Alex Harris - Co-Founder of Fiat Growth and Fiat Ventures: Maximizing Partnerships, Adding Your Next Offering, and Evaluating Major Business Moves

Alex Harris  00:00

To me, that goal, just to make that impact, aside from valuations and any money, any good story to tell, or anything like that, to have been the tiniest part of that journey to help millions of people is something that I'll be proud of forever.

Callan Harrington  00:20

You're listening to That Worked, a show that breaks down the careers of top founders and executives and pulls out those key items that led to their success. I'm your host, Callan Harrington, founder of Flashgrowth, and I couldn't be more excited that you're here. Welcome back, everyone, to another episode of That Worked. This week, I'm joined by Alex Harris. Alex is the co founder of Fiat Growth, the fintech market's leading growth consultancy. He is also the co founder and general partner at Fiat Ventures. Prior to founding Fiat Growth, Alex lead paid growth and partnerships at Chime and leading them from Series A to becoming a unicorn at Series D. Chime is the largest neobank in the US with nearly twenty million members and was most recently valued at twenty-five billion dollars. This was a really fun conversation, because Alex provided a ton of really good frameworks. We talked about how to test whether you and your co founder are a good fit to partner together. We also dove into Alex's process of how he makes major business decisions. Going a little deeper on that, we talked about how they test and release their new offerings at Fiat. I thought it was an excellent process that greatly de risked the decision to release new offerings. Now, I'm probably biased, but the part of the conversation that I loved the most was talking about how they maximize partnerships at Fiat. Partnerships are the number one growth driver in my own business, so I had a ton of questions for Alex. And I thought he provided really, really good answers to all of them. So much so that I will personally be implementing many of the items that he mentioned. So with that, let's jump into the show. Alex, welcome to the show.

Alex Harris  02:35

Thank you so much for having me.

Callan Harrington  02:37

Man. I've been excited for this one. I've been looking forward to this interview. And where I want to start this is tell me the story on how you met your business partner.

Alex Harris  02:45

I love that story. It actually goes back close to twenty years ago, we were both freshmen in college at UC Berkeley. I always tell people we met cuz I did Drew's laundry. That always gets a weird reaction and a weird look. That is true. The story behind that is, I was an equipment guy for the football team at Cal, and Drew, my co founder, played for the team. And so I did his laundry along with the entire team, in addition to a number of other things that put us together on the field together for hours on end every day. So we got to know each other really well. And Drew was always an incredible guy and incredible friend, regardless of him being actually on team, which was an amazing team. By the way, we're talking the Aaron Rodgers, Marshawn Lynch, bowl game every year, top five in the country, like really good teams. And I was the lowly laundry guy. And he was always cool to me. So we met all that time ago, stayed in touch over the years, and when it came time for- I was at Chime, which we can chat a little bit more about later. But I was at Chime and he was at Steady, and we saw the opportunity, both of us in our roles, advising a number of companies in the space, and decided to start something together.

Callan Harrington  04:01

I love that. I think when you first say it's like, yeah, I used to do Drew's laundry and just no follow up.

Alex Harris  04:08

No follow up. And he hates that. He hates when I do that. I love doing that. And I just leave it there. And it sits there.

Callan Harrington  04:13

Sit in the uncomfortable silence as long as possible before you break. That's even better coming from his viewpoint, because he doesn't want to say, it's because I played on the football team as well, is my guess.

Alex Harris  04:26

People's imagination can run wild, and I'm sure people will think did he beat Alex up and like make him do his laundry? Or why did he willingly do his laundry?

Callan Harrington  04:34

Oh, that is so cool. I love that story. Did it just like from working together all the time? Is that like what- And did you guys at that point- I'm curious, were just good friends? Of course you're in college. So it's probably more driven from personal friendships and things like that. But did you guys have anything at that point where it was at some point, we want to do something, we want to be entrepreneurs, be great to be business partners? Did it start at that early?

