FinTech Is Hard! What It Takes to Make It – With Jason Gardner of Marqeta, Inc.

This is a transcript of the first episode of the new MEDICI Studio series, "FinTech Is Hard! What It Takes to Make It," featuring an exclusive interview with Jason Gardner, CEO & Founder at Marqeta.

Aditya Khurjekar: I'm here with my co-host, Amit Goel. Amit is in Bangalore, I'm in Princeton New Jersey, and we are really excited to have Jason Gardner of Marqeta from Oakland, California. 

Amit Goel: Hello, everyone. Welcome to the show!

Aditya: I am so excited to welcome Jason. Thank you for taking the time early in the morning in California, and thank you to all of you in the audience. So, on the one hand, I am really excited that we can do this after the big news for Marqeta from last week. On the other hand, it is also a very sombre time. With what is happening in the country and the world—the protests, the pandemic... So many things are happening around us that are clearly on our minds, and I want to start with that, Jason. I know we are here to talk about FinTech, and we'll talk about Marqeta, but I want to also address what we see around us in our communities and our country. Jason, would you like to share your thoughts on that as we get going?

Jason Gardner: I appreciate that. Thank you for having me. I wrote an email to the company that I want to read to the audience which I feel encapsulates not only who I am as a person, but also how I feel about what's going on in the country today and it certainly represents not only myself and my team but also the people around us including our customers. 

“Minneapolis, a south Georgia neighborhood, Sanford, and so many other cities and towns that have witnessed the violence and death against African American men. Sadly, this isn’t a rare moment in time. Hatred and violence, institutionalized amongst the few, always turn its ugliness into action.

“This has been an incredibly challenging week for our African American community. I know how upset you must be. This has been very upsetting for me personally. At Marqeta, we believe in equality and justice. We stand with the African American community, now more than ever. 

“I care about this company and its people. I care that you all walk through the door every day feeling like you belong. That you want to make a difference for each other and our customers, not just for Marqeta, for other human beings who work here. For other human beings in your cities and towns, countries and states, neighbors, and roommates. 

Justice starts with how you show up. Like you belong to something greater than yourself. I encourage you to make a difference and stand up for what’s right in the best way possible, as you see fit and peaceful. I have faith that love conquers all.”

Aditya: Jason, thank you for sharing that. I really appreciate it. I can only be inspired by how you have shown leadership not just today this week, but I have seen you from afar for the last almost 10 years. We first met in 2012, and it's always been very inspiring, even the brief interactions that we have had.

Jason: I appreciate that. Everyone who knows me knows that I care about other human beings. That's how companies get built; it's how ideas can come up and how you treat people is truly what you'll be known for. And for me, that's incredibly important. It's incredibly important for the people at Marqeta and our customers. It's incredibly important for what's going on in the African-American community today and what's going on around this country. So, first and foremost, this all about people and how you treat them. And I want to make sure that the people in the audience know how I feel and who I am as a person separate from the accomplishments that I've had.

Aditya: Thank you. We do have a few different audiences here today. We have people here who are participating on Zoom. This is being live-cast on YouTube, Twitter/Periscope, and LinkedIn, and we will also be publishing this after the social media blackout Tuesday.

Let me start with the first obvious question. This is our “FinTech is Hard!” series. I couldn't have thought of anybody better than you to kick this series off. Firstly, do you agree with me that FinTech is hard?

Jason: I think today it's less hard. This is my second FinTech company. I co-founded a company named Property Bridge back in 2004. We sold that back in 2007 to MoneyGram International. I was on contract there for a couple of years and then founded Marqeta by myself about 10 years ago. Nobody was investing in FinTech. There was this general assumption that you know the large financial institutions and large banks—not only here in the US but around the world—were frankly impossible to compete against, based on their size, capital, know-how, resources, etc. So, starting in the very early days around FinTech, which wasn't even a thing, getting the attention of not only capital but partners and friends and associates, and employees was really tough. It was very hard 10 years ago. It's still hard. It's just less hard today.

Aditya: What is specifically hard about the company that you chose to build because you've done this before? You had an exit before FinTech was a thing, I agree. But what was your primary motivation to do what you chose to do when you started Marqeta? 

Jason: Being an entrepreneur is like being struck by lightning. It’s not “you find an idea.” It’s “an idea that finds you,” and once that idea finds you, you really know what you want to do. It needs to come from the heart, not the head. You need to feel very strongly and have conviction because you know what it's going to do to you. I mean, it's physically and mentally taxing. It puts stress on your relationships, whether it's your spouse or partner, kids, family friends, etc. 

