Full Transcript [AI Generated]:
Finimize Studio (00:02.642)
Hi, Dan. Good to see you again.
Dan (00:05.152)
Lovely to see you too.
Finimize Studio (00:07.218)
I caught up with Izzy the other day, your head of comms. And we remembered we tried like five times to try and get you to speak at a Finamize event over the years and just never quite made it happen. So I'm glad the stars are finally aligned.
Dan (00:19.214)
I would have rushed there in an instant. This was held back from me. I would never have missed it.
Finimize Studio (00:22.77)
Well, I remember at the time I was always fascinated with your Habito brand. Like how does this start up with these grotesque stylized monsters, managed to become one of the most recognized real estate brands in the UK. And that's really where I want to start. So if I can set the scene for us, we're here in 2024. FinTech and finance brands have never been more boring and everyone is chasing the algorithm.
The dominance of performance marketing, product experimentation culture means everyone is copying each other and reverting to the mean. It's just created this really boring, vanilla, undifferentiated set of options for consumers. But you don't do that. Both Habito and Communion, you've invested from the start at creating a very differentiated brand. So let's dig into why that is a little bit, because founders normally hate spending on brand, especially early stage founders. So why do you invest in it so early on?
Dan (01:19.342)
I think there's a couple of things. So first, just to add to what you're saying, I think that the advent of generative AI is only going to accentuate the mediocrity of everything forever from now on. So I think we may look back on 2024 as halcyon days of human creativity. But the answer is twofold. I think one is I am, I think ultimately a frustrated creative, you can see all the stuff behind me, like I'm obviously doing the wrong job. But two, it really was sort of a...
came from necessity. So Habito was founded back in 2014 and we did exactly what everybody does. We started with too much Facebook advertising, too much Google PPC, horrific CAC and really we're staring at some, sorry, horrific acquisition costs and we're staring at some really problematic unit economics that weren't gonna be sustainable with the business to survive. So.
we sort of knew that we had to be brave, we had to do something different and we felt that our real core advantage in the mortgage market where we were was that it was just a fundamentally important product to lots of people. It wasn't ancillary or nice to have. Most people at some level, like it's right there in Maslow's pyramid, care deeply about shelter and the idea of home ownership is a powerful one. So we felt like if we could tune into that in a very real way that there was a chance to have
outsize cut through for the amount of budget and reach that we had. And as such, that was the bet that we decided to make that if we really let all the way in to the pain of mortgages and found the right creative partner who could be brave with us, that we could make a splash in the world. I guess we did.
Finimize Studio (03:01.618)
Yeah, you certainly did. It was very differentiated position, especially for a real estate brand. But I'm curious how you do that well. Do you have a bit of a playbook or a process that you follow? Because it's actually, it's quite easy to do something different that's not very good. It's quite hard to do something that's different and is good.
Dan (03:19.022)
Yeah.
Dan (03:23.022)
Yeah, so I think if I, if that sort of break into a few steps, I guess I, and to some degree I'm repeating now at Communion. I think the first and probably the most important is that you have to find a human truth. So not something hypothetical that you would like to be true, not so not something aspirational about the way that you would like the market to become, but something that is like viscerally and recognizably true for a lot of people and clearly your customers right now. So that's the first step. And again,
for mortgages it was that it feels like hell. Like it feels like you're being robbed, you're having your time wasted, you're confused, anxious, the whole thing. So that was quite easy to discover if I have to. The second and maybe the hardest thing I think as a founder is you need to get uncomfortable. So being a founder is a generally uncomfortable position and you're somewhat of a mad fantasist trying to convince the world that you're a CEO of your imaginary company with your imaginary products.
And there can be an urge to fit in for your brand to look like the other brands. You know, and everyone's looking at this. Back then it was the Stripe website. Now it's the Linear website and trying to make sure that their product looks like the others so they can feel confident that customers will understand it. But we are just so inundated with mediocrity in our everyday lives and so overwhelmed by marketing messages that if you're comfortable with the thing you're putting in the world, then no one else is going to notice it.
So you have to find an edge to it. And now, as you say, that can, that edge can go completely the wrong way. So it can either be kind of lame or disinteresting or offensive and problematic. And that's why step one is the most important. So you need to find the human truth that is recognizable, that shows that you're not just showing off or sort of courting, you know, problematic press or anything like that. But there's a human truth there. And then find an edge to it that makes you feel uncomfortable enough that other people will notice it. And then...