Alex Harris  04:59

I don't know. No, that is, I mean, funny enough when we started, apps didn't exist, right? So if you would have told me, I'll be at Chime, and Drew will be at Steady, and these are mobile apps, and this is what they do, and this is like, we probably wouldn't have been able to, would have been like, what? Certainly were a ways off from what our business became and our careers became. I think there's just always a strong bond of trust and friendship there. So I think I knew that he was a lifelong friend and someone I wanted to keep close. Hopefully, I think, he felt the same. And as much as I'd love to say, we dreamed up Fiat Growth and Fiat Ventures on the field of Memorial Stadium, I think it was more about the bond and the trust, than than the actual idea of even thinking, hey, we're gonna do something together. You guys started to get very close. And if something could come up, great, but we're not thinking about that at this point.  Well, you know, you meet those people, including you and I, when we met, right? Like, you meet those people, and you're like, we're going to do some stuff together, right? There's a ton of mutual respect, and joy that comes from working together, and you just know that you will someday. So I think there was some of that, just time brings clarity.

Callan Harrington  06:05

One of those things I think it's interesting is where I find it really difficult, and this happens all the time, and I don't really understand it, and I'm curious to get your take on this. But a lot of times, you get randomly paired up with a technical co founder, you've never worked with this person, you didn't have a pre existing relationship with this person. That's a pretty big risk. So my guess is when you guys went into this, did you feel any of that?

Alex Harris  06:30

I look for this as an investor too. It's not to say that it can't be done. Because a lot of people do it all the time. And you need to build that bond. There's so much trust that comes from knowing each other for twenty years, and knowing each other when there wasn't anything at stake. We were just college kids. Again, I was a laundry guy, right? Like there's, there's no reason to try to sweet talk me into anything other than getting maybe some free gear.

Callan Harrington  06:54

Yeah, that makes sense.

Alex Harris  06:55

Football gear, so maybe, maybe, but that was the best I could do in those days. So I think just having that trust, having that communication, we're literally- we'll have conversations, we're like, you're better for that, I'm better for that. We will call out each other's flaws without hesitation. To know that, and to know like, offhand, that's a me thing, that's a Drew thing. Even on Zoom calls too, where you're missing some of the body language, still like I can tell, we'll make eye contact, they're still like signaling. It's just knowing each other well. So, it's nice. And you can get that without twenty years of history, for sure. I look at it kind of like relationships where you put all of your stuff out there, right? You put your crazy, you put your whatever, like, you know, you kind of let it all out. And then you see how you work through that together. You see, you can test, there's some challenges, and you can with a co founder talk about hypothetical challenges and how you would handle- let's even simulate that, see what that conversation would be like anticipating down the road, months and years down the road. We need to make this decision, including even, someone makes an offer to acquire, someone makes it- like, all these things that you talk through, how would we approach that together. And I think you can get a sense, it's definitely not the same as decades of trust, but it's something you that you can simulate, and should, when you're looking for a co founder.

Callan Harrington  08:13

I totally agree with that. We had an exercise one time, we were- I don't want to say butting heads, but there was some tension on- we were a young executive team, and we were stepping on each other's toes in some areas, and big personalities were coming out, myself certainly included. And one of the things that we did was a kind of a roles and responsibilities exercise, where each person put what they believe their roles and responsibilities are, and what they believe each person on the executive team's roles and responsibilities were. And when we actually shared that, there were a ton of discrepancies. And that was so illuminating as to what really that- like to iron this out. To your point, is that what you're kind of thinking, is it something like that, where you're going through that?

Alex Harris  09:02

The thing is, you can anticipate everything in the world. But that's never how life turns out. That's never how business turns out. So it's about how you tackle challenges together, how you do things together, how you communicate, rather than anticipating everything down the road. We did as an executive team recently, we had the RACI chart where you go through and you're responsible for this, you're accountable for this, you're gonna be consulted on this, informed on this. And that changes, as we hire more people and great people who we trust and delegate to, that changes our responsibilities as the business grows. There's different challenges and different needs. And it just grows in unexpected ways. And so it just requires that open communication.

Callan Harrington  09:42

So I definitely want to circle back on this, because I'm really curious to hear what those different stages have been at Fiat Growth and how you guys have handled that. But before we jump there, so let's talk a little bit about what led up to founding Fiat Growth. So you're at Chime, and before that, one of my favorite stories from our original conversation is, you almost ran into T.O., Terrell Owens for those, he worked for the Niners. Can you please share that story?

