The Acquire Podcast Ep. 7: ‘Founders not meeting with their customers are doing it wrong’: Conduit’s Kirill Gertman
- Conduit’s co-founder and CEO Kirill Gertman joins us on the Acquire Podcast.
- ‘If you're a founder and are not talking to your customers,’ he says, ‘I’m sorry but you're doing it wrong.’
Welcome to Acquire, Tearsheet’s Marketing Podcast. I’m your host, Rebecca Cohen, Head of Tearsheet Studios. In today's episode, I'm speaking with Kirill Gertman, co-founder and CEO of Conduit – a B2B fintech providing infrastructure for DeFi payments.
Tearsheet will be launching the very first Bankchain Conference – all about the merging of traditional finance with crypto and blockchain technology – coming this May. We’ll be talking with leading crypto leaders from Coinbase, Paxos, Zero Hash, and more, about partnering with traditional FIs and bringing the two worlds together. Submissions for Bankchain Awards are currently open for those exceptional firms and products paving that way, and tickets for attendees are live on our site.
On today’s Acquire podcast episode, Kirill and I will be talking about Conduit’s mission of building one API for DeFi, going to market in unlikely geographies, crafting a reliable, trustworthy brand that stands out in the sci-fi aesthetic of the crypto world, and much more.
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The following excerpts were edited for clarity.
The breeding ground
I’m Kirill, the CEO of Conduit – allowing other companies to get access to yield in DeFi to either manage their corporate dollars or create high earnings accounts for their customers.
I've been in the space for quite a while now. I've been in fintech for probably about 12 years now. If you're listening, you probably can’t tell, but that's how I lost my hair – fintech is a tough industry.
I've been in banking as well for a little while, where I tried to do some innovation, which was a really fun and exciting challenge. Then I moved on to crypto, where I spent four or five years actually building consumer facing products first; I was a VP of product at BRD, a mobile wallet later acquired by Coinbase; then I was head of product at Eco, which is a crypto wallet that looks just like a regular neobank’s checking account except customers get 5% interest.
In building these things, one thing that I realized is that it's hard; this may not be the most astute observation, but after having banged my head against the wall a couple of times, I realized the wall is actually pretty hard.
When I was on the fintech side, I saw a lot of the infrastructure stock being built. Back when I started, all you had to work with was like a company called Yodlee – there wasn't Plaid or Marqeta or anything really. Over the years, I saw these things come up and make life easier for fintech founders and product people like myself.
Problem and solution
When moving into crypto, I realized none of that is there: there is very little infrastructure and vendors you can rely on. While at the same time, crypto can actually deliver valuable useful products more than the traditional financial infrastructure.
Because if you're working in a traditional sort of fintech that's based atop a traditional bank, you don't have much control over the underlying product at the end of the day, so you can put a nicer UX or mobile mobile app on it, but the underlying products – the checking account, savings accounts, debit card – are very restricted in many ways. You can't do very much about them. With crypto you can, but it’s really hard to put these things together, especially in a way that's seamless to the end user.
Having realized that, I decided to start Conduit because I thought other companies would want to build on top of crypto, specifically on top of DeFi, and they're gonna find it hard just like I did, and they're going to need help. I founded it with my co-founder and CTO, Michael Gregson, around June of last year, and have been going at it since.
Building one API for DeFi
The catchphrase ‘One API for DeFi’ actually came from one of our earliest angel investors, Simon Taylor, who’s one of the co-founders and now CTO of 11:FS. When I was describing what I wanted to build, even before we officially started the company, he was like, ‘Hey, that's one API for DeFi’ so we adopted that (thank you, Simon).
No such thing existed before. In order for any company to connect to DeFi, you had to work with two to three different vendors, and also build a lot in house, because there wasn't a one stop shop you could use – so that's what we're doing. We want to make the experience as seamless as possible, get rid of all the complexity, abstract away all the difficult parts of crypto, and just let people connect to us and build on top of us.
Above and beyond the API
One of our first customers in Brazil met me on Zoom and said, ‘We're researching the the API, and it’s great, but at the end of the day I'm an accountant, and I need something to click on; we have good cash cash flow, and I want to deploy that, so can you give me an interface?’ So that's what we did, and that was the beginning of that product. Since then, every customer that we've had has actually started using both: the API side and the corporate treasury, which is essentially a web UI on top of that same API.