It's tough starting businesses.

It’s tough convincing people to leave well-paying jobs to join you on a journey. When you have nothing, it's difficult to convince people to part with their money. When you just have a spark of an idea, you almost have to have fire coming here under your eyeballs and have such conviction that you know that it's a fait accompli that the train has left the station. So in the early days, you have conviction around the idea. 

A while ago, a friend and I were having sushi at a restaurant in San Francisco. He said, “Hey, try to put a bunch of Groupons on a card.” And I wanted to solve that problem. I knew nothing about issuing and processing. There are thousands of acquirers around the world in the payment card industry.

A lot of people will tell you that a lot of other people have tried to create issuer-processors from scratch, and they haven't been able to do it. So why you? For me, that's a big motivation. Getting a “no” or people telling me that I can't do something is incredibly motivating for me. Whether I was 5 years old or 25 years old, when people told me that I couldn't do something, it really motivated me to go solve that problem, either mentally or physically. So it's a big driver for me to solve these big complex problems. 

Amit: I think I met you for the first time in 2015. Aditya and I visited your office, and I still remember that it took me a while to sort of understand the proposition that you had because you said something like: We are building our card-issuing and management platform. And it was such a new thing because, at that time, everybody was either building a mobile wallet or building merchant processing & acceptance platforms. When it came to card-issuing, all the incumbents had those legacy solutions and infrastructure. You were there talking about open APIs and how you can issue cards and control a lot of things in there. My question to you is in two parts. One is how do you get that kind of insight? Is it because of what you did earlier? How did you have that very interesting insight that this can become a big company one day back then? Secondly, I think, in terms of the clarity of thought, I see a lot of FinTech founders struggle in terms of positioning their company. How did you do that?

Jason: In the beginning, I had this theory that there were all these companies that haven't been invented yet where a card was either going to support their core business or be their core business—sort of the many flavors of Groupon, solving the problem of putting a bunch of Groupons on a card. In the very early days, very few ideas were invented at the start that survived over the years. The very original thing that you wanted to do is what the market finds a fit for. So, in the beginning, we very much did so. We created a Marqeta card, which allowed you to pay in advance for your groceries and get a return. Then we got a call from Facebook: “Hey, we want to do something called the Facebook Card. We talk to all the issuer processors out there, and they keep talking about you guys.” We were shocked. We were probably 19 people out of Emeryville, California, in 2012. We didn't know why anyone was even talking about us. We knew about the original theory, the business that we had, and where we were headed simply because the TAM of issuing and processing was obviously going up and to the right. 

There was a lot of talk about cash and checks going out over time. Visa and Mastercard are unique; they're the only networks in the world that have interconnected every merchant in the world, whether online or offline, who take cards. So, globalization, e-commerce... That need was going to become significant over time. So that's what we have. We could put a stake in the sand around that and understand that the world was going to be headed that way. There are n number of ways to create a market or a product that you see fit—that first step when we built the Facebook Card, and we worked with their engineers as we exposed our APIs to them. We really learned an incredible amount, and we found that there's a market here. At the time, we had discussed opening up our APIs, but we knew we had to figure out how to operationalize the business. Where did we want to focus on the market? Was it a come-one-come-all strategy? Was it enterprise? So we got that up and running. And then eBay called, and then in 2014, we opened up the APIs. We announced that at Money20/20 in the fall, and the company just took off. We really not only hit product-market fit, which is incredibly challenging in and of itself because you need to learn how to scale. We found a real market for what we described as commerce disruptors at the time right.

Amit: You build something in the FinTech ecosystem which people now call financial infrastructure-API space; it's hugely popular, especially with some of the recent activity that has happened. So that leads me into the next question: a lot of your customers such as DoorDash, Square, and many others have grown with you over the last five to seven years. They have huge volumes of payments. I have seen this in financial services and FinTech, especially in the enterprise play that, at some point, the enterprise starts thinking in terms of a build vs. rent or build vs. buy, and that puts a lot of pressure on stickiness and margin. So how have you maintained the stickiness with some of these customers? How do you go forward to maintaining the margins?

