Do the Job: The Discipline of Sustaining Profitable Embedded Finance

Episode Transcript

Ahon Sarkar:
‍Hey there, welcome to the Embedded Finance Blueprint, where we get past the noise to help you navigate the landscape, unravel the hype, and actually build a sustainable embedded finance business.

Today, there's no debate anybody can build these products, but who should? And if you should, how do you do it correctly? That's what this series is about.

I'm Ahon Sarkar, general manager of Helix by Q2, and I'll introduce you to a few friends, who will share their real-world lessons for success and help you avoid the potholes along the way. In just six expert conversations, you'll learn everything you need to get past getting to market, and get to growing your business.

So, let's dive in.

Welcome to a very special episode of The Embedded Finance Blueprint, brought to you live from FinTech Meetup with none other than our illustrious guest, who I'm about to introduce.

If you've gotten this far, you probably know that my name is Ahon. I lead our Helix by Q2 team, which helps innovative companies like Credit Karma, Betterment, and Gusto build unique banking products built around people. And you know that this podcast is about getting behind the curtain and trying to understand, "Okay, I can launch a bank account, I can launch a debit card, but how do I actually build a sustainable business?”

So far, we've talked through how to create a good business model, how to design a compelling product, how to choose your partners, how to launch a human-centric product, and how to manage your program.

But after you've done all that stuff, how do you make something that's sustainable and profitable, and is going to last for your business for the long run? To answer that question, we have none other than my friend, Alex Johnson.

Alex has a ton of experience in the credit space and has worked at places like Cornerstone Advisors, but, more recently, he started his own newsletter, which has come to prominence in the fintech world as a refreshing, hot take on everything that's happening —with the reality of what's underneath it: How are those businesses built? How are they managed? How should you think about the ways in which they differ from each other?

Alex, thanks so much for being here.

Alex Johnson:
‍Thank you for having me.

Ahon Sarkar:
‍I am thrilled that we get to do this in person.

Alex Johnson:
‍Yeah. This is awesome.

Ahon Sarkar:
‍All the other ones are via Zoom, and now we're in this random birdcage inside a conference. So, if you hear the background noise, you're here with us.

Alex Johnson:
‍That's right.

Ahon Sarkar:
‍Amazing. So, we're going to start this episode off the same way we've started the other ones, by asking you one of my favorite questions, which is: What is one myth that you'd really like to debunk about embedded finance?

Alex Johnson:
‍I have a couple, but I'll pick one of my favorite ones, which is: When I think about embedded finance, we get excited about the infrastructure, rightfully, which is allowing us to put financial services anywhere. So, any company can be a fintech company.

That's the whole tagline. I think what we miss when we talk about that, though, is that while every company can be a fintech company—theoretically from an infrastructure standpoint, we can embed this stuff anywhere it needs to be—not every company has the right to be a fintech company, or to offer customers financial services.

You have to earn that right, and I think I've seen this most clearly play out over the last couple years in the neobanking space, where, thanks to Marqeta and a couple of other trailblazers on the infrastructure side, suddenly it became really easy to issue debit cards, to create bank accounts. There was this sort of modern Banking-as-a-Service infrastructure that everyone could build on. And we were like, "Okay, well, let's launch some neobanks.”

And then, more people came in and said, “Okay, let's launch some neobanks.” And, suddenly, you look up and there are 400 neobanks, and there are way too many to keep track of. And it's really not very clear what it is that they're doing or what unique value proposition they're providing.

Ahon Sarkar:
‍“Why should I use you?” right?

Alex Johnson:
‍Yeah. I mean, a debit card with a slightly cooler color is not a valid reason to be.

Ahon Sarkar:
‍You're telling me purple is not enough of a reason to sign up?

Alex Johnson:
‍Sign up. I won't go on to a whole rant here, but I will say that purple and green are way played out in fintech colors. So, if you have some branding questions, feel free to look me up afterwards because I have strong thoughts about fintech branding.

