Latest / Giant Ideas / "A BILLION dollars came in to Mercury in a few hours" Mercury CEO on Lessons from SVB's Failure & How To Lead Through a Crisis

Transcript

"A BILLION dollars came in to Mercury in a few hours" Mercury CEO on Lessons from SVB's Failure & How To Lead Through a Crisis · Giant Ideas

• 0:00
  SPEAKER_00: That doesn't mean you get to be emotional as a CEO.
• 0:02
  SPEAKER_00: As a CEO, it's actually like you kind of have to be very like, hey, we're dealing with this, it'll be fine.
• 0:07
  SPEAKER_00: No matter what you have to say, it's gonna be fine, and we're on top of this.
• 0:10
  SPEAKER_00: If you sound like you're panicking or worrying and stressing, that is infectious.
• 0:15
  SPEAKER_01: Hello, and welcome to Giant Ideas with me, Cameron McLean.
• 0:19
  SPEAKER_01: And me, Tommy Stadlin.
• 0:20
  SPEAKER_01: We're co-founders of Giant Ventures, which builds and backs purpose-driven companies.
• 0:24
  SPEAKER_02: At Giant, we're lucky to meet extraordinary people with giant ideas that are changing the world.
• 0:29
  SPEAKER_02: This podcast brings you behind the scenes access to those ideas and the inspiring stories of the people behind them.
• 0:35
  SPEAKER_01: We explore how one giant idea can kickstart a billion-dollar company, shape culture, and transform life as we know it.
• 0:42
  SPEAKER_02: So this is the last episode of Giant Ideas Before the Holidays.
• 0:45
  SPEAKER_02: We wish you all a Merry Christmas and a happy holidays, and we will see you back here in 2026 for more fantastic interviews about Giant Ideas.
• 0:56
  SPEAKER_02: Emad, welcome back.
• 0:58
  SPEAKER_02: Today we're going to dive into what it takes to survive a crisis, namely the SVB run on the bank.
• 1:04
  SPEAKER_02: But first, we're going to do a small segment that we do with all our guests, which is to ask them if you had to pick three photographs that define your life and what you've learned from it, what would they be?
• 1:14
  SPEAKER_00: I don't know if I was prepared for that.
• 1:28
  SPEAKER_00: That was a really defining moment for me, like coming out to San Francisco and being part of this community and uh like really learning to be an entrepreneur.
• 1:37
  SPEAKER_00: I went to a lot of Y Combinator dinners.
• 1:39
  SPEAKER_00: I actually did my batch dinners and then I would almost did all of them until 2009.
• 1:44
  SPEAKER_00: Uh, just because it was just like so amazing to talk to entrepreneurs and like learn learn all these stories.
• 1:49
  SPEAKER_00: Uh so I yeah, I love talking to entrepreneurs.
• 1:51
  SPEAKER_00: I actually have my own podcast that does that as well.
• 1:53
  SPEAKER_00: Uh but that was like a big uh defining picture and moment for me.
• 1:58
  SPEAKER_00: Uh uh Yeah, I'm trying to think of other kind of defining pictures.
• 2:03
  SPEAKER_00: I'm not like a very nostalgic kind of person, uh, but there's a picture of me from when I was a baby, you know, like on my on my dad's chest.
• 2:11
  SPEAKER_00: Uh and I just think of that picture just because I I also have a baby right now who's eight months old, and that picture I was around that age.
• 2:19
  SPEAKER_00: So and I I feel like when you become a parent, you kind of uh realize all the things that your parents did for you because before your parents you just kind of take take them for granted.
• 2:29
  SPEAKER_00: Uh and so that I guess that's the second picture.
• 2:32
  SPEAKER_00: I'm trying to think of a a third defining picture.
• 2:35
  SPEAKER_00: I mean, there is a picture actually when we were uh at Mercury when we were like a nine-person company, and Joe Montana came to this.
