🎧The Fintech OG Series: David Haber and Owen Jennings

Welcome back to FinTech OGs! This week, I’m joined by two leaders whose careers have shaped the evolution of modern financial technology: David Haber, General Partner at Andreessen Horowitz and co-lead of their AI Apps Fund, and Owen Jennings, an executive officer and Block’s Business Lead.

From early ventures like Bond Street and the first days of Cash App to today’s frontier of AI in finance, David and Owen share how FinTech continues to evolve—what’s working, what hasn’t changed fast enough, and the massive opportunities they see ahead. We cover everything from consumer financial health to small business challenges, AI-driven automation, and the next wave of credit innovation.

This is a masterclass in FinTech past, present, and future.

Transcript

Julie Verhage-Greenberg 0:01

Hey everyone. Welcome back to another episode of FinTech OG season three. In this episode, I'm joined by two leaders whose careers have shaped the evolution of modern financial technology. We have David Habert, who is a general partner at Andreess and Horowitz, and he previously sold his company Bond Street to Goldman Sachs and Owen Jennings, who spent more than a decade at Block and is currently their head of product and operations. So these two share how fintech continues to evolve over the decade plus that they've been in the space, what's working, what hasn't changed fast enough, and the massive opportunities in particular that they see ahead of us in the next few years. We cover everything from consumer fintech to small business challenges, AI-driven automation, and the next wave of credit innovation. Goes without saying that this episode is a masterclass in fintech past, present, and future. So don't forget to subscribe on Apple, Spotify, or wherever you listen to podcasts. And without further ado, let's dive in.

David Haber 1:34

Sure. Julie, thanks for having us and bringing us together. I'm David Haber, a general partner here at Andreessen Horowitz. I joined the firm about four years ago initially as a general partner focused on fintech investing and also to open up our New York office and now help co-lead our AI apps fund. So kind of all things consumer, all things B2B. And I've spent my career kind of going back and forth between uh investing and entrepreneurship. So had joined a different venture capital firm back in 2011 called Spark, basically as the one kind of non-GP at the firm at the time. And it's really when I kind of started going down the fintech rabbit hole back then, you know, somewhat naively. It felt like a big part of the economy that hadn't been changed by technology and wasn't a category that was really being covered super closely by, you know, any of the senior folks at the firm. And it just so sort of dove in. And, you know, I'm sure we'll chat more about that. But uh, in some ways, you know, got lucky and ended up making some good investments, um, ended up leaving the firm and starting up a fintech company called Bond Street in 2013, which I ran for about four years. A good friend of mine named Peyton Sherwood. We ended up selling the business to Goldman in 2017, got merged into what became Marcus, and ended up staying three years in a kind of variety of strategy roles before leaving to Joe Win and Dreeson.

Julie Verhage-Greenberg 2:43

I'd forgotten about your Spark days. I can't forget about Bond Street since I first met you while you were doing Bond Street, but I forgot about uh your start at Spark. Owen, I'd love to hear more about your background because you've basically been in either investing or fintech since you graduated school and you joined Squareslash Block slash Cash App when it was only like, you know, four years old at the time, and now it's what, 15, 16 years old. So um you've seen it go through a lot of changes.

Owen Jennings 3:11

Yep, 100 100%. Thanks so much for bringing us together and having us on. So I started my career at hedge fund, Bridgewater Associates, and I was uh on the macro team. So I got fairly obsessed uh with uh the US economy, the global economy. That was my job, and uh started to build a strong perspective that the US economy just really wasn't working for basically anybody. And so that led me away from the hedge fund world and the investing world and straight to block, which at the time was Square. Um, and that was really the core business at the time. Cash App had just launched as a Hack Week project. And so I spent my first three years on the Square side. Um we were private at the time and we were going through the process of maturing uh ahead of going public. So I helped build out the support team, the sales team, the account management team, marketing, international, all of that stuff on the business side. Did that for about three years. And then I joined Cash App in 2016 when Cash was about 25 people. I was one of the first product managers on Cash App, and then had the opportunity to lead product for many of the new products and services that we launched over the years. And so for about three years, I was the chief operating officer of Cash App, overseeing at the product side and the business side. And then about a year ago, we functionalized the company. Um, and so I took on a similar role uh block wide across all of our brands Square, Cash App, Title, Proto, et cetera. And so currently I oversee essentially our product team and our operations teams uh at block.

Julie Verhage-Greenberg 4:39

Awesome. Well, one thing I wanna I wanna stick with you, Owen, on this at first. But since you've focused a lot on the consumer side throughout your career, one of the things I remember when I first got into fintech back in like 2014, 2015, so a little bit after you, but also a while ago. With that, everyone was talking about how people weren't gonna have to live paycheck to paycheck anymore. You're gonna make it so much easier for consumers to manage their finances, et cetera. And it feels like we've made baby steps there, but it feels like there's still so much more room to go. What are some areas that you've seen from your side where you think we are making great progress? And then also areas where, you know, if I would have asked you back when you were starting at Cash App, would we have this by 2025? You'd be like, oh yeah. And we don't have it by 2025. We're still working on it.