But I think the problem we run into is that you have not clearly answered that question as a company: “What right do you have to play that important role in your customers’ lives?” And I think the other thing that's really important to remember with embedded finance is that financial services is one of—along with, maybe, your own physical health—the most important things that you have to manage on a week-to-week basis, and we've seen this recently with some bank failures and some stress on the system.

This stuff really matters, and you have to earn the right to play that role in the lives of your customers. Just the fact that you have an app where, theoretically, something can be embedded does not mean that you have that right. So, to me, that's the biggest myth we need to dispel.

Ahon Sarkar:
‍I totally agree. And it's almost like there are two questions. There's one, which is, “Do you have the right?” which is kind of like when you want to go on a rollercoaster, “Are you this tall?”

Alex Johnson:
‍That's right.

Ahon Sarkar:
‍You won't have that problem. I might.

Alex Johnson:
‍My sons recently have objected to that rule at Disneyland, but that's a separate issue.

Ahon Sarkar:
‍And the second question is, “Okay, if you are that tall, should you do it?”

Alex Johnson:
‍Yes.

Ahon Sarkar:
‍Is it actually going to further your strategy, or is it just going to be more of a distraction? So, I'm really excited to dive into that today because I think the people who are listening to this podcast are trying to answer the question: “I've heard the hype, I've seen the successes. I'm just trying to figure out if that's me, or if that's something that I really shouldn't spend our time on.”

Alex Johnson:
‍Totally. Yeah. Well, and I will just emphasize that I think a characteristic of almost every good company is focus. You're saying, “no,” way more than you're saying yes.

And there's all this great infrastructure out there. I like to think about the lives of executives working at these non-finance companies that suddenly have fintech companies knocking on their door going, "Hey, have you thought about launching a debit card?"

Right? I mean, that's probably something you're becoming much more inundated with than you used to be. And you have to be able to answer that question. And your job, as a good executive, is to say, “no,” nine times for every one time you say, “yes.”

And so, it's such an important question to ask: “What makes this the one ‘yes,’ out of the 10 requests that we get? Why are we saying ‘yes,’ to this?” And I think it really needs to be interrogated closely before you dive into it.

Ahon Sarkar:
‍And, in order to answer that question, you must know what is important, and that's sometimes where people get lost.

So, maybe let's start there and talk about—I know you and I are both big fans of—the Jobs to Be Done framework, which is that, when you have a product, there's a fundamental job that it's supposed to do for you. Let's focus in on embedded banking, and maybe we can both take a crack at this.

What do you feel is the job of an embedded banking product?

Alex Johnson:
‍Well, so, I think that's a great question. And I think—setting the embedded side apart just for a second—if you think about what a banking account does, and I've written about this in my newsletter, it really has two core jobs. One is to be a safe place for you to keep your money. And we've seen this play out recently with FDIC insurance and with crypto and a whole bunch of examples.

Those things are not bank accounts. If you don't have FDIC insurance, if you're not in a place where you can feel confident your money's going to be there tomorrow, you're failing a very basic test of offering a banking account.

So, first, it needs to be a safe and accessible place to get your money. That's step one. Step two, though, which I think we don't talk enough about, is you need to be able to provide what I like to call a command center for making financial decisions.

A lot of other embedded finance products, lending as an example, sort of disappear into the background.

Ahon Sarkar:
‍Yeah. That you have a specific need for one time.

Alex Johnson:
‍Exactly, right? And it's an enabling function that's like, “I don't want a loan, I want a house.” So, I have to get a loan to get the house. And the more the loan can just be pushed into the background and made invisible, the better.

Bank accounts aren't like that though. We don't want bank accounts to be invisible. I want to know how much money is in my bank account, and, more importantly, I want to log into my banking experience—and whatever app that's in—and I want it to have a tailored set of things that it can do as a command center. It’s much like stepping onto the bridge of the Starship Enterprise, where I know what I can do with this, and it's tuned to the things that I need it to do.

And, to me, one of the potential real cool values of embedded banking is those command centers can be tailored to the specific segment of customers that a company works with.

And so, just to give one example, you mentioned Gusto. I have a very small sort of side business where we had to set up payroll. So, we started using Gusto, and I was really not familiar with Gusto's embedded banking product. But I have to say, one of the things I've really appreciated about it, as a business owner, is it's tailored to my needs as a very, very small business owner. And as an employee of that business, that's what they built it for.