• 2:42
  SPEAKER_00: Like Joe Montana runs this like uh VC fund.
• 2:46
  SPEAKER_02: And he's uh he's a big former football player, American football player.
• 2:49
  SPEAKER_00: Yeah, he's he's he was huge.
• 2:50
  SPEAKER_00: But anyway, he came into this like we were working in like a live work space.
• 2:54
  SPEAKER_00: So we're like, it was basically an apartment, and he came into the apartment to speak to us, and we have a picture of like the team of nine and him.
• 3:01
  SPEAKER_00: Uh and it was kind of it's kind of like a fun picture from the early.
• 3:04
  SPEAKER_02: Does he tower over everyone on the team?
• 3:06
  SPEAKER_00: Is he noticeably uh well, you know, no, he's he's not played sports for a while.
• 3:10
  SPEAKER_00: He's definitely taller than everyone, but he's not like that muscular.
• 3:13
  SPEAKER_00: He was also a quarterback, so I think uh they they tend to be like kind of uh nimble.
• 3:18
  SPEAKER_02: Fantastic.
• 3:19
  SPEAKER_02: And YC back then was just totally different to what it is now.
• 3:21
  SPEAKER_02: I remember going out there in sort of 2014, tending a couple demo days, but you were there even earlier.
• 3:26
  SPEAKER_02: It was a really small, kind of informal community, right?
• 3:29
  SPEAKER_00: No, I mean it was tiny.
• 3:31
  SPEAKER_00: Like more than half the companies would literally like stop the day after demo day.
• 3:35
  SPEAKER_00: Like they wouldn't raise money, and that was the end.
• 3:37
  SPEAKER_00: Because there was only, you know, they only gave us$15,000.
• 3:40
  SPEAKER_02: I want to take you back to March 2023.
• 3:44
  SPEAKER_02: Silicon Valley Bank has failed after a massive bank run, making it the third largest bank failure in United States history.
• 3:52
  SPEAKER_02: What was going through your mind and what was happening at the Mercury headquarters that weekend?
• 3:57
  SPEAKER_00: Yeah.
• 3:58
  SPEAKER_00: Uh it's definitely like a a microcrosm of like a startup roller coaster.
• 4:05
  SPEAKER_00: Because it started on like a Thursday, and on Thursday it was, you know, it was all kind of from Mercury's perspective.
• 4:10
  SPEAKER_00: So Mercury was you know, at least for early stage startups, a main competitor to SVB at that point.
• 4:15
  SPEAKER_00: Uh, you know, we'd we'd done pretty well.
• 4:17
  SPEAKER_00: Uh we're already kind of a unicorn at that point.
• 4:20
  SPEAKER_00: Uh, but they were definitely the 800-pound gorilla that we were like kind of you know uh up against.
• 4:26
  SPEAKER_00: Uh so the first day, you know, there's some of these rumors.
• 4:30
  SPEAKER_00: Yeah, I I guess like I was just like, okay, whatever, you know, there's these rumors, like I think it's probably silly.
• 4:36
  SPEAKER_00: But the you know, our number of signups and number of deposits is like going crazy because all these people are trying to like move money out of SVB.
• 4:43
  SPEAKER_00: And we tried to be like very respectful about it.
• 4:45
  SPEAKER_02: We didn't kind of promote ourselves or we so you were seeing in real time as the rumors were spreading, more and more deposits come into Mercury.
• 4:52
  SPEAKER_02: So you were kind of seeing this correlation.
• 4:54
  SPEAKER_00: I mean, not just a small amount, like a billion dollars of deposits came into just Mercury in like a few hours.
• 5:00
  SPEAKER_00: Uh so this is like what like the biggest growth, you know.
• 5:04
  SPEAKER_00: You can imagine as a start, like we have like you know, sequel airbacked companies that would be like hard to like you know get on a call, uh going like, hey, give me an account in like five minutes.
