Latest / The Longest View with Dez Fleming / The Future of Private Markets with Ryan Eisenman, Co-Founder of Arch

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The Future of Private Markets with Ryan Eisenman, Co-Founder of Arch · The Longest View with Dez Fleming

• [Desmond Fleming] (0:00 - 0:29) Cool, man. Well, Ryan, I'm so excited to have you on to talk about Arch. We'll talk about kind of where you all sit in the private market ecosystem, how you think about fintech infrastructure changing as well, and there are a ton of really interesting themes, but I think the first place I want to start is tell me what's going on in in private markets today. How has it changed over time since you've started Arch? [Ryan Eisenman] (0:29 - 1:24) Yeah, when we first started Arch, people were like, cool idea, seems like there's a problem there, but we're not sure if this is a venture scalable business, not sure if this is investable, maybe just try to like build a conservative type of scaling business, and I think that's kind of changed over the last seven years. In 2018, alts were a theme, but they weren't that understood of a theme, and now if you go talk to any private equity firm, hedge funds, credit funds, VC firms, a lot of these firms are now thinking about how do I get more of my products into the wealth channel? So get family offices, investment advisors, banks to buy these funds, and then similarly you have this whole wealth management world of independent wealth managers or wealth managers at banks that are thinking about the inverse of how do I get my clients into private market investments because that's where there's a lot of energy and a lot of return. [Desmond Fleming] (1:25 - 1:38) Yeah, when you think about that spread of asset classes, right, private equity, private credit, venture, they actually probably all have different maturities in terms of their penetration into the wealth channel. What are you seeing in that respect too? [Ryan Eisenman] (1:38 - 2:14) Yeah, we look a little bit at some of like the Swinson data and the Swinson model, and it seems like the biggest asset class is still private equity, but there's a lot of interest in venture because venture is typically something you can like touch. You hear about these companies, you see Ubers or DoorDash delivery drivers, and you're like, oh, this is like the future. And so I think it's pretty interesting for a lot of independent folks to invest in venture. Private credit is huge right now, really having a moment just because of a lot of where lending can happen today with modern regulation. And so that's been a major driving factor. And then real estate is just like constantly a large asset class that continues to grow. [Desmond Fleming] (2:14 - 2:29) Some say the largest asset class on Earth, depending on how you look at it. OK, so let's let's let's wind the clock back seven years ago. Yes. You're starting Arch out. You are two. How many years out of school were you at that point? [Ryan Eisenman] (2:29 - 2:31) About two and a half to three years out of school. [Desmond Fleming] (2:31 - 2:37) And so what was the kind of founding moment or founding genesis of Arch? [Ryan Eisenman] (2:37 - 2:57) Went to a dinner in New York City, met an investor, was kind of at the time trying to think about which path to personally go down. I've had a few startup ideas. I was also very interested personally in venture. And then over a course of a couple of coffees, ended up pitching this idea to him. He lit up when I talked about this idea. I was like, yes, I have dozens, if not 100 K1 generating investments. [Desmond Fleming] (2:57 - 2:59) So he felt the pain on his own. [Ryan Eisenman] (2:59 - 2:59) He felt the pain. [Desmond Fleming] (3:00 - 3:00) Yeah. [Ryan Eisenman] (3:00 - 3:20) And he was like, I have this pain point. My advisor and accountant have this pain point. This is death by a thousand paper cuts. By the way, if you want to start this company, you should meet these two engineers. They're really interested in a similar concept. And maybe the three of you would want to be a team. And then the conversation evolved over the next couple of weeks of if you want to work together, I would love to back it. [Desmond Fleming] (3:20 - 3:20) Yeah. [Ryan Eisenman] (3:20 - 3:27) So this individual became one of our first clients, our first check into the company, and then introduced the founding team together. [Desmond Fleming] (3:28 - 3:32) Oh, wow. I actually didn't know that. And that's how you met one of your co-founders, Jason. [Ryan Eisenman] (3:32 - 3:42) Yeah. Jason and Joel are my two co-founders. They both went to MIT, studied computer science and math, went different ways after school and then did another startup together before. [Desmond Fleming] (3:42 - 3:47) And so did you have any background in wealth management or tech prior or was it just consulting? [Ryan Eisenman] (3:48 - 4:16) Consulting, had interned at a wealth management firm, interned in the back office of a VC, so saw some of the pain points in both places. My dad was a financial advisor, so saw some of his workflow. And then we just started talking to as many people as we could in the industry. And this problem just was this burning problem that kept us up, that we really cared about, because we thought like, OK, there's all this pain around how you manage investments. But ultimately, like you're not trying to focus on the management of investments. You're trying to focus on how do you make investment decisions? [Desmond Fleming] (4:16 - 4:17) Yeah. [Ryan Eisenman] (4:17 - 4:37) And so we realized that people are making suboptimal decisions because they don't have good data. They don't have good data because they have poor operations. So it's kind of like this pyramid. We have to solve it at the source, solve for operations, which can give you good data, which can lead to better decisions and better outcomes. And that's the mission that we're on, is going to continually push up that pyramid. [Desmond