20VC Why Move Fast and Break Things Is Not Right, How To Instil Radical Candor In Your Organisation & What Founders Must Ask For From Their Investors with Jason Brown, Founder & CEO @ Tally

Summary Notes


In this episode of "20 minutes VC," host Harry Stebbings interviews Jason Brown, founder and CEO of Tally, a fintech startup revolutionizing the credit card experience to empower consumers. Tally has garnered nearly $20 million in funding from prominent investors like Shasta Ventures and Cowboy Ventures. Brown, a serial entrepreneur, shares insights on his journey, emphasizing the importance of patient growth, rigorous team recruitment, and fostering a culture of radical candor within the workplace. He also discusses the challenges and strategies for fundraising, particularly the significance of transparency and a well-crafted narrative. Brown envisions a future where Tally automates financial life, liberating users from mundane financial tasks, and advocates for regulatory changes that would benefit fintech innovation.

Summary Notes

Introduction to Tally and Jason Brown

  • Tally is a startup aimed at improving the credit card experience for consumers.
  • Jason Brown is the founder and CEO of Tally, with a background in founding startups, including gen 110.
  • Tally has raised nearly $20 million from notable early-stage finance firms.
  • The company's mission is to alleviate financial stress for credit card users through its app.

"Now, Jason is the founder and CEO at Tally, the startup that's building a better credit card experience, giving power to the consumer."

This quote introduces Tally and Jason Brown, highlighting the startup's focus on enhancing the credit card experience and empowering consumers.

Credit Card Pain Points

  • Credit cards are widely used but can be difficult to manage.
  • There are significant late fees associated with credit cards, amounting to $11 billion annually.
  • High APRs affect consumers, especially the 40% of U.S. households with credit card debt.
  • Tally aims to reduce stress and improve financial well-being for credit card users.

"At the end of the day, credit cards are amazing. They're just kind of a pain to stay on top of."

Jason Brown discusses the paradox of credit cards: they are useful but challenging to manage, setting the stage for Tally's solution.

Tally's Solution

  • Tally offers an app that consolidates credit card management.
  • The app provides a line of credit to help users avoid late fees and high APRs.
  • Users can maintain their card perks and rewards while saving money and reducing hassle.

"So what it does is it brings all your cards together in one easy to use app. And what's really cool about it is the app actually comes with a line of credit that helps you avoid pitfalls, like getting hit with late fees, paying high aprs, and accumulating debt."

This quote details Tally's app functionality, emphasizing its ability to simplify credit card management and mitigate common financial setbacks.

Evolution of Founding Strategy

  • Jason Brown emphasizes the importance of recruiting in a startup's success.
  • He has adopted a "never settle" approach to hiring, seeking candidates that he would be deeply disappointed to lose.
  • Brown spent four months and interviewed 38 candidates to find the ideal head of credit for Tally.
  • He believes in being precise, realistic, and vivid with the company's mission and vision to attract dedicated individuals.

"Assuming that you have a good market and a great idea, I believe that the number one lever you have to succeed is recruiting, meaning the quality of the people that you have on the team, how passionate they are about what you're doing, and their willingness to stay with you through thick and thin."

Jason Brown identifies recruiting as the most crucial factor for a startup's success, highlighting the need for a passionate and committed team.

Product Endorsements

  • Harry Stebbings shares personal endorsements for the Eight smart mattress and Full Contact contact management.
  • Eight smart mattress provides sleep quality tracking and has been developed using data from over 10,000 people.
  • Full Contact offers features like duplicate contact merging and business card transcription, improving contact management and engagement.

"Eight is a sleep innovation company with their latest product, the eight smart mattress. Being a bed that literally tells you how well you slept last night, paired with an intelligent sensor cover that measures the quality of your sleep and delivers a daily sleep report."

The quote describes the Eight smart mattress, emphasizing its innovative features that contribute to sleep quality and productivity.

"With full contact, they provide the ability to organize your contacts, gain rich insights into them, and therefore build deep relationships with features like automatically identifying and merging duplicate contacts to the ability to snap a photo of a business card and full contact will transcribe them for you."

This quote explains Full Contact's capabilities, highlighting its role in enhancing contact management and relationship building.## Employee Motivation and Retention

  • Retaining talent in a startup requires giving them a vivid, engaging vision to work towards.
  • Employees may become disenfranchised if the reality of the job does not match their expectations.
  • Providing a compelling mission can keep employees motivated over time.

"So they're going to feel like what you're working on is not what they thought they were signing up for. And making it vivid is all about allowing the people that are leaving their wonderful jobs at other companies to come work for you."

This quote emphasizes the importance of setting clear and exciting expectations to prevent employee disenchantment and to maintain their motivation.

Recruitment and Hiring

  • Outsourcing the recruitment of key hires is discouraged due to adverse selection.
  • The best candidates are typically not actively seeking jobs and are found through referrals or direct outreach.
  • Building a team requires time and focus without compromising on the quality of hires.