Owen Jennings 5:27

Great question. I think the need is still there. And I think there are companies like Cash App who are playing a meaningful role and trying to help um the average American. I mean, if you step back and just look at where we are, there's just a massive liquidity problem in the United States. So about 95 or 100 million adults in the US say that they can't cover a $400 emergency expense. And then you have about 50 million adults in the US who don't have access to credit at all, either because they're credit invisible or because they're credit unscorable, but regardless, they're unable to borrow. I think FinTech has increasingly been and has a massive opportunity to continue to play a huge role here. Um and so one of the one of the products that that we offer um Cash App Borrow is kind of a liquidity smoothing product. And we see our customers use that in order to smooth over their cash flows. I think it's I have the same instinct as you. So one of the things that we talk about is that the way that paychecks work right now, by and large, is that you're essentially fronting uh your labor to your employer, and then you get paid two weeks later. That seems like it's highly likely to change. Um, and I would hope that that block um and others in the syntex space are able to are able to lead. I think some of the alternative lending um platforms that exist, like Cash App Borrow, and even how I think about Afterpay and Buy Now Pay Later to some extent, will continue to build and will continue to push forward to a place where essentially you can smooth over your income and your cash flows over a certain period of time. That definitely is uh one of the one of the things that I would have expected to uh perhaps have have changed more quickly than it has. Um, but there's still just a massive need and a massive opportunity.

Julie Verhage-Greenberg 7:10

Yeah. And then David, I want to bring you in here because something I keep thinking about is how AI might finally be able to give us more progress on this front. And since you are now focusing a lot on AI, I would love your perspective here as well.

David Haber 7:23

Yeah. I mean, I think there's a ton of potential there. And, you know, I mean, one of the reasons I've always admired Square, in some ways, it was a very similar mission to what we were trying to do at Bond Street, which was, you know, we started with a small business lending product, but ultimately, you know, the ambition was to sort of be the financial advocate for small business owners. Um, and we built a bunch of software product to try to help them better understand, you know, how to manage their budgets and, you know, cash flow and ultimately sort of try to nurture that user into becoming a transactional customer over time. You know, I think about what could be done today with LMs and AI that wasn't possible back in 2014, 2015. And I think there's still a ton more to be done. I, you know, I'm curious if you guys are working on any of that on the Square side. But but yeah, I mean, I think ultimately like that's what you know, many people start businesses not to be the CFO of their companies, but because they're passionate about their product or their service or their craft. And and and there's just so much more interesting software today to make, you know, the financial part of their lives and frankly, a lot of parts of running their business much easier. So, you know, we're spending a ton of time kind of investing across lots of different, you know, A applications, you know, in different verticals, um, you know, that are again making small businesses and large businesses a lot more efficient and happy to go into more detail.

Restaurants Under Margin Pressure

Julie Verhage-Greenberg 8:33

Yeah, I mean, I find it fascinating how, you know, it we often focus on the consumer side of things, but as you mentioned, small businesses also have a lot of problems managing cash flow and whatnot. So it's not just one or the other that that can still see a lot of progress in this space for sure. Keeping that in mind, what are certain areas of fintech that you guys find super interesting right now? It can be those, and you can kind of dive deeper into why you find those fascinating, or if there's something else that you find really interesting right now.

Owen Jennings 9:04

Just following on this thread, I think that there's not necessarily a deep understanding in the fintech space more broadly of what's happening in the small business world uh right now. I'm talking to a lot of sellers and prospective sellers, especially in the in the food and beverage industry, who are saying it's it's getting to a point where it's basically impossible to run a restaurant. And so there's a bunch of things that are going on. I won't go through all of it, but cost of labor is a huge issue, especially post-COVID and increasingly now. Cost of goods sold is a huge issue. I think CPI is kind of a joke relative to what's facing a small business owner. Um, it's not actually capturing. And then you have the variability of this week avocados are $4, this next week they're $6. And then you get into this place where, okay, I need to drive growth for my business. So I'm going to sign up with the delivery platforms. And then you get addicted to that. And then you're paying, you know, X percent of your revenue to the delivery partners. And so all of this is just compressing margins in a massive way. And I think just to connect it back to what David was saying, I think that there's a lot of opportunity here from when you think about how good that the foundational LLMs are getting and how we might be able to use those. So a given small business, like a 20-location quick serve restaurant, will use about 40 or 50 software products. They're only going to use a portion of them. They'll maybe use each of them to 10, 20, 30%. And so what I see happening over the in the coming years is just a move to more personalized software and the ability to take out the 10 or 20 or 30% of the SaaS products that you actually need, build something custom for Owen's bagel shop. And that's like one of the key tailwinds that can help with these restaurant owners and other small business owners who are just getting hit so hard on the margin side. So that's really exciting for me. And it's like a tangible use case where you can actually see uh the benefits of vibe coding accruing to, or just engineering efficiency in general, accruing to people who really need it in this economy.