Jason: We have great technology. We invented modern card issuing, which today is a term to describe open APIs for issuing and processing. As the first company doing that back in the early days, we knew that the future was going to be led by engineers, developers, technical product managers, and visionary entrepreneurs. There was a real DNA match in regards to what we were creating in the platform that was going to really solve last-mile issues, whether it was supporting DoorDash’s core business, or being the core business of many of our customers.

So, in the early days, it was about finding that product-market fit. Then there is the human aspect of when you support someone's core business: how you treat your customers. It’s about making sure they have what they need. Giving them tools, features, and automation to help them support their business. Watch them grow and bring new tools or engines to them to help them better support their business. Like back in 2016, when Square came to us, and they wanted to add the card to Cash App. We worked with Square, Apple, and Visa to bring to market instant issuance. It was the first company in the world to work with Square and have the ability to generate a card and drop it into Apple Pay and then Google Pay. So these are the things where we've grown up with our customers and have serviced them in a way that creates that stickiness. But it's really about a relationship.

It’s not only hard to build companies, but building a company with a technology that has to be absolute. It has to work all the time when you swipe the card at the point-of-sale, or you tap a phone, or you insert a card, or you enter a number online. It always has to work, and the number of people, resources, and know-how to keep that up and running, operating at peak performance. Over time, you create trust and a foundational relationship that you watch your customers grow with you, and we've really enjoyed that with them.

Amit: This is a very critical part of their businesses. They would rather trust an expert, and somebody they have trusted over a period of time. 

Jason: Trust is the foundation of every relationship. In a world where we support the core business or are the core business of the customers, trust is the absolute foundation. We do not take that for granted. We make sure that when our customer calls or they Slack us or text us or email us, we respond immediately with the best most informed answer at the time and treat them the way that they should be treated. We are there for them, and we are their infrastructure. So it's important for us that we're supporting them in the best way possible. 

Amit: My question is really about a DIY kind of a platform that is sitting on the payment gateway side of things. I think it's very well understood that they are very much DIY. When it comes to card issuing, processing, and management, I want to ask: where is the industry right now versus deals which are cracked with enterprise sales, where there's human involvement and all of that, versus a developer coming in using open APIs. How far have we moved in card issuing and processing with regard to the DIY perspective?

Jason: At the end of 2015, after we had opened up the APIs to the world, it was very much come-one-come-all. We found that when developers, even though we had very well-documented APIs, there were a ton of questions. “What’s a card load?” In the early days, you become indoctrinated into the issuing processing world. The thought of asking the simple question of, “What's a card load?” Card load is when you put money on the card. But in an industry where companies are building these products for their business, they have a lot of questions but not necessarily about the APIs. We still get those questions today, even though the API is incredibly well documented. But regulatory: what does it mean to deal with either KYB or KYC? What are the limits? There's a lot of questions around bringing these complex products to market, regardless of the flavor, whether it's a virtual card, tokenized card, or a physical card. So there's the aspect that we had in the beginning, which I think is a bit of a false pretense, that you can have very well-documented APIs and you can go build-in those APIs with that interaction. But there happens to be a ton of questions around how these products are built. This is fundamentally different from the acquiring side.

The acquiring side is the acceptance of cards. You can add four lines of code to your website and be up and running in a matter of minutes. When you're building card products, it's not only technically complex but about really navigating the regulatory and compliance side, creating PCI-compliant widgets. Things like this that most companies aren't really thinking about. They're only trying to solve a problem. That creates really a whole other community of bringing these products to market, whether it's here inside of Marqeta or outside. 

Aditya: I want to shift the topic a little bit here, Jason, and talk about you as a founder and you as a CEO. We had a great conversation with Matt Harris a couple weeks ago, where we went deep into the VC-founder relationship. We have another series going on where we talk to VCs. What is the ideal relationship when you see yourself, having done this before, going from founder to CEO and beyond? Is there like one critical secret sauce in there as a founder and CEO that you think works for you? You have to deal with so many different things on any given day, week, or month. What is that one thing that’s different you can share?

Jason: It's trust. Trust is the foundation of any relationship, whether they're your investor or whether they're your employee or business partner; they're all business partners to me. I think there's this mentality that you hear a lot about as an entrepreneur, which is “VCs are here to bring you suitcases full of money, but I'm going to run the company the way I want to run it.” But the fact of the matter is that your investors have a fixed number of investments they can make over their lifetime. Maybe 25 would be a lot. So they have a vested interest in your success. Some investors are more difficult than others. Some are more hands-off, and some are more hands-on. But I think of them as my business partners. They have a vested interest in my success. If I'm successful, they're successful. They need to be seen as someone who is interested in your success as much as your executive team or business partners or employees across the company. So I've always treated them that way. I am good friends with all my investors. I talk to them on a regular basis. I get their insights and thoughts on things. I don't necessarily take their advice all the time. Sometimes I do. 