Lastly, number three, I guess for me is you've got to make a big enough bet. So the agencies will all be telling you, you know, you can spend 10K, 20K, 30K, whatever it is on direct response, cable, daytime TV or whatever. That may be fine for your brand and every product is different. I shouldn't speak universally on that topic. But there is a sort of a minimum entry fee for finding out if creative works in any specific vertical channel, particularly if you're going to be trying to do television or radio.
Dan (05:45.038)
So make sure you meet that minimum buy -in or you won't get a clear read on whether your thing worked or not. Like you may just kind of fall under the radar of sort of the critical mass of human attention. So yeah, but like make sure you've got enough cash to lose and enough cash to find out if your idea was the right one.
Finimize Studio (06:04.914)
It seems like your philosophy is based as a founder on being brave, right? Like you just mentioned, it's important to root everything you do in customer truth. Once you have that, you then have to be bold and trust your creatives. So I'm curious how you start to bring that to life. How do you, you know, do you have any examples of this specifically at Habito and how do you know when it's working? How are you measuring that ROI?
Dan (06:34.062)
Yeah, I mean, I saw, I remember the original scamps of the first TV ad, which I think was someone having their spine ripped out and their gold tooth pulled out by a mortgage. And I thought, actually my main concern was I thought it was juvenile. I was like, people are gonna think this is daft and we're asking them to trust us with the most important financial transaction of their lives and all of their personal data. And we're like, walking around with, you know, cartoons.
And that I did, I was really nervous. And this one thing I would say here is like bravery is often a team sport. And I remember like, I remember cornering our VP marketing and CMO at the time and being like, are you sure? Because I'm not sure at all. I wish I could like take all of the credit for the bravery. But just, yeah, it sort of, we all looked at each other in the eye and we're like, no, listen, we, you know, necessity is the mother of invention and we don't have another idea right now.
and spending more on Facebook is clearly not the answer, so you make the bet. But I also think, and I should be careful not to generalize, but I think given that so many founders come from consultancy backgrounds or engineering backgrounds or product management backgrounds or even performance marketing, there is often an urge to kind of multivariate test everything to death and that if we just run enough tests that we can...
require certainty at small scale before we actually risk humiliating ourselves or killing the business. And my experience of multi -layer testing, although incredibly useful at conversion, funnel optimization, and lots of little things, it's not gonna work for this. You're not gonna be able to focus group your way through it. Like at some point, you are gonna have to like take a big gulp and make a leap of creative bravery if the rest of the world is gonna notice that something happened.
Finimize Studio (08:20.85)
And then how are you measuring that the world has noticed? And because I guess the reason that founders won't invest so heavily in brand is like, it's expensive. It's expensive to do it well. And then when you bring it to life, often it's difficult to connect the dots between revenue growth. How have you done that in the past? And do you have any examples where, you know, you have or haven't seen the ROI come through from investing so heavily in brand?
Dan (08:30.158)
Mm -hmm. Mm -hmm.
Dan (08:44.43)
Yeah, so the thing that I don't always mention about the Habito story is it was our second try TV campaign. And so we did a TV campaign about, I forget, six or nine months previous to the successful and the Hello Habito campaign, which was about algorithms. It was like a very beautifully animated thing about how our algorithm was the cleverest algorithm for finding your mortgage. And I remember being very excited. And I can't remember what we spent, but it was like a lot, like 50 ,000 pounds on television, which to us was like a meaningful sum of money.
And I remember that we had the spot times when you, when it was going to be on these channels and I'm watching all of the dashboards waiting for the spike. And it was like a mill pond. Like there was, there was nothing. It was as if the advert had never happened. And we had, we were, it was in my own habits of creative L. And that felt pretty bad. And like we'd kind of messed it up. And, and there, I think it's because we'd gone for a product truth and tried to tell everybody how clever we are.
Finimize Studio (09:26.29)
You're in Habito Hell.