Alex Harris  10:08

My very first job. I made $5.65 an hour. That was minimum wage at the time. The same thing for football, it was actually for the 49ers, very first thing I did was sorting screws of different sizes. I did that for hours, but it was in the 49ers locker room. So I was like, this is the greatest thing ever. Ended up getting to work closely with a number of players, including Terrell Owens, who, by the way, is a tremendous guy and gets a bad rap. Really, I can't say enough about him, including he was cool to me after what happened was, I was driving in, I think at the time I was like sixteen, I think I'd just got my license. I was driving in the Niners parking lot. He was leaving on a motorcycle, there's kind of a blind corner, and we both jammed on the brakes. We're both, we were both going too fast, and came this close to colliding my SUV with T.O.'s motorcycle. Again, you talk about low man on the totem pole taking out star receiver, I guess I might have made Sports Center, but not in a good way.

Callan Harrington  11:07

You could have robbed us of so many amazing highlights.

Alex Harris  11:10

So many.

Callan Harrington  11:11

So how did you get involved in Chime?

Alex Harris  11:13

I've always had a passion for fintech and financial wellness, generally, I think it's a great- it's the toolkit for upward mobility for so many unlocks to really taking care of yourself and your family. And so I've always paid special attention to that, as technology developed, that allowed these interesting applications, as some of these legislation changes that unlocked and made some of these business models possible. I was fascinated by it. I actually got reached out to by a recruiter for, at the time the company was called, 1debit, the number "1" and then "debit." And I think I looked it up online, I was like, what is this? I was like, this doesn't seem like a real business. But it's fintech and they claimed, like good founders and banking and whatever. So I was like, cool, let me chat with them. So turned out to be a real business. It was, at the time, it was a rewards card and just becoming a banking product. So joined to lead paid growth, just after the Series A, and also ended up leading partnerships as well. Until, as we were closing our D round, is when I left and started Fiat.

Callan Harrington  12:20

Chime is known as probably one of the fastest growing and one of the most successful fintechs. Everything that you want out of that experience was there. A couple of things that I'm curious about is one, I've heard you talk about this on other podcasts, when you actually talk about, and you hit on it briefly here, where did this passion for this come from? And because I know sometimes, I don't know, I've worked for a number of companies, and I've said like, yeah, I'm really passionate about insurance. I'm not really that passionate about insurance. I am passionate about, I love the small business owner. And I loved working with agencies, because it's like the epitome of a small business owner, growing this business because you just don't make a lot of money for a while, and then it becomes this great business. So I do have a passion for this. But when I hear you talk about it, it really feels like you really have a passion for this. Where did that come from?

Alex Harris  13:13

I think it came from recognition that life is really short. And there's only so much time we have to actually make any kind of impact. And that impact can be being a good friend to one person, or rescuing an animal, or doing like, you can make that kind of impact, of which I believe in doing as well. I think the greatest way to make an impact, potentially even if it's a small impact, doing my small role, potentially millions of people, is often through technology, and in this case in through finance. So I know it's not- we didn't cure diseases or anything like that. But there are tens of millions of people in the US who stopped paying bank fees, who were able to have a savings account for the first time, and have that emergency savings, and really start to have a meaningful impact on their lives and their well being of themselves and their families. To me, that goal just to make that impact, aside from valuations and any money, any good story to tell, or anything like that, to have been the tiniest part of that journey to help millions of people is something that I'll be proud of forever. That in itself is really motivating.

Callan Harrington  14:28

This is the piece that I could impact. It's like you found this company at the right time. It's kind of think funny when you think back on it like fees, overdraft fees, random fees that you can't explain, when there's a lot of money in the bank account. Those things add up.

Alex Harris  14:42

So much. And they also have those lovely bank fees where if you overdraft four days in a row, they give you an extra fee, because you did it four days in a row, an extra overdraft fee, and there's all these really predatory practices. And one of the things I built out there was a product at the time called Bank Fee Finder. Essentially we used Plaid to get people's banking data and run that against some common language that we look for the data for bank fees. And so we would process and say, you've been paying this in fees. We actually did a video that was great. We had, we called it the "what the fee face." When people said, they'd say, you know, what do you think you're paying in bank fees, and everyone, for the most part, like nothing, or like, oh, you know that ATM one time or something like that. And then they'd find out that they've actually paid hundreds in bank fees. On average, at the time was, I think $329 a year in bank fees was the average across a wide set of people. And it's pretty eye opening, it's those things that we don't notice, and $329 is when you see those articles about people needing to have an emergency fund, and the percentage of the country that actually doesn't have it, that is a huge piece of potential emergency fund, and it's quite meaningful. So it actually is the big impact.

