As startups mature, entrepreneurs are often called upon to remake themselves within their own businesses to keep their passion alive. We recently spoke to Zip's CEO Larry Diamond about the journey he's had building the payments and BNPL company, beginning in Australia and beyond. He recently move to the US to lead its expansion stateside. You can read and listen to our entire conversation here.
We asked Larry a few questions ranging from the technical (what the US BNPL market can learn from the more mature Australian market) to the mechanical (consumer protections and rising calls for regulation).
Here are 5 questions with Zip's Larry Diamond.
As an entrepreneur and leader, how do you keep the passion alive?
It's actually our 10th birthday this year. We started in June 2013. I've still got the fire. I'm still wearing my Zip t shirt and pretty much wear it every day. I got a little bit grayer over the years, but the passion is still there.
Because at the end of the day, I think we can build a really strong business around the world of financial services, doing things better. We started 10 years ago on a journey that's taken us from Australia, Sydney, all over the world, and now currently in America. Over the last 10 years, we've grown from zero to 12 million customers.
What I like to say is I've probably had 10 jobs in those last 10 years, too.
You recently made the decision to sell off some of your operations in countries that don't fit your strategy now. What happened?
We had product market fit, but timing is not in your control. Given what was happening in the financial system, there was a big opportunity to do things better in all these markets. I like to say in a parallel galaxy right now, we built out this global payments system and we're just dominating. But as we saw the reckoning of interest rates, which happened very viciously, we had to adjust to focus on markets that were either profitable or had a near term pathway to profitability. 90% of the enterprise value were in our core markets: Australia, New Zealand, America and Canada. .
And we're now exclusively focused on our core markets. It's producing $8 billion to $10 billion in GMV per year. Our last quarter, we're doing about $180 million in revenue a quarter. And over 12 million customers have joined us. So we've got a lot there to take care of.
How do you size up the US BNPL market?
Around competition, I would say, first of all, that the BNPL sector here is incredibly very noisy. If you look at share of payments, it's only about 2% of its payments market. So it's got a long way to go to get to more mature markets, like the Nordics, which have had BNPL for almost two decades now, where 20% of the e-commerce sector goes through by now, pay later. So we see it as incredibly early.
Tell us about how you grew as a leader as Zip grew?
As a leader, I think that the most important character trait, particularly in a fast growth business, is just self awareness. Where am I at? Where am I weak? What do I need to learn? And so that's what we encourage. That's what I've encouraged myself to think that way. If you can do that, you can continuously adapt and work out okay.
When we were all working around the table, we knew everything that's going on. Then we moved to a team of 30 -- okay, now we have to create new roles, we have to split up roles, we have to hand over hats, crumbs fall in between. And so the company almost breaks all of these moments and you can kind of decisively see those right in the beginning.
It sounds like you envision payments as the beginning of a customer journey. How do you describe it?
So I think the adoption has been at checkout at that moment of truth -- I no longer need to go into a bank and sign up. I can do it right there at the checkout. And so it sort of starts there. But the beauty of why we love this space is payments almost becomes the access point to the relationship between us and the customer. And that's why we were so product centric and customer centric because every transaction -- well, It's an opportunity to talk to the customer, understand what they're looking for, how they think about their financial world.
That's really informing how we're building out our app it when it starts at checkout, but ultimately, we want them to be in the app and our mission is to be that first payment choice everywhere and every day.