Fleming] (4:37 - 5:17) If you think about March 10 years from now, what is that vision? Because, you know, thinking about private markets, especially in the venture context, so many people aspirationally want to say, hey, let's make private markets operate a little bit like public markets, where there's more liquidity, secondary markets, more visibility and ability to trade in these assets. And you also kind of see it. I'm sure you saw the Robin Hood news recently where they're announcing there. I think it's a publicly traded fund that is intended to invest in private assets. So is that kind of the long term vision that you're charting for ARCH? Or is it more about working up the stack of automating some of the workflow for your existing client base? [Ryan Eisenman] (5:17 - 6:16) Yeah, I think you're going to see a lot more announcements like this Robin Hood announcement. And we think that similarly, private markets should in a lot of ways work more like public markets. They're 30 to 50 years behind. If you want to buy Apple shares or Tesla or Coca-Cola, you log into Schwab or Robin Hood, one click buy. You can see your performance. Your tax information is consolidated. You get a consolidated 1099. If you look at private markets, you have to go to the FirstMark website for their K1, then Sequoia's website for their K1, and then Benchmark for their 1099 or for their K1 and their capital calls. And then you go to Blackstone and all these different one off websites and one off portals. There's no consolidation. It's mostly PDF driven. Someone is logging in, getting the PDF, reading it, taking some action, funding a capital call, receiving a distribution. And we think that one click alt should exist. So what we're really building is one click alt Schwab for private markets. That's where we're going. [Desmond Fleming] (6:16 - 6:25) And so your client base today is RAAs, is it the GPs or the fund managers themselves? Family offices too? [Ryan Eisenman] (6:26 - 6:45) Yes, a lot of family offices, about 180 of those today. Over 100 RAAs and multifamily offices. Four of the biggest top 20 banks are using us in various ways. Seven of the top 25 accounting firms. GPs, the funds themselves, if they invest in funds. So we work with a lot of fund to funds or venture firms that have. [Desmond Fleming] (6:45 - 6:47) That's like a step stone or something like that. [Ryan Eisenman] (6:47 - 6:56) Yeah, exactly. That type. Fund admins. And then we're starting to support GPs with some of their more like LP related workflows, which is a big, big space for us. [Desmond Fleming] (6:56 - 7:40) Yeah. So it's like the client management for the for the GP. Yeah. Yeah. To make it more, more simple. OK, cool. One of the things I love to do on this podcast is also to talk about the process of company building, too. So you've been at it for six, seven years now. How how have you grown as a founder in that period, as well as what have your observations been in terms of how the venture ecosystem has changed? Because 2016, 2017, totally different time for funding. That's like right in the middle of the ZURP area before people were like, oh, man, we're in the ZURP area or era. So curious how you've kind of observed that those shifts over time, too. [Ryan Eisenman] (7:40 - 8:01) Yeah. And for us, for the first three years, it was like three people, then four, then five. So we're a very small team. So it's like you don't have to do much people management. You don't have to do that much recruiting. It's a lot more of like, how do we find product market fit? We go meet with customers. We show them the latest thing. They give us feedback. We go refine the thing. We bring it back to them. We say, now, do you want to pay for it? Then we talk to the next person. [Desmond Fleming] (8:02 - 8:06) So sorry, it was the three of you for three years. That's that's really kind of lean. [Ryan Eisenman] (8:07 - 8:13) Yeah. Well, we hired a fourth person a year and a half in and then a fifth about two and a half or three years. [Desmond Fleming] (8:13 - 8:14) Yeah. OK, got it. [Ryan Eisenman] (8:14 - 8:18) Very lean. We had raised half a million dollars, essentially. And we wanted to stretch that. [Desmond Fleming] (8:18 - 8:19) Yeah. [Ryan Eisenman] (8:19 - 8:20) Because we wanted to survive. [Desmond Fleming] (8:20 - 8:20) Yeah. [Ryan Eisenman] (8:21 - 8:23) What do you need to do as a startup? Don't die. [Desmond Fleming] (8:23 - 8:25) Yeah. It's like the number one rule. Yeah. [Ryan Eisenman] (8:25 - 8:25) Don't run out of money. [Desmond Fleming] (8:26 - 8:26) Yeah. [Ryan Eisenman] (8:26 - 8:41) So we were really lean and only once we were starting to repeatedly sell felt like we had good product market fit, had more people buying our product. We're like, OK, great. Now we can afford to hire more people and justify it. And we could raise more capital. So then we raise a seed round in twenty twenty one. [Desmond Fleming] (8:41 - 8:55) Did you ever feel any tension from that first investor who gave you the half a million bucks or whatever it was of the pressure of growing faster? Because I do think that's one of the tradeoffs or cardinal sins that venture investors impose on entrepreneurs. [Ryan Eisenman] (8:56 - 9:14) Maybe a little bit like our investors have been great at seeing the long term vision and allowing us to run the company in the way that we think makes the most sense. But I think there definitely is always that pressure, because if you're an investor, you're like, I want to know as quickly as possible, will this thing work or die? And I can move on to the next thing because you have multiple bets at the same time. We have one bet. This is like this. [Desmond Fleming] (9:14 - 9:16) Yeah, that's your life. You're levered to it. [Ryan Eisenman] (9:16 - 9:28) Yeah. So we need to make this thing survive. So we don't want to like run too fast. And I think there are probably places where our original investor thought we could go faster and should be a little more aggressive and