And it doesn't do everything. There are things that it very intentionally doesn't do, for sure, but what it does do is for that use case of people being paid: “When am I getting paid? How do I manage the direct deposit across multiple different places? How do I want to allocate those funds?” For those sorts of core jobs, it's really well-tuned to those things.

Ahon Sarkar:
‍It's focused.

Alex Johnson:
‍Exactly.

My former boss, Ron Chevlin, likes to call checking accounts paycheck motels. And I think there's a really interesting consumer behavior shift hiding in that phrase, which is people are now comfortable having multiple accounts and so, you don't necessarily just want to have one bank account or one other financial account.

You're willing to spread things around. There are all these apps on your phone, that's fine. But they can't be generic. They have to be specified, and they have to have those very specific command center purposes.

So, again, using my dumb Starship Enterprise analogy, there's the bridge, but there's also engineering, and there's also the science section, and there's also these different parts, and not all of them do the same things. They're all tuned to the specific jobs that they're supposed to be doing. To me, that's the core principle.

Ahon Sarkar:
‍It's interesting—because of what you said in the prior answer—and then, also, because of Helix's foundational thesis on this space. Our whole focus is: "How do you build differentiated products?"

And if you're actually going to be differentiated, rinse and repeating what a bank does in a different color, it's probably not going to do it. And so, you start to ask the question, “Okay, well what's a real (competitive) moat?"

We talked about this a little bit in the business model and product design episodes, but it really comes down to what do you do that nobody else can do that's hard to replicate? And what does that unique context show you about the problems that someone has? And then, to your point, how do you focus your command center to that person's life and that person's problems? Because if you're not solving a problem for them, you're not doing a job. If you're not making it easier for them, you're not doing a job.

And so, these people who've created a solution looking for a problem, I think are struggling right now. Whereas the Gustos, the Squares, the Credit Karmas, the ones who put it into the right context, I think are seeing a huge lift from it.

Then, where that takes me is, if you've gotten this far in the podcast, you probably have a thought process around, “I think I know the problem I'm trying to solve for the customer, and for myself. I think I know how I want to build the product and make it focused around the user. And I've now brought it to market, and I've just started managing it.” Well, now, how do you do that job better?

What are the things that you think about when it comes to how you make this a truly sustainable business in the long run? Are there specific things that pop front of mind for you?

Alex Johnson:
‍Yeah, I think the general principle is something I always think of as one plus one equals three.

The thinking there is that you have an app where you are helping a customer manage whatever sort of product or service you provide. And then the customer has a bank account and a different app, and those two are connected. There's direct deposit going back and forth, whatever.

That's one plus one equals two. There are two apps the customer can manage, and it's just fine. It's not this overwhelming problem for them to do that.

And I think—to pick on a term that I don't really like that much—when we talk about super apps, I think we sometimes get a little bit wrapped around the axle: “Can you believe we have all these apps on our phones that we have to manage? Wouldn't it be better if it's all in one app?”

I think, no, it's fine. I have a bunch of apps on my phone. I somehow manage to navigate them all. I have the cognitive capacity to do that. It's not a problem, right?

Ahon Sarkar:
‍I don't need to call a taxi from my grocery app.

Alex Johnson:
‍Exactly. And so, just jamming things together because things together are better than things apart, that's not a valid thing. That's one-plus-one-equals-two thinking, right?

One-plus-one-equals-three thinking is very different, which is, to your point, asking, “What is it that we know about this customer in the context of what they're doing that would allow us to solve some different problem for them?” And I think there are tons of examples in financial services and outside financial services—and all of these different experiences that consumers are having—where you can get more of those value-add experiences that you can't get elsewhere.

So, to use one example, I really like in Apple, on the iPhone, how—buried very deep in the settings and everything—there's ability to go in and manage all of your subscriptions.

Ahon Sarkar:
‍Through Apple, yeah.

Alex Johnson:
‍Yes, through Apple and through your iCloud.