There just aren’t a lot of products like that out there today, so that makes my life both easier and harder; easier in the sense that there’s not a lot of competition, and harder in the sense that we need to do a lot of education around this: What is it? How does it work? What's the risk?
I’m very happy to do it, which is one of the reasons why I go on these podcasts and tell people as much as I can about these things. So far, probably 80% of the of the sales cycle is education – if we can explain how this works and what it is, the rest of the way is actually relatively easy, because we're giving 5 to 8 percent on top of your dollar, who wouldn’t want that, so that part is pretty easy.
An honest education
I found that people appreciate honesty. Is it risk free? No, it's not – there are risks involved, and I explain in as much detail the risks and what they look like. We’ve just been very, very transparent about this.
We also approach this from the point of view of, ‘Would we be comfortable deploying our own capital into this?’ This is one of the biggest things that people always ask me. We raised a round recently of 17 million dollars, and people asked, ‘Are you putting any of that money towards it?’ And yes, we're dogfooding in that sense, putting our own capital to work in our own product and I can demonstrate that. That, again, builds trust.
So we’re coming at it from a very open and transparent angle, being open to questions and being ready to answer as much as we can has been pretty helpful so far. Like I said, have I figured this all off? Maybe not.
Time to value
The creation of the corporate treasury product altogether was something we didn't necessarily expect in the beginning; we thought we're just gonna be a straight up API without UI or UX, and people are using it but they also want easier ways of accessing it.
For other people thinking about how to position the product and how to sell it, one lesson that was really important to realize was time to value. We're selling an API, so there’s always an integration process at the end of day, no matter how simple you make it.
It's really weeks until they can see any value and the product working. And one of the things that the dashboard allows us to do is actually reduce the time to not even hours, but minutes – we give somebody in a company a login, they log in, they can actually start clicking around and seeing that the thing actually works.
It’s a lot easier to manage than if I had to wait for weeks, potentially months, for the engineering team to do their integration and for them to see something come out of it. So that's definitely a big lesson for us.
We went to market in Latin America, first in Brazil, now Colombia and Argentina, and we’re also looking at Africa where we have strong inbound from places like Nigeria and Kenya.
A lot of companies, a lot of founders, whether American, Israeli, or European, tend to naturally look at the American market and think that's all that there is. And this is great, the States is a huge market, but there's a big world out there aside from the US with a lot of potential customers, and they're really often underserved by startups and general financial systems. So that was another big lesson: look outside a little bit to see if there's interest, and that was the case for us.
I learned a lot about their regulation and compliance, because what we do has to do with money movement, and specifically with crypto, so in every country where we are in the market we had to go and talk to local experts to understand the legal requirements. I also learned that lawyers are expensive, which I knew before, but didn't realize the full expense to it.
The other lesson, which may be more actionable for other folks out there, is the fact that it may seem a little daunting or scary. I've never been to Brazil before Conduit, so I was not sure how it’s going to work, how we’ll be able to find a common language; I speak a bunch of languages, but not Portuguese.
Then we realized, it’s just people. We can use English, we can find some sort of common interest, and if we deliver a good product, it's still a good product in Brazil, or in Africa, it doesn't matter. But we also had to learn a lot about how the local people interact, it's a little bit different from our cultural point of view, so that’s one of the lessons as well, which we're still learning. Like I said, I haven't got it all figured out, but we’re always very open about that.
We have people all over the place. I'm in the US today, but we have people in the States, Canada, Argentina, Brazil, Spain, Ukraine, and all over the place.
Words, shapes, and colors
Funny enough, I think I came up with a name very quickly, because I was really looking for a word that describes that connection, the bridge, between the scary and unknown world of crypto and DeFi with the traditional financial world.
So I looked at a bunch of words like ‘bridge’, and we had a few other choices, but they’re usually taken by more famous, bigger companies, or just otherwise not available. So I actually came up with Conduit very quickly, but then I put it aside, thinking there can be something better out there.
We worked internally quite a bit and with an external branding consultant as well for over a month of looking at other variations to our names, then finally came back to this one because we never found anything that fit us better.
