, whatever it was like seven years ago and me trying to run away from you to here we are now.

Eric Jorgenson: Yeah, podcast soulmates. Smart friends for the win.

Zach Pettet: Smart friends for the win.

Eric Jorgenson: Thanks for hanging out with us. If you enjoyed this episode, you will certainly appreciate my previous episode with Zach, if you didn't have that as background, similar kind of crazy energy in the episode with Jason Hitchcock, where we talk about web 3, NFTs, defi and the metaverse. That was like a year or two ago now. But I think the ideas really still hold up as you think about the financialization of everything and what's going to happen between tech and finance over the next decades. You might also enjoy the series we do about Rolling Fun, the startups that we're investing in. And my most popular episode of all time is the enormous eight hour episode with Balaji. Well, it's a four hour episode, we edited it a lot. But I highly encourage you to check that out. And please, if you enjoyed this, take four seconds to leave a review in the podcast app. It is the single best way to help the show grow.

I really appreciate you hanging out with us. This is all about laughing and learning, building leverage, and compounding our faces off.

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There's a revolution going on, man. Go pay attention to it. Get a part of it. Get exposed to it. You're going to make money along the way. You're going to have fun.

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Take a few quiet moments for yourself. Breathe deep and be well.

Investing, TechEric JorgensonNovember 29, 2022Technology, InvestingComment

Money 20/20, Fintech Innovations, and Interviewing Legends with Zach Anderson Pettet

Jorgenson’s Soundbox Episode 52: Zach Anderson Pettet

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