And it's kind of a pain to get to, but I always, when I see that, imagine if they took that subscription management functionality, pulled it out of there, put it into the wallet, and combined their native inherent knowledge of what I'm subscribed to, even what services I use. They track screen time. They know what services I use. So, they could pop up and say, "Well, okay, Alex subscribes to Spotify. He subscribed six months ago. His free trial ran out three months ago.”

Ahon Sarkar:
‍But he's still being charged.

Alex Johnson:
‍And he's still being charged, and he's not using it because we know how many times he opens the app. Maybe we should surface an insight for him that says, "Hey, you should consider canceling this, and if you did, you would save this much money."

Ahon Sarkar:
‍Well, I mean, it's what they're doing if you've ever run out of space on your phone. They’ll be like, "Well, you don't really use this app, I'm just going to go ahead and delete it for you, and if you need it later, you can download it.” Right?

Alex Johnson:
‍Exactly.

Ahon Sarkar:
‍What you're saying reminds me a lot of one of our customers, Rocket Money—used to be Truebill.

Alex Johnson:
‍Yeah.

Ahon Sarkar:
‍That was the genius, right?

Alex Johnson:
‍Totally.

Ahon Sarkar:
‍Where they figured out, "Okay, how do I get a good sense of what people actually are getting value from versus not and get rid of the headache that is managing those subscriptions?” Because nobody's checking mail, everyone's deleting all of the emails they get. I don't even look at my transaction statement to know what those legacy things are that I'm holding onto.

Alex Johnson:
‍And I think that's such a good example of this sort of parallel thinking that you have to do when you're doing this, which is bank accounts before Truebill did not do that, right?

Bank accounts were not designed to help you understand, “Okay, what are all of these bills that I'm paying that I forget about, or that they sort of tricked me into, and just come out of my account every month?”

Those kinds of insights, those are customer problem-focused. Then, if they work backwards into: What's the experience? How does it fit into a bank, and what should that look like?

And I think that you can take those kinds of ideas much further when you can embed them in the places where those things are already happening. So, Apple helps you manage subscriptions. That's an example of that.

Obviously, Gusto is enabling you as an employee to get paid. That's an example of that. So, I think there are lots of examples of how you can provide a core job to be done for your customers that has nothing to do with financial services, right? If you're doing embedded finance, they're coming to you for some other reason besides financial services.

Ahon Sarkar:
‍Sure. And if you're trying to start a neobank, you're probably too late.

Alex Johnson:
‍Exactly. Well, and the thing is, your job is not to be a bank for them. That's not your job. That's not what they've trusted you to do. That's not what you've earned the right to do. But—and this is the cool thing about what embedded finance and embedded banking, financial services can solve—so many little adjacent problems that people have because a lot of it relates to, “Where's my money? When does the money come?”

Ahon Sarkar:
‍Storing money, moving money and data.

Alex Johnson:
‍Exactly, right.

Ahon Sarkar:
‍That's what it is.

Alex Johnson:
‍Exactly, those three things.

And so, think about, “What's the core problem we're solving for our customer? What have we earned in their lives? How can those three things help make that even just incrementally better? And the thing is, today, people are willing to sign up for incremental improvements in the core job that you're helping them do.

Ahon Sarkar:
‍Yes, 100%. And it's interesting, I feel like the chatter in the industry right now is around, “I've launched this product and now I need to figure out how do I make it profitable?” And I think, in what you're saying, those are the two big things to focus on, right? Well, maybe there are three things.

One is, are you actually doing the job that you signed up to do well? And if you are, then you'll have engagement come up. If you're not, then your engagement probably sucks.

And there are a bunch of fintechs out there with a ton of inactive customers that are just a cost center for them. And they're not asking the question of why does no one want to use this? Probably, guys, you are not doing the job.

So, that's one.

There's a whole second category, which is, okay, does your P&L make sense? Are you losing a ton of money to fraud? And do you need to maybe go focus on your fraud controls and the granularity there to try and save some money?

But then, the third thing—and I think this is the one that people really forget—is the one you highlighted just now, which is how do you catalyze more usage of your core product? And this is where embedded finance and becoming a neobank are different things.