probably we should have. [Desmond Fleming] (9:28 - 9:28) Yeah. [Ryan Eisenman] (9:29 - 9:38) And it's like hard to Monday morning quarterback because maybe we would have missed a key inside or maybe would have like mishired or done something that would have put us on a different path. [Desmond Fleming] (9:38 - 9:38) Right. [Ryan Eisenman] (9:38 - 9:54) And so we're like pretty happy with where we are today. Granted, we have like so much more. And we think that it's really still day one here at Arch. And but I think there's always this ability to or this this need to take in information and take in suggestions and then figure out how it applies to our company at our time. [Desmond Fleming] (9:54 - 10:17) What was one of those kind of were there any inflection points early on in terms of that iterative loop of talking to customers where you figured out did you viscerally feel like, OK, there's a repeatable motion here. I know what to say, when to say it, who to say it to. Yeah. And therefore, I can translate my learnings to someone else on the on the sales side. [Ryan Eisenman] (10:18 - 11:12) Yeah. May of 2020, we were kind of like struggling a little bit with sales. It was like two and a half years in. We had some customers, but we couldn't figure out that repeatable motion. We'd have meetings with people and be like, it's really great what you're doing. I've been waiting for someone to build this for years. And they'd be like, great. So you're ready to buy. And they're like, no, like this seems like it's a lot of work to get started or like, do you have a sock on it? There were a lot of reasons why people wouldn't buy. So we consulted with some people who had done a lot of enterprise sales and had done sales and rebuilt our process. And then we got a sock on it. We pitched for a very large customer. We kind of redid our platform and our sales collateral. And so in order to try to win this really big platform RAA that we didn't actually win until two or three years later, we just tightened every process at Arch. And that gave us the go to market, the pitch, the product in order to actually start to sell. [Desmond Fleming] (11:12 - 11:15) So did you change the sales pitch or you changed the product or both? [Ryan Eisenman] (11:16 - 11:37) Both. It was like the same core product, but we built dashboards in, we made it more visual. We thought about like, what does someone need if they're buying this as an RAA, as an investment advisor or buying this as a family office. And we just kind of had this like tightening towards this goal of let's go try to win this really big client that would have been probably like 10 X the size of who we were at the, at the time. [Desmond Fleming] (11:37 - 11:38) Yeah. [Ryan Eisenman] (11:38 - 11:40) Uh, didn't get that client, but we learned a lot along the way. [Desmond Fleming] (11:40 - 11:49) Got it. And so what, if I call that a rebuild generally, and it starts in May, 2020, how long did that take? [Ryan Eisenman] (11:50 - 12:09) And I would say it was a little bit less of a rebuild than it was just like a tightening of the overall approach and sales pitch. And maybe it was like two months or so of like real work towards some of this goal of like being enterprise ready. And then other things like getting our sock out, it took maybe a little bit longer than that. [Desmond Fleming] (12:09 - 12:11) Yeah. It's procedural. [Ryan Eisenman] (12:11 - 12:13) Yeah. I think we were an early Vanta client at the time. [Desmond Fleming] (12:13 - 13:06) Oh, great. Great. That's, that's very cool. So you're building the business. It's probably 2020. What were some of the other unlocks? I'm curious to hear between, you know, raising your seed in series A, how that game changed as well. Because I think one of the things that occurs in venture is that you as the founder, your life and your job is constantly changing, right? You alluded to it early on where tighten a group of people, you're the person basically knocking on the door, doing the sales, probably also managing and touching product product. And now today you are starting to become a manager of managers. Cause I think you have something like 160 employees today. You've referenced probably over a hundred customers as well. So curious what changed between the seed to the series A and then also curious what changed from the series A to the series B. [Ryan Eisenman] (13:06 - 13:26) Yeah. So when we raised our seed round, we still hadn't hired anyone for sales. So I was like the only person doing sales. Then we hired a first salesperson and this woman named Kelly Moore. She's been awesome. Has like really helped us think through like repeatability of sales and structure and is a huge advocate for clients and like people generally love her. [Desmond Fleming] (13:26 - 13:27) She's still with you guys. [Ryan Eisenman] (13:27 - 14:42) Still with us today. A huge culture carrier at the company is one of those like early founding employee types. And then when we raised our series A we had just brought on our second and third seller. So starting to go from founder led sales to having a couple of sales people to a sales team. And now we have a sales manager and nine sales reps and folks that can like make that part of it scalable. I think there's this part on the go to market side of starting to show repeatability of sales. If we put a dollar into sales, can it produce $3? If we hire a person, can they produce value? Can this, can we see growth over time? Which I think is something that VCs care a lot about. And then similarly on the product side, it's like how do we continually build our product from like a single product to a more valuable product to an easier product to onboard and use to go from having a single skew to multiple different products that we can sell to clients. Cause you might want everything we have or you might want the skinny bundle or maybe you need these new add on features that give you better business intelligence, the ability to diligence new