• 5:14
  SPEAKER_00: You know, like okay, we'll give you an account in five minutes.
• 5:16
  SPEAKER_00: Uh uh and yeah, these were like established companies and they were relatively uh easy to verify and like uh do KYB and KYC.
• 5:25
  SPEAKER_00: My approach with all these things is to try to build product because that's what it's about.
• 5:30
  SPEAKER_00: Uh so we made this process where but we moved uh something to the top to that said, like, hey, if you're an SVB customer, uh connect your SVB account uh and we'll prioritize uh based on that.
• 5:42
  SPEAKER_00: So we you know we were basically like if you're not an SVB customer, you don't need a bank account in these next three days or five days.
• 5:49
  SPEAKER_00: Uh so we would just put you at the bottom of the queue and all the all the SVB customers we put at the top of the queue.
• 5:54
  SPEAKER_00: So we built a little bit of product in it, but it was mostly like you know, mostly at that point, I thought it was kind of overblown uh and we would grow a lot because of this like kind of unfortunate situation for them.
• 6:05
  SPEAKER_00: And then, you know, halfway through Thursday, all the wires stop, but you know, we still don't know what's going on.
• 6:10
  SPEAKER_00: And then it's Friday when you know the FDIC walks in and shuts down the bank.
• 6:15
  SPEAKER_00: And at that point, kind of the emotion kind of flips the other way because it's like, hey, you know, if if SVB, which is like a 40x 40-something year old bank that's like you know, public company worth 20 billion plus can like basically fail, you know, why is S why is Mercury safe, which is like a startup, and you know, this is the kind of questions our customers were asking us.
• 6:37
  SPEAKER_00: And you know, all day I'm on on calls with customers saying, like, hey, you know, uh, we don't have the same FTIC insurance uh situation, we're sweeping money to other banks, uh, and you can also use our US government T-bill product and your money is safe, etc.
• 6:53
  SPEAKER_00: But obviously, like uh yeah, the SVB CEO was also saying your money's safe just before this happened.
• 7:00
  SPEAKER_00: Uh so people were, and there was just like this like crazy sense of like uh fear in that on that Friday.
• 7:07
  SPEAKER_00: And and then yeah, so the whole team was working really hard.
• 7:10
  SPEAKER_00: We were still on even though no money could move out of SVB, we had like this big backlog of like customers that wanted to sign up.
• 7:16
  SPEAKER_00: So the whole team was working kind of uh through the weekend, kind of signing customers up, and you know, on Saturday morning, I was like, hey, I'm I keep having the same conversation with people where I'm trying to explain like the money's safe, and you know, why don't we make a way to visualize where the money is exactly?
• 7:34
  SPEAKER_00: Uh and also extend our FTIC insurance.
• 7:37
  SPEAKER_00: So so we ended up doing two things.
• 7:38
  SPEAKER_00: Number one, I worked with our partner banks to you know, at that point we had one million FTIC insurance, we extended it to three million and then five million by the end of the week.
• 7:47
  SPEAKER_00: I you know, before this point, people just hadn't asked that much, like they didn't they didn't think or worry about like whether their bank deposits were safe.
• 7:56
  SPEAKER_00: So we worked with our partner banks to kind of distribute the funds kind of more broadly to the kind of sweep networks and extend the FTIC insurance.
• 8:03
  SPEAKER_00: So the uh the basic FTIC insurance is 250k in the US and we extended it to 5 million.
• 8:09
  SPEAKER_00: Uh and then the second thing we did is we built this product which we called Mercury Vault, uh, which helped you see, you know, yeah, how much more money do you have than FTIC insurance?
• 8:21
  SPEAKER_00: Have I got the US government T-Bill Mutual Fund set up?
• 8:23
  SPEAKER_00: Uh, if you don't have it set up, like helped you get it set up, uh, and then showed you, you know, like is your money like kind of covered between these two products?
• 8:32
  SPEAKER_00: Uh and that really like people really like that.