David Haber 10:58

Yeah, and we still spend a ton of time in financial services. You know, I'm I love fintech, obviously. You know, I think one of the things I've always loved about it is that the definition of fintech kind of continues to expand. And I take a pretty liberal point of view on what I consider fintech. I think historically it was companies that led with a financial product, obviously, incredibly successful ones like like Block, maybe less successful ones like Bond Street. But I think I've taken a different point of view in where I've been spending time, you know, here at Indreessen. I sort of view fintech more as a horizontal than a vertical. And so it's almost an embedded business model in lots of other different types of software products. You know, and I always say that opportunities sort of live between fields of expertise. And it's been a really fun way to invest here at Indreeson because we have, you know, a bunch of different experts across lots of different vertical categories. And so I've kind of gone around the firm and collected GPs basically and done deals kind of at the intersection. So at the intersection of FitTech and Healthcare, you know, I led an investment in a company called Crux, which is operating at the intersection of uh energy and capital markets. They basically have created an exchange for initially for transferable tax credits, but are now facilitating debt inequity for large, you know, wind, solar, nuclear, you know, advanced manufacturing companies. And I would say the common thread and the things that I look for are companies that lead with software or and or have the potential for a network effect. Um, and as a result, they've spent a lot of time in areas that, you know, in in kind of wonkier areas of capital markets. So for example, I led a seed, you know, probably three years ago in a company called Modern Fi here in New York City, which is building a bank-to-bank deposit marketplace. So, you know, the banks, many banks have excess deposits, they want to sweep those deposits and sell them essentially to other banks that are hungry for deposits because they have a lot of lending capacity that they need to fund. Many also have large value clients, but you weren't you're only getting 250k of FDIC coverage. So if you can split you know $100 million balance into 400 different accounts, you can get all $100 million in FDIC coverage. And so Modern Fi is basically an exchange, you know, really facilitating sort of a ledger and keeping track of these deposits. Again, we seeded the business three years ago, two years ago, SVB first republican signature failed. And all of a sudden, managing your uninsured deposit base became existential. And so all of these large community and regional banks sort of flooded, you know, that business, looking for an alternative to this very kind of legacy uh but you know, very profitable business called IntraFi that is owned by Blackstone. And so Modern Fi is sort of building the next gen version of that business. And in fact, the founder of that company is a guy named Gene Ludwig, who used to be the head of the OCC. We brought him in to lead the Series A. He's now, you know, invested even more. And so we're sort of blessing Modern Fi, sort of IntraFi 2.0 in some ways. I could go on, but that's sort of an example, like, you know, businesses that have sort of two sides, you know, in in some capacity, uh, you know, and get more valuable the more sort of participants there are in the network.

Julie Verhage-Greenberg 13:45

Yeah, that makes a lot of sense. Um something else I want to you touched on it a little bit, David, but each of you could have like gone into something else other than fintech at various points in your career. So I'd love to, were you ever tempted to? And if yes or if no, what has kept you in fintech versus going to trying something else? I know the definition keeps getting broader. So, you know, leaving gets harder in the sense that fewer and fewer things don't qualify as fintech, but you're still both like in very nitty-gritty fintech type roles.

David Haber 14:18

Yeah, I think it's one thing about careers just in general. You know, it's like relationships compound. I think networks sort of compound. And I think financial services obviously, you know, I don't know, like 20% of the global GDP. So it's a massive market. I think there's a ton of inefficiencies still, you know, and I've seen it kind of from different angles, right? I saw it, you know, in the startup ecosystem. I saw it within a 40,000 person company at Goldman Sachs. You know, the vast majority of, you know, what they call the federation, which is basically, you know, the entire back office of the firm, was, you know, largely living in Excel, let alone enterprise software across legal compliance, risk, vendor onboarding. There's so much opportunity for AI and and you know software in general to sort of transform these businesses. And so it just feels like we're incredibly early, you know, in sort of technology's impact on one of the biggest parts of the global economy. And the and you can have tangible impact on people's lives, right? You know, to Owen's point earlier in your conversation on, you know, consumers or small businesses, like, you know, again, these are how people, you know, feed their families and you know, support their local economies. And so I've always sort of loved that. I mean, we are like, you know, mantra at Bontri was like long live small business. It felt like it was one of the, you know, kind of unifying themes. Like who didn't want to support small businesses, right? And it felt awesome to be able to sort of, you know, do well by also doing good. And I sort of, I think there is sort of that common thread across a lot of where we spend time in in financial services.

Julie Verhage-Greenberg 15:40

Not only have you stayed in fintech, you've stayed at the exact same place your entire time in FinTech, pretty much. So you very much have not have not left.

AI Vendor Churn And Real Moats

Owen Jennings 15:48

Yes, although there's been many chapters to block over the years. But I the way that I think about it, I so just as a person, I can get pretty interested in in many different things. And so the way that I the way that I've thought about it is I really want to be working on a problem that matters. And I believe that's the case at Block. Like our purpose fundamentally is economic empowerment. And so it's way easier getting out of bed every day or working late into the night when you're working against that purpose and mission versus when I was at Bridgewater, for instance. Um, that's not to say that there's not other problems that matter. Like I think that if for whatever reason I were to find myself in a different field in 20 years, I think it would just be a problem that matters. It could be healthcare, it could be education, it could be economic inequality. Um, there's a number of things. I just, you know, in the tech space more broadly, there's a lot of places where you can work with great people and you can learn. And and like not all of those companies are working on problems that really matter. So, so that's like my lens for how I assess like how I spend my days.

Julie Verhage-Greenberg 16:51

Awesome. Well, we we've mentioned AI, we've mentioned vendors. This is something I was chatting with Pete Casella from Stack VC, formerly at point 72 about. It's just like, what how do you do vendor management in a world of AI where you're probably switching vendors every two to three months on something because that product's better and it's easy to switch, et cetera? I'd love your guys' perspectives on one, how do you invest in companies in that space, keeping that in mind? Does a moat even exist at this point anymore? Two, how does Block think about making sure that it's doing everything it can to offer these tailored solutions and thinking through do I build this internally? Do I buy something that's gonna help me offer this product? And some of that might be, you know, above your pay grade and stuff like that too. But I'd love like the company's general ethos on that. And you know, any other thoughts when that that topic is brought up? Because I feel like it is one that's super important right now, especially given that um it was like a week or two ago. I forget the exact date, but that Anthropic announced it was gonna do financial advisor tools through AI, which, you know, sent shockwaves through any financial AI assistant focusing on advisors, et cetera, um, trying to build in that space. Um, David, since I mentioned investing a lot, why don't we start with you on this one?