investments, um, solve other problems, understand how much SpaceX and Andorol and other portfolio companies you own through your managers. So we're building a lot more of like the deep tech stack that you need to manage private market investments. [Desmond Fleming] (14:43 - 14:47) Well, how would you just, do you still, how close are you to product today? [Ryan Eisenman] (14:47 - 14:48) Uh, still very close. [Desmond Fleming] (14:48 - 14:51) How would you describe your, your product philosophy? [Ryan Eisenman] (14:51 - 15:25) Uh, it's really customer centric. So when we build a new product, uh, we want to think about who are the top customers. We think like one will get a lot of value out of the product, want to be early and then we'll give us a lot of feedback. And so we have kind of these different cycles of beta programs and soft launching products and iterating with clients and in order to bring new things to market. And we're still bringing a lot of products from zero to one. Cause we think private markets are still really in their infancy and we've built a lot. Uh, we just did this recent study around how many clicks does it take to manage an alternative investment? [Desmond Fleming] (15:25 - 15:28) I think you said 5,500 clicks, something like that. [Ryan Eisenman] (15:28 - 15:41) Uh, yeah. It's like the old Tootsie roll commercial. So it's 5,500 clicks to manage a private market investment. Uh, so that's your average private equity fund or hedge fund. Uh, and we've automated about 84% of those clicks for our clients today. [Desmond Fleming] (15:41 - 15:41) Yeah. [Ryan Eisenman] (15:41 - 15:57) And replaced 84% with our platform. There's still things that live outside of our platform that you have to manage, um, like fully completing a capital call. Yeah. And so those are opportunities for us to continually push the product to turn all truly into a one click experience. [Desmond Fleming] (15:57 - 16:46) Yeah. What would that look like to you in practice from a product perspective? Because that's where you, and I'm sure you guys have a lot of thoughts. That's where you can start to see some of the like agentic or AI native workflows where, uh, you could imagine a customer has, you know, they get the message from a first marker, whomever they say, Hey, you've got a new capital call. That person might be on the go in their life and yeah, they want to execute it, but they don't want to have to go into their bank, check the end recipient. Okay. It's first mark, do the wire, yada, yada. That could all be, you know, in the future state be done to your point at a click of a button or also a voice command or text command that is then routed through AI. So do, how do you think about that kind of opportunity and the additional automation that you can bring for end clients? [Ryan Eisenman] (16:46 - 17:02) Um, I think there's a lot of great applications for AI in our business where we're big lever, we big users of AI. A lot of this though, I think would live outside of an AI system. It's like you can do things within traditional banking and APIs and you want to be extremely exact with the processes that we're kind of building. [Desmond Fleming] (17:02 - 17:04) Yeah. Uh, you can't make mistakes moving money. [Ryan Eisenman] (17:04 - 17:25) Yeah, exactly. Um, so there's, there's kind of more traditional, uh, technologies for things like money movement that we might leverage. Uh, but there are a lot of changes happening every day with like banking as a service provider. Some of like the FedNow ways to like pay more quickly. Um, and so we're looking at a lot of things around how can we bring more modern technology. [Desmond Fleming] (17:25 - 17:43) So if we're talking about there's just low hanging fruit within FinTech writ large of driving more automation, that's one hand. And on the other hand, it is saying, how can we leverage LLM systems to provide more insights for your customer base? What are you guys thinking about on this right hand side, if anything? [Ryan Eisenman] (17:43 - 18:16) Oh yeah. So we introduced the first of its kind, uh, AI summary for investor letters, uh, because venture firms and private equity firms spend a lot of time writing commentary to their investors. And then the number one problem is these letters live in a portal, so no one gets them. Uh, but then some people get the letters, but then every fund typically reports around the same time, which is most quarters, 45 days from the end of the quarter. Um, so then all those letters arrive at the same time and you have hundreds of pages of reading. Maybe someone who's like the CIO of an, of an allocator reads them or someone reads the letter, but not everyone does. [Desmond Fleming] (18:16 - 18:16) Yeah. [Ryan Eisenman] (18:16 - 18:32) Um, and maybe they read them late. So we summarize the letters automatically, put them into an email and automatically deliver that email to our clients. So then they can very quickly and very easily understand the summary of what they need to know. And then we make all that context searchable for them within their arch platform. [Desmond Fleming] (18:32 - 18:43) Yeah. And then you could, you could almost imagine that then there's like a, uh, like a next step automation or next step recommendation based off of everything that's going on in someone's portfolio. [Ryan Eisenman] (18:43 - 19:29) Yeah. It's like every document has a workflow associated with it. So firms will send like a, a, an election of, Hey, you're getting an in-kind distribution. Do you want to buy, sell, transfer to this other account? Like, what do you want to do? And so we can bring more context into those decisions, into the key decisions so that when you get that election of, Hey, you're getting shares, uh, we can tell you how many shares you own, not just through that manager, but through other managers. We can help you understand what rounds have been raised and have like the ability to research. We can make it easy to see all the commentary around that investment, uh, and