Mercury's Playbook for Building a Multi-Billion-Dollar Fintech Company with Immad Akhund

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O n people don't like switching banks, right? Everyone talks about how they don't like their bank, but no one wants to switch it. So it's much, much better if you can start really early and you're like, oh, this is your First Bank. And 80% of Mercury customers even today are within 12 months of incorporating the other thing. Startup founders talk to each other a lot. There's a very tight group of them, and recommendations are a big way that startup founders make decisions. So getting in there, you can become the default in that space, which is quite a powerful thing to be.

I need some traction. You need some traction. Let's get some traction.

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A lot of my early customers were actually people I'd invested in just because they're this. I wasn't investing in them for them to become customers, but they were in the exact kind of sweet spot for, like, types of customers we could get. That's where I got our first lawyer from. A lot of the people that helped build Mercury, like, came from those conversations for sure.

Your network is your net worth. How did you hone in on that founder target market? Are a lot of your customers earlier, like seed and series A stage companies versus later stage? Is the plan to then migrate on to bigger companies?

Yeah, I think both the good thing and the tricky thing about being in the banking space is that people don't like switching banks, right? Everyone talks about how they don't like their bank, but no one wants to switch it. So it's much, much better if you can start really early and you're like, oh, this is your first bank. And 80% of Mercury customers even today are within 12 months of incorporating. So being the first bank is really good. But if you're going to be the first bank to tiny SMBs. You're going to have trouble building a big enough business there. But startups are interesting because they're. They start, but they can become big actually quite quickly. Right. We have some companies that started with us. They didn't have an idea and then they ended up raising $100 million and they're still using mercury within two years. That's a very rare kind of combination. There's a bunch of reasons why I think startup founders are actually like a pretty interesting market to start with, especially for Mercury. That was one of them, I think. The other thing which I think would tie into kind of this go to market conversation is startup founders talk to each other a lot. There's a very tight group of them and recommendations are a big way that startup founders make decisions. So getting in there, you can become the default in that space, which is quite a powerful thing to be.

Another key lesson here is if you are disrupting an ancient industry that people are not prone to switching, then catch them young and watch them grow.

Yeah, exactly.

Sounds creepy, but that is true.

I think if you replace catch with get, then it won't sound so creepy.

But you had a pretty successful launch. Walk us through that playbook.

Yeah, I've been launching startups and products for many years. Mercury was very different in that like we launched and then people actually gave a shit and it kept growing from that point. Yeah, we launched in April 2019. There's a few things that worked out well. I think that actually one important thing is we were doing a bank. Maybe now it's a little bit more standard, but especially back then, we were basically the first real building business challenge your bank, and there's some power to that word. Like we weren't trying to be like the financial tool stack or some other thing. We were like, this is your bank. For ideas to spread, they need to be like very. Like there needs to be good meme, like understandable, ambitious, all of that stuff. And that helped a lot. Another part of a good initial spread is having the key. There was two main investors that we had. We had about 60 investors in our seed round, which I partly did for this kind of distribution effect. There was like Elad Gill and Justin Kahn. Yeah. And in recent Horowitz, those three tweeted about Mercury. And it was actually not to be too reductionist about it, but that was the initial fire that like led to a ton of follow on distribution. And it was really that we had a little bit of tech, but the tech press wasn't like that interested. But like, we blew up on Twitter, and a lot of founders read Twitter, and that actually fueled a continuous kind of initial six months of 40% plus growth every month.

You evangelized the tech influencers, and it blew up on tech Twitter. But you also did a product hunt launch. Or did you?

Yeah, product hunt was powerful, too. Those kind of things tend to be like, a spike at the start and then dies off. You need to have something that, like, continues. I would say the Twitter sphere was, like, a bigger deal for us than, like, the product on launch, which was also reasonable.