David Haber 18:10

Yeah. I mean, again, I spent a ton of time, you know, looking at and investing in companies that sell software into large financial institutions. And I think one of the benefits of having worked at Goldman was just sort of seeing, you know, what a firm like that looks like from the kind of like inner sanctum. You know, I worked very closely with our CIO and CTO and the heads of engineer across every division. Like we were in most board meetings. So it was a fascinating kind of like perspective on I think what is a great company. But it taught you like what are they, what is a firm like that uniquely good at? What are they bad at? You know, how do they think about sort of building versus buying? And I think the reality is I think the culture at many of these institutions is changing quickly. You know, Goldman was like famous, you know, for they weren't interested if it wasn't built in-house, basically. I mean, they still operate on their own email client that they developed in-house, not Gmail, not outlook like Orbit, you know, which was developed by Goldman Sachs, which is bizarre. But but I think that's changed, right? And I think Marcus, you know, RIP was sort of a catalyst for a lot of that evolution because you know, the consumer business didn't exist, right? And so they were beginning to adopt sort of third-party technology kind of more aggressively. You know, I think with Marco Argenti joining a CIO from Amazon, it helps sort of bring them more into the cloud. And so I think the culture has changed, and that's made it much easier for you know smaller companies and startups to be able to sell into large financial institutions, you know, a lot more efficiently. And as I was sort of saying earlier, I still think that there's massive workflows and problems within these institutions that that they're not even, like there's not even software. There aren't vendors yet, at least that they've yet adopted, or they're very legacy kind of old world solutions. So I think there's there is and there's going to be massive companies built in sort of more AI native, you know, uh, enterprise software companies focused on solving these workflows for large financial institutions. I guess to answer your question on like MOTAS, you know, because I again that's like the topic that we spend probably most of our time, you know, thinking about the way I've sort of thought about this, and I'm curious if I want agrees, but like it's this notion of differentiation versus defensibility, right? I think AI is an incredible catalyst and tool for differentiation, right? The idea that I don't know, a voice agent can do auto loan servicing, you know, in 50 languages, 24-7, fully compliantly, you know, you can spin up and down the labor force like programmatically, depending on demand, like hugely differentiated, right, versus a human, right? Maybe a thousand times more efficient than the individual. Is that sort of voice capability or the AI capability alone a source of defensibility? I would argue no.

unknown 20:35

Right.

David Haber 20:36

I think it's an incredible tool for differentiation. I think the source of defensibility is everything else, right? And and I think our the hot take might be that it's like all the same things that have always been true in software, which is like all the other downstream workflows. It, you know, it's about becoming the system of record or deeply embedding yourself within your customer or becoming a platform or having a network effect. I don't know that this moment is that different from that perspective. I think the thing that is fundamentally different is that the software can actually do the work. Right. And this is like radically changing the TAM, you know, for most of these companies because the market is labor, which is probably a hundred times larger than IT spent. You know, so many markets that were never that interesting to sell software into are suddenly becoming fascinating, you know, markets for AI companies to go tackle. And again, the growth and ACVs that we're seeing in these businesses are are staggering because of this dynamic. So, you know, again, I still maybe I'm old school in that way, but I still believe that moats exist and modes still matter. And so we often, you know, are debating what is the theory of defensibility for this company, even if they wedge in with sort of the particular AI feature, like how are they going to sort of proliferate within the company? You know, can they build sort of this, you know, system of record sort of like gravity, you know, in in the business? Because again, I think that's where defensibility largely resides.

Owen Jennings 21:52

On the block side, so I'm I'm personally working on some pretty interesting things that I don't think I can talk about yet that are related to this. But I guess two themes that I think are interesting. So one is I think we're starting to be in the place where like for some simple software, I think you're starting to get to the place where there's just an easier decision to just build it yourself relative to to buy it. I don't think that's by and large true. Um, but um for some simpler software, I think you'll start to see that being important. And then for some of the more complex software that we buy that's like truly acting as like the source of truth for a given process, whether it's Salesforce or Snowflake or what have you, I think as we continue to move forward, I think the question of like to what extent is this piece of software going to be able to integrate with the operating system that we're using at our company, uh, and this is just like speaking broadly, will increasingly be more important. So I think you have to imagine that in X amount of time, the way in which folks at a tech company are actually using their computer is that you're basically MCPing into a whole bunch of different sources of truth. And I can connect to Snowflake and Tableau and my calendar and my Slack and my Gmail and so on and so forth. And there will probably be differences at how good a given source of truth is at allowing that to happen naturally. Um, and so I expect to see that kind of like convergence. Um, and and that's one of the things I've been thinking quite a bit about.

Highs Lows And Hard Lessons

Julie Verhage-Greenberg 23:16

If you have anything coming up over the next week that you can mention, feel free. But I'm excited to hear what it is when it does get announced. Switching to a little bit more of a personal side of things, I'd love to dive back into your careers and talk about moments of highs and lows. Cause I think a lot of times we see people that have climbed the ladder and are in higher ranks like yourselves, and we either forget about or it sort of gets erased from memory that there were a lot of lows along the way as well. So I'd love for you guys to think back to maybe like a specific high where um, you know, talk about that moment. And then with the low, what sort of got you through that? What did you learn from it and advice for anyone that might be listening to this? We have a lot of founders and other executives that listen to this podcast.