Dan (09:41.582)
or and nobody cared how clever we are because it didn't relate to their experience of mortgages. So when we went back to the drawing board and we did it again, we saw the spike when the spots came through and there were big spikes and not to get too sort of dull econometrics guy on it. The thing that you would really see is you would run these campaigns for a few weeks and you'd be very, very busy because you're front of mind, you know, salient, good brand recall, all that kind of stuff. And then at the end of it, what you would see is that your new, you know, the
traffic would drop away, but you would have a new baseline. So, and every time you ran one of these campaigns, the baseline sort of creatively became higher and higher and higher. So we were able to sort of look back and do the arithmetic and figure out that this were, you know, even though the, the cack just in those two weeks, maybe didn't look good, that on a blended basis, it looked really, really good. And then to take the example of the Hello Habito campaign. Yeah, I think we, we halved our customer acquisition cost and tripled the size of the business in the 12 months that.
followed on from that first campaign.
Finimize Studio (10:41.234)
That's incredible. Especially because it's so easy to fall into the trap of mediocrity, especially when you're trying to be creative, right? You're trying to bring as many opinions in as possible and you end up reverting to the mean. But then being bold enough to place a large enough bet to see that pay off. How did it feel when you started, when it, when it actually worked?
Dan (10:51.214)
Hmm.
Dan (11:02.702)
man, I didn't trust it. Like, I just kept finding ways to say the denominator of the arithmetic was wrong, or maybe that was something else we've done. So no, I remained suspicious and difficult throughout the whole process. I think it was only two or three years into the journey where I was like, oh, wow. And actually when we did the grownup econometric analysis, we found out that I think it was 80 % of all of our volume was being driven by television. And actually,
Ironically, we were under investing in television compared to what it was doing for us. Now look, that was a B2C fintech in a specific space. That is not going to be a universal playbook. But I think you can abstract the kind of the conceptual piece of bravery and culture. It doesn't need to be TV. It can be social. It can be any number of channels. But you've got to make yourself unignorable in the world. And that requires both bravery and good creative partnership. You can have to find some people.
who sort of can see where the edges are in the world that you might exploit.
Finimize Studio (12:04.05)
I love that you've got to make yourself unignorable in the world. What a great mantra for anyone trying to build a brand. Now coming on to communion. We spoke briefly, uh, last week about your partnership with uncommon who are arguably like the hottest agency in London right now. It's amazing that you guys are partnered from such an early stage and again, speaks volumes to your belief in, in brand and, and rooting it in, in customer truths. And we'll come onto that a bit more later, but.
You reference when you were talking through that relationship, the importance of giving creatives enough freedom. What do you mean by that? And what did that process look like when you were working on the new communion brand?
Dan (12:45.326)
I think it's a general truth that there is a level of stricture that just doesn't work for wild thinkers. And that's universal. It's beyond advertising. I once had a tattoo where I let the guy do whatever he wanted. Best tattoo I ever had. The more time you spend trying to be like, I want it to look like this and showing him 19 photos of different things, you're just killing it for them. You're ruining the whole point, isn't there?
Finimize Studio (13:04.146)
Yeah.
Finimize Studio (13:14.706)
And you're not a tattoo designer, to continue with the analogy, right?
Dan (13:18.99)
I'm certainly not a tattoo designer. And so my view is very much, you've got to, I think a universe of infinite optionality can be overwhelming even for the most creative people. So you've got to put some rails in and help them figure out both the customer truth and strategic truth. But then man, you've got to get out of the way. What do you know? What do I know? And I do think you have to trust your taste to some degree.
or if you really, really don't have that in you, which some don't, some founders I know just, they just don't see it as their gift, then you've got to find some already strong who you do trust in the CMO role or the VP marketing role. And it's funny, man, like you'll just see it and we were very fortunate with Uncommon that we were their founding client. So in a way we were two startups who sort of grew in parallel over a number of years. And so obviously when I was going back to the beginning with Communion,
We were super excited to go through that journey together. And I think there were many things they found very frustrating about Habito because they turned up a few years in and were like, God, your logo's so shit. We always wanted to redesign that. And so with Communion, they got to have creative and portnet on absolutely every aspect of the business. But yeah, it's a snowball rolling down a hill. The more creative ownership they feel in the business and the more they can see their own...
creative fingerprints on the work that's being generated, like the more excited they are about doing the next thing and so on.
Finimize Studio (14:49.65)
Fantastic. I love it. And what a lesson for other founders trying to work with creatives to be able to give up that control. I'm going to shift gear now and we're going to talk a little bit about growth and scaling. So when you're building a challenger brand, I'm really interested in the differences between how you scale a company like Habito to over half a million. What do those hundreds of thousands of customers look like versus
Dan (14:59.79)
Yeah.
