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My second conversation with Christina Cacioppo (@christinacaci), Vanta's cofounder and CEO.
Charlie Songhurst says the best returns come from companies that are highly boring and highly complex, because fewer founders want to build them.
Vanta is one of those companies.
When we first talked five years ago, Christina told me about building the first version of Vanta in Excel.
Since then she has turned it into the category leader in security compliance. Now she is rebuilding it around AI.
We discuss:
- Why great software businesses got cheap
- Why Vanta eats the cost of AI instead of marking it up
- Why comp for top people is up 10X in five years
- What is over/under hyped in AI
- How AI attackers are changing security
- Vanta marketing + billboards
- Building trust in an era of low trust
Enjoy!
TIMESTAMPS
0:00 Intro
4:17 Surviving the SaaSpocalypse
9:40 The AI Pricing Trap
16:17 Rebuilding Software for AI
22:43 Silicon Valley's Talent Wars
31:57 What's Overhyped in AI
38:39 Security at Machine Speed
47:16 Reinventing Software
55:37 The Billboard War
60:38 Rebuilding Trust in Technology
Patrick OShaughnessy retweeted
Today, we are breaking down @Affirm.
Affirm's stock fell more than 95% after its IPO in 2021. Today, it processes over $50 billion in GMV and is growing more than 30%, faster than when it was a fraction of its current size.
Its founder, Max Levchin (@mlevchin), grew up in Ukraine, moved to the US as a teenager, and co-founded PayPal in his early 20s.
While in college, he funded his first startups with credit cards and unknowingly destroyed his credit score. Years later, even after PayPal's IPO, he was denied a car loan because of his credit history.
That experience helped inspire Affirm's founding mission of building more honest financial products.
Fraser Christie, founder and CIO of Sandstone Global Investment, joined us to break down the business, its remarkable recovery, and why he believes Affirm can become the payment network of the internet.
Some interesting facts from our conversation:
1/ Affirm has roughly 50% market share in US buy now, pay later
2/ Max Levchin earns less than $40,000 in annual salary and owns billions in Affirm stock. He now spends much of his time working with a small engineering team on new products.
3/ Affirm can have negative customer acquisition costs.
4/ 70% of purchase volume comes from interest-bearing loans
5/ Affirm earns roughly 4% gross profit on purchase volume after funding costs and credit losses.
6/ Affirm underwrites every transaction individually
7/ Affirm Card already accounts for roughly 20% of purchase volume and is growing over 100% annually.
8/ Only 75 of the 250 largest US merchants have integrated Affirm directly into checkout.
9/ Headcount, G&A expenses, and stock-based compensation have remained essentially flat for several years despite significant growth.
10/ 95% of transactions come from existing customers. Average usage has grown from 2 transactions per year to 7 since its IPO.
11/ Roughly half of Affirm's loans are sold to third parties, with the other half remaining on its balance sheet.
12/ Affirm has no late fees, no compounding balances, and no deferred interest. Every loan is designed to be paid down to zero.
Enjoy!our conversation:
1/ Affirm has roughly 50% market share in US buy now, pay later and is gaining share against Klarna and Afterpay.
2/ 95% of transactions come from existing customers. Average usage has grown from 2 transactions per year to 7 since its IPO.
3/ Affirm can have negative customer acquisition costs. It makes money when a new customer signs up and completes their first purchase.
4/ 70% of purchase volume comes from interest-bearing loans, rather than the shorter-term pay-in-four products most people associate with BNPL.
5/ Affirm earns roughly 4% gross profit on purchase volume after funding costs and credit losses.
6/ Affirm underwrites every transaction individually, using AI to determine how much to lend, to whom, and at what rate.
7/ Affirm Card already accounts for roughly 20% of purchase volume and is growing over 100% annually.
8/ Only 75 of the 250 largest US merchants have integrated Affirm directly into checkout.
9/ Headcount, G&A expenses, and stock-based compensation have remained essentially flat for several years despite significant growth.
10/ Max Levchin earns less than $40,000 in annual salary and owns billions in Affirm stock. He now spends much of his time working with a small engineering team on new products.
11/ Roughly half of Affirm's loans are sold to third parties, with the other half remaining on its balance sheet.
12/ Affirm has no late fees, no compounding balances, and no deferred interest. Every loan is designed to be paid down to zero.
Enjoy!
$AFRM
open.spotify.com/episode/4Oo…
Christina Cacioppo on high growth v. high margins:
"I think in the fullness of time, an 80% growth business with 80% margins will actually be better than a 160% growth business with 30% margins.
One of these will return more cash in the fullness of time. But today the latter is valued at 10x the multiple of the former.