David Haber 24:03

Yeah, I mean, happy to kick it off, but you know, I used to joke that all the cliches of entrepreneurship are true. I think all the, I'm now a new parent, like I think all the cliches of parenthood are also true. Agreed. Like you're on the roller coaster, all the things. And, you know, I started Bond Street when I was 25, right? I joined Spark at, you know, I was 23 back in, you know, 2011. Again, went down the fintech rabbit hole back then, got lucky, ended up like seeding Platt and a bunch of other companies when I was there. But really I always thought of myself more as an entrepreneur than as an investor. And, you know, my co-founder Peyton was running engineering at Venmo. They had just gotten acquired by Braintree and PayPal, and so pulled them out to go start the company. And it was sort of a moment when a lot of the data that we thought we would need to sort of understand the financial health of small companies at that point in time was just becoming available online to API. So Intuit had just launched the QuickBooks API, but also Zero and Stripe and Harvest and Braintree, like this whole ecosystem was opening up. The IRS had just started accepting e-signature. We knew we could integrate into credit bureaus, and Plat had just launched their irrigation API. So that was a why now. Uh, you know, and the and the the hope and the thesis for the business was that we could deliver, you know, uh, again, sort of capital to small business owners much more efficiently than you know they were experiencing in a bank, which still required them to print out documents and wait weeks, if not months, to get a decision. I think that was largely true. Everything else about the business was really hard. You know, we we raised in total $11.5 million in equity, which sounds like quaint today, but you know, $900 million in debt capital, you know, which I guess was a high. I mean, we had seeded the comp we had raised a million and a half dollars in seed equity. Uh, we ended up convincing Jeffries to give us $100 million of their balance sheet before we raised her Series A. You know, we part of the reason for that, and again, the thing I'm most proud of in building that company was just the incredible team we built. You know, the first person we hired was our chief credit officer. It was a guy named Jerry Weiss, who was the head of small business risk at Citibank. I think he was 57 when he joined us in my apartment. So he had been underwriting small business loans longer than I'd been alive at that point. Uh, and he joined us before we had payroll setup. And so there are moments like that where you know you're an entrepreneur and you look around the room and you know, people are betting on you. And you know, they're betting with their time and their careers on your idea, and you go from something that was in your head to something that's like real life, and all of a sudden you're helping, you know, Joe Coffee open multiple locations throughout New York City and you're showing up and physically seeing the impact of your work. I mean, that Bond Street still, I think, is the most rewarding part of my career. It was also definitely the most challenging in in a lot of ways. The thing that we never really cracked the nut on was, you know, finding small business owners at the transactional point of intent, right? Like when they actually needed the capital. And unlike Square Capital, we were focused largely on term loans. So really on growth financing as opposed to working capital. So we were, you know, our average duration of our loans was one to three years in duration. It was $150,000 loan. It was really to help entrepreneurs open a new location, buy a piece of equipment, uh, you know, maybe refinance a more expensive product, hire employees, et cetera. And we didn't, we didn't have a unique advantage, I would say, in finding those customers at that moment. It's not like we had an accounting software product that gave us unique, like perfect visibility into their working capital or their or the you know their finances so we could push a loan at the right point in time. We were really ultimately having to sort of pull customers into the ecosystem. And ultimately that drove, you know, cackup. You have sort of negative selection for people that need capital instead of being able to push capital. And, you know, we grew the business, like we got to, I don't know, a couple hundred million in originations a year, you know, several million dollars in revenue. But I had no idea candidly how to get us from 200 million to like 2 billion a year in originations. And the most challenging piece, and you know, Julia were like reporting on this all throughout, lending club went public in 2015, valued, I think at its peak at 12 billion dollars, declined 90%, you know, the subsequent year to one and a half. Ondeck went public at 3 billion, declined to 350, funding circle, green sky could go on. And so we ultimately, you know, benefited in some ways the wave of online lending in 2014, 2015. But then when the tide went out, it was just really challenging. And and ultimately, I mean, it's funny, that's how I met Alex Rampel here at Entrisa and I pitched him as an entrepreneur in 2015, 2016. And he's like, you're awesome. You built a great team, you're probably the best, you know, company or product in this space. But ondeck is trading at $300 million market cap. They've raised $350 million in equity, like there isn't a venture outcome here. And and so living through that experience and ultimately trying to figure out what to do with the company is, you know, it's just a very painful process because you started hoping that it's going to become square or something equivalent. Uh and, you know, things don't always work out that way. You know, again, super proud of the experience and would never trade it. You know, and ultimately, I think it's made me a better person, a better entrepreneur, a better investor. And so I'm grateful for that.