Sometimes, a lot of entrepreneurs think we're smarter than everybody else, but the fact of the matter is that having insight from people inside and outside the company is just incredibly helpful. You have to remain steadfast in your vision. You have to remain steadfast in regard to the things that you want to do. But you know, when things are going great, everyone loves you. When things are going rough, you need to have relationships with people. You need to build that trust over time so that they're in it with you, and they're helping you navigate through it. And we had those days early in 2015 where we almost ran out of money, but we had great investors and business partners who really cared about where we were headed and kept my head in the game with regards to the things that we had. And now that's five years past; we’re a 3-billion-dollar company now we have close to 450 employees. We operate in the US, Canada, Europe, Asia, now heading into South America and Latin America. I couldn't do that without great business partners, great investors, and a foundation of trust. 

Aditya: As a leader, when do you ask for help? When you give homework to your board members? When do you give them an action item which is like, “Help me”? A good leader obviously knows that asking for help is not a sign of weakness. But how do you decide when to ask for help?

Jason: There are probably a lot of times that I needed to ask for help, and I didn't. In some ways, I see asking for help as a sign of weakness. I want to power through it myself. I probably asked my wife for more help than anybody else. She is a psychotherapist, so I typically step in her office multiple times a week. She's really good, and she's been through three companies with me. She's seen all the ups and downs, and she's great to help me navigate and get through things. So asking for help: it happens in multiple ways. You can ask your business partners, your executive team, your investors, or your customers. Some of it is help to get things done, and some of it is help to give you a good perspective. In the early days, you’re actually pretty immature when you start a company. You are very focused on your vision and the things that you want to get done. Sometimes, there's a fight. Sometimes, it's “I'm right,” or “They're right.” And then, as time goes on, you recognize that everybody has a vested interest in the success of the company. Asking for help is really about seeing people step up and get things done. You're really in it together.

So in the early days, it's very difficult to ask for help. I saw it as a sign of weakness, but as time goes on and you recognize that everybody has a vested interest in not only your personal success but professional success and the success of the company, you find that you end up asking for help all the time. Part of it is getting an executive coach. I’ve had an executive coach for, I think, two or three years now. She helped me a lot about understanding how you think success is infinite and then when you see that success, in some ways, is a series of successes, and a series of mistakes. We adjust over time, you make less mistakes, and you have more success. A coach really helps you become a better CEO, a better leader, and a better person—very much like you cannot be a professional athlete without a coach. And that's helped me to get to where I am today, and it's helped me get past the “I need help” as being seen as a sign of weakness. 

Aditya: Have you ever seen a time in Marqeta where you were fully ready with your product, but struggling to find investors and VC funding? What was your strategy to keep the team motivated from work and financial perspective? How did you manage the time frame? 

Jason: In the early days, when you’re raising money, you are going to hear a lot of “No.” The one thing you have to always remember about when you're going out and raising capital or recruiting is that 90% of raising capital is actually psychological. You have to convince people that your vision is going to make them successful, whether it's an employee or an investor. You have to truly believe from your heart, and when you talk about your business, you talk about it in the context of where it's headed, what it's accomplished, the signs in the market, and why the market is going to come to you versus some other model. You really need to talk about it in a way where it absolutely comes from your heart.

You need to convince people to part with their money when you're one of the thousands of people asking the same question: “Will you invest in my business?” And again, an investor in a well-known VC is going to maybe make 25 investments in their lifetime. They can probably manage 10 investments fairly well while they're seeing all this influx, and it's really psychological. You have to really become focused on what’s most important about your product. You need to talk about the product-market fit. You need to talk about the milestones that you've achieved. You need to convince people about where you're headed. They can either join you on the ride or if someone else is going to, and they're going to miss out. So I would definitely focus on the psychological aspect. Aditya had talked about weakness: when you're hiring people, or you're raising money, if you show weakness in those discussions or you're not true to your vision, or you're not speaking from your heart, it comes out, and people pick up on that. It's well-known that 90% of communication is nonverbal. So when you're meeting with people in person, the intonation of your voice and how you speak—it all comes together in regards to the journey that you're on and convincing people to come along with it. 