And so there's a part where everyone's being irrational here. And then there's a very clear game-on-the-field piece.
If you need to be financed, you're looking at investors today, many of whom are AI maximalists, that are like, 'We'll invest in the labs and we'll invest in tractors in Iowa. Nothing in between.'"
My second conversation with Christina Cacioppo (@christinacaci), Vanta's cofounder and CEO.
Charlie Songhurst says the best returns come from companies that are highly boring and highly complex, because fewer founders want to build them.
Vanta is one of those companies.
When we first talked five years ago, Christina told me about building the first version of Vanta in Excel.
Since then she has turned it into the category leader in security compliance. Now she is rebuilding it around AI.
We discuss:
- Why great software businesses got cheap
- Why Vanta eats the cost of AI instead of marking it up
- Why comp for top people is up 10X in five years
- What is over/under hyped in AI
- How AI attackers are changing security
- Vanta marketing + billboards
- Building trust in an era of low trust
Enjoy!
TIMESTAMPS
0:00 Intro
4:17 Surviving the SaaSpocalypse
9:40 The AI Pricing Trap
16:17 Rebuilding Software for AI
22:43 Silicon Valley's Talent Wars
31:57 What's Overhyped in AI
38:39 Security at Machine Speed
47:16 Reinventing Software
55:37 The Billboard War
60:38 Rebuilding Trust in Technology
Christina Cacioppo on why Vanta is eating its token costs:
"If you try to charge people based on tokens, they are very quick to say, 'Oh, you've just marked up a Claude token 4X. Are you 4X as good as Claude?'
You actually put yourselves in a competitive position against the models that probably no application really wants to do.
We're eating the token cost right now. We're taking lower margin.
This is a usage phase and a deployment phase of this technology, and just go nail that, and you can figure out commercialization after."
My second conversation with Christina Cacioppo (@christinacaci), Vanta's cofounder and CEO.
Charlie Songhurst says the best returns come from companies that are highly boring and highly complex, because fewer founders want to build them.
Vanta is one of those companies.
When we first talked five years ago, Christina told me about building the first version of Vanta in Excel.
Since then she has turned it into the category leader in security compliance. Now she is rebuilding it around AI.
We discuss:
- Why great software businesses got cheap
- Why Vanta eats the cost of AI instead of marking it up
- Why comp for top people is up 10X in five years
- What is over/under hyped in AI
- How AI attackers are changing security
- Vanta marketing + billboards
- Building trust in an era of low trust
Enjoy!
TIMESTAMPS
0:00 Intro
4:17 Surviving the SaaSpocalypse
9:40 The AI Pricing Trap
16:17 Rebuilding Software for AI
22:43 Silicon Valley's Talent Wars
31:57 What's Overhyped in AI
38:39 Security at Machine Speed
47:16 Reinventing Software
55:37 The Billboard War
60:38 Rebuilding Trust in Technology
Patrick OShaughnessy retweeted
I have never watched Seinfeld nor Curb Your Enthusiasm but this profile is really great
colossus.com/article/many-fa…
Christina on why Vanta pays its top people 10x what it did five years ago
"Should I adjust the pitch and be like 'Inevitably the baseline here is Vanta's 50 billion.
The real question you should be considering is if you join, can you take us on a journey to 250 billion?’
Should I start saying that? Probably not. But the answer is not definitely not.
Because that is the pitch that people who work at Vanta are getting from other companies. The market now is saying that so much, you do seem unambitious.
Total comp, it's probably like a factor of 10. I think it actually should be higher. My general comp philosophy is you never pay the top people enough.
Patrick: What those top people are doing that's so valuable typically.
High agency, get shit done. That sounds so milquetoast and that's worth millions of dollars, but yes, actually it is.
A high-context person who understands the company and the customers and the domain, making generally reasonable decisions and sometimes bad ones, and then iterating on their bad ones and just moving is so valuable."
My second conversation with Christina Cacioppo (@christinacaci), Vanta's cofounder and CEO.
Charlie Songhurst says the best returns come from companies that are highly boring and highly complex, because fewer founders want to build them.
Vanta is one of those companies.
When we first talked five years ago, Christina told me about building the first version of Vanta in Excel.
Since then she has turned it into the category leader in security compliance. Now she is rebuilding it around AI.
We discuss:
- Why great software businesses got cheap
- Why Vanta eats the cost of AI instead of marking it up
- Why comp for top people is up 10X in five years
- What is over/under hyped in AI
- How AI attackers are changing security
- Vanta marketing + billboards
- Building trust in an era of low trust
Enjoy!