• 8:38
  SPEAKER_00: Like instead of you know, us talking about it, uh, we were like showing them an actual product and transparency, but it also showed how we were different from an SVB because like we weren't lending against these deposits, our partner banks were sweeping these deposits to a broad set of banks.
• 8:53
  SPEAKER_00: Uh so it was a very different proposition.
• 8:55
  SPEAKER_00: So, yeah, there was a ton of fear even afterwards.
• 8:57
  SPEAKER_00: So, actually, you know, First Republic failed and then was acquired uh basically a week afterwards.
• 9:02
  SPEAKER_00: So, so this kind of fear around like uninsured deposits kind of continued for a while, but you know, we really flipped the script on that story thanks to that product uh and the work that the team did there.
• 9:12
  SPEAKER_00: Uh and the whole team went away, you know, at that point, I don't know exactly how big we were, probably like 350 or something.
• 9:19
  SPEAKER_00: But you know, most of the time when you have a bigger company, everyone's not working towards like round one very specific thing.
• 9:25
  SPEAKER_00: You know, we're all doing different things, but but it was kind of a fun moment for the for the company where we were all working on this like one objective, like you know, getting customers signed up and like answering the questions and like building uh Mercury Vault.
• 9:36
  SPEAKER_00: Um so even now, like if you ask you know employees of Mercury who who were here back then, a lot of them would say that was the best uh best weekend they had at Mercury, but it was like kind of intense work and stress.
• 9:48
  SPEAKER_02: Are there any um are there any leadership lessons that you take forward?
• 9:51
  SPEAKER_02: Or you think it's such a specific moment in time?
• 9:53
  SPEAKER_00: No, I think there's like two things.
• 9:56
  SPEAKER_00: Number one, you know, I I believe a lot of kind of transparency and openness, but I think you do have to couch your like that doesn't mean you get to be emotional as a CEO.
• 10:07
  SPEAKER_00: Like I think as a as a CEO, it's actually like you kind of have to be very like, hey, we're dealing with this, it'll be fine.
• 10:13
  SPEAKER_00: And it normally is fine, but like no matter what, you have to say it's gonna be fine, and we're on top of this.
• 10:18
  SPEAKER_00: If you sound like you're panicking or worrying and stressing, that is infectious.
• 10:22
  SPEAKER_00: So I think that's one thing I I've tried through these any difficult times to like I'm very open with like, here's all the problems, here's all the things that could go wrong.
• 10:30
  SPEAKER_00: But I try to be like optimistic and very like calm as a person, and that's how I project uh project things.
• 10:38
  SPEAKER_00: Uh number two, I do think I don't know if this is a leadership lesson, but it's definitely like a lesson for Mercury, is that we try to answer with product.
• 10:47
  SPEAKER_00: Uh like that's our strength.
• 10:48
  SPEAKER_00: Uh like words are cheap.
• 10:50
  SPEAKER_00: I think it's better to make something and like have that be your answer to your problem.
• 10:54
  SPEAKER_00: Uh uh I don't know if every crisis has like a product solution.
• 10:58
  SPEAKER_00: Uh, but I think there is like something to it.
• 11:00
  SPEAKER_00: Like, I think uh doing something, and like doing something just feels better than like talking, like as a as a builder, like uh giving the team like something to build and like talk about the thing we build.
• 11:11
  SPEAKER_00: And like uh it also like speaks to our customers to say, like, hey, you know, these people aren't like sitting down over the weekend, like sending emails, these people are like building something that's gonna like actually help improve my experience in Mercury.
• 11:23
  SPEAKER_00: Uh, and that's like so different from like what any uh like large financial institution would do, right?
• 11:28
  SPEAKER_00: Like the you can't imagine a bank like building a product over over a weekend to try to like uh solve a customer problem.
• 11:36
  SPEAKER_02: So it was a it was a crazy time.