Dan (15:05.006)
Mm -hmm.
Finimize Studio (15:18.002)
Communion scaling, it's first thousand. So let's start with what channels work for you with Habito and any examples where you really crack something. I know we've spoken about TV, which is completely unconventional. I don't know if I'll ever have another startup founder come on here and talk about TV. And then normally terrified of it as a growth channel. But what are some of the keys to really cracking TV and then any other channels that you found accelerating in that scale up phase of the business?
Dan (15:47.982)
So this is a bit geeky, but I think it is interesting. I don't hear people talk about it that much. It's activation window. So if you take something like Habito is an extreme on this, which is that most of the time, most people don't need a mortgage. If you know what I mean. We used to estimate there's only ever maybe 300 ,000 people in the UK who were literally in market right now. Whereas for something like a Monzo card, like everybody's always in market for a Monzo for their first, you know, everyone's got one now, but back when they were launching.
you kind of got zero activation costs. Like why wouldn't you add this lovely new card to your wallet and this wonderful new product? And I think that that does drive channel selection to a degree. Whereas we didn't need someone to be able to click through to Habito at the point of receiving the message, because most people didn't need to click through and it would have been a waste of their time. What we needed them to do was remember. So that six months, 12 months, 24 months later, when they did come into market,
we had the highest brand recognition. So when they went to Google it, they would find us. Communion is completely the other way around, more similar to a Monzo where anyone can activate at zero cost with our product. And we need to kind of create the smallest window, if you like, between receiving the message, emotionally resonating with the message and installing the application and getting on with it. And I think that that we completely misunderstood in Habitat. So we're like hammering away on performance marketing, trying to drive people to a website for a product they don't need today and eventually,
we figured out that we needed to invert that pattern. Whereas, yeah, I think Communion is more similar to other B2C apps where it's like, come now, do the thing, you'll feel better, and then stay with us and go on this journey.
Finimize Studio (17:25.618)
Well, I think I'm fascinated by this sort of activation window that you're talking about because it's so relevant to investing as well. You know, we, on the previous episode, I was talking to Barclays managing director about how long it takes to build a relationship for something like an investment portfolio, which I imagine is similar to a mortgage. It's a large sum of money. It's a big life decision. You probably think about it at most once a year, once every few years, but you need to stay top of mind throughout that journey. So.
Can you talk to us a little bit more and perhaps with an example of what does that look like? What is that activation window and what are some of the activities that would pay off from investing in that?
Dan (18:04.462)
Yes, I think you've got a couple of roads to that. So there's the sort of more classical CRM model. So in just using mortgage as the example, there isn't that much to say about. So if you're in a two year fixed rate, really there's not much to talk to you about for the 21 months until you need to do it next. But you've got to find a reason to stay engaged. So the things that we did was we would monitor your mortgage balance and let you know, you know, if we saw that you were overpaying, we would show that the curve had steepened and so on. So we sort of...
deepened that association, if you like, between us and the underlying product and kind of deepened the commoditization of the underlying product. So it was like you had your mortgage with Habito, not really with HSBC or Barclays in the mind of the customer. But really, and this is a bit of a boring answer, but it was the best predictor of retention. So the best predictor of us getting your next mortgage, your remortgage, was always a net promoter score. So you just gotta do a fucking amazing job on the first one. And then they're like, of course I'll do it.
Why wouldn't I like that? No one wants to fill in that form again. So you had a really good chance as long as you did a brilliant job that they would stay with you. And then so that's the sort of the inside the product. And then outside the product it is, it's just that it's good old, you know, what was it? Unprompted brand recognition where they've just, they're seeing you around. And that was another, I should say another key thing of the Habso strategy was we found out that all of that sort of cheap.
direct response TV, like the cheap end of TV did nothing for us. I think we were actually one of the first brands who were, we bought individual spots. We didn't buy by weight or in bulk. And it was Champions League final, Love Island, God, I forget what it was, Bake Off. I know it's Bake Off BBC. I can't remember now, but we were trying to like whatever the largest viewership spots were. So we were actually not on TV that often, but we were absolutely hammering the moments that mattered. And I think...
