JJ Yu

Fintech @a16z

[James da Costa @jamdac]

https://t.co/TeV8e3ndp7

[David Haber @dhaber]

Thrilled to have @lloydblankfein join me on the @a16z podcast.

Lloyd is arguably one of the most effective and resilient leaders Wall Street has ever produced. Having joined @GoldmanSachs in 1981 and rising to Chairman & CEO from 2006–2018, he skillfully guided the firm through the 2008 financial crisis—transforming it into a bank holding company and positioning it as a dominant global powerhouse while many competitors faltered.

This was a particularly fun and wide ranging conversation as Lloyd shares his story of growing up in the projects in Brooklyn, getting into Harvard, joining Goldman via acquisition of J.Aron and rising through the organization as a creative trader and risk manager. We touch on the opportunities and risks he sees in AI and what young people should do to build a successful career.

Hope you enjoy this conversation with Lloyd!

[David Haber @dhaber]

Tony James is arguably the best investment firm builder on the planet. Having scaled DLJ to the largest alts platform in the world when it sold to Credit Suisse, and again with Blackstone from $14B to nearly $1T in AUM.

Along the way he just happened to lead the Series A into Costco (and Starbucks!) in the 1980s (and has been on the board ever since).

What is equally striking to Tony's success is the incredible impact and legacy he's had on the people he's worked with over the years. Some of the most successful people in finance credit their careers to Tony's mentorship / guidance.

I hope you enjoy this conversation as much as I did.

[James da Costa @jamdac]

🚨How does an AI-native startup unseat an incumbent?🚨
👇Enter the Greenfield Strategy: AI-native startup bingo.

The battle between every startup and incumbent comes down to whether the startup gets distribution before the incumbent gets innovation. One of the most powerful, and underrated, ways for startups to win distribution is to serve companies at their formation: greenfield companies.

@stripe @deel @mercury @cartainc @brexHQ @tryramp have all done this at scale.

Why does this work?

Simply put, acquiring customers de novo is easier than getting customers to switch:
- Many of the large software incumbents have hostages, not customers. Their customers would love to switch, but ripping and replacing existing software is risky and expensive. New companies don’t face those switching costs; they simply look for the best solution and evaluate based on merit.
- New companies don’t need as many features to have a complete solution.
- New companies have fewer stakeholders. You only have to convince the founders.

Grow with your customers:

If you attract all of the new companies at formation and grow with them, you will become a big company as your customers become big companies. Consider @stripe: many of Stripe’s customers did not yet exist when Stripe was founded. Some of those early customers later became large businesses in their own right. So when enterprises outside of Silicon Valley also needed to prepare themselves for a shift to ecommerce models, Stripe was an obvious choice, with plenty of relevant reference customers already in place.

Incumbents, on the other hand, would much rather sell to existing businesses vs. companies that don’t exist now but might exist in huge numbers in a few years. They are bound by the rules of P&L (Profit & Loss) – and there’s no “P” for greenfield companies that don’t exist yet, just “L” (in sales, marketing, and product development costs). The startup, however, isn’t bound to a financial model – the startup doesn’t need one; it's still figuring stuff out! That leaves ample room for the startup to define the category.

Graduation moments:

In a similar way, software “graduation moments” (the moments when a startup begins to develop enterprise needs) also create opportunities to execute this greenfield strategy. QuickBooks may be great for single-product, single-entity companies, but once businesses add multiple subsidiaries, currencies, or more complex reporting needs, they outgrow it and require the controls, integrations, and scalability of an ERP like NetSuite. And you can now build a far better ERP with AI - just look at @RilletHQ.

AI-native startup Bingo:

There are many different categories of enterprise software. Enough to fill a 5x5 Bingo board and more!

In each category of the Bingo board, there sits an incumbent that could be dethroned by an AI-native alternative.

So, how does a new company win the game of Bingo?
- Pick a square
- Make a narrow wedge much better
- Find a constant source of new customers
- Rapidly iterate and add features to grow with your customers
- Don’t be constrained by the division of existing categories

If you’re building a category-defining company on the Bingo board - come and talk to us.

cc: @arampell @astrange @a16z

[angela strange @astrange]

Buying a home is the biggest financial decision most people ever make, but the mortgage process sucks.

I spoke with Tim Mayopoulos (Former CEO of Fannie Mae), @michael_yu (CEO @usevesta ), and @wangandrewd (CEO Valon) on the a16z podcast about how to fix this $13T industry that touches 50 million Americans.

We discuss why change has been so hard, how new platforms are rebuilding the core systems, and how AI is already cutting costs and reducing mistakes. We also cover the role of policy in speeding up innovation and what a modern mortgage experience could look like.

For the first time, the combination of new infrastructure and AI makes real change possible. If we get it right, we may actually make getting a mortgage easy and transparent.

[David Haber @dhaber]

Excited for our friends at @CanapiVentures to have doubled down on their investment in @ModernFi_ leading their $30M Series B. We've been proud supporters of Paolo, Adam and the ModernFi team here at @a16z since leading the seed in 2022.