Owen Jennings 28:48

I'll be again I'll be a little bit vulnerable. I don't know that folks on my team that know this in terms of my low. So, in so if I rewind back to 2016, basically like my only experience is, you know, I've been at Bridgewater for a few years, focused on macro investing. And then I've been on the Square side for a few years, really focused on the business side. So almost nothing having to do with software development or product development. And when I moved over to Cash App, it was not a mature business. There's like 20 people, everyone's wearing multiple hats. We're trying, we had like just figured out a way to monetize. And I had a conversation with Brian, who's the CEO, and he's like, okay, you're gonna do some business stuff, some growth stuff, but you're also gonna do products. I have no idea what product management is at this point. And so I like to go into these first meetings for a couple of weeks, and I'm I thought that I was either gonna get fired or gonna have to quit because I just like did not understand anything. I remember going to the we had a little coffee shop in in our office, and I remember walking there with Brian a couple months in and just saying, I don't think I can do this. I people are talking about staging versus production, and I have no idea what they're talking about. I don't know what mobile means, I don't know what client means, I don't know what server means. I've never looked at a line of code in my life. And I remember talking to my wife and like starting to look for other jobs. And luckily I was able to rely on some incredible people who were unexpectedly just, I don't know, super, super helpful and super forgiving and had reasonable expectations and they helped me come up the curve in a pretty massive way. So anyway, I only I think that's useful just because I think folks can think that they're on a certain track or think that they don't understand how to do X or they don't understand how to do Y. And it doesn't have to be, it doesn't have to be the case. You can learn basically anything. And then I guess the tie-in to one of my one of my happiest moments, I guess this is going back. So if you then fast forward X months or a year later, one of the first products that I worked at at Cash App as a in this quasi-product role was um our instant rewards program or instant discounts program. The the question at the time was like, how do we get people to use Cash App Card? It's great because you know, people there, you know, money is coming into Cash App, so there's money to be spent and that's useful. And we were seeing, you know, reasonable growth rates, but like how do we supercharge that? And let's not do the like points thing and you convert your points into MQM and MQD and like that whole game. Let's just make it really simple. So the idea was you get a dollar off when you use your cash card at a coffee shop. Um that was the feature. It was it was fairly simple. The issue was we had to identify all the coffee shops in the US. And I wish we had Goose and LLMs and so on and so forth at the time, but we didn't. What we did have was Owen. And so I spent three months manually grouping coffee shops. And I have such a I have such a incredible understanding of the coffee shop situation in the US. Is it a bakery? We would argue like, is this a bakery? Is it a cafe? Is it a coffee shop? Should it qualify? And anyway, went through this with an incredible team on the on the design side and the engineering side, and we launched a dollar off coffee, and it was the happiest moment of my career. It was the first time I'd ever done anything really on the development side. It was kind of like the flipping of the chapter of like imposter syndrome and uncertainty. And do I have any idea what I'm doing? Can I even do this? And the rest is history.

Career Advice And Safe Hands

Julie Verhage-Greenberg 32:12

Oh man, something that took you three months could have taken you three minutes to how far have we come? I know. Crazy. Taking on this front, what advice would you guys have for someone that's maybe just graduating from either like an undergrad or an MBA and looking to get into fintech right now? Are there certain areas or certain stages, or just like things to keep in mind as you want to grow your career in this space?

Owen Jennings 32:35

I think my my like basic worldview is to focus on meaningful work and meaningful relationships. And so for anyone, regardless, like if you're in high school, college, if you're 20 years out and you've been working, I think if you surround yourself with incredible people and you build authentic relationships with them, good things happen and they'll raise you up when you're having a tough time and you'll learn from them. And so just invest meaningfully there. And then on the meaningful works, I think I already talked about it. I guess for me, not to really have an opinion on what anyone else thinks, but fintech is really broad. And so there's a whole bunch of things that you can do. I guess my guidance would be you want to be spending your time on something that you really care about and that you think is having a positive impact in the world. And I think there's like no shortage of opportunities in the fintech space to do that. But I wouldn't think about fintech overall as a category that's like super broad. I would think about what is the problem that I'm solving for customers and can I get really excited about that? Because if you get really excited about it, then you're gonna want to learn. And I think learning is basically the thing that compounds over time and is the most beneficial. So meaningful work, meaningful relationships.

David Haber 33:38

Yeah, I mean, I agree with all that. I think the, you know, the other vector I often talk to younger people about is just what stage of company are you interested in. I think that you know, people join an early stage company to have, you know, kind of like outsized responsibility quickly and, you know, I would argue outsized impact. Um, you know, one of the kind of, I don't know, uh, attributes, compliments that I gave my the best people at Bond Street was this notion of what I called safe hands. And it was sort of a characteristic that I described, not just for the most senior people, but also for the most junior people of the company. And it, you know, if you've ever been a manager or you know, certainly it's the best feeling as a CEO to have people that you know you can just give a project or a chunk of the business to, you know that it's gonna get done effectively on time. You don't need to micromanage, you don't need to chase. Doesn't mean they're not gonna have problems, you know, but they're gonna be entrepreneurial and they're gonna raise their hand, they're gonna communicate. And every time I found somebody that was safe hands, I just fucking poured responsibility on them. And some of the leaders of the company, you know, were the most junior people. I remember a young guy on our team named Jeremy Roosh, I don't even know what his title was, like business associate or something. He was like a year or two out of Duke. And he was he was writing content, he was passionate about sales. So we ultimately built a team in the India and the Philippines. He ended up, you know, becoming kind of our BP of sales. You know, and then ultimately, like he ended up leaving and bootstrapping an outsource sales company that you know worked with a bunch of businesses. He just sold it like you know, six or eight months ago. So those are the moments that you get, I just I think are incredibly fulfilling. And I think if you can be, and I think this is a characteristic that, again, works at every level. Like the ultimate archetype of that kind of safe hands quality was a kind of name Eddie Sarrell, who became our COO. He decided not to join Goldman because I think he had PTSD from doing banking, you know, 10 years prior or whatever. So he ended up going to Stripe and ended up building Stripe Capital, and then was like their chief risk officer. He's now running like, I think their business network. Like he's an incredible operator. Um, and he was like the ultimate, you know, kind of safe hand and ultimately became kind of my like right hand in running the business. I mean, he ran, you know, probably more of the company than I did at some point. But, you know, be safe hands, I guess, is the advice, you know, that I would give anybody, frankly, joining any company, but certainly for young people.