Again, depending on your brand and the demography of your customer group and whether you need to build trust. And that's a really interesting point, trust, right? Is that we could be really outrageous in the advertising because we were in an expensive ad slot. Do you know what I mean? So if you're doing something outrageous on daytime TV, it all looks a bit cheap and wobbly, but if it's in the Champions League finally, you're like, oh, it must be okay. So there's all of these unconscious associations that allow people to build trust and increase the probability of retaining and staying with you for that next mortgage or that next investment or that next important.
Dan (20:27.118)
software purchase order it might be.
Finimize Studio (20:29.682)
That's awesome. And again, just so impressed that the boldness that you have to go with for that to pay off. If I had to switch focus to communion, right? What's the playbook for your first thousand customers? Cause I imagine you're not on Champions League final ads or, or love Island ads.
Dan (20:47.95)
Not quite, not quite. Although we did manage to get, thanks to our friends at Uncommon, we did manage to get Spencer Matthews to be in our launch video. Being abused actually by the, we were swearing at him and it said in big letters, effing Spencer Matthews, which, get yourself a celeb, abuse him, but on the internet. No, it's completely the opposite. No, we got like, we're pre -seed business, no budget. But the playbook is the same, right? And for us, the, you know, the human,
Finimize Studio (20:55.282)
There you go.
Finimize Studio (21:02.546)
So that's the playbook for startups to copy. Yeah.
Dan (21:17.838)
truth of communion is a somewhat radical one, which is that we don't believe that the problem is that people don't understand compound interest or aren't investing in the right products. We believe that there is a fundamental anxiety at the very basis of the relationship with money that stops people being able to think about money rationally. So it leads them to impulse purchase or put their head in the sand about financial planning. So when we talk to our audience for communion, we were...
Completely new channel for me actually, it was 90 % of our first thousand customers were acquired via TikTok. And by far and away, somewhat to my embarrassment, the most successful ad was me talking into the phone and just saying, Sky Sports is trying to steal your money, Beyonce is trying to steal your money. And sort of like fairly confrontational message about how difficult it is to survive in late capitalism and how absolutely overwhelming the sort of the...
and calls to consumer all the time. And that like, the first thing you're gonna have to do is like introspect, understand yourselves and build if you like some sort of armor, if you can resist all those marketing messages. And that really, really landed for us. And we were trying a bunch of stuff that was much more rational, like save every day and things will be great or get a great interest rate with communion. And that just all like flowed down the river and no one cared about it. But when we...
found that emotional truth, which I think you're seeing in a bunch of different areas, you know, with parents' paranoia about phone use and all this stuff. I will think it's the same underlying thing, which is we are in an unnatural state of consumption and we feel overwhelmed by it and we want to find solutions. And actually social, you know, and it's funny, my first instinct was like, let's make a really cool advert and put it on TikTok. And I did try that and it really, really didn't work. So you have to respect your medium.
And also understand that your medium confers a trust or a lack of trust in the same way as television does and think about the implications of that for your brand.
Finimize Studio (23:18.002)
But is that message that you sort of said resonated? You believe that, right?
Dan (23:24.59)
I believe very deeply. Yeah.
Finimize Studio (23:27.154)
So talk to me about that and what you've sort of learned. Why do you believe that so deeply and why is it the sense that, why is it important that consumers feel the sense that their money has been taken from them by all of these other things that are vying for their attention?
Dan (23:43.342)
So I'm like, embarrassingly, I'm like a fintech dinosaur. Like I've been doing this for nearly building consumer fintechs for nearly 20 years in the UK and investing in a bunch of them as well. And it's funny, right? Like I really thought I was doing generally a good thing. And now, you know, you've all the same buzzwords, you're like democratizing access to X and removing the friction of getting a mortgage and making pricing more transparent. And I do think we did all of those things, whether it was us or TransferWise and once I think it's been a slew of great businesses who've done that.
But there is a bit of an engineer's perspective on that, which is like, we'll just remove all the friction, we'll correct the market inefficiency, whatever it might be, we'll automate all those ineffective people in the call center away, all of the sort of megalomaniacal tech founder narratives that come out. But they do all fundamentally ignore the human. And I think that was what really landed for me as I sort of transitioned out of Habitat. I was like, oh, we've done all of this. But whenever I talk to people about their financial lives, they seem more anxious and upset.
than ever. They don't seem like that all these products that we invested so much of our time and money and really solved the issue. So that I like, I really sat down with the team here and we read everything and we did hundreds of customer discovery interviews. And that, that was the thing that really came out. It was, it wasn't that people were worried that they weren't, didn't have the optimal ROI on their savings or that they didn't understand the different nicer or an ETF was or anything like that. It was that they felt like they couldn't save like that. That was an impossible.