TIMESTAMPS
0:00 Intro
4:17 Surviving the SaaSpocalypse
9:40 The AI Pricing Trap
16:17 Rebuilding Software for AI
22:43 Silicon Valley's Talent Wars
31:57 What's Overhyped in AI
38:39 Security at Machine Speed
47:16 Reinventing Software
55:37 The Billboard War
60:38 Rebuilding Trust in Technology
Patrick OShaughnessy retweeted
One of my favorite @GuptaRK22 stories:
Ravi took Christina and me to lunch with his friends Sheryl Sandberg and Tom Bernthal.
In his intro Ravi described Vanta as a “boring but amazing” business to Sheryl.
Sheryl - who knew the painpoints Vanta solved from her personal experience at Facebook - immediately snapped back at Ravi “what about this could you possibly find boring Ravi, this is so interesting.”
First time I ever saw Ravi blush
Christina Cacioppo on why French software companies have stopped building on American models:
"I was very surprised to learn a lot of the French software companies are using Chinese models predominantly.
I was with our customers in France...and someone said, 'We all switched to Chinese models when Trump closed Fable off to non-Americans.
We just realized there's a huge business continuity risk.
We can't trust that if we build a business on one of these American models, it'll always be available, so we stopped doing that.'"
My second conversation with Christina Cacioppo (@christinacaci), Vanta's cofounder and CEO.
Charlie Songhurst says the best returns come from companies that are highly boring and highly complex, because fewer founders want to build them.
Vanta is one of those companies.
When we first talked five years ago, Christina told me about building the first version of Vanta in Excel.
Since then she has turned it into the category leader in security compliance. Now she is rebuilding it around AI.
We discuss:
- Why great software businesses got cheap
- Why Vanta eats the cost of AI instead of marking it up
- Why comp for top people is up 10X in five years
- What is over/under hyped in AI
- How AI attackers are changing security
- Vanta marketing + billboards
- Building trust in an era of low trust
Enjoy!
TIMESTAMPS
0:00 Intro
4:17 Surviving the SaaSpocalypse
9:40 The AI Pricing Trap
16:17 Rebuilding Software for AI
22:43 Silicon Valley's Talent Wars
31:57 What's Overhyped in AI
38:39 Security at Machine Speed
47:16 Reinventing Software
55:37 The Billboard War
60:38 Rebuilding Trust in Technology
Patrick OShaughnessy retweeted
Christina is one of the best founders in the valley
She is building a dominant security company.
She is a great mentor to other founders and an incredible friend too. Highly recommend.
My second conversation with Christina Cacioppo (@christinacaci), Vanta's cofounder and CEO.
Charlie Songhurst says the best returns come from companies that are highly boring and highly complex, because fewer founders want to build them.
Vanta is one of those companies.
When we first talked five years ago, Christina told me about building the first version of Vanta in Excel.
Since then she has turned it into the category leader in security compliance. Now she is rebuilding it around AI.
We discuss:
- Why great software businesses got cheap
- Why Vanta eats the cost of AI instead of marking it up
- Why comp for top people is up 10X in five years
- What is over/under hyped in AI
- How AI attackers are changing security
- Vanta marketing + billboards
- Building trust in an era of low trust
Enjoy!
TIMESTAMPS
0:00 Intro
4:17 Surviving the SaaSpocalypse
9:40 The AI Pricing Trap
16:17 Rebuilding Software for AI
22:43 Silicon Valley's Talent Wars
31:57 What's Overhyped in AI
38:39 Security at Machine Speed
47:16 Reinventing Software
55:37 The Billboard War
60:38 Rebuilding Trust in Technology
Charlie Songhurst on why "boring and complex" companies may offer the best returns
My second conversation with Christina Cacioppo (@christinacaci), Vanta's cofounder and CEO.
Charlie Songhurst says the best returns come from companies that are highly boring and highly complex, because fewer founders want to build them.
Vanta is one of those companies.
When we first talked five years ago, Christina told me about building the first version of Vanta in Excel.
Since then she has turned it into the category leader in security compliance. Now she is rebuilding it around AI.
We discuss:
- Why great software businesses got cheap
- Why Vanta eats the cost of AI instead of marking it up
- Why comp for top people is up 10X in five years
- What is over/under hyped in AI
- How AI attackers are changing security
- Vanta marketing + billboards
- Building trust in an era of low trust
Enjoy!
TIMESTAMPS
0:00 Intro
4:17 Surviving the SaaSpocalypse
9:40 The AI Pricing Trap
16:17 Rebuilding Software for AI
22:43 Silicon Valley's Talent Wars
31:57 What's Overhyped in AI
38:39 Security at Machine Speed
47:16 Reinventing Software
55:37 The Billboard War
60:38 Rebuilding Trust in Technology
Whoever does the ads at Ramp is a special talent
Larry David is one of America’s unlikeliest icons, and one of history’s purest founders.