Cycles In Lending Crypto And Markets

Julie Verhage-Greenberg 35:39

Yeah, I think that's all of that from both of you is great advice. One thing to circle back to before before you wrap things that David, you mentioned how the lending space obviously skyrocketed and then all of a sudden, you know, got swept away for a variety of reasons. Are there any spaces right now in FinTech that you guys feel are experiencing a similar situation where you know it's crazy highs right now or recently has been, and you feel like gravity's gonna catch up at some point, whether it's you know, six weeks from now or a year or two?

David Haber 36:16

I hope not.

Julie Verhage-Greenberg 36:19

I mean like it was all of fintech in 2021, 2022 when things went crazy.

David Haber 36:23

But yeah, I mean, look, I've like again, we've been doing this for a long time. I think we've seen sort of different market cycles, you know, things go in and out of favor, you know, things that are kind of more rate sensitive, you know, change with macroenvironments, more, you know, depending on you know, there's just sort of natural pressure on kind of balance sheet intensive businesses that I think kind of ebb and flow again with the kind of rate environment. It's been awesome to see, frankly, a lot of the consumer fintech companies, you know, begin to go public. I think it'll be really fascinating to watch, you know, as you know, there's so many different business models in kind of neobanks around the world, right? You have, you know, obviously, you know, Chime Go public in the US, you have you know companies like you know, Walla, you know, in Argentina, Colombia, and Mexico, you have New Bank in Brazil, you have Revolute, Manzo, et cetera. But and obviously Cash App being one of the biggest, you know, but each with their own sort of like characteristics, right? Some are deposit-funded, NIM-oriented businesses, some are interchangeable businesses, some are FX oriented, some have like subscription models. And so I think it's going to be really interesting to see how the public markets ultimately reconcile all these different sort of business models. Will they understand how to value these things? Because again, just because New Bank is worth a lot doesn't necessarily mean Monzo should be worth the same ultimate, because again, fundamentally different businesses. So I hope they're all worth, they're all amazing companies. It's not really a comment on that. It's just there's so much private capital behind all of these. I think it's going to be fascinating to see how they how the public markets sort of reconcile these things.

Owen Jennings 37:44

I think there's a hype mismatch right now between stablecoins and Bitcoin. I and so I think on the stable coin side, we're seeing a bunch of interesting things. And I think what Bridges is is great. Zach is a X X square, uh, he's awesome. The from a use case perspective, I think what you're where you're seeing really strong market fit is more on like the B2B side. Uh and so you're seeing less broad utility on the consumer side.

Julie Verhage-Greenberg 38:07

And less US and more other countries.

Owen Jennings 38:10

Totally, and less US and more countries. And then I think, you know, who knows how things evolve. I obviously have a strong point of view that we, you know, we want to make Bitcoin everyday money. And we and the key point here is that like stable coins can be useful and they can be better forms of digital dollars, but ultimately they're still centralized. And that's kind of like the key point and what drives us from a principal's perspective. And so I know you had David Marcus on um recently, but a lot of the investment and focus on at the block side is like sure stable coins could be a useful, you know, on or off ramp, similar to to other forms of payment. But fundamentally, when we think about uh fixing the money, uh it has to be a payment network built on top of Bitcoin. And I I don't hear nearly as much talk about uh the payment utility of Bitcoin on FinTwit and podcast as I hear about uh stablecoin. So I'm looking to kind of fade that hype mismatch.

Julie Verhage-Greenberg 39:01

There you go. And if Jack ever wants to come on and talk about it, I'm here. I will gladly do that interview.

Owen Jennings 39:06

Perfect. I'll I'll send him a text. Perfect.

Julie Verhage-Greenberg 39:10

Um, anything else that you guys find really exciting in the space right now? Anything that I didn't ask that you find in porn areas you're focusing on, things you're excited about over the next six to 12 months?

Owen Jennings 39:21

I think one what one thing that that I'm pretty interested in. I know we touched on kind of like the credit access issue in the United States. One of the areas where I've been spending a lot of time is just thinking about uh underwriting. And I think now with, you know, we've always had kind of sophisticated machine learning models that are helping us do underwriting, but I think that there's a premium on data and proprietary data. I think the basic setup in the US is pretty crazy where you have these credit bureaus, you have the three credit bureaus who give you a credit score, and then they're using a very small subset of potential data, and then they're updating that thing infrequently. And then the entire way that the system works is not actually reflective of credit worthiness. So, what we found when we added credit scores to our underwriting models, they actually performed way worse.

Julie Verhage-Greenberg 40:10

And so did you test it to see what happened?

Owen Jennings 40:13

I think a couple of years ago, maybe 18 months ago. I'm not exactly sure. But the reality is like we're obviously in a position where we can see your peer-to-peer transactions, we can see your cash card transactions, we can see your direct deposit, your stocks, your Bitcoin, your tax, like like so much data. It's really sad how just outdated and archaic the credit situation in the US is with the credit bureaus. There is so much data available. We could do such a better job.

Julie Verhage-Greenberg 40:40

And it's not just it's not just consumers. Same thing goes for businesses, too. Someone like a block or a toast or whoever that has all the data on the business, payroll, things like that, can obviously lend to that business a lot better than what a FICO score could do.