Alex Johnson:
‍Totally different.

Ahon Sarkar:
‍If you're launching a neobank and your hope and prayer is that interchange is going to make you a billion-dollar business, it's going to be tough.

Alex Johnson:
‍Yeah. I have bad news for you.

Ahon Sarkar:
‍Yeah, it's going to be tough. But if you have an existing base, if you have an existing profitable product, and if you think about this product like we talked about in the business model episode —solving a core problem for the customer and solving a core problem for yourself (Be a little selfish, right?)—then the question just becomes, How do you do those two jobs better?

How do you get people to use your core business more because of the value they're getting here? And how do you start that with making sure that you're actually doing the job and driving net new engagement?

Alex Johnson:
‍Yeah, I think that's the exact right question to ask. And I always think of Starbucks as an example of this. They're a very famous embedded finance example, and I know everyone's kind of tired of hearing about it.

Alex Johnson:
‍Despite them coming before all of this.

Alex Johnson:
‍Oh, totally. Yeah. Yeah.

I mean, very, very much trailblazers on a lot of this stuff. And it's a prepaid account behind the scenes. There's nothing fancy. They put this together with duct tape back in the day. And the thing I think they did really well that we all need to continually remind ourselves of is, to your point, they first solved a problem for customers.

Ahon Sarkar:
‍I don't want to wait in line.

Alex Johnson:
‍Exactly. And that's a killer at Starbucks. I don't want to wait in line. That's going to drive huge engagement, to your point. That's going to solve a problem that's going to drive engagement. And they saw that.

The other thing, though, that Starbucks does really well is that it strikes a good balance in the benefit to you and the benefit of embedded finance to the company. And a lot of times those benefits to the company are things that don't touch the customer at all, right? And so, in Starbucks's case, they get a free loan from their customers for all these balances that are sitting on there.  

Ahon Sarkar:
‍Over a billion.

Alex Johnson:
‍It's amazing.

And then there's breakage, and they can write that off, and they can go use that money to go build new stores and stuff. It’s incredible. And so, that's this other really cool parallel business sitting beside it. And this is, I think, the key to the whole thing.

You have to absolutely make sure that those two streams never cross, right? Like in Ghostbusters, don't ever cross the streams. That is a very bad idea because when that happens, you start to lose your motivation or lose track of what you're actually supposed to be doing.

Ahon Sarkar:
‍Are you a coffee company or are you a finance company?

Alex Johnson:
‍Right.

Ahon Sarkar:
‍You're probably a coffee company.

Alex Johnson:
‍And to Starbucks's credit, when you ask them that question, or you look at what they do, they would never in a million years say they're anything but a coffee company.

Ahon Sarkar:
‍Yes, 100%.

Alex Johnson:
‍It's what they do. And they know that. In everything they do.

They're getting into NFTs now. Great. They're the only company I trust to use NFTs in a way that's going to actually add value for customers because they are a coffee company, and they know that. And everything they do falls back to that.

And I think this is where embedded finance actually has a very long history. It hasn't always been digitized, but you know, look at car dealerships. Are dealerships companies that help you buy a car or are they companies that help you get financing?

The last couple experiences I have had are even more like they help you get financing, right? “Oh, you're getting this car? That's great.” (I just bought a minivan, so I went through this recently.) And they're like, "Oh, this is going to be great. You're going to love it.” And then the gears almost shift.

And then they're like, “You have to talk to our financing guy.” And I'm like, “I don't want to talk to a financing guy, I'm actually not financing. I'm just going to trade my car in, and I don't need a loan. That's fine.” And they're like, "No, no, you have to talk to him." And I'm like, "I don't want to talk to him."

It's so clear that the whole business model has been absorbed by making loans. And, in fact, if you look at the bottom line of a lot of these car dealerships, they actually make more money on financing than they do on selling the car, which is crazy.

Ahon Sarkar:
‍The look of disappointment when you say you're not financing.  

Alex Johnson:
‍Well, honestly, I've read examples of car dealerships sending customers away and going, “If you're not going to finance, we're not going to sell you a car.” That's insane to me.