the investment's history. And so the goal is kind of back to that pyramid of help people make better decisions by removing time spent on non-critical decisions and giving them more context for the actual decisions. [Desmond Fleming] (19:29 - 20:05) Yeah. Can we go back to one of your comments of wanting to build the Schwab for private markets? I think Schwabs are really fascinating business. Cause I, you know, outside looking in, I think most people view them as just like the distribution platform where you can like trade and purchase different, uh, uh, products, but they make a lot of money off of banking. So I'm curious about how you think about the uniqueness of being able to own the transaction layer, whether it's in private markets, in public, poor public markets, and the, uh, inspiration that you may take from a business model like Schwabs. [Ryan Eisenman] (20:06 - 20:50) Yeah. Um, I think there, when you build a platform that's valuable to your end customers and you listen to your end customers, you find all these little opportunities to serve them in better ways and in a more integrated way. Um, and so we've started to talk to our customers around like related banking problems. We found that a lot of our customers keep large amounts of cash in non-interest bearing accounts or accounts where they're making 0.1%. And this can like meaningfully affect the return on their investments and meaningfully affect things that they can do, whether in their own personal lives or philanthropically. So we think that there's an ability to like, it's kind of like, we talked about if you give a mouse a cookie, if you build one click capital calls, then you might be able to help people better optimize where their cash sits, um, and have better intelligence around, um, their assets in different. [Desmond Fleming] (20:50 - 21:16) So what does that, what does that, uh, to contextualize that a little more, a customer of yours, let's make it up and say it's a single family office. They may be expecting capital calls across 10 different funds and they're like, Oh, this is gonna be a pain to deal with. Uh, but they may keep that in like their, I guess it's the business checking account that's not yield bearing. And that that's one of the issues that's come up. [Ryan Eisenman] (21:17 - 21:30) Um, yeah. And it depends. Like every family office does things in different ways, but like they may keep some cash in a highly yield bearing account. And then there might be several hundred thousand dollars that sits in a non interest bearing account. And that's just like opportunity. [Desmond Fleming] (21:31 - 21:43) Yeah. To a certain extent, it's free money for both of you guys. If it's managed properly. Okay, cool. What is it like, um, selling to family offices? That's a pretty opaque, uh, group of people to sell into. [Ryan Eisenman] (21:43 - 21:45) Yeah. Uh, really hard at the beginning. [Desmond Fleming] (21:46 - 21:46) Yeah. [Ryan Eisenman] (21:46 - 21:50) Um, because they're not seasoned tech buyers. [Desmond Fleming] (21:50 - 21:51) Yeah. [Ryan Eisenman] (21:51 - 22:08) Uh, so they're not used to buying software and they are probably pretty risk averse and it's hard to like reach them, um, and get in. And so it took a long time and a lot of like trying, failing, trying to figure out what we, what we need to do and then trying again. [Desmond Fleming] (22:08 - 22:10) What were some strategies early on? [Ryan Eisenman] (22:10 - 22:20) Early on it was like asking for advice and trying to understand like what people need so that we could understand. Okay, great. You said we don't have this. Now we have this. Are you ready to buy? [Desmond Fleming] (22:20 - 22:20) Yeah. [Ryan Eisenman] (22:20 - 22:43) And just continually iterating on the product. And for us it's make the cost of using us lower, make the benefits higher. And then there's like real costs and then perceived costs and benefits. And so it's like having security buttoned up is really, really important. But like if we can get a warm introduction to a family office from another family office that they trust, that makes everything so much easier. [Desmond Fleming] (22:43 - 22:43) Right. [Ryan Eisenman] (22:43 - 23:01) And over time we see that there's this flywheel of people using the platform really liking it and sharing it with others. And so 44% of our clients came to us through a referral from another client. Oh wow. So it's like this really strong embedded virality of people using the platform and sharing it with other people. [Desmond Fleming] (23:01 - 23:15) Yeah. It's funny, you know, whether it's RAs, family offices, you know, the bank platforms as well, very network industry financial services where everyone's a little bit of, you know, one degree removed from one another. [Ryan Eisenman] (23:15 - 23:25) Yep, exactly. And then there's a lot of crossover because every investor or family office has an accountant, those accountants support different advisory firms. So there's a lot of crossover. [Desmond Fleming] (23:25 - 24:03) Yeah. You talked about your team from a sales perspective is now nine people or so. How are you thinking about scaling go to market? Because again, at your size, I don't know what the growth is, but keeping up, you know, 10, 15, 20% month on month growth, whatever it is, you have this compounding effect where each year or each month you may be having your net new largest month or that's happening more frequently. Are you using kind of direct hand to hand combat of go to market sales? Are you thinking about, you know, ways to manage that enterprise scale where it's more partnership like sales as well? I'm just curious about how you're, how you're thinking about that. [Ryan Eisenman] (24:04 - 24:29) Yeah, kind of a mix of both. So we just hired our first marketing person, pretty late, probably seven years into the company. But now we're thinking about like, okay, we should do more marketing to really think about the story we're telling and make sure we're consistent