thing and that saving wasn't for them. And when you went really dug down further into it, it was that they, you know, they were experiencing like real like pit of the stomach money anxiety on a daily basis, particularly the sort of 20 to 40 year old segment. And felt deep shame about that. It wasn't the kind of thing they were like sharing with their friends and family, you know, the way they might, their relationship was. So that, yeah, that, but that really...
presented itself very clearly to me as an opportunity, not even beyond like for building a company, but that if we could somewhat reduce the level of anxiety and sort of in individuals and start to fix that relationship with money, I think that there are all of these second order benefits in terms of them making great decisions about money, enjoying the things that they spend money on more. And that was yeah, that's really the very crux of communion.
Finimize Studio (26:03.666)
I'd love to talk about that for a moment because, you know, we're 10, I guess in your instance, 20 years into this democratization of finance. Savings, have we really made a dent in that? Are people really more saving more? Are people really investing more? And then tried methods of sort of goal setting and roundups and financial literacy just don't seem to have worked. And particularly through all of the research we've done, you know,
really engaging with our community to try and understand, you know, what are those blockers and barriers? Actually, when it came to investing, like the rainy day fund was the biggest barrier to entry for anyone to invest. So like these concepts are very simple, but we've managed to create an atmosphere. There was so much guilt. People feel stupid. People feel like they want to put their head in the sand around the concept of saving. And, and that actually the act of saving seems completely insurmountable now to the point where people just don't start.
What is the industry getting wrong here, in your opinion?
Dan (27:03.15)
So we're gonna get a bit philosophical here, Max. So I believe that one of the fundamental problems of technology as a solution is that it tends to promote passivity in the end user. So there is a general like, just watch the next video on YouTube or let the thing round up your change and then auto invest it into a basket of ETFs or whatever it is. There is a general like in the interest of efficiency and productivity, we are gonna take away work.
from the end user. And always the story is to free you up to do creative stuff and spend more time with your family. And I think sadly, the truth is it's to free you up to consume more, watch more advertising and spend more money to feed the machine. But that's a conversation for another day. But I think in saving that, you really, really see the problem is that the further the active relationship with money, and even like the physical relationship with money, first it turned into a plastic card. Now even that plastic card's gone. And now it's like a thing that flies through the air.
from the end of your phone like magic. And all of the like the very sort of basic building blocks of the brain, like they cannot, like we're not built to understand that level of abstraction in exchange and bartering and so on. So I really, you know, and we live this quite in a quite literal way in communion. Like I think that the relationship has to be active. So at communion, every single day we all save a pound. That is the primitive of the app. Everyone comes in, they drag a pound.
They can see that everybody else has saved a pound as well and if they're on streaks and all that kind of stuff and they'll consume a sort of a meditation on the psychology of money altogether. And that sounds sort of like what, like a pound? Is that enough? That seems like a sort of trivial amount. You're gonna make them do that every day. That sounds awful. That's an enormous amount of friction to do something that is very easily automatable. But the reality is that we are what we do. And if you once a day, even unconsciously in that moment for the...
minute that you spend in the app or even the 10 seconds you spend in the app are like, oh, I'm a saver. Like I'm a person who saved today. So when that marketing message comes at you being like, no, it's time for you to spend, you are able to resist it because you have built like that resilience in terms of your own identity. And so I'm a huge believer in that. And I think it becomes a little bit more complex around investing. And I agree, these sort of waterfalls of like, well, you can't do X until you've done Y.
Dan (29:28.686)
It's only people who've done X who are gonna tell you that. It's only people with emergency funds saying, you definitely need one. And listen, and I'm cautious not to blather on, but I do, I very much understand the urge of people, you know, we've lived in this very low interest rate environment for five to 10 years, and you're hearing that everybody else is becoming a millionaire on crypto and meme stocks. Of course, you don't wanna stick your money in some, you know, tracker. Of course, you wanna take like a big swing with a massive asymmetric upside.
but that isn't ultimately the best thing for most people. And I think sort of trying to balance the fact that the best thing you can do with your money is incredibly boring and won't give you a load of dopamine with the fact that you need to make it an active thing that they engage with daily, that is a real puzzle. And, oh, sorry. The doorbell. I put everything on mute except the doorbell. I think that was it.