Callan Harrington  15:59

Chime was very successful. And was it right after Chime that you started Fiat?

Alex Harris  16:04

Yeah, so few things happening at once. We're closing our Series D, that was the one that vaulted us for the first time over a billion. And talking to Drew, talking to a lot of our partners, when I was leading partnerships, found myself advising them because I wanted to be a good partner, but then realized I really enjoyed it. So it's a way to have a big impact is to kind of expand that reach and say, you know, I know a little bit about a few things. So maybe I can be helpful, or I can connect you to this person. So I did that. And Drew and I were talking about, you know, hey, maybe we could actually do this and advise companies, that was the at scale. That was the first step. And so I made the jump. My wife was pregnant with our second child and didn't love the timing, but made the jump to start a consultancy, which was Fiat Growth. Brought in Drew as my co founder quickly, and started working with a number of great companies early in the space, helping them launch a number of market leaders today, as some of our first clients.

Callan Harrington  17:09

Did you wait till you had enough income coming in before starting this? Or was it I'm advising a couple, I'm just burning the boats, and we're gonna go see how this goes?

Alex Harris  17:19

There's certainly some risk. I will say one, big shout out to my wife and her company. She spent ten years at a company called Fastly, they were our stability, they were our health insurance. That was not that we had all of our bills covered, but it was let me take a little more risk. So very grateful to her for putting up with me every day, and also for for that, which was critical to our early days. Yeah, basically, building this business has been a series of calculated risks, including every hire we've made, every additional service we've added. It is looking at what we have currently, looking at the pipeline of prospects we're talking to, and making projections, what's going to close. And you need to do that with some accuracy. Even today, we need to do that with some accuracy. We don't want to turn down a great client that we're excited to work with, and because we don't have the capacity. At the same time, we don't want to hire ten people more than we need at any given point. It was a calculated risk, in the beginning had a few clients that could piece together enough money to make it work and sight on additional clients coming in. So certainly took a leap of faith, but a calculated one.

Callan Harrington  18:25

You brought up something interesting there. As you're kind of picking these services, dsid you find that service right out of the gate? Or did you have to experiment with throwing all kinds of stuff at the wall in order to find one that really stuck?

Alex Harris  18:37

The first one that was pretty apparent, either from the beginning or early days, I think that we knew, and I think it was just from a lot of the conversations we had, was there's a lot of efficiency in partnerships. Because at this point, I'd like to think we've become, thankfully kind of a known entity within fintech at least, where partners know who we are and how we operate, know that we can just have a conversation. Which is instead of: hey, I'm selling something to you, it's like, let's just talk. You, partner, and me. Let's talk about what are your KPIs? What are you trying to do? What's important to you right now? And, hey, I have some ideas that may be able to help. And there's that efficiency of there are several things that I may run by you, and it's less salesy and more organic of a conversation of true partnership, when there's that efficiency of, oh, cool, you're trying to do that. Well, have you thought about this, this and this, and these are our clients? There's, we saw that efficiency early on from partnerships as a great first vertical for us.

Callan Harrington  19:40

Interesting. If I could play that back real quick, because I'm super curious on this. So if I hear you, what you're describing is you're a potential partner of mine, and instead of going, hey, what do you have that could potentially be a good fit for us? It's: how are you held accountable? What are the goals that you have? I'm going to help you with whatever resources I have at my disposal to help you hit those goals. And then naturally as a result of that, my guess is you're building up enough goodwill, it's naturally going to come back your way. Is that what you're saying essentially?