and make sure that we make it easy for customers to know who we are and what we stand for. It's like, we care about customers. We're going to be here for a long time and we're innovative. And if you send us a message, we'll respond really quickly. Our response time is 12 seconds in platform. Wow. [Desmond Fleming] (24:29 - 24:32) You track that too. Yeah, we got that. [Ryan Eisenman] (24:32 - 24:44) We're rigorous about customer service and customer support. So we track all these things and our SLA is 30 seconds for that team. But the team itself is like really competitive. The team wants to do better every, I don't know how they're going to do better next quarter. [Desmond Fleming] (24:44 - 24:46) Get that from 12 to nine. [Ryan Eisenman] (24:46 - 24:48) Yeah, exactly. They're trying. [Desmond Fleming] (24:48 - 24:52) Yeah. Do you incentivize people for that or is that just like a cultural thing? [Ryan Eisenman] (24:52 - 24:53) Cultural thing. [Desmond Fleming] (24:53 - 24:53) Yeah. [Ryan Eisenman] (24:53 - 24:54) Yeah. Really cultural. [Desmond Fleming] (24:54 - 25:00) And do you think that was intentional or a by-product of how you and your co-founders operate? [Ryan Eisenman] (25:01 - 25:59) I think we've always really cared about customers and had this understanding of it's a really tight knit industry. I like this quote, which I feel like is a Charlie Munger quote, which is like short run markets are voting machines, long run they're weighing machines. So it's like, if you do a great job, in the short run, like someone else can market better than you and win. But in the long run, if you just provide the best product and the best experience, then you win. And so we've always been obsessed with customers and serving customers well and being an advocate for our customers and having them see us not really as a vendor. We never really liked the word vendor more as like a thought partner and an innovation partner for them. I think that's carried through several of the teams at Arch. We have a really strong head of operations who cares deeply about customers as well. And she stood up this support function. And then people within the support team took that mandate even further. And so it's really like been self-generated and hopefully it's just like a prolific culture thing within the company. [Desmond Fleming] (25:59 - 26:14) What has been the most difficult thing about entrepreneurship? And then what is maybe, I'll frame it as an unexpected joy or benefit of running your own company in the past year. You're coming on a decade of doing it. So that's pretty unique. [Ryan Eisenman] (26:14 - 27:02) Maybe the hardest thing is just the need to continually prioritize. It's like work's never done. There's never a point where you're like, Oh, I've done everything I can do for the day. And yeah. So it's like, what's important, what's urgent, how do we better understand that matrix and how do we optimize for like the things that need to happen today or the things that we need to like make sure we're working on that maybe aren't urgent, but are important. So thinking with some of that in mind, the joy is just like every day we get to come in and create, we get to build new things, we get to launch them to customers, hear their feedback, refine the product. It's pretty high agency. And we hope that employees feel that as well, where it's like I can actually have a huge impact on customers. I can have a huge impact on the team that I work with and on the industry. And then we just want to get 1% better every day and do this for a really long time. [Desmond Fleming] (27:03 - 27:05) Did you have an inkling you wanted to be an entrepreneur? [Ryan Eisenman] (27:06 - 27:23) I've been keeping an idea list for several years before I started Arch and just was interested in like what things exist in the world and why certain things don't. And so there were like kind of some notions of it. It could be cool to start something. But it was really just like, this was the idea that really mattered. [Desmond Fleming] (27:23 - 27:48) One thing that I hear a lot especially in venture and tech ecosystems is people have an influence and sometimes those influences can come from, you know, traditional sources. Like they read an article about another founder in Fortune or Wired or they see it in TechCrunch. I'm curious if you had any influences that helped you want to, you know, jump into the fray. [Ryan Eisenman] (27:49 - 28:28) Well, my great grandfather was like kind of an entrepreneur and I guess like truly an entrepreneur. He ran a small general store in a small town in Kentucky. And so it kind of grew up on some of those stories of what it's like to truly serve customers and like think creatively of, okay, well we can, some people might not have money to buy goods, but we can trade goods for scrap. And you collect the scrap and take the scrap to trade that for money. And then you can take the money and buy more chickens and you can use the chickens to create more eggs and kind of thinking about like how everything is connected and how to be like pretty scrappy in that environment. And then similarly with my grandfather, I kind of grew up on like stories of building. [Desmond Fleming] (28:29 - 29:49) Very cool. I know we're jumping around here a little bit, but another one, another one of the topics that I do want to talk about is coming back to the theme of what's going on within private markets. So first of all, it feels like private markets are increasingly growing. You know, the amount of public companies over probably the past decade has gone from 8,000 to 4,000 public companies. Private companies are staying private longer. They're getting bigger about 83 or 87%. I forget the statistic of companies that are doing more than a hundred million of revenue or also are private today. And you've talked about this theme of making private markets operate more similar to public markets. I'd love to unpack that and understand how you think about the component parts that