‘I am a strong believer in lightning-strike, low frequency/high impact marketing’: Zeta’s Bhavin Turakhia

If you’ve been to Money 20/20 the past couple of years, you’re likely to have encountered Zeta. Maybe you were one of the 10,000 people who attended the Journey and Foreigner concerts the company sponsored. Or maybe you stopped by the firm’s big booth at the center of the floor. 

That type of marketing – what founder Bhavin Turakhia likes to call ‘nuclear strikes’ – is helping the credit card as a service firm mature in the US. Bhavin shares with us the playbook he’s using to grow Zeta, honed from his experience building and growing three other SaaS firms in his career.

We discuss why Zeta targets the largest banks and fintechs and how the firm is landing and expanding via enterprise sales. Talking to Bhavin is like talking to a professor of real-life business – he readily shares his experiences and frameworks for how he’s thinking about scaling his fintech firm.

Bhavin Turakhia is my guest today on the Tearsheet Podcast.

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The following excerpts were edited for clarity.

Zeta is a modern, next-gen processing platform for issuer and core processing. Built essentially over the last seven years, my co-founder and I founded Zeta in 2015. We are a technology service provider to banks and fintechs, predominantly mid to large banks and fintechs, providing them a platform that enables them to launch modern credit cards, debit cards, prepaid accounts, deposits and loans.

Coming to fintech from tech

I've been a serial tech entrepreneur for the last 25 years. I found my passion early on. I started coding when I was 10 years old. I was in a boys only school so no distractions back in 1989. I was born and raised in Mumbai, India. I currently shuttle between Dubai, Mumbai, and New York. I started coding at an early age. I started my first company when I was 17, called Directi, along with my younger brother. I ran that for 14 years and sold that in 2014. And since then, I started three other companies. Zeta is the latest one, co-founded in 2015.

This my first company in fintech. In fact, every one of them has been different themes: web infrastructure services, domain name registry, communication, and then fintech. I still own and operate the other three but minimalistically so. They're all tech, SaaS, but in different spaces.

Non-fintech selling to banks and fintechs

We're not really a fintech – we power fintechs and banks. Fintech is the most abused term in the industry. It doesn't mean anything, but we basically think we’re a technology service provider, which means we're not manufacturing or distributing or providing financial services ourselves. We're only providing technology as a platform to fintechs and banks. Both my co-founder and I are excited about the payment space in general. But in many ways, it's one of the last, if not the last, industries that still uses legacy platforms that were built before the cloud and smartphones. Actually, most of them were built before I was born. And we felt like, here's an industry where innovation is very slow, new releases take years, where it takes an average of 21.4 months to launch a new product, with no modern experiences. 

If you think of a credit card today and a credit card launched back in 1964, it pretty much does the exact same thing for the most part, barring a few enhancements. So we felt this is one of the last industries that's large, that has global scale, that has a high impact opportunity, that is running legacy platforms and stacks, where incumbents don't really necessarily love the platforms they use currently. Our perspective was that it is ripe for disruption.

Building B2B SaaS 

I've spent my life building B2B SaaS tech companies, and I've made every mistake that a possible entrepreneur can make. I’ve messed up on product ideas, built the wrong stuff that nobody wanted, had hypotheses wrong, as well as go to market strategies. I think over time, I now have a template when it comes to building B2B SaaS cloud companies, which probably applies to any company.

I think of every company and every product that I've built as going through four stages: planning, discovery, scaling, and steady state. Ramki and I did about a year of homework deciding what to build and I think six or seven deliverables at that point, which is a plan that comprises of who's the persona, what's the problem statement, what is our product going to do that is going to effectively address it 10x better than existing solutions? So persona, problem, product, and the go to market strategy. What is the revenue strategy? What is the moat that will ensure how our business can sustain itself? 

So, if you think of Zeta as a technology service provider, the banks and fintechs are personas, and specifically within them, the tech teams and the business teams. The problem that they face is they're using an ancient legacy technology that doesn't allow them to be as agile and nimble, fast and innovative as they could be. Our product is intended to leverage modern cloud platforms and technologies to enable them to build modern experiences. Our go to market strategy is enterprise sales. We charge as a SaaS platform per active user per month fees. By itself, this is a very sticky business with a powerful moat. That's the planning stage.

Then in the discovery stage, you get to Product Market Fit by “here's a hypothesis that I've had in the planning stage, I'm going to build it out, I'm going to take it to market, I'm going to see if there are customers willing to pay me that love our product that will stick around and have a high retention, high NPS, who will be very disappointed if we stop providing them the product or service”. 

For the scaling stage, because we validated the hypothesis, now we can put in capital, which is where we are with Zeta. We've got the first few customers. Let's go and get as many customers as possible. By the time it gets to a steady state in the scaling stage, I also build out all the playbooks: the sales playbook, the training courses for the entire team, making sure everything that was done in the discovery stage is now repeatable. And then after that, you've got the steady state where things will just continue kind of growing on their own. That's the template, if you will, and most of my mistakes were made in skipping parts of this framework. Like, if you don't do your planning properly, if you don't have a clear persona with the clear problems. There are no shortcuts. 