Is there any specific lessons we can take away from nearing the sustained growth? Because usually you get a TechCrunch article or you launch on product content. You can engineer those things. Frederic from TechCrunch is here. You can beg him to do an article. You can launch on TechCrunch and ask everyone to go and like, your thousand people here, and you go viral. But then that's a blip.

Right?

How do you maintain that sustained acquisition?

Yeah, that's a good question. Yeah, Step number one is having a product that hits, like, a minimum. That's this term. This is a square term, but I'll steal it anyway. But minimum, delicious product is what they say, but I really like that term. But I think there is, like, a time and space for MVPs, but when you're going after a big incumbent industry where there's lots of players, you need to have something above an mvp, which is something that's, like, shareable and is really good. The three things we did there that were really important was, number one, we spent, like, way too much time on our onboarding. This is partly because we were doing multiple deals with, like, partner banks, and it just took forever to get us live. So our designers and engineers, like, we designed the onboarding experience, like, three times. So try it out. As an investor in other things, I'm like, why did you guys spend so much time in this onboarding experience where it really creates that first impression that's really, like, important. People are like, wow, normal banks are just fricking impossible to sign up for. Whereas, like, ours takes five, ten minutes, and it's actually, like, a joyful experience. So that was one thing. The second thing was, like, I was unwilling to compromise on, like, certain features that I thought were, like, key to this audience. Number one was wires. So we were the first Challenger bank that had online wires. It sounds simple, but I was like, I'm being an entrepreneur. I never use a bank that doesn't have wires. But getting wires done with the partner bank was like took us an extra year basically. And then the third thing was we allow non US residents to use Mercury. So I moved from the UK to the US and I was like, I'm not going to launch a bank that I couldn't use myself when I started my startup in the us. So yeah, that was also very unusual. I don't think anyone had done non resident banking. But yeah, those kind of like things where you don't compromise on something which is actually kind of pain, gets the product to a level where people can say, okay, this is actually like something different, I want to share it. And to answer your question, like number one, it starts with product and having that like thing that's shareable and memed. And then there's like all of these kind of standard tactics like obviously talked about that, Twitter influencers and blah blah, blah, you get all your friends and all those people to share it, et cetera. In B2B, it's hard to make a viral product. We've done a bunch of things since then. I wouldn't say the first product we made was viral. We did little things that were interesting. We made it. So one of the things that we identified was that like sharing wire details are annoying, right? You're like, oh, an investor asks you like, I don't know if you've had this experience, but investor asks you like, what's your account number and routing number? I have no idea. And then you have to email someone and go, what's my account number and routing number? So we made it. So as soon as you approved, we send you a PDF with a really beautiful like account number, routing number, all the details you need to receive a wire or investor. But that's got a little bit of a viral loop, right? Because you're sharing that PDF around and people seeing it. So you can do these little things. And it helps to be in fintech where there is this kind of payment loop that has like a, has some virality in it. But I don't know if there was one thing that was key. Another. Yeah, it's hard to measure some of this stuff. Another thing we did is like every time you sender wire by default, it says viamercury.com in the memo.

And then Hotmail used that trick in the early days.

I don't think anyone apart from us has ever used that in the payments loop. But don't tell anyone we do that. And yeah, so little things like that. But I don't know if there was anything else that was like crucial to it.

But I think it starts with the product.

Right.

Make it easy to try, wow them make it easy to try, easy to use and easy to share. So I live in the Bay Area. The number of times I've been asked to stand in the line of bank of America, we have a massive team in Canada, 80 or so people, and I have to stand in line in bank of America to make a wire. And the number of times I've shared that f Bank of America, I have to stand in this stupid line. And so if there's a wow experience I'm like, it took seconds. So you share that and then it's via Mercury.

So that's good. Sounds like you need to sign up to Mercury.