• 11:38
  SPEAKER_02: I remember it very I think it's the whole the whole of the technology ecosystem, Silicon Valley and beyond, was just holding their breath, right?
• 11:44
  SPEAKER_00: It was like Sunday at like 4 p.m.
• 11:46
  SPEAKER_00: Uh the FTIC was like all deposits are insured, and everyone was like, Thank God.
• 11:50
  SPEAKER_02: And in a way, bailed out bailed everyone out, if we if we're honest.
• 11:54
  SPEAKER_02: Um I think it was the right decision.
• 11:56
  SPEAKER_00: It definitely bailed it out.
• 11:58
  SPEAKER_02: But I I remember thinking like you on Wednesday, no, this this is like this seems far-fetched.
• 12:03
  SPEAKER_02: And then Gary Tan's email to YC got forward to me by one of my friends in the YC batch, and then I saw the found the the email from Peter Thiel, uh founders' fund, and then I was like, oh, this is uh this is gonna be a self-fulfilling prophecy at this point.
• 12:16
  SPEAKER_02: This is happening.
• 12:17
  SPEAKER_02: And uh you did what you could, right?
• 12:19
  SPEAKER_02: But uh it was it was hard to do too much at that moment in time.
• 12:23
  SPEAKER_02: Um and how did you take that moment in that crisis and have you solidified it then?
• 12:27
  SPEAKER_02: I mean, it seems like it was a pretty important moment in Mercury's uh success trajectory.
• 12:31
  SPEAKER_02: You've got two billion deposits in just four months, 26,000 customers.
• 12:36
  SPEAKER_02: You know, how did you uh kind of drive the organization forward after that huge influx?
• 12:40
  SPEAKER_02: How did you ensure that the customer stayed around?
• 12:43
  SPEAKER_00: Yeah, I mean there was there were two aspects that we wanted to like do well.
• 12:47
  SPEAKER_00: Uh number one, obviously that set of customers we wanted to do a great job of.
• 12:51
  SPEAKER_00: And uh in general, banking is very sticky, but this was like a weird moment where people had to like deal with this.
• 12:59
  SPEAKER_00: So you know, we we really wanted to uh spend time with them, right?
• 13:03
  SPEAKER_00: Like make them feel like, hey, this is you know, this is what features.
• 13:07
  SPEAKER_00: I mean, I would say our product was far better.
• 13:09
  SPEAKER_00: So like, you know, most people who experience it don't want to leave.
• 13:13
  SPEAKER_00: Uh but but we also had to like speak to like, you know, this is really safe and like this is this is how the FTS is so like you know, a lot more around like that transparency and like why where your money is and what it's doing.
• 13:25
  SPEAKER_00: Um and we ended up yeah, I haven't seen the recent stats or anything, but I think six months later 96% had like stuck around.
• 13:32
  SPEAKER_02: It seems like products your superpower, Ahmad.
• 13:34
  SPEAKER_02: You've come back to it a few times.
• 13:35
  SPEAKER_02: Yeah, is that it?
• 13:36
  SPEAKER_00: Yeah, uh I mean I would hope so.
• 13:39
  SPEAKER_00: Uh I think like I think probably Mercury superpower is like a combination of product and like real customer centricity.
• 13:46
  SPEAKER_00: You know, it's not the product doesn't stop at like the design and feature experience, it's also like what's the customer support product, what's the compliance product?
• 13:54
  SPEAKER_00: You know, we try to think about that end-to-end experience as like the product experience.
• 13:58
  SPEAKER_00: Oh, so I was gonna say the second thing that was really important is like keeping the momentum and like becoming the market leader.
• 14:04
  SPEAKER_00: I don't know if we did one thing or to like make that happen, uh, but we did end up like uh like the month before March 2023 and two months after that were like 80% difference in like sign-up rates.
• 14:19
  SPEAKER_00: So and that stuck, right?