Finimize Studio (30:23.666)
That's all good. That's all good. That's why we've got Guy here.
Dan (30:28.014)
So yeah, no, I think just I'll try and rewind a few words so that makes sense. I think the challenge is balancing the need for dopamine and active engagement and excitement that people want and why they can flake gambling and investing with the need for an active saving habit that isn't something that's happening to the user, but it's something that the end user is doing for themselves.
Finimize Studio (30:47.442)
Well, I think, you know, for us talking about investing, this is the message that we give to all financial institutions right now is we need to stop thinking of ourselves and our role as teachers and advisors, because anyone that's got kids or runs a team, you try and tell them what to do, it's never going to happen. And a lot of that is because if someone tells you what to do and you say, okay, I'll do that, then you've got no autonomy to explore what to do next and to go on your own self -discovery journey. Whereas if you allow people to go on that journey.
and provide some contextual nudges and let them make their own mistakes and then come up with their own solutions to that. Then they've got a framework and a foundation to build upon. Someone tells you to do something and it doesn't work. If it does work, you also have got nothing. So we're completely, completely there with you on that. So we spent some time on the philosophical to bring it back down to something quite practical. What would your advice be to banks and platforms to try and get more people to save?
Dan (31:48.046)
So this is a challenging one because I think that these platforms by their very nature are trying to sell a lot of products simultaneously. And that is partially because they've got high customer acquisition costs and they need to generate lots of revenue to offset the amount of money they spent acquiring the customer. But I think, I do think ultimately that it is the overwhelming number of options that is a, is part of the challenge and part of the overwhelm that these end users experience. So I think...
partially my unhelpful advice is just try and do less. Stop trying to flog them palladium and this coin and that coin and be honest about what you think is actually beneficial for them and do a good job of selling that to them, which is tough advice. And I think also, yeah, I think it's just take, I think you have to take people more seriously. And I just, I think that all of the multivariate testing and all of the Kahneman and Tversky behavioral economics, like it all models the end user as an idiot.
like as an automaton who is just gonna react to impulses that you fire at them. And I think A, that's like a horrible way to exist in the world, conceiving of people like that. And B, I think people are getting wise to it. And I think there is a, I think just in the same way that, you know, we're more media savvy than our parents were and understand the internet. I think that this, that when I speak to, you know, my niece and nephew and a lot of the communion customers, they are just much more thoughtful about the way that they are consuming and actually,
I again, I'm straying philosophical, but it's often what they are, their identity is defined by what they don't consume more than what they do consume. Like veganism being an example, like I'm a person who doesn't do that rather than I'm an American Express customer, which would have been my parents' generation. Like they're happy because they did do that. I don't know if that makes sense.
Finimize Studio (33:34.354)
It makes total sense. And I think this idea of sort of stripping everything back and essentially there's only so much real estate. I remember you told me this last week, there's only so much real estate and surface area that you have when you're engaging with a customer. So the more you cram in is more noise, more playing into anxiety, more overwhelming and more likely that people just duck out of that whole process.
Dan (33:43.15)
Mm.
Dan (33:56.91)
I mean, and I say this with all the love in the world, love Monzo, love TS and Tom and the team, phenomenal people, but like, that apps a problem now. Like between it's trying to like do a lot of things, trying to monitor my mortgage and sell me a flex thing and a premium card, all good well -considered products, I think they show a lot of respect to the customer. But even they're like very smart people trying to sell products that are actually reasonable and that people might want to use. I can't navigate the app anymore and I've been using it for how long it's existed. So I think...
I think you've got to be honest with yourself about what you're doing and this sort of ruthless single mindedness of trying to generate long term customer value means stripping some of that stuff out.
Finimize Studio (34:34.994)
And how are you going to defend against that at communion? It's very easy to be sort of narrow on day one when you've got a small customer base and you're solving a clear need. But series D, E, F, beyond you have, you have investors to appease.
Dan (34:49.422)
Do you know what's the big thing? And this is going to sound productive. It's all about acquisition cost to me. So the second you let those balloon and every founder does it, they're like, oh, it's okay, because we'll cross sell X and we've got this product Y coming. You've got to find a way to sustainably acquire a lot of people at reasonable cost or you will never have control over your products and you will keep hoping for the best with the new launches and cramming everything in every nook and cranny of the front of the iPhone. So I think that's number one. So how do you do that is a different question.