And so, I think it's a good example of this pattern that I see play out with embedded finance, where financial services revenue is sort of seductive in a weird way. And I think we're maybe used to it in financial services because we deal with it every day. We talk about interchange all the time. Interchange is magical.

Interchange is, “So you're telling me I can issue this card, customers can use it, and I don't have to do anything? And money just appears in my account? That's amazing.” It's like being the government. You get to tax people, and you just get money that comes into your account. This is incredible.

Ahon Sarkar:
‍You do have to do something.

Alex Johnson:
‍I know, yes.

And that's the core point, that you do actually have to do something. Because what happens is if you're a non-financial services company looking at financial services products on the surface, all of these revenue streams look magical.

You're not manufacturing anything. You're not shipping anything. You're not doing the really hard, in-person work that you typically do to run a business. And so, on the surface, when you get interchange revenue, you get lending revenue, you're like, “Oh my God, this is incredible.”

And you see lots of companies that slip into this mode of: “Well, maybe we should lean more into that direction. If we're an airline, we fly people all over the country. We have this huge fleet of jets, and we have pilots and stewardesses and all these things. But we really have a credit card, and the credit card is amazing. Look at the profit margin on that.”

And so, suddenly, your whole business sort of slides toward the financial services product, and you lose track of what you're supposed to be doing. And, so, to me, that's the biggest long-term takeaway when you're thinking about how to do this: “How do you design something that's beneficial to the customer, beneficial to you, but in a way that does not distract you from the core business of solving whatever problem you're solving for customers.”

(21:18)

Ahon Sarkar:
‍I mean, that right there is human-centric design, right?

Alex Johnson:
‍Exactly.

Ahon Sarkar:
‍How do you actually think about who you are to these people? I'll give you a quick example.

We have large-scale retail chains coming to us. They're like, "Hey, we want to go launch embedded banking.” That could be really cool, right? Because you have this whole ecosystem you've built over decades, and tens of millions of customers.

We're like, "What do you want to do? You just want to launch a neobank?” It's like, "What?” They're like, "Yeah, we want to launch a neobank. Our customers need financial services."

And it's like, “But what's the problem? What are you trying to do new for them?” And  they're like, “Well, we don't know that yet, we're can stackers. We’re not in the business of financial services.”

And it's like, “Well, maybe start with that.” Start with the problem you're going to solve. What can you uniquely do? How do you do that job really well? And then, let's help you get there.

Because then, you're not losing your identity. You are still a grocery chain. And, actually, it's all about, “How do I make the grocery value process better? How do I get people to enjoy their time in the grocery store? How do I get them to spend more on the right things? How do I get them to budget on a weekly basis for what they're going to spend on their biggest weekly expense aside from rent.”

Alex Johnson:
‍That's a great example of how you could tie that to financial health and say to your customers, “We care about every aspect of your health, so we're going to try to help you make great decisions when you're in the store. You're shopping for different things, and we're going to help guide those decisions. We're going to have a financial services component that helps make sure you don't spend more than you need on groceries. We're going to help you manage every aspect of your health as it relates to your spending in a grocery store.”

Ahon Sarkar:
‍We care about you.

Alex Johnson:
‍Exactly. There's such an opportunity to do that. And if you think about grocery stores as a good example, they are perfectly set up to solve that problem in a way that banks never could.

Ahon Sarkar:
‍And that is the promise of embedded banking. It is not,  go launch a bank account or debit card. No, it’s, use the context that you have—that nobody else has—to make something brand new. And I think that's exciting.

Alex Johnson:
‍Exactly.

Ahon Sarkar:
‍All right, let's close on the big question, which is: If you're in the hot seat and a CEO's coming to you. He or she is looking to build embedded finance. He or she has gotten this far in the podcast and is trying to think about how to build a sustainable business.

What's the one piece of advice that you'd leave them with?

Alex Johnson:
‍Yeah, I think the biggest one is just returning to make sure what it is that you're trying to get out of this, and be crystal clear about that.