Yeah. And the other thing you said that's really important. People ignore this, but you spend a lot of time on onboarding. Onboarding is the leading indicator for engagement. It's you invite people to your house and they open the door, they stomp over a bunch of garbage, they don't see you and then they see a bunch of people they don't know and they leave. But if Imad opens the door for you, he welcomes you, he pours you a glass of wine and he introduces you to five other people that you know, then you feel welcome. And so onboarding I think is a leading indicator of that engagement that you drove.

Yeah, we actually have a onboarding engineering team. So all because there's the piece of onboarding which is the user facing piece, sort of. Then there's the what does this compliance and all of this due diligence and all this stuff that happens in the internal side. We think it's so crucial that we have a literal team that works on it.

And there's some other successful startups like Superhuman, they onboard every single customer manually. There's some data points on if you spend time onboarding customers and they have a good experience, they're more likely to come back. Because if customers self serve, sign up and they don't have a good onboarding experience, if they're dormant, they're more likely to eventually churn. But today you said you get 55% of your new customers through word of mouth, that is insanity. I don't know how many companies can say that. Have you done things to deliberately incent or engineer or incentivize your customer base.

To drive that word of mouth is tricky because it's sometimes easier to go, oh, we spent 10 million on ads and now we're going to spend 20 million on ads and we'll get some number of users, whereas word of mouth is like how do I make more word of mouth happen? So I think about it a lot because it is a key to our growth. Number one is as an engineer, I find it tricky to think about branding, but having a really strong brand just makes a huge difference. Like ideally you can become the default in your space, which I mentioned earlier. We want to be the which bank are you going to use use Mercury kind of thing. And we just want it to be a no brainer default. That requires some engineering but also I guess requires I don't know if it's luck being the first mover and things like that make a difference as well. This is one part. The other part is we serve entrepreneurs and I just want to be helpful to entrepreneurs. So we try to do various things just to be helpful to entrepreneurs. So we have a program called Mercury Raise where we help startups raise money and we connect them with investors and we do various educational podcasts and guides and all of this stuff. My rough theory, and that's hard to prove, is if it can just be helpful to some smaller set of people, we can make them into like much bigger advocates of mercury. The other thing that's interesting, which I'm not going to be mean to our competitors or anything, but having a very broad set of SMBs, so a lot of like tiny, small customers, actually just being really nice to the small customers makes a huge difference with word of mouth. Because when someone tweets about, oh, which business bank should I use? It's not our like unicorn customers that are responding to that person saying you should use Mercury. It's like our tiny customers that are like these big advocates for us. And whenever there is like something within our segment and someone's what should I use? There's always like mercury advocates out there. And that's because we're just really nice to our small customers. Like we have really strong customer support for them. We don't charge fees to small customers or big ones. We're free. But doing like these things that are like particularly nice to people that think that they're ignored by other people makes them into big advocates for you.

And that's like playing the long game, right? You're not looking for immediate monetary value. There's a big lesson. There is you're not just disrupting banking, you're building a community. And the lesson there I take away is fall in love with your customer and make them successful beyond your product or service. If you build that community, you won't become a commodity and that's why banking is becoming a commodity. But you guys are truly invested in making these customers successful beyond the product or service with everything else you're doing now. To do that though, you need to have this community product focused culture throughout the organization. It can't just start and end with the founder. How do you proliferate that across the organization? When how many people are you guys?

That's a good question. We try to hire. It's not a large percent of Mercury, but there's quite a lot of people at Mercury that are entrepreneurs or have been entrepreneurs before. That creates like this deep empathy with the audience. I think that helps a lot. We have one of our core kind of cultural values and I wrote down like all of our cultural values when there was like four of us and we pretty much haven't changed them. But one of them is being humble and being helpful. And I think there's like, when you have these like internal values that you actually like, value and hire against and promote, they also become your external values. I think those two are probably the main ways. We just say it all the time as well. We want to help entrepreneurs. That's why we're here. And it's. Yeah, it is a hot struggle.

How often do you go in front of the team and speak and do you do like weekly?

Daily.