Alex Harris  20:11

Absolutely. We're gonna have a real conversation about you and your goals and your company goals. And I'm going to do my best to be helpful to you, and make recommendations, including there might be something that's actually it's not a client, or you know, but it's just hey, let me introduce you to so-and-so. It comes back. It's that building that goodwill and that trust, that's what we kind of do. It's relationship building. Just be a good person, put it out there, it'll come back. So building goodwill with all these partners, and the trade off is they'll take our calls. And so when we have a client that says, hey, we want to look at partnering with so-and-so, well, one, because we have a close relationship, we know what's important to so-and-so. So we can help them refine their pitch. Two is that, you know, the partner will take our call. And then third is just kind of that organic of: we know, we've been talking them, and actually, this is important. So let's go ahead and add this person to the prospect list. And it's basically being a good person, being a good partner at scale, that led to legitimate business, that as our first service.

Callan Harrington  21:14

You've got your clients, and on the other side, you have partners that you're able to introduce your clients to. And these partners on this other side of this, that your clients want to be in front of, are they buying any service or anything from you? Or that's purely like, you're just building really good relationships with them, and bringing really good deals to them?

Alex Harris  21:34

For the most part, we're building that relationship and bringing good deals to them. The amount of stuff that comes from that later, either they go and they found something, or they go somewhere else, and they want to bring us in, or they get to know us, and they're like, actually, can you help me with this, or, you know, you guys do that. It builds that relationship where there's that curiosity, where we can share some of what we do, and that ends up- whether it's word of mouth referrals, whether it's actually working with them, whether it's working with them in another location, or another company, it just, it finds its way back.

Callan Harrington  22:08

I'm going down a rabbit hole in this because I'm super interested, and I think this is a place that a lot of people struggle with. They want to do partnership models, but they don't really know how to do it. And what the standard ends up being is, I've got a potential partner. And I've got this cadence, I follow up once a quarter and see what's going on, say, hey, if you've got anything that could be interesting, would love to talk. And then they repeat this every quarter, to the point where they stop picking up the phone calls. If somebody wanted to do this, what would they do? Is it do you reach out on a specific cadence? Do you use trigger events, such as I found this article that you might find interesting based on our previous conversation? Or what does that look like?

Alex Harris  22:53

It's kind of that account based approach in terms of what you know, is helpful. For some people, we have a regular cadence that we'll check in. Whether it's a text or email, or it's just kind of a one off thing, whether it's a funny thing or useful article, or like, hey, let me introduce you so-and-so. And for some, it's just they know that they have shared their goals with us, so it's kind of as it as it comes up. There's those regular partners like a NerdWallet, or a Penny Hoarder, or some kind of publication, where you know that they're gonna want to have a conversation, if they know it's a good brand, and they're gonna want to learn more. So there's kind of that regular cadence. Then there's kind of some of the niche areas where it depends, but again, building that relationship, you know, it varies depending on the situation.

Callan Harrington  23:41

Some people you've kind of got this regular cadence, and some people it's, I know what your goals are, I know exactly what you're looking for, so I'm going to bring specific things, whether that's introductions to clients, whether it's introductions outside of that, I'm bringing certain things to you that are interesting to you, that align with your goals. And you trust them, you know, that they're a good company, so you trust making those introductions. That's kind of what I'm hearing. Is that right?

Alex Harris  24:04

We certainly do, as we've expanded, our partners that we partner with, there is a process where we're reaching out, and introducing ourselves, and making friends with new partners, as new businesses are developing, that can be key partners. For the most part, I'd say 70% of the businesses we work with, we've partnered with before. So we know how this goes. We're not doing that, we're not reaching out cold. So that working knowledge is key.

Callan Harrington  24:26

And getting back to what you said before, because you're providing value, because you've got a good reputation on the the introductions that you're making, they'll pick up the call when you guys call.

Alex Harris  24:37

They'll also- I find that, you know, they say in sales, the best thing besides a "yes" is a fast "no."

Callan Harrington  24:42

So true!

Alex Harris  24:43

Yeah. Right. Which is great. Instead of saying, cool, well, let me take a half hour or an hour to, you know, pitch you on something that you have no intention of ever doing. You can be real with me, and be like, you know what, great fit, but that's actually going to be on our Q3 roadmap. Let's engage again then. Or hey, we would never engage in this type of a partnership structure. And then we can bring that back to the partner, and if there's potential, we can kind of tweak it to say, you know, this is what they're working with, to try to make it successful. So I think it also breeds those honest conversations.