Role of CEO

The framework also provides a kind of handy guide to what role I should play in every stage. So in the planning stage, it's actually grunt work and homework. It’s primary and secondary research I’m doing myself. So Ramki and I, we spent a lot of time understanding the industry like, the regulatory and compliance aspects, technology, competition. What's out there? What do customers want? 

In the discovery stage, it's more product strategy and go to market strategy that I can contribute to trying out like, how should we go about positioning ourselves? And how should we go about selling our products and services, pricing it, packaging it, and things like that. Basically, what happened in the last several years. 

Right now, in the scaling stage, we deal with the mid to large sized banks, typically, our customers will have millions of cards, millions of accounts. There's probably about 250 or 300 banks around the globe that are actually relevant for us as targets or a sweet spot for our prime target audience. I still am involved very heavily in pre sales motions and the pitches and the crafting of the messaging, supported by an outstanding team in North America and great marketing team across the globe. But I do a lot of deals and I am involved quite a bit in deal making. I am involved to a certain extent in product and strategy. But my co founder and CTO Ramki, he is an absolute genius when it comes to technology and engineering. He sort of handles the bulk of that responsibility. And so those are the two areas where I had most strategic value. And then the third would be bringing in the right leadership. Over the last year, year and a half, we've grown substantially both in terms of the number of people and the leadership itself. So the core team, most of it has been built out in the last two to two and a half years. And that's what you do in the scaling stages: bring in the right middle and top tier leadership and management and then enable them, coach them, train them, mentor them and work along with them, leveraging their input because they come with a myriad set of experiences to grow fast.

Personalization: Under the Zeta hood

We actually think about leveraging modern technology as a pillar when it comes to selling our product. The typical financial institution has 5 million credit cards, and every customer gets the same experience. But that's not a digital experience. When you think about digital, you and I will open our Instagram apps or Facebook, Netflix, or Google search results, they're going to be completely different because they are personalized to our circumstance. That doesn't happen with any financial service, because the online platforms do not support hyper personalization. We're the only stack that's built what we call a hyper personalization policy engine that enables financial institutions to define the product in the form of dynamic parameters that essentially allow completely different experiences on a per transaction, per card, per account, and a per account holder basis. There's this whole sort of hyper personalization piece. Zeta’s platform, Tachyon, comes natively embeddable banking ready. We have an interesting construct on our platform called a VBO, or a virtual bank operator. So if you're a bank, you can create thousands of VBOs inside the Zeta stack. Each virtual bank is like a mini charter that you can then provide with a sandbox and a set of pre configured APIs and web interfaces to your brand and fintech partners, or Asian bank partners. So if you're a bank in North America, and you've got Krogers or Target or somebody as your co brand partner, or Brex or Revolut, or whoever you're powering as a fintech partner, you can literally give them a sandbox environment within which they can distribute your products through APIs and embed those experiences inside their merchant interfaces, inside their apps, inside their web apps, and so on and so forth. Zeta’s stack is natively embeddable banking ready, because we provide 100% self service through both. 

We have full lifecycle API coverage, from product setup and configuration to product provisioning, to account provisioning to account management, transaction management, account closure – the full lifecycle.This enables you as a bank or financial institution to be able to actually innovate faster, because you can build any app without being dependent on us. You can configure any product without being dependent on us. You use it much like one would do with AWS versus what you would do in the data center days, where you can now go and provision a machine – nobody needs to tell you how you don't have to go and buy a machine and buy connectivity and buy electricity and buy a cage and buy data center space. It's all self service. 

Then there's a bunch of other unique aspects. We support this notion of many to many multi level customer account card hierarchies. We support some really unique next gen, out of the box digital experiences. We have unparalleled extensibility. So the stacks are built in some really interesting ways where you can actually interrupt state machines within the platform, like let's say transactions coming to our switch. You can configure it such that you interrupt it. And then basically we make an outbound call to you. You can participate in the authorization and then resume a state from somewhere. So it's event driven, API first, and it enables lots of interesting capabilities. 

What banks are looking for

What financial institutions are looking for is how to create unique experiences for consumers, because consumers are demanding that. How do we end up being more agile faster, and enable building apps and doing business at the speed of thought, as opposed to sales speed, basically, which is that kind of self service in the API stack? We started with this vision of democratizing banking, basically making payments invisible, much like how we think about water, right? There was a time when all of us would go to fetch water. We would go to a well, or a lake or wherever, we basically to where water is, but now water comes to us when we need it, where we need it. Financial services is going through that same revolution. We used to go to a bank to deposit money and withdraw money, but now it's going through a revolution where banking and financial services appear in the canvas when you need them and where you need them contextually. How do financial institutions enable that? That's where the embeddable banking readiness comes in. So all these pieces can enable banks to become digital first companies. That's really our goal.

