Please enjoy this transcript of my conversation with Andrew Jamison, CEO and Co-Founder of Extend, a virtual credit card platform. Transcripts for other episodes can be found here.
“Nothing good really happens with cash.” – Andrew Jamison
Andrew Jamison is CEO and Co-Founder of Extend, a virtual credit card platform. Prior to founding Extend, Andrew managed all B2B payments solutions, including virtual card platforms and products at American Express. Before that, he spent 10 years as an SAP consultant.
Transcript – Founder Spotlight: Extend – The Power of Virtual Cards with Andrew Jamison, Cofounder and CEO
Daniel Scrivner (00:06):
Hello, and welcome to another episode of our Founder Spotlight series, where we dig into the ideas, frameworks and strategies of the world's best founders. I'm Daniel Scrivner and on the show today I sit down with Andrew Jamison, Co-founder and CEO of Extend which is the world's first virtual card platform that works with every card issuer. Which might make you think, what the hell is a virtual card? Which is exactly why I wanted to record this episode because as it turns out, they're incredibly powerful.
Daniel Scrivner (00:33):
Virtual cards effectively tokenize a physical card making it easy to create any number of digital cards, each with advanced controls around everything from spending to geolocation, to merchant gating, which enables very powerful uses for a massive number of industries. From helping lawyers and law firms clearly break out expenses by cases and attorneys, to powering food delivery companies like GrubHub and DoorDash so couriers can easily pay for the food they're picking up, to helping travel companies hold thousands of hotel rooms all tied to individual virtual cards.
Daniel Scrivner (01:04):
In this episode, we cover how virtual cards work and why they're so powerful. We dive into an incredible number of use cases that will open your eyes to just how profoundly this transforms the physical cards that we've all taken for granted. We talk about the incredible origin story of how Andrew and his co-founders decided to found Extend. Why it took nearly two years to lay all the technical foundation for Extend and what it's like to sell into some of the world's largest financial institutions. You can find the notes and transcript for this episode at outlieracademy.com/100. You can find Extend on Twitter at paywithextend and online at paywithextend.com. With that, let's dive into the world of virtual cards and what they unlock with Andrew Jamison of Extend. Andrew, thank you so much for joining me on our Founder Spotlight series. I'm thrilled to have you on to talk about what you're building at Extend.
Andrew Jamison (01:56):
No, delighted to be on this show. So excited to have the conversation.
Daniel Scrivner (02:00):
Thanks Andrew. So I want to start first, super boring just if you can share a quick sketch of your background and then we'll dive into all the fun, interesting stuff.
Andrew Jamison (02:09):
It's almost the opposite way around in my life. My personal life's really interesting, my work life's really dull. No, just in terms of my background look fairly diverse. I actually have an Australian father, a Swedish mother. Was born in the UK, but very quickly at the age of 12 months they made their way over to France where I started my education in a French school till I was 10. And then got punted across the channel to go to boarding school in the UK where I went all the way through and then through to college over there as well. So that sort of gives you a little bit of an understanding of the web that I have in terms of countries and languages.
Daniel Scrivner (02:44):
It's a super fascinating background. How has that shown up later in your life? I don't know, in dispositions or languages or unique skills?
Andrew Jamison (02:53):
Well I think we have an increasingly global workforce. And what it allows I think is to understand sort of the nuances between cultures. How do the Dutch react versus the British versus the French versus Germans versus Americans. For me it's just it creates a very interesting lens to look at things, trying to bring in the cultural dimension of why they're coming at you from a certain angle or why they have a certain attitude towards certain things. So I found from an EQ perspective it's actually been helpful to really have that background. And on the other side, it also helps you to be able to engage with people when you can speak in their natural language.
Andrew Jamison (03:26):
If you can start first and cobble your way through a sentence it's still better than sort of going straight to English and so it helps to build bridges. Even though obviously English is the global language, just the ability to make that effort I think helps to create an engagement model where people are more receptive. And so I've always often taken that as something that's important in my personal life but actually then spills over into the world of business increasingly as I've moved around the world and now found myself in the US.
Daniel Scrivner (03:54):
Yeah, that's fascinating. The part you left out was that you spent 12 years at American Express which is closely related to what you're building at Extend. And one of the questions I wanted to ask there is that's an enormous period of time to be at one company through what I would imagine is a pretty incredible inflection point in technology. Being at a company like American Express over the last 12 years, what were some of the biggest evolutions that you saw in kind of credit, debit cards, banking over that period in time? What was your view like from inside American Express?
Andrew Jamison (04:29):
So it's really interesting that today we talk increasingly of embedded payments as something that's important in a user experience. And we see it every day contextualized right in our consumer lives, whether it's how you grab an Uber and payments is embedded. You almost gone to a point in life where you step out of the car without thinking about payment. And certainly I've done that at a few yellow taxis here in New York. You sort of bowl out and the guy goes, you got to pay. And you're like, oh yes, yes, that was the model. And thankfully they came up with an innovation called Curve. And so now we can do that too without having to think about it. But look, I had started my career and look, I've only had three jobs in my whole career and I'm now 51. So I guess I've been around a few years. But the first eight of those were working alongside SAP as a consultant deploying the solution.
Andrew Jamison (05:13):
And then I brought what I really knew is really about clients and what it took clients to make payments. I was always in the B2B side of the world. I've never been on the consumer side of the world. So it has always been about what does it take for businesses to make payments? And my secret source, I always say my competitive advantage relative to everyone else at Amex, most folks have come from the consumer side of the equation. Whereas I had literally been born and bred in terms of how do you integrate things into an ERP and businesses operate off ERP, especially if you're in that Fortune 1000 sort of range, you're operating on big platforms like SAP. And so then I spent 12 years really looking at a landscape where it was no longer about corporate cards because corporate cards had been around for decades.
Andrew Jamison (05:55):
And it was about saying okay, well if Amex were going to continue to grow, how'd you get into other indirect payment spaces. And the more you went into that space the more you realize it was actually relying on other technologies that weren't actually the card or the payment rails themselves and so that integration. So for me that embedded payments journey really started in earnest for me the minute I'd leapt from ERP into Amex. And look, my first journey with Amex was we went out to buy an electronic invoicing company. Again, the philosophy was simple. See the invoice, see a purchase order, have the first right to finance it. And so the mind map was already there. And this was back in 2007, 2008. And Amex was interested and said, okay, how do I go beyond just T&E and how do I help create efficiencies across bigger spend?
Andrew Jamison (06:47):
And so that was an interesting journey because they kind of went in with two feet and then very quickly realized, well, that's great but we're really experts in payments. And so we sort of end up unwinding a lot of that business as part of that journey. But it was look, that was the big thing around seeing embedded payments which again just keep going. And then the digitization of the whole experience that started to happen again around digital statements. And we forget that Apple iPhones and the Samsung phones they're not really that old in terms of how long they've been around. And so how much of it we now rely on that tool to do so much of our work it was the beginning of that journey. So for me that was a great time to be around to experience that conversion from paper and phone to truly digital channels.
Daniel Scrivner (07:34):
Yeah. Well and it aligns really nicely with what you're building at Extend which I want to get into in a second which is basically the first virtual card platform. But I want to come to a point we're going to come back around to later in the episode, which is talking about at a super meta level what cards unlock in a global world where we're all interconnected and we might need to transact at any point in time. And one of the things that you said when we were first talking about doing this interview was about cards as an instant trust enabler and how powerful that is. Can you just go super meta for a second and share your opine on what cards unlock in a global interconnected world and why they matter.
Andrew Jamison (08:15):
Yeah. I mean look, it's actually amazing. And we