We really focused on the word itself, the tone itself, what it would sound like and convey. Only after we went back to ‘Conduit’, we started working with another designer that I've known for years on the branding and colors.
I wanted something that stands out just a little bit. If you've seen the website, it's a little bit different than what you normally see, especially in crypto. A lot of the time in crypto, you have this sci-fi theme that looks like an 80’s sci-fi movie. And that's cool and all, but I don't think it conveys the message, or the sense of confidence. We wanted it to look reasonable, approachable, stable, and to say, ‘We're here, we know what we’re doing.’ So we went for somewhat of a muted theme in terms of the backgrounds, and a little bit stronger theme with the actual colors to just stand out a little bit. I don't think you see a lot of orange and blue in crypto – it's usually very sci-fi stuff and we actually wanted to get away from that.
Standing out from the crypto crowd
That's our whole premise at the end of the day: We take all the complexity, and we hide it in a box, that’s our whole thing.
If you look at the illustration style, for example, same thing there as well. I wanted to present something that looks nice, a little bit different, with a style that conveys some calmness, some sense of stability, security, reliability, rather than the ‘Oh, my God, you know, the candlesticks are going up and down like crazy.’
We looked a little bit for inspiration from companies like robo-advisors; Wealthsimple in Canada has a really nice design. We looked at companies that are trying to instill a similar sense and sensibility: We manage these things for you, and we're reliable and stable. Like I said, we didn't actually take their style, we didn't even follow them very closely; we came up with something that's hopefully our own. I'm pretty happy with it, to be honest.
The other thing that I should admit to not doing, which people usually do: we didn't do a ton of user testing on this. We did a bit around the messaging and copy, but not necessarily on the design itself. Because, again, I just felt that it worked for us, and stuck with it.
Crypto, Mordor, and the age of regulation
I think the BlockFi settlement story is actually a positive thing. That's how BlockFi positioned it, and I think it's right. It was an expensive thing for them, but overall, for the industry and us, it's a positive thing.
At least now we have some sense of what we need to do now and the path that we need to take.
In terms of branding, we want to position ourselves as a guide. As a maybe not so great analogy, you can imagine the customer as taking a walk to Mordor – you want to have a Gandalf with you.
Crypto is not Mordor, but it’s essentially venturing into an unknown territory and you don’t know what to expect. So we, as the conduits (that’s why I picked that name, so I can do these bad puns), can essentially lead you through the process, tell you what to do and not to do, and take us together with us.
I don't think that comes through very much in our actual external marketing materials, because we don't have much yet, but it does come through in our actual conversations.
Deliver value at the source
If you're a founder and you're not talking to your customers on Zoom, I'm sorry but you're doing it wrong.
Do it as early as you can, and as late as you can take it.
If you have zero customers, you absolutely must get on Zoom with prospects, and if you have 100 customers, get on Zoom with an existing customer and say, ‘How are you doing? Anything I can do to help?’ Do that.
It’s hard, because it takes a lot of time, and there’s a lot of pressure like external factors, people inside that need your attention, or investors that may be afraid to raise money. This is all true and very difficult, but at the end of the day, if you're not delivering value to Your customers, none of this matters. Investors won’t keep giving you money if you can’t create value.
And the best way for you to figure out if you’re creating value is to do that, right? The other ones don't talk to customers. Now you can even visit some of them in person, which might take longer, but worthwhile if you build that relationship.
The upside of being the boss
I love my job. Nobody’s forcing me to start a startup or be a founder – I could have had a normal job. I’m not going to say it’s easy – it’s hard.
And I think the reason that I love it is because I get to work with people that I like and enjoy working with. I understood this a while ago actually about myself, but not not right away.
Honestly, I'm a fairly introverted guy. At some point, I realized, actually, there's a way for me to choose the people that I work with. So that led me to become first a manager, then VP, but then eventually want to choose my boss and have more agency. That's honestly the primary motivation for me to start a company. I can choose the people that I work with, I can choose the investors and boards, so choosing my boss as well, in some sense. And I love it and I love the team. I'm not just saying this because they’re listening to the podcast (maybe they won't, they're busy anyway). I really do, and I do it every day.