But again, for something like communion, like the member mechanics, customer referrals are totally fundamental. And that, again, requires the product to be something that people understand and feel is good for them, or they won't recommend it. Which again, I think is a good discipline for a builder.
Finimize Studio (35:34.322)
Totally. And perhaps indicates a bit of what marketers and product builders can expect in the future, a bit of a reversion to organic tactics, brand tactics becoming more powerful than this whole reversion to the mean and performance. So as we're coming to the end of this now, Dan, I'd like to finish all of these episodes talking about leadership. You know, you've scaled a successful brand, you launched another cool startup. You're very happy to go back and throw yourself in at the deep end of hand to hand combat.
Dan (35:46.51)
100%.
Finimize Studio (36:03.186)
But what's your biggest lesson that you're taking with you into this, this, this new, uh, challenge that you have, but also the biggest lesson that you want other leaders to take away, uh, from being a, like what makes a great leader.
Dan (36:17.23)
That's a big one. So to avoid sort of trolling out the usual stuff, the thing that really struck me is two things. I can only speak for myself, but I was a very insecure founder. And I think a lot of the founders I talk to are pretty insecure, because there has to be something like a bit wrong with you to like wanna do this and to like be sort of, how would you say, confused enough about your self -worth that you think everyone.
is going to want to come along with you. These delusions of grand joy. Exactly. So, but that comes with it. Like the insecurity that makes you like need to do that with your life also means that you spend a lot of time looking at all the other products and all the other founders and shit like they're going quicker and they're already in the US or whatever it might be. And I definitely found that that led me to a sort of a combination of.
Finimize Studio (36:44.786)
Yeah. Delusions of grandeur, comfortable with the uncomfortable.
Dan (37:09.23)
of intellectual promiscuity and greed and like just what I wanted to do everything all the time. And so, you know, at Habito, I look back on it like there was a point where we're building a mortgage broker, a mortgage lender, but a whole life insurance business, like not just not a broker, like we do all of that simultaneously. And I broke our leadership team, like I literally broke their minds as well as my own. And I think the thing that if there's anything I took from it, and everybody talks about focus,
And people often, I forget who said this, but people often talk about focus as a binary, like you're either focused or you're unfocused. And that's not true. It's definitely a gradient, if you like. And I think that the cost of parallelization of attention, of splitting your focus of your team in multiple directions, people massively, massively underestimate the cost of that. Because you've got all these people sort of rotating through all of these different priorities and trying to get them all to line up even for a moment.
is very, very challenging and creates a bunch of politics and friction and discomfort in the organization. So if there's anything that I would have taken from what I've learned to date, it is that serialization is the answer. Like do one thing at a time. It feels terrible because you're like, oh God, but what about priority X? Two, three, four, five, and six. But if you can bring your whole organization and your full attention and energy to bear on a single problem, you can get it done really quick and then you can move on to the next thing together. It requires...
real, real internal discipline and like the amazing kind of people that I've had the good fortune to work with. And I think it goes against all of my natural instincts, but I've just again and again over the last five years, it's turned out to be the right thing.
Finimize Studio (38:49.874)
And is that something that you work on consistently with yourself? Is that easier now you've got some experience and had some success?
Dan (38:57.678)
Yeah, I definitely, I self -report to my team quite frequently. I'm like, I've got a bad idea. I'm thinking about pressuring you into doing it. Like, I'm just, I'm getting off my chest. So you've got to set up some guardrails for yourself because that, you know, because every negative is a positive, right? Like you're a visionary and you're a fantasist. And so, I'm one.
One is lauded and one is incredibly dangerous and they're partially post facto decided which one you are depending on how successful you are. But I think it is really just important to know thyself and to give the people you work with the opportunity to know you and call you out when you've slipped from the positive version of your proclivities into the negative.
Finimize Studio (39:40.914)
fantastic way to end this episode, to know thyself. But for sure, look, I've loved this conversation. Dan, I've got so much respect for you as an entrepreneur. I'm going to take this away, but I'm sure many of our listeners will too about being bold as a point of differentiation, really listening to the customers, but ultimately just keeping things simple.
Dan (40:03.662)
It was a huge pleasure, Max. Thank you so much for having me. All right, man.
Finimize Studio (40:06.098)
Thank you so much. See you soon. Bye.
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