Callan Harrington  25:16

So you had this connector partnership service, which makes total sense. That's so unique. And my guess is nobody else was doing it. Nobody else had been doing this when you guys started this. Is that fair to say?

Alex Harris  25:26

No one in the way that we did. It's weird, because people ask, yeah, who are our competitors, or who's- no one's doing exactly what we're doing in a really thoughtful way, where we're all services, everything we do. We're both strategy and execution, so we're not just telling you, this is what you should do. We're not just making a few intros, we're actually helping with execution and hands on. There aren't a lot of people who do that on the affiliate partnership side. There are some people who will get you in the door at some partners. There are some great people doing that, not to discredit them. That distinction comes in, especially in a complex product, like say financial services, it's not about getting in the door. It's about optimizing that partnership once your live. So that's a ton of feedback, talking about everything from well, what's important to you, partner? Including what metrics, my EPC, my RPM, monitoring for that, making sure that we're actually discussing with the partner, okay, well, last time we tried this, and it actually gave us a bump of this, why don't we have a position to- have you thought about positioning like this? There's a lot of that collaboration between all parties to unlock, from a performance perspective, what's going to be a meaningful partnership, and a meaningful positioning of the partnership, for the client, for the partner, for everyone. I don't know that there's anyone that really does that the way we do that. And that, to me, and I think in practice, is really the key unlock for a lot of these successful partnerships and growth strategies.

Callan Harrington  27:01

You're consulting on the entire process. You're not just a headhunter to make introductions. Because so many- What do you know, it's kind of funny enough. So I said earlier, so many partnerships fail, because you don't really necessarily know how to execute the actual partnership. How do we set this up right from the beginning? Because if you don't get quick wins, those things are dead, in my opinion. How you implement them, how you measure them, that makes so much sense that- so you guys built this, you found this niche, and you started to really grow. What happened next? What did that next level of growth look like? And how did you guys unlock that next level of growth?

Alex Harris  27:37

Me personally, in my career, and also, you know, most recently at Chime, have worn kind of both hats, of the paid growth hat and the partnerships hat. So paid growth was a logical next step. People would learn that I had done that, wanted to chat about best practices. And paid growth, you don't have a lot of the same efficiencies, they're really unique to the company, to the platform, all these, the data pipes that we're setting up, and all these optimizations that we're making. So that was a leap that required investment that was maybe one of those uncomfortable moments to actually make some hires. I consulted on, as I say, strategy and execution. We were opening up the paid growth channel, and I ended up doing a lot of the strategy and a little bit of the execution. But the execution at scale is just way too time intensive. So to take the leap on that side, to do strategy plus execution, like we do in everything today, that required a leap of faith in hiring some experts who have- my rule is hire people who are smarter than than you, and we definitely did that. Our first hires on the paid growth side were, and remain today, incredible. And that allowed us to unlock that service. Again, we made a calculated bet that there was enough demand, there's enough in the pipeline, there's enough existing, hey, we're doing strategy, what if we could do execution, that the signals were there to lean into that, service as our next service.

Callan Harrington  29:04

How do you decide on when to hire the next position? Is that based on where the pipeline is? Is it based on where the floor is? Like, we know we're getting this level at all times? How do you decide that?

Alex Harris  29:14

Because of the relationship we have with our clients, we get a ton of feedback from them in the market generally, including on the venture side, we'll see, hey, these businesses are- this is a common thread, they have this need, or there's a lot of wasted spent here. So we get all these data points that point us to, okay, open this service next. The market is there, the demand is there. At the same time, we may test something and say, you know, this is really kind of a one-off case, or yeah, I don't know that we can make that hire. So we test that and validate that. Today, you know, having fifteen plus service lines, we'll test new service lines with partners and with advisors. We have Fiat Advisory, where we have over 100 advisors who are top experts in the space that we'll bring in. And we use them for many, many different pieces, including some of the service lines that I mentioned. But also, we keep seeing this theme in people needing capital market support here. So let's see if we have an expert. And is this someone we just refer to, to be good to our clients? Is this someone we partner with? Is this someone that we bring in as an advisor that we can regularly work together on? Or is this someone that we hire out, and let's build out this service line together, as just as an example of these are, we're constantly having these conversations with a variety of services, and ultimately want to do the best thing for our clients. But of course, build a sustainable business ourselves, where we know if we're going to make that full time hire, that we have confidence that we're going to keep them employed and grow with them for a long time.