ModernFi is building a modern deposit network that helps community, regional banks, and credit unions source funding, protect deposits and better serve their customers and members.

These institutions are vital to the American economy -- but as we saw in 2023 (with the collapse of SVB, First Republic and Signature) - their position can be fragile without the right infrastructure.

It's rare to find fintech companies with network effects -- but ModernFi is one of the few notable exceptions.

Today, they're announcing the launch of NBID - a bank-led consortium - that gives participating banks a share of the economics in their deposit network. We have over 100 participating banks, with several hundred more expected to join the network in the coming weeks/months!

This should be a fascinating case study in how to compete with entrenched PE-owned incumbents (namely IntraFi / R&T owned by Blackstone/Warburg and GTCR respectively). 😎💪

Huge congrats to the ModernFi team! Onward!

Read more via @business below!

[Dylan Parker @djacksonparker]

First tweet ever. Hopefully the Series C won’t be the second.

@_MomentHQ has raised a $36M Series B led by @indexventures to automate the $150T fixed income market.

We're also announcing our partnership with LPL Financial, the largest broker-dealer in the U.S.

Our team automated bond trading at Citadel and Jane Street - now we’ve assembled a world-class team to power every mission-critical workflow in fixed income.

Thanks @PaigeSmithNews for the write-up in @business, and to @a16z, @lightspeedvp, @Venrock, @neo & @contrary for the continued support.

And welcome, @janatindex to the board.

[Seema Amble @seema_amble]

We’re thrilled @a16z to partner with the @TomaAuto 🚗 team as they build the next generation of dealership software, starting with AI voice agents!

[martin_casado @martin_casado]

Unbelievably grateful to @GavinNewsom for doing the right thing for California and vetoing SB 1047. This is the path to sensible AI policy and maintaining California's global leadership in AI.

Thank you to every who worked tirelessly to shed light on the perils of SB 1047. Many have worked tirelessly on this for months. We're all deeply indebted to you.

Going forward, @dawnsongtweets has articulated well the right path to evidence based policy. Please join me in supporting her and her co-authors to keep California the leader in AI, and effective AI policy.

https://t.co/IIrSlMhiy1

[angela strange @astrange]

https://t.co/2kJIecKglg

[Anjney Midha @AnjneyMidha]

We've submitted a 14 page response to @Scott_Wiener to set the record straight once and for all on the dangerous impacts of SB 1047 on AI safety, open source and Little Tech. Pls help amplify.

[Anjney Midha @AnjneyMidha]

Within 24 hrs of launching https://t.co/MA9VwMt1ld, hundreds of academics, researchers, developers, founders, and students have urged the CA legislature to oppose SB 1047. Thank you. Let's keep this momentum until this flawed bill is dead. This isn't a drill; we have <60 days

[angela strange @astrange]

Looking for some spicy fintech takes? @marqeta CEO @Simonkhalaf & @Plaid CEO @zachperret have thoughts 💡

At our 3rd annual Connect/Fintech event we discuss:
- How the fraudsters have GenAI too
- The battle between payment rails in the US
- What would happen if we called interchange & rewards "bribes"?
- How the payment card might finally become smart
- Is the term fintech obsolete?

Check out the latest episode of @a16z ‘In the Vault’ 👇

[David Haber @dhaber]

1/ 🎙🔐In The Vault is out! Ep 1 features @RMartinChavez from @SixthStreetNews

A Wall Street veteran of 30+ years, Marty is known for turning trading and risk management into a software business. We explore the digitization of FIs, AI’s potential, how it’ll change regulation, and much more.

Listen now 👉 https://t.co/NesM8JlAwC

[David Haber @dhaber]

1/ For too long, big financial institutions have felt the need to build everything in-house, while startups struggled to navigate these complex organizations. As former founders and executives at @a16z - we see the opportunity to accelerate a more collaborative future.

[Alex Rampell @arampell]

AI is changing the world, and the impact is going to be particularly strong in the bits-heavy world of financial services.

Was fun to wrap up our 3rd annual Fintech Connect event — where we bring public company CEOs, startups, and public/late stage private investors together.

[angela strange @astrange]

Financial services is heavily regulated, so will be slow to adopt Gen AI right? Wrong.

A year ago, Gen AI x FinServ use cases were theoretical. Now, early implementations abound & we have a clearer picture of GenAI's potential (+ opportunities hiding in plain site). A 🧵👇

[David Haber @dhaber]

1/ We're thrilled to be leading @CruxClimate's Series A round of financing to build the definitive ecosystem for transferrable clean energy tax credits. You can read more about @mandrusko1, @MichelleVolz and my thesis to invest here! https://t.co/7lCgUrQSij

[Tamara Winter @tamarawinter]

One of Charlie Munger’s final acts was the very thing that characterized his life: sharing his wisdom freely.

In tribute, we @stripepress are honored to bring you the full text of Poor Charlie's Almanack:

[David Haber @dhaber]

Raising debt is a totally different undertaking from raising equity for your startup. @melissawasser, @jaytoj and I aim to demystify this process in the third part of our series on simplifying your funding strategy. https://t.co/JG1qsjD54m