Owen Jennings 40:55

100%. And that was the, you know, the core thesis behind Square Capital back in the day was like one, we have this, you know, we basically are seeing your minute to minute top line revenue. And also, you know, we're first to get paid back because we're first in line, because we're actually moving the money. So that that actually worked uh quite well. Not too dissimilar on the cash out borrow side. And even how we think about afterpay is like there's a ton of signals that we can use that are just completely ignored and not ingested by the credit bureaus. And so obviously, there's like a specific thing here from a business building perspective at Block that I'm excited about that can help our customer and drive enterprise value for us. But also, like, it's not going to be the case that 100% of humans in the world are using block. I would love that to be the case. Uh and so I think it's a broader point, which is there's like a 30-year gap between what we are capable of doing in terms of extending credit and opening up access relative to how the traditional financial systems work. And the US is even better than some other markets. So I still see uh despite the the ups and downs and the highs and the lows, I think if anything, there's like a it's more obvious now that there's a greater opportunity to help consumers and small businesses in this space than it was before.

Automation Vibe Coding And Taste

David Haber 42:03

Totally. I mean, I still think, you know, financial services broadly is still one of the most pro human capital intensive industries on the planet. I mean, it's like, you know, lots of pretty highly paid people generally like sitting in Excel. You know, whether you're doing underwriting or loan servicing or you know, banking or anything. I mean, it's just it's pretty incredible. And so I think, you know, we are still super early in sort of AI's impact in this industry. Like I'm just incredibly bullish on, you know, the effect that it's going to have across the market. And I think it's like it's particularly a different moment than let's say the cloud era, right? Because you know, ultimately you're seeing both bottoms-up adoption, you know, largely in like the engineering, you know, uh, you know, teams within these companies using, I don't know, cursor or GitHub Copilot or whatever, and seeing like massive productivity gains there. You're seeing kind of the broader labor force begin to adopt, I don't know, probably like Microsoft 365, you know, like kind of more AI features again, broadly. But then every CEO, every board member of every large company can now plug a prompt into one of these models and sort of intuitively understand that impact that it's gonna have on the business. So you're seeing both kind of bottoms-up momentum and top-down pressure to figure out, okay, what is our lab, you know, our AI strategy? And I think the firms that embrace the technology most aggressively will have radically different cost structures, right? And that's gonna enable them to go, you know, take market share, require you know, other businesses, operate a lot more efficiently, and ultimately, you know, deliver product, better products and services for the end clients, right? I mean, I remember, you know, the non-AI version of the at Bond Street, I was trying to lobby uh, you know, the IRS to have a real-time API, right? How much capital, how much friction is there in getting a mortgage or a small business loan or a personal loan because you're calling a tax transcript, you know, you had to submit a 450, it was called a 4506T tax authorization form, and we were getting back an XML feed, you know, like 24 or 48 hours. Right. And that was like with technology, the way that probably like the largest banks were doing it. And so these are you know, and again, how do you actually like speed that up and what is the impact? That it can have in the economy if a lot of this is done, you know, with AI. So yeah, I'm super excited. I think we're like at 1%, you know, done and sort of impact. And, you know, as a VC, like there's going to be massive companies built. But you know, I'm more, I'm even more excited for the impact it's going to have on the world.

Final Takeaways

Owen Jennings 44:14

Just to build on that, this has been kind of a core focus at Block and our kind of top priority is thinking through how we can automate more of what we're doing. I think it's flowing. I don't think that we can overestimate the impact that that these LLMs and the tools built on top of them are going to have for fintech and for tech technology companies more broadly. I think we're at the, we're at the place now where we're seeing, you know, pick your favorite stat over the past few months, but you're seeing way higher engineering velocity and design velocity. So that's awesome. I think you're at a place now where you're seeing a way higher rate of automation for some of the more operational teams, whether it's customer support or risk operations or compliance operations or what have you, which is great. But I think the fundamental thing is we've gone from a place where, you know, a certain percentage of block could write code to a place where it's now 100%. And so to your point about, you know, the CEOs and board members, what have you, I'm vibe coding on a regular basis. And I can, I'm my my technical chop stopped at SQL. So I've never been able to write code or do anything. And now I can, instead of writing a document that expresses a feature that we can build, I can just mock it up in our design language in 20 or 30 minutes. That's super useful for block, but honestly, the coolest moments for me have been I've gotten really good at uh getting Goose, which is our code name Goose, which is our kind of AI tool multi-model built on top of uh, you know, kind of choose your own model to work with Xcode. Um, and so I've built like five iPhone apps over the past several weeks that I'm using in my day-to-day. And they're not like brilliantly architected, and I'm sure they wouldn't scale, and I couldn't have a million people on them, but it's like very useful for what I'm trying to do in my life. And I think it's like a fundamental shift. And so I think you have to anyway, I think the more interesting thing is gonna be we're getting to a place where individuals and companies are basically gonna be able to build anything, but they're not gonna be able to build everything. And that's like kind of the that's the the entire theme of this like AI era, is like everyone's talking about how like taste becomes more important. I like truly am seeing that because you're gonna have a proliferation of software, and potentially X percent of it is just like slop. And so, how do you make sure that you're building the right thing? Uh, and it's just a complete paradigm shift, even versus nine months ago or 12 months ago.

Julie Verhage-Greenberg 46:36

Amazing. Well, thank you so much for joining me, you guys. I learned a lot in this conversation, and I know that the people listening will as well.

Owen Jennings 46:45

Thanks so much. Thanks for taking the time.