Callan Harrington  30:45

What I find so interesting about this is it still plays to your core strengths, your core strengths are building relationships, connecting people. And I'm sure you're probably still doing some of this, but you guys are good sized business now. A lot of the things that you were doing early on, building these relationships, building these partnerships, and maybe you're not doing that much anymore, because you guys are a good sized business now. You're still doing the same thing, as far as like, you're playing your strings and the ability to find the right people, find the experts tested there. If this really works, okay, well, we'll work together at a little bit greater capacity. And if this really, really works, then we're going to try to hire this person internally. So you de-risk all of it by doing it that way. Is that right?

Alex Harris  31:30

Yeah, pretty much. I mean, there's certainly a small amount of risk in life in anything you do. But there's a lot of de-risking that comes from that. And we stay involved, as strategists, both for our own business, and also helping the companies that we work with on the venture side, I lead our platform team, where basically, I'm kind of maybe that diagnostician, where we're talking about: where do you need help, what's going wrong, let's figure this out. And then bringing in the right specialists, who are team members to look into it further and, and put together a plan, and then execute that plan. That's probably the role that I play most often today. My team already is way smarter than me. I try to make sure that I don't fall too far behind. So I try to stay up on things. There's a certain amount of de-risking that comes with that process.

Callan Harrington  32:20

So let's talk about the VC a little bit. One of the things I'm curious about is, so you guys continue to keep growing and growing and growing to services and had a ton of success with that. What led to the decision to create a VC. I mean, the reason I asked this is many people, then what you see a lot of times is services, when they get to a certain size, is everything becomes how do we decouple revenue from headcount, which typically means we're gonna build a SaaS product or software solution or something like that. We're gonna go actually the VC route, and build a venture capital firm, as opposed to trying to build a SaaS company or a fintech, or yeah, I guess for this matter, a fintech.

Alex Harris  32:58

Several factors led to it, it was a combination of lots of people telling us, hey, you guys need to do this. You guys get crazy insights, you do the ultimate due diligence, because you're working in the trenches with companies, you're setting up their analytics and martech, you know what's real and what's not, you see if there's opportunity before anyone else gets to see it. A number of friends, especially other VCs, who flagged like you guys have to be doing this. There's some of it for- I had never would describe myself as a VC because I'm just a growth guy. And capital is one of the pieces that's necessary for growth. And so that's kind of how I look at it is a natural extension of how do we build the best business possible. You need to know the venture market as well, and in many cases, be able to assist, not just with advisory, your execution. But hey, this is a great opportunity. No one else in the market has seen this yet. We know all these data points, because we're working with so many in the market. So we should lean in, that we should maybe lead this round with a check and save the company time. There's a ton of efficiency, especially these days, in venture markets, there's 100 conversations you have to have, you have to talk to everyone three or four times. You can save the founders- it's a more efficient way, it's a more efficient way to build. So we say in some cases, we reverse engineered venture capital, because normally you build a monster fund, and then you build up your platform team, and you support it in some way. We started with our consultancy and built up those services. First, got those insights that unlocked venture, where we can not just pick winners, but we can actually build winners, and have those unique insights. So I think, again, it was just that holistic look at we're really well positioned to build efficiently with partners. And we're well positioned as the business in this ecosystem to evaluate and build winners, so that in itself is appealing to our LPs. So I think it was a lot of kind of dot connecting that we knew that we had something unique.

Callan Harrington  35:01

You guys have the growth engine, like, for, and if you invest in this, so you guys have a pretty good feel that it's going to be a winner. The odds are stacked in your favor. What are you looking for? When do you guys know it's gonna be a winner? What are some of those things, what are those checkboxes when you look at a company, what do you look for?