And, honestly, to the point of setting up metrics for measuring this stuff, there's a lot we can talk about. You can talk about engagement, you can talk about revenue that you're generating. But I think it's really important to not only ask what happens if we become really successful at this, but what's the kind of success we might have that we actually don't want? And be very intentional about that.

It goes back to saying no. If you set everything up and say, “Yeah, our goal is to drive these metrics for our core business, we want people to come into our stores more. We want people to engage with this other service we provide, and we think by offering this banking product, we can drive those other things. Then, be very intentional about that.

And also measure. Are customers using the product the wrong way? Are they using it in a way that you didn't intend? Are they driving metrics for you that are good for the business but not aligned with the vision that you had or providing value? And in which case, take a step back, try something new.

Don't just assume that when you get into embedded banking that things are going to work the way you thought they would. Because we all learn a lot as we go through this. And for a lot of these companies that are doing this, it's the first time ever launching a financial product.

It's very exciting, and it's very different than anything you've ever done before. Be very aware of the things that you don't want to have happen that might pull you away from your mission of serving those customers. Because, again, financial services is something that can make a ton of sense in the short term, but long-term, it can be a distraction if you don't do it in a way that's really aligned with customer value. And to me, that's the core thing you always have to keep in mind throughout the whole process.

Ahon Sarkar:
‍For sure. And oh, by the way, if you're at one of these large companies, and you're trying to convince your whole team to do it, knowing the answers to those questions upfront is probably the single most valuable thing that you can do, right? Because your boss, and his boss, and her boss are all going to ask, “Well, why should I care about this? I’ve got to care about a million things. The economy's in a tough spot right now. I'm focused on profitability. Talk to me about why this matters.”

And if you innately understand the activity you're trying to drive, the problem you're solving, the way you're growing your core business, and you don't see this as, "Hey, boss person, I'm trying to go run a brand new neobank," you'll have a better shot of building it. You'll have a better shot of succeeding, and you'll know what your North Star is the whole time.

So, you'll be able—to your point—to know at the end of the journey, "Did I go where I wanted to go? Maybe the path was different, but did I get to the place where I was trying to go?

Alex Johnson:
‍Yeah. The North Star thing is exactly right.

I mean, you're going to run into some mountains, you're going to run into some rivers that you can't forge. There are challenges along the way. There are companies that help make that easier.

But I think, at the end of the day, you have to have that North Star in mind. And it needs to be based on customer value. It’s really smart at the very beginning of this process to spend a lot of time talking to your customers. What financial services or financial-services-adjacent problems do they have in using your services or your products? What part of your experience that you're giving to them kind of sucks today because there's some sort of money-adjacent friction there that's stopping people from getting what they want. Go find those, compile four or five of those, and you have a really strong business case for doing this.

Ahon Sarkar:
‍So, basically, find your problem. Figure out how you're going to solve it in a way that grows your core business and decide what your job is. Figure out how you're going to measure whether you're doing a good job, and then make every decision based off that, more or less.

Alex Johnson:
‍That's right, and just be incredibly disciplined about just sticking to that. And there are plenty of examples of companies that have done that. And quietly, they're these really successful financial services companies. They never talk about it. It's like Fight Club, they never ever talk about it. But behind the scenes, the financial service is playing a key role in delivering on their value proposition to customers. And that's what embedded banking is all about.

Ahon Sarkar:
‍I totally agree. What an awesome end to the podcast. Alex, thanks so much for being in this random booth with me.

Alex Johnson:
‍My pleasure.

Ahon Sarkar:
‍Really enjoyed the conversation.

And for those of you who are listening in, this is our last episode. So, hopefully you got a lot out of the last six episodes, and you now know how to go build these types of businesses.

If you have more questions, I'm sure anyone who's been on one of these podcasts would be happy to talk to you. Alex is nodding his head.

Alex Johnson:
‍Absolutely.

Ahon Sarkar:
‍And so would we over at Helix. So, get to thinking about what you're actually trying to do for your customers, what you're trying to do for your own business. Start with that focus and everything else will be a lot easier thereafter.

Alex Johnson:
‍Absolutely.

Ahon Sarkar:
‍Thanks again. See you guys.