get you to that, or even what you think the main problems of achieving that that vision is. Cause I, you know, I do think it'd be, I think it'd be cool. I think it would be great for everyone if private markets did operate more like public markets, but also I think most importantly for the average investor. So like let's throw out QPs or credit investors having that same level of access is, is super important too. So I know that was a multi-layered question, but would love to get your feedback. [Ryan Eisenman] (29:49 - 31:02) Yeah, for sure. Well if you just turn private markets into public markets, then you like might, you might lose like some of the specialness of private markets. Private markets are pretty unique and special in a lot of ways. And they have a lot of risks, but they have a lot of opportunities in them. And so I think it's not just purely about creating public markets. Cause there's a reason why some things are private versus why some are public, but it's like, there's so much friction here that doesn't need to exist. So we're just kind of following the like, where's the pain and how do we solve the pain and where's the opportunity? How do we build for the opportunity? And so I think there is a story that really matters about helping more people access private markets. Because if you are a Blackstone or an Aries or one of these large funds, you're trying to raise more capital because that allows you to do more business and grow your firm. So you need to sell more of your products to more people. And the obvious solution to a lot of folks right now, outside of maybe 401ks is the wealth management world. But the wealth management world needs better experiences because these are real people that are used to iPhones and perplexity and chat, GPT and Google and Robin hood. And then you give them interlinks or like, what is this? [Desmond Fleming] (31:03 - 31:03) Yeah. Yeah. [Ryan Eisenman] (31:03 - 31:17) Yeah. It's not like an institution that's been investing in private markets for 50 years. So you kind of have more of this like need to explore things at first principles level because you have people who are experiencing private markets for the first time and are like, this is insane. [Desmond Fleming] (31:17 - 31:17) Yeah. [Ryan Eisenman] (31:17 - 31:51) Um, and we hear all the time people saying, I don't want another K one. I'm not going to invest in private markets because I don't want another portal login and I don't want another K one. So unless the alt world solves this problem, then they're limiting their own TAM. Um, and so we think that like a big part of our vision and our journey is to solve the friction problems so that more people can invest in private markets. But we also want to like help people understand the implications of their decisions and which private market investments are good versus not. Cause I think there's also this big problem around information symmetry. [Desmond Fleming] (31:52 - 31:53) People don't know. People don't know. Yeah. [Ryan Eisenman] (31:54 - 32:09) Um, some people are professional venture or private equity investors and have a good idea of what a good fund is, a good company is versus a bad one. Other people are doing it for the first time. And anytime you're a first time buyer, you're not going to be as good of a buyer as someone who does it every day and is constantly kind of in the market. [Desmond Fleming] (32:09 - 33:02) Yeah. And it's also one of those things where it's like for, especially for first time buyers, they float toward the big brands, the companies that they know. And yeah, look, you know, are you going to lose money with Blackstone? Probably not. But is Blackstone the best risk adjusted, uh, investment for your portfolio? It depends for a lot of people. Um, so that, that's another thing that is super interesting. And I also think, have you guys ever thought about, uh, I'll frame it as GPLP matching. So obviously there's platforms like an iCapital that do this primarily for a lot of the largest funds that exist. But, you know, again, that real estate that you're building out of being able to make it incredibly simple for investors and their intermediaries to manage their private assets. Like I would argue that has to have come to come to mind for, for you guys internally. [Ryan Eisenman] (33:03 - 33:11) Yeah. I mean, there's definitely value there and there's a pull from both sides. It's like if you're an LP, you do want more deal flow and you want to know who are the great managers that are raising. [Desmond Fleming] (33:11 - 33:12) Yeah. [Ryan Eisenman] (33:12 - 33:41) And if you're a GP, even if you're a great GP, still a process to raise. Yes. Um, and so I think there are ways that we can reduce friction on that side as well. Uh, we need to think about the right way to do it. Um, cause anytime you're thinking about things that have anything to do with the marketplace, avoiding adverse selection is really important. So how do you make sure you match people to the appropriate opportunities at the right time? And then there's liability there and things that we need to think about, uh, in order to do it correctly. But it is an opportunity that is kind of adjacent to what we're doing today. [Desmond Fleming] (33:41 - 33:53) Do you think advisors will ever be disintermediated? Some people argue with RAs in particular, you know, relatively high fee to just get put into index funds. Just curious about your thoughts there. [Ryan Eisenman] (33:53 - 34:11) Yeah. I mean, like you've had two major innovations in the last decade of robo advisors and like direct indexing, which kind of have a good amount of overlap between them and then all the, uh, the, the rise of ETFs as well. There are a lot of people that said, okay, robo advisors are going to take advisors jobs. [Desmond Fleming] (34:11 - 34:11) Yeah. [Ryan Eisenman] (34:12 - 34:12) And. [Desmond Fleming] (34:13 - 34:15) All the money's going to go to betterment or wealth front. [Ryan Eisenman] (34:15 - 34:50) Yeah. And