Alex Harris  35:19

It starts in the very beginning, our first conversation, there's some of it, and that includes actually the earlier part of our conversation, where it's kind of team dynamics. It's one of my favorite questions is: what keeps you up at night? If you don't have a good answer for that, if you can't be real, it either shows you're not taking a good look at your business, or you're not secure enough to call out where you need help. You're not coachable. There's some of these things that we look for in the very beginning. That's not necessarily unique to us. Those are just good questions that good VCs ask. There's that in the beginning, based on our work, and our playbooks that we've built, we know when something is believable or not. When someone says, hey, we're gonna do this, and they show a compelling slide, and we know, generally speaking, you're never going to get that kind of adoption rate. Or validating that it's there. You can validate even, actually, in some cases, you're like, actually, you have something really special here, why aren't you doing more of this, and actually even collaborate in real time, and see something special that even the founders themselves may not be seeing. Metrics wise, we know what's possible, we know what sales cycles- how long sales cycles are, the process of getting the partnership live. So we can do a lot of due diligence. And you know, what's integration look like? What's the revenue model look like? And okay, you're going after these people, and okay, cool, you're selling to employers, but how are you getting in front of employees? And what's that process look like? And basically looking at the full funnel, to gut check, based on our experience, this will work, this could work, this is definitely not going to work.

Callan Harrington  37:00

That's one of the beauties of being in an industry for fifteen, twenty years, right? You can see things and know very quickly, although they look- I've seen this in insurtech a zillion times. I'll see something, especially if they're selling to agencies, and it looks amazing on paper. And it's like, wow, how was nobody ever thought about this. But you can tell pretty quickly it's a disorder never get adoption, or it will. But it's not going to get adoption at the rate that that says on this slide.

Alex Harris  37:29

There's a huge expectation that people have, where their mindset is, if I just build the best product, I'll win. That's understandable why great product builders would think that way. The reality is, that doesn't always happen. And it's because you need to think through the growth, the path that you have, to make sure you're thinking through: these are the points of failure, this is how we can correct that, and really make sure you're actually growing your business, rather than just relying on product alone.

Callan Harrington  38:02

You hear about it all the time. Those actually get talked about a lot, about the products that were just phenomenal, but something happened. And a lot of times, until it's go-to-market, you underestimated how difficult it is to get somebody to actually buy something, because it's hard. It is super hard. So, Alex, you've had tons of success. You had tons of success at Chime, even dating back to Cal, right, those teams were amazing. So you've been around success for a really long time. Fiat has grown like a rocket ship, to the point where now you can spot other rocket ships. One of the things I'm curious about is, this is the last question I have is, if you could have a conversation with your younger self, what advice would you give them?

Alex Harris  38:40

The funny thing is, there's part of me that- your mistakes and your lessons that make you who you are, and you learn from them, you learn from a bad boss, just like a good boss, you learn. So there's part of me that, short of saying like, hey, Alex, invest in Amazon and Apple or something like that. There's part of me that is just like, I would say, get comfortable with the discomfort. You never know how life is gonna turn out, you never know how anything is going to turn out. Something that seems like the end of the world may actually be opening up a new opportunity. So there's a certain amount of be proactive, but also just go with it, and have faith that if you keep doing the right things: be a good person, be kind to people, be helpful, believe in data, and make informed decisions. If you keep those principles in mind, it will work out in the end. So I don't think I would change too much from that, other than maybe alleviating some anxiety along the way.

Callan Harrington  39:41

One of the things that I had to grasp too, that same thing that you just said, was if you could play for the long term, right, it makes those shorter term setbacks not feel like the end of the world. And I it took me a long time to be able to even consider doing that. But like what you said is so true. You said something in there that really stuck with me, and that what feels like the end of the world usually ends up being an opportunity in disguise. I think that's excellent.

Alex Harris  40:06

Time and time again. I think it starts when we freak out about a test when we're in school, right? And we think- or like, you know, some grade, and we think our life is over, or a breakup or something where you think your life is over, and just patience and time and the pieces will come together.

Callan Harrington  40:21

I love it! Alex, not a better place to wrap up than there, man. Thanks for coming on the show. This has been awesome.

Alex Harris  40:26

Thank you so much for having me. It's been a pleasure.

Callan Harrington  40:32

I hope you enjoyed Alex and I's conversation. I loved hearing how Alex sets up and maximizes partnerships. If you want to learn more about Alex, you could find him on LinkedIn in the show notes. Also, if you liked this episode, you could find me on LinkedIn to let me know. And if you really want to support the show, a review on Apple Podcast or Spotify is very much appreciated. Thanks for listening, everybody, and I'll see you next week.