• 14:20
  SPEAKER_00: Uh our growth basically like almost doubled, and it was an inflection point in that way.
• 14:26
  SPEAKER_02: It sounds like the definition of never let a good crisis go to waste.
• 14:28
  SPEAKER_00: Yeah, I mean I I feel bad for the folks at SVB.
• 14:31
  SPEAKER_00: I mean, I don't, you know, I think there's good there was good people working there, and it's it was definitely like a you know a set of situations where like it wasn't like that, you know, it wasn't a bad bank, uh, it was just like a crazy kind of situation, uh, both in terms of uh the interest rates changing, the commitment they did, and uh obviously the bank run.
• 14:52
  SPEAKER_00: Um so I feel bad for them.
• 14:54
  SPEAKER_00: Uh but yeah, it was definitely like you know, when your when your biggest competitor gets taken out, like that's an that's definitely an opportunity to uh spend time in doubling down.
• 15:04
  SPEAKER_00: Kind of reminds me recently of this, like you know, there was this like scale AI thing where like that's like a$15 billion company where the you know Meta did this weird thing where they uh you know bought out the CEO and some of the team, and there was like a ton of activity around like all of their competitors kind of uh taking the most uh taking as many customers as possible.
• 15:25
  SPEAKER_02: A last question, Imad, which we often ask many of our guests, what do you think it's about it is about you that has enabled you to be so successful having come from London to Silicon Valley and and do what you've done?
• 15:35
  SPEAKER_00: I do think like being an engineer was quite a powerful step.
• 15:38
  SPEAKER_00: Like I did, you know, when I did computer science in 2002, I definitely did not know this is why I was doing it.
• 15:44
  SPEAKER_00: It was just like something that I was good at, but but having that skill and being able to build things uh is such a powerful uh part of like the early stage of entrepreneurship.
• 15:54
  SPEAKER_00: You can, you know, you don't need to like rely on other people, you can just do things.
• 15:57
  SPEAKER_00: You know, there's always like this anti-computer science sentiment.
• 16:00
  SPEAKER_00: People now are like, oh, AI is gonna replace computer scientists or whatever.
• 16:03
  SPEAKER_00: But I think that's BS.
• 16:04
  SPEAKER_00: Like I remember when I was doing uh my degree, everyone was like, Oh, you know, why are you doing this?
• 16:09
  SPEAKER_00: Like all the Indians are gonna do the coding.
• 16:12
  SPEAKER_00: I was like, you know, I'm just doing it because I like it.
• 16:14
  SPEAKER_00: I didn't have like a good answer at the time.
• 16:16
  SPEAKER_00: Uh so anyway, that was definitely useful.
• 16:20
  SPEAKER_00: I think coming to Silicon Valley was powerful for me, uh like just being surrounded and this and immersed in this ecosystem.
• 16:26
  SPEAKER_00: And uh that's been uh a fun.
• 16:28
  SPEAKER_00: I like I don't know if I would have been quite as ambitious and wanted to do big things if it wasn't for being here.
• 16:34
  SPEAKER_00: Uh and then I guess probably the third thing is like I just have a weird, like I don't think about risk in the way that most people think about it.
• 16:42
  SPEAKER_00: Like I think it's I think it's more of a risk to not do things and have a boring life than to do things and fail.
• 16:48
  SPEAKER_00: But I don't know why I have that mentality.
• 16:49
  SPEAKER_00: I don't like I don't know if anyone ever told me, but I've just like always had this like weird relationship with risk.
• 16:54
  SPEAKER_02: Seems like a healthy mentality.
• 16:56
  SPEAKER_02: Well, on that note, Imad, we're gonna wrap it up.
• 16:58
  SPEAKER_02: But thank you so much for sharing your lessons.
• 17:00
  SPEAKER_02: Hope to see more British entrepreneurs making the jump to Silicon Valley and building huge businesses like yourself.
• 17:05
  SPEAKER_00: Yeah, thanks for having me.