What is your communication cadence to make sure that message is continuing on when you're not in the room?

Yeah, we have a weekly all hands. We do different themes but every four weeks basically we talk about culture in the all hands and we take like a different topic of culture and we talk about it. But yeah, we try to make it interesting for the team as well rather than like super repetitive. But yeah, you got to talk and it's not just talking about it, you got to live it as well. Right. We've invested quite a lot in mercury rays and there's no real, it's hard to measure ROI benefit from that. But it's all about helping entrepreneurs and we have three people on the team just doing that.

But we're getting into this world where if you don't have a job, you can go and do a bunch of gigs from Fiverr to Upwork. People want purpose, right? And you're giving them that purpose. And there's a key lesson here is great companies start with great alignment and great purpose and you've built that. And that's a fantastic lesson here. In what order do you recommend startups building their teams from seed to series B? Like who do you hire? Who are the key people you brought on at different inflection points?

Good question. I think it obviously partly depends on what is your go to market, what are you building, what's your main unique proposition? For us, it was product. So one of the first hires was like really strong designer we got. And then before we launched it was basically designer and engineers only. So I'm an engineer and I was like coding all the time before we launched. I think that, yeah, I don't. I'm not believer in like filling out the team too much until you really have product market fit and you can do it. So when we launched it was crazy because it's like me and my co founder were on customer support all the time. Like Zapier had a similar, similar story. I think, I think it's a good sign when the founders are doing the customer support initially anyway. After that you've launched and you have some traction. I'm a big believer in not hiring for roles until it's like super painful. So we actually only just hired a finance leader and I was doing it all with one other person on the team until recently and it was like way beyond painful. So I think it gives you. When you go to that level, it's very easy to go fill roles in for the sake of it and then you end up not hiring the right people because you don't understand the thing that you're hiring for. It's just better for founders to do as much as possible themselves for as long as possible and then like slowly fill out that team. I'll tell you some roles that were crucial for us. Actually. I'm like good friends with the gusto founders and they told me like, go hire a recruiter really early on. So we hired a recruiter at like as soon as we did our series A, which was a 20 million Series A internal recruiter. And that was like hugely important for us because. Because then you go from, oh, I'm going to hire my friends and like people who just happen to come across. I'm going to be very targeted and hire like great people to fill out these specific roles and these are the profiles I want to go after. So recruiter was like a crucial hire for us that I think teams like that's one that probably I would say do earlier than later. Let's see. I'm trying to think of other roles that I'm like contrarian on. And the other thing that I touched on earlier is I try to. We hired relatively early on. We have like engineers behind Every one of our people teams. Like we have a engineering team behind our support team. We have an engineering and product team behind our onboarding team and we have engineering product team behind our risk and like fraud team. I think giving teams like the power to actually take on feedback from customers and actually go implement it rather than like trying to go fit into someone else's roadmap makes a huge difference. I don't think most people do that even when at scale, but I think it's been like such a powerful thing.

For us, so we're gone a little bit over time. So one question on rapid fire.

Okay.

How do you grow fast without growing old? Most of us, like we, we build companies, we add lots of people, you get burnt out. What is your secret to having two kids and doing four startups? Hyper growth mode, investing in 200 plus companies without being tired and growing old.

I think the key is to try to outsource yourself. I think. I'm not a micromanager. Like my aim at Mercury is to do nothing. I'm like, why am I doing this? Surely someone else should be doing this kind of thing. And I've always thought about it from the start like that. Like I try to do the highest leverage things that are like extreme problems, but I'm really trying to make it so the team knows how to do it themselves or hire other people to do it because yeah, there's only so many hours in the day and you shouldn't be the bottleneck to things.

What a great lesson to end on. Hire smart people and get out of their way. Give them a great purpose. Give them a great purpose. Empower them.

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Silly shit focused on the tech stack thinking it was brilliant. Now I know that it's no way for you.