Aditya: I'm going to pick up one more question here from the audience before we wrap up. There’s a question about the new banking wave and how Marqeta would adapt to a cardless ecosystem. Any thoughts on that? Do you think we'll go cardless anytime soon? How do you look at that potential future? 

Jason: We believe in digital-first credentialing. This is the work that we did with Square and Apple back in the early days of the Square card. The ability to instantly issue and digital-first credentialing has been in Asia for a long time: QR codes or whether it's Alipay or WeChat pay. Across Asia and Southeast Asia, there’s a number of wallets. This has been going on for a long time.

These are not card-first cultures. The US, Europe, parts of Latin America, South America, and parts of Asia are card-first cultures, where getting a piece of plastic in the mail before you can try to transact is frankly, the first thing you do. One thing we've seen through COVID is that digital-first credentialing has been fast-forwarded by three or four years. So absolutely; we're seeing digital-first now. In fact, at Marqeta, in on-demand delivery alone, we've seen a 20x increase in contactless. We've seen a 180% increase in mobile payments. We know that viruses live on paper money. We know that people are obviously going to ATMs a lot less; they're wanting to use their phone, whether it's Apple Pay or Android Pay or a contactless card. So I think it's a safe bet to think that in the coming years, digital-first—where you won't have a card—will be here sooner than you think. The problem is that the payment card ecosystem is a two-sided business. You have the merchant that has to be able to accept Apple Pay or Android Pay or Samsung Pay or a number of wallets. They need to accept contactless cards, and that's the drama around a two-sided business: you have to have both sides equipped to do digital-first payments. That’s obviously going to be sped up here. And there is a time when I believe we will no longer have plastic. So it's a smart bet to be investing in digital-first technologies or digital-first credentials for the future.

Aditya: I'm going to ask you the last question here. I know there's a lot on our minds with COVID, with all that is going on here in the US. In the ecosystem, we know that FinTech is hard. I'm an eternal optimist, and, as entrepreneurs founders, I think most of us have to be. What I believe is optimism and hope are what drives us to do what we do. But what would be your closing thoughts? Any advice as you look at your little crystal ball, both for Marqeta and the industry. 

Jason: Hope is great, but hope is not a strategy. You have to take action; you have to take action locally and nationally. And it starts with you. 

I'm on an 80-year plan. I had a father who was very, very tough on me. I had a mother who was an eternal optimist and constantly told me, “You can do whatever you want to do with your life. You can be whoever you want to be, and you can live wherever you want to live.” And the combination of those two made me realize that I am solely responsible for my actions. I think early on, that’s why I became an entrepreneur. I remember being a little kid and hustling people for money to pick their weeds and shovel their snow. There’s something I found incredibly gratifying by doing work and getting something in return for that.

During COVID-19, when we found that the restaurants around Oakland were struggling, we created “Oaklanders Supporting Oaklanders” within days. We put our own money in from Marqeta. We had employees put money in. We had friends and business partners who put money in. We worked with three nonprofit organizations within the city of Oakland to feed less-advantaged people, whether it was homeless people or people with drug problems, whether it was immigrant families. You have to take action in the world today, whether it's COVID-19 or it's the injustice that African-Americans have been in. 

It's not just a moment in time. This has been going on for decades and centuries. You have to take action and stand for something that's right. Being a human being is hard. For the disenfranchised or people of color, it is infinitely harder, and it really is about you as a person, taking action, and what you stand for so that you can make the lives better for other human beings around you. I'm very lucky that I've been able to create companies and have success. A lot of that is about luck. A lot of it is about the people that you surround yourself with. A lot of it is about being in the right place at the right time. There's an absolute skill in there as well about having a vision and sticking to that, and you feeling fait accompli and having fire coming out of your eyeballs. Whatever you're building is going to be a generational business, but it frankly starts with business. It starts with people and what you stand for. And for me, as I've gotten older through three different companies, I care a lot more about how people are treated both inside and outside of the company and service to an organization, and that success is not about a single person. It's about a body of people, what they stand for, and what they've been able to accomplish.

Aditya: Jason, Thank You so much. I really appreciate you taking the time. I really appreciate you sharing with us what you shared from the heart, and this is the time where we all need that, so I just want to say a big thank you, Jason. Thank you, everyone, for joining us.

Jason: Thank you for inviting me! 

Watch the full video interview here.