In our latest profile, Correspondent-at-Large @blakejharrisNYC—who spent six years talking to Larry for his new book—explains what makes Larry so special, and why it took him so long to break through.
Larry was a mediocre student with a middling social life. His first two jobs—selling bras and driving cabs—ended quickly. At 25, he called his mother from a hotel room: “Ma, nothing good is ever gonna happen to me.” She urged him to become a mailman.
Soon after, he found what he thought would be his calling: stand-up comedy. His material was funny, but he rarely finished a set. If somebody in the audience looked at their watch, or didn’t laugh when he thought they should, Larry stormed off.
14 years later, aged 39, he got a break. He was asked to write his first sitcom script for a big new Showtime series. Only an eighth of what he wrote survived the edit, but the episode was still his. He was broke, and the writing credit could have sparked his career. But Larry refused to put his name on it.
Even with Seinfeld, Larry nearly hit self-destruct. The pilot performed worse than almost any other show NBC had ever tested. Still, the network ordered four episodes, one of the smallest orders in TV history. Larry barely made it through them.
When the studio installed a showrunner to oversee the scripts, Larry endured the man’s notes, then said “NO. I’m not doing one thing,” and walked out. In the summer of 1991, with the show finally starting to work, NBC wanted Jerry and Elaine to get married and have a baby. Larry quit in the parking lot and wished everyone good luck. Jerry stood with Larry, and NBC caved.
Larry’s friend and comedian Bill Scheft put it this way: “He doesn’t [act this way now] because he has fuck-you money. It’s the opposite. He has the fuck-you money because he’s always acted this way.”
Read the full profile by Blake, author of Emperor of Nothing: The Making of Larry David.
colossus.com/article/many-fa…
Patrick OShaughnessy retweeted
“He doesn’t [act this way now] because he has fuck-you money. It’s the opposite. He has the fuck-you money because he’s always acted this way.”
He just like me fr fr
Larry David is one of America’s unlikeliest icons, and one of history’s purest founders.
In our latest profile, Correspondent-at-Large @blakejharrisNYC—who spent six years talking to Larry for his new book—explains what makes Larry so special, and why it took him so long to break through.
Larry was a mediocre student with a middling social life. His first two jobs—selling bras and driving cabs—ended quickly. At 25, he called his mother from a hotel room: “Ma, nothing good is ever gonna happen to me.” She urged him to become a mailman.
Soon after, he found what he thought would be his calling: stand-up comedy. His material was funny, but he rarely finished a set. If somebody in the audience looked at their watch, or didn’t laugh when he thought they should, Larry stormed off.
14 years later, aged 39, he got a break. He was asked to write his first sitcom script for a big new Showtime series. Only an eighth of what he wrote survived the edit, but the episode was still his. He was broke, and the writing credit could have sparked his career. But Larry refused to put his name on it.
Even with Seinfeld, Larry nearly hit self-destruct. The pilot performed worse than almost any other show NBC had ever tested. Still, the network ordered four episodes, one of the smallest orders in TV history. Larry barely made it through them.
When the studio installed a showrunner to oversee the scripts, Larry endured the man’s notes, then said “NO. I’m not doing one thing,” and walked out. In the summer of 1991, with the show finally starting to work, NBC wanted Jerry and Elaine to get married and have a baby. Larry quit in the parking lot and wished everyone good luck. Jerry stood with Larry, and NBC caved.
Larry’s friend and comedian Bill Scheft put it this way: “He doesn’t [act this way now] because he has fuck-you money. It’s the opposite. He has the fuck-you money because he’s always acted this way.”
Read the full profile by Blake, author of Emperor of Nothing: The Making of Larry David.
colossus.com/article/many-fa…
Patrick OShaughnessy retweeted
Great read
Larry David is one of America’s unlikeliest icons, and one of history’s purest founders.
In our latest profile, Correspondent-at-Large @blakejharrisNYC—who spent six years talking to Larry for his new book—explains what makes Larry so special, and why it took him so long to break through.
Larry was a mediocre student with a middling social life. His first two jobs—selling bras and driving cabs—ended quickly. At 25, he called his mother from a hotel room: “Ma, nothing good is ever gonna happen to me.” She urged him to become a mailman.
Soon after, he found what he thought would be his calling: stand-up comedy. His material was funny, but he rarely finished a set. If somebody in the audience looked at their watch, or didn’t laugh when he thought they should, Larry stormed off.