there definitely are people who don't have traditional advisors because they have a betterment account. They use Robin hood. There's a lot of do it yourself people and you can be a do it yourselfer. Um, but I think there's always going to be a very strong market for people that want a real person, professional advice. And when an actual advisor, what an advisor does may change and they may take on different opportunities or different things that they don't do today because they're constrained. Um, and they don't have tools available to like allow advisors to do certain additional tasks. Uh, but I think you're always going to need advisors. [Desmond Fleming] (34:50 - 34:58) Yeah. It's kind of like the house analogy. Like when you're selling your home, it's an emotional process. So you want to talk to someone. Do you think that's one of the main driving reasons? [Ryan Eisenman] (34:58 - 35:05) I think it's a big part of it. It's like what's one of the most important things an advisor does is when the market is going down, they say, stay in the market. [Desmond Fleming] (35:05 - 35:05) Yeah. [Ryan Eisenman] (35:05 - 35:11) Um, and they keep you rational and they're a sounding board. Uh, and that's a pretty important thing. [Desmond Fleming] (35:11 - 35:56) Yeah. Don't kill your compounding. It's 2008. This is actually a great time to buy if you can, if you have it. One of the things I love doing, uh, about this podcast as, uh, as well as other media that I've started is look, building companies is super hard. Uh, venture can also be super opaque for the version of you back in 2016, 2017, what would be the advice that you have for a founder generally wanting to start a company? And then what would be the advice that you have for a founder specifically wanting to build out? Uh, what I'll frame it as, I think you said at the intersection of, you know, infrastructure for FinTech as well as, you know, vertically focused kind of financial services platform. So curious about the advice that you would have for each of those types of personas. [Ryan Eisenman] (35:56 - 37:03) I'll echo this. We had a, um, event in our office this morning, had a Dave Gilboa from Warby Parker and Vinay Minda from blank street. I do a panel in front of our clients talking about consumer investing and building consumer companies. And one of the things that Vinay said that really resonated is like, in order to be a founder, you kind of have to be like super naive and think things will be way easier than they are. Um, because there is a lot of pain in building companies. And especially I think in this space, it's like uniquely painful. And we see people that almost every month we see a company enter this market. And then we also see a company exit this market. Cause there's all these things are actually like really complex and really hard. But I think if we were to tell, to talk to ourselves in 2016, 2017, it's just like, Hey, like really look at the long term here. Um, meet people that are too big to be our customers today, but just develop relationships with them and ask for advice and understand what do you need in a year or two years, three years, five years to be clients. And how can we start to really understand your needs and build relationships so that when we have a product that fits your needs, we already have a warm relationship and can be well positioned to sell it. [Desmond Fleming] (37:04 - 37:26) Yeah. I think that's great advice, uh, to double click on that because some of relationship building, some people are very great at relationship building and it comes very natural for you. Did you set like tactical milestones of, okay, I heard this person, I met with them, I'll follow up with them six months. Like tactically how would you encourage people to build those kinds of longterm relationships? [Ryan Eisenman] (37:26 - 37:52) I think it's just building a muscle around it. It's like when you read a Washington journal article and it talks about a person that's in your industry, that's really impressive. Like reach out to them. We found customers that way and a lot of people won't reply, but you only need one person to reply for it to be valuable. And so it's just like building the muscle, being used to getting told no, um, but just continually like showing up every day with grit and integrity. Um, and then build your reputation over time. [Desmond Fleming] (37:52 - 37:56) Yeah. Last two questions. Who's an entrepreneur that you look up to? [Ryan Eisenman] (37:56 - 38:18) The quick answer that came to mind today is like my co-founders are awesome. Really look up to them. They have almost the opposite strengths that I have. Uh, and they're the perfect people to build this company with because we can like really block and tackle for each other in different ways and solve problems for each other and do things that the other ones aren't good at. Um, and so really enjoy building the company with them. [Desmond Fleming] (38:19 - 38:32) And then last question, uh, this is an offer for you to make an ask. If you had, what are the things that, you know, for the people listening, watching, whatever, what are the things that they could help you out in your process of building art? [Ryan Eisenman] (38:32 - 39:01) Yeah. If you know, investment advisors, accountants, institutions, endowments, foundations, pension funds, funder funds, fund admins, uh, we would love to talk to them and see if they're great candidates for what we have today and then pick their brain on what we should be doing in the future. Cause if we take our own advice of we have a lot more to build, so we should be talking to people all across the spectrum of what do you need from your private market investments? What do you need from your PE managers? What do you need from your portals? Uh, cause we have, we have a big future to build. [Desmond Fleming] (39:01 - 39:03) Yeah. Love it. Ryan, thanks for coming on. [Ryan Eisenman] (39:03 - 39:05) Yes. Thanks so much. This is great. Of course. Great.