Examples of hyper personalization

In Zeta, you configure a product. A product could be a credit card, a product comprised of multiple policies that can be interest policy, reward policy, statement policy, transaction policy.  In a typical legacy system, everybody then gets the same experience. In Zeta, each of these policies have what we call dynamic computation and dynamic assessment, meaning that these policies can be attached in such a way that they actually get attached to a single transaction, or a single card or single account or single account holder. So for instance, any conventional legacy platform, you would have a credit card that says, whenever you do an ATM withdrawal and cash withdrawal, you will be charged 18% interest. And whenever you do a purchase transaction, you will be charged 14% interest. Let's say these are the two settings available. 

With Zeta, you could literally do things like all transactions done at Exxon Mobil between 6 PM to 9 PM. On Wednesdays, they'll get 5% interest. I'll give you a simple example of personalization. I want to do something as anybody who uses a card to withdraw cash from the ATM on their birthday doesn't get charged an ATM fee. That's a very simple thing, right? On your birthday, you want to sponsor the person to be able to go out there and party. And as a bank, you care about the individual. And you're like, that's what I want to do. The only way to do that with legacy systems is you will still charge a fee, then there's a batch process that will run on some separate system once a day, once a month, or whatever to figure out this person's birthday, then they are credited back. It's not instantaneous or instant gratification, because you can't configure it at the transaction level. 

Fee personalization on the Zeta platform is extremely trivial. And so we allow the ability to not only define this in what we call a dynamic hyper personalization policy engine, which supports various rules for various policies, you can actually go one step further, which takes you into interesting possibilities. You can inject dynamic JavaScript into any of these policies that gets assessed at runtime and perform a completely runtime Dynamic Assessment for that particular policy. So that also gives you some really interesting capabilities that you otherwise wouldn't get with any other platform.

Dynamics of selling to a bank, building a brand

I'm a strong believer of branding and positioning. I also believe in what we call ‘nuclear strikes’ or ‘lightning strikes’. You could take a $10 million marketing budget, and you could spread it over 100 small things versus one big event or two big events or whatever. I'm a strong believer of the latter. A smaller number of lower frequency, high impact events is kind of like, you can toss 10,000 grenades or one nuclear bomb. In a morbid sense, you get a much higher impact with a nuclear attack. So in branding, I have always believed in high impact, low frequency kind of initiatives, which is what we do with Zeta. We had Journey in concert last year at Money 20/20 – this year, we had Foreigner in concert. I think upwards of 7000 people attended, so it was great branding exposure. 

But enterprise sales goes much beyond branding. It's consultative, solutioning based, and it's very dialogue oriented. We compare ourselves to Boeing: we're selling our clients the planes that are being used to transport their customers. In our case, we're selling core systems that will be used to actually power their products and power their customers. And so we realised, firstly, that we're focusing on financial institutions that are a different kind of the larger set, like, I would say, top 40 banks in North America will be a prime target (we're still talking to the top 75). Similarly, across the globe, the top 250 banks are our primary target. Similarly, on the fintech side, the top percentile of the fintechs are targets. 

But we also found that with the financial institution, there has to be a readiness from their side. It's not a small lift. There is a sizable cost. And I'm involved in migrating from a legacy platform, any platform to any other platform. And so we do anticipate and expect some sort of readiness from the banks, the financial institutions, to actually want to make that move, and have a team internally that truly understands the benefits of a cloud native stack, A lot of the legacy platforms are still talking about cloud and service oriented and stuff like that, but they're very key distinctions between cloud enabled and cloud native, between service oriented architecture versus microservices. You need individuals on the opposite side of the tech layer. 

And when you think about product, hyper personalization, embeddable banking APIs, you need to have the readiness to be receptive to and understand all of that. We found a lot of the large financial institutions have started their exploration journey around this over the last three to five years. Some started building their own stuff, realized after a few years that it actually makes sense to partner with the right stack. We're finding many of them receptive to our pitch. Our target audience is small, but there's a lot of influences, a lot of individuals within the organization, your typical large sale for us. Our largest customer in India is a bank called HDFC Bank. In North America, we've got two large contracts. At the end of the sales process, you would have talked to probably between 70 to 200 people in the organization multiple hours, across about a six to nine month journey, before you close the sales piece, and then another 12 to 18 months for implementation and other six deployments to begin actually bringing in customers before it becomes steady state. So it's a patient process.

2023 goals

Our focus for the next 18 to 24 months from a go to market standpoint is North America. We will basically start a couple of other markets sometime in 2024. We've launched credit cards. We shortly hope to launch debit cards and prepaid too with a few really large North American clients that we're working with pretty closely. So the goal will be to do that. And the second goal is I think we're in that scaling stage right now when I talk about my template. So we're putting into place the playbooks for customer service, support, site reliability, product intakes, and others. So a large part of the preparation in North America in terms of compliance, regulatory, initial setup, initial branding took place in the last two years, and now it's about setting in place the playbooks and the the leadership team that will be able to carry it on 18 months from now.