14 years later, aged 39, he got a break. He was asked to write his first sitcom script for a big new Showtime series. Only an eighth of what he wrote survived the edit, but the episode was still his. He was broke, and the writing credit could have sparked his career. But Larry refused to put his name on it.
Even with Seinfeld, Larry nearly hit self-destruct. The pilot performed worse than almost any other show NBC had ever tested. Still, the network ordered four episodes, one of the smallest orders in TV history. Larry barely made it through them.
When the studio installed a showrunner to oversee the scripts, Larry endured the man’s notes, then said “NO. I’m not doing one thing,” and walked out. In the summer of 1991, with the show finally starting to work, NBC wanted Jerry and Elaine to get married and have a baby. Larry quit in the parking lot and wished everyone good luck. Jerry stood with Larry, and NBC caved.
Larry’s friend and comedian Bill Scheft put it this way: “He doesn’t [act this way now] because he has fuck-you money. It’s the opposite. He has the fuck-you money because he’s always acted this way.”
Read the full profile by Blake, author of Emperor of Nothing: The Making of Larry David.
colossus.com/article/many-fa…
Pretty, pretty good
Larry David is one of America’s unlikeliest icons, and one of history’s purest founders.
In our latest profile, Correspondent-at-Large @blakejharrisNYC—who spent six years talking to Larry for his new book—explains what makes Larry so special, and why it took him so long to break through.
Larry was a mediocre student with a middling social life. His first two jobs—selling bras and driving cabs—ended quickly. At 25, he called his mother from a hotel room: “Ma, nothing good is ever gonna happen to me.” She urged him to become a mailman.
Soon after, he found what he thought would be his calling: stand-up comedy. His material was funny, but he rarely finished a set. If somebody in the audience looked at their watch, or didn’t laugh when he thought they should, Larry stormed off.
14 years later, aged 39, he got a break. He was asked to write his first sitcom script for a big new Showtime series. Only an eighth of what he wrote survived the edit, but the episode was still his. He was broke, and the writing credit could have sparked his career. But Larry refused to put his name on it.
Even with Seinfeld, Larry nearly hit self-destruct. The pilot performed worse than almost any other show NBC had ever tested. Still, the network ordered four episodes, one of the smallest orders in TV history. Larry barely made it through them.
When the studio installed a showrunner to oversee the scripts, Larry endured the man’s notes, then said “NO. I’m not doing one thing,” and walked out. In the summer of 1991, with the show finally starting to work, NBC wanted Jerry and Elaine to get married and have a baby. Larry quit in the parking lot and wished everyone good luck. Jerry stood with Larry, and NBC caved.
Larry’s friend and comedian Bill Scheft put it this way: “He doesn’t [act this way now] because he has fuck-you money. It’s the opposite. He has the fuck-you money because he’s always acted this way.”
Read the full profile by Blake, author of Emperor of Nothing: The Making of Larry David.
colossus.com/article/many-fa…
Going to just keep recommending this incredible product.
I’m an investor in the company but moreso just an avid fan of the team and the product.
If you have a loved one with hearing loss, you need to try these. Life changing.
David Vélez on why stablecoins could save the US dollar:
"There are about 190 currencies around the world. My view is that in 10-20 years from now, those 190 will be 10.
The fiscal situation in so many countries around the world is so dire that a lot of that fiat money is not real money.
And so increasingly, billions of people are going to be banking on the offshore world, US stablecoin, but also Bitcoin and other type of assets.
I think the US stablecoins ultimately will be the big savior or one of the biggest saviors of the US dollar, because it democratizes access to the US dollar.
At least there is a lot of demand for the US stablecoin. There's very little for the Brazilian stablecoin, unfortunately."
My conversation with David Vélez (@velez_david), founder and CEO of Nubank.
The last time we did this was five years ago, and Nubank had 35 million customers. Today it has over 140 million, and it has just announced it's coming to the US.
David now talks about expanding to 100 countries and reaching a billion customers.
We discuss:
- State and future of global banking
- Agents as a customer segment
- Going from one direct report to 20
- How he's rebuilding the company with AI
- Where fintech opportunities remain
- The end of cash
- Founder v CEO, great leadership, and finding the right mission
Enjoy!
TIMESTAMPS
0:00 Intro
1:25 Banking's $10 Trillion Disruption
5:54 AI's Impact on Banking
14:40 Building Moats in the AI Era
23:29 The Future of Money
36:01 Nubank's Global Expansion
48:24 Reinventing Nubank with AI
59:47 Founder Mindset and Leadership
1:13:18 Nubank's Future and Entrepreneurship