"Any candidate that is coming to you through a recruiter, they might be good, but they're not the absolute best candidates."

Jason Brown points out the limitations of using recruiters for key hires, suggesting that the most exceptional talent is usually employed and not job hunting.

Startups and Regulation

  • The 'move fast and break things' approach is flawed, especially in regulated industries like healthcare and fintech.
  • Embracing regulation and working within legal frameworks is crucial for long-term success.
  • Startups in regulated industries need sufficient capital to afford meticulous compliance.
  • Venture backers who understand and support the need for discipline are essential.

"For any business in a highly regulated industry, this is obviously healthcare. A lot of fintech, these are areas where the regulators have a huge say in what you can and can't do."

Jason Brown challenges the conventional startup wisdom by highlighting the importance of adhering to regulatory requirements, especially in sectors like healthcare and fintech.

Radical Candor

  • Radical Candor is a management concept that involves caring personally and challenging directly.
  • It's crucial for team members to feel comfortable providing direct feedback to higher-ups, including the CEO.
  • Implementing Radical Candor involves praising and encouraging direct challenges without becoming defensive.

"So that's the biggest challenge. It's obviously easy for a CEO to be radically candid with a janitor or something like that, but for it to go the other way around is a big challenge."

Jason Brown discusses the difficulty of implementing Radical Candor, especially in encouraging employees to give honest feedback to those in higher positions, like the CEO.

Implementing Radical Candor in Organizations

  • Radical Candor is implemented through exercises that encourage personal reflection and role-playing.
  • The exercises help team members practice giving and receiving candid feedback based on real personal experiences.

"So one of the exercises, actually is to have everybody think about a relationship they've been in where they weren't radically candid."

Jason Brown describes an exercise used to foster Radical Candor within the team, which involves reflecting on past experiences of withheld candor.

Role of the CEO in Startups

  • The CEO's role in the early years of a startup involves a balance between detailed involvement and overarching strategy.
  • A bimodal distribution of time is recommended, focusing on one significant, leveraged aspect of the company while maintaining a broad perspective.

"I want to comment specifically in the first couple of years of the startups, because maybe it's different once you get further out there, but I adhere to a bimodal distribution of my time."

Jason Brown shares his approach to managing his time as a CEO, indicating a dual focus on both a single critical area and the overall strategy.## Delegation and Trust in Team Management

  • Effective delegation requires hiring trustworthy individuals to handle detailed tasks.
  • Maintaining a high-level perspective is only possible when you trust your team to manage their responsibilities without micromanagement.
  • Delegating allows leaders to focus deeply on areas that are highly leveraged for the company's success.
  • Time management and prioritization are crucial in allocating attention to strategic areas.

"The only way you can do that is if you hire amazing people who you can trust with all the things you're not spending really detailed time on, right."

This quote emphasizes the importance of hiring competent and trustworthy team members to delegate tasks effectively, allowing leaders to focus on strategic areas.

Importance of Recruitment in Company Growth

  • A significant portion of time can be dedicated to recruiting key roles when it's a leverage point for the company.
  • Detailed involvement in the recruitment process, like using LinkedIn and making personal outreach, is sometimes necessary.
  • Prioritizing recruitment can have a substantial impact on the company's trajectory.

"At different times in the company, I've spent up to 60% of my time on recruiting, so literally spending endless hours on LinkedIn, trying to find the perfect person, personally, reaching out to them, having all the phone calls, right."

This quote illustrates the dedication to the recruitment process as a critical investment of time and effort to find the right candidates for the company.

Founder's Involvement in Market Research

  • Direct involvement in market research, such as conducting focus groups and surveys, can yield unique insights.
  • Founders may have a unique perspective that allows them to see things others might miss.
  • A statistically oriented approach to analyzing data can tease out critical insights for the business.

"And I am literally in the weeds, talking to people, doing focus groups myself, surveys, actually analyzing the data."

This quote demonstrates the hands-on approach taken by the founder in conducting market research to gain a deep understanding of the customer's emotional state.

Fundraising Strategy and Execution

  • A history of successful fundraising experiences can inform current practices.
  • Building relationships with investors beyond the business context can contribute to a successful fundraising process.
  • Aligning with investors who share the company's mission and demonstrate enthusiasm is beneficial.

"So I would give us an a plus marks on fundraising. I don't think there's anything we've done poorly."

This quote reflects the speaker's confidence in their fundraising abilities and the successful strategies they've employed.

Managing Runway and Financial Strategy

  • The goal is to avoid making short-term decisions that may negatively impact the business in the long run.
  • Having a longer financial runway allows for disciplined decision-making that prioritizes long-term success.
  • The ability to move slower deliberately can be an advantage for the company.

"I didn't ever want to have to make a short term decision."

This quote highlights the strategic choice to maintain financial flexibility to make decisions that are in the best interest of the business's long-term success.

Advice for Startups in Fundraising

  • Seed rounds may be more accessible due to the higher risk tolerance of investors at that stage.
  • Articulating a clear, transparent story with underlying assumptions is crucial for Series A fundraising.
  • Being open and honest about the risks and assumptions can lead to more productive discussions with investors.

"I think it all comes down to having a perfectly curated story where you know exactly what are the underlying assumptions that will make or break this and being really transparent about it."

This quote advises startups on the importance of transparency and clarity when communicating with potential investors during fundraising.

Building Digital Native Consumer Finance Brands

  • Transparency, mobile-first design, and simplicity are key components for consumer fintech targeting digital natives.
  • Consumers desire clear understanding of a company's revenue model and the absence of hidden fees.
  • The digital native market is expected to see more innovative consumer fintech solutions.

"People want simplicity of the actual structure and they want to be able to know what are your incentives and what's in it for you."

This quote emphasizes the importance of transparency and simplicity in building consumer trust and loyalty in the fintech sector.## Importance of Platform Presence

  • Digital natives prioritize certain platforms, and it's crucial to have a presence on these platforms.
  • Secondary platforms should be considered but are less critical.
  • Being present where the target audience is most active is essential for engagement and relevance.

"But being on the platform that the digital natives are using first and foremost, and any other platform secondarily I think is important."

This quote emphasizes the significance of prioritizing the primary platforms used by digital natives to ensure maximum engagement and relevance to the audience.

Product Design in Finance

  • Simplicity is key in financial app design.
  • Many banking apps are complex and difficult to navigate, even for those with financial expertise.
  • Startups like Robinhood, Digit, and Tally focus on simplicity and essential functions, contrasting with traditional banks.
  • Good product design involves removing unnecessary features to help users focus on key actions.

"So it's simplicity. Specifically in finance. [...] the product designers and the engineers have spent the time to figure out what are all the things we can do for you and take out of this experience so you can focus on just the key things you want to do."

This quote highlights the importance of simplicity in product design, especially in finance, where the goal is to streamline the user experience by focusing on essential functions and removing superfluous features.

The Tally Development Journey

  • Tally's development required patience, with a two-year period from stealth to soft launch.
  • The process involved rigorous engineering and a phased approach before reaching full product launch.
  • The anticipation of releasing a well-crafted product can be challenging but is deemed worthwhile.

"Man, just being patient. [...] And just knowing that you're putting all of this time and effort and rigorous engineering into it and knowing that it's worth it, but wanting to get the product out there really fast, absolutely."

The quote captures the challenge of patiently developing a product with rigorous engineering and the desire to release it quickly, reflecting the journey many startups face.

Fintech Content and Resources

  • Jason Brown finds the First Round Capital blog valuable.
  • There is a lack of high-quality fintech-specific blogs or newsletters.
  • Other sectors like SaaS have numerous valuable resources, but fintech is lagging behind in this regard.

"There's nothing good on fintech, I got to say. [...] But, yeah, there's nothing that's high quality."

This quote conveys Jason Brown's opinion on the current state of fintech content, suggesting a gap in the market for high-quality fintech resources.

Future of Fintech Regulation

  • The OCC is considering issuing a special purpose fintech charter.
  • This would allow fintech companies to focus on specific banking functions without adhering to all traditional banking regulations.
  • Such a charter would benefit startups by reducing regulatory burdens for services they do not provide.

"The OCC is contemplating issuing something called a special purpose fintech charter. [...] So you'd still have to comply 100% with the regulations related to what you're doing."

The quote explains the potential impact of a new fintech charter on startups, where they would only need to comply with regulations relevant to the specific services they offer, potentially easing the regulatory landscape for fintech companies.

Tally's Five-Year Roadmap

  • Tally aims to automate financial life for its users.
  • In the future, Tally seeks to act like a personal accountant, taking tasks off users' plates.
  • The goal is to reduce the need for users to manage their finances actively.

"In the future, Tally is actually going to be doing those things for you, so you don't even have to worry about it."

This quote describes Tally's vision for the future, where the app will proactively manage users' finances, reducing their need to engage with financial tasks directly.

Personal Recommendations and Endorsements

  • Jason Brown recommends the book "The Science of Interstellar" for its inspiring take on the universe's vast potential.
  • Harry Stebbings endorses the Eight smart mattress and Full Contact contact management solutions for their innovative features and benefits to productivity and organization.

"I have a lot of favorite books, but I'm going to go with the science of interstellar."

"Eight is a sleep innovation company with their latest product, the eight smart mattress, being a bed that literally tells you how well you slept last night."

"With full contact they provide the ability to organize your contacts, gain rich insights into them, and therefore build deep relationships."

These quotes reflect personal recommendations from the speakers, suggesting products and resources they find valuable for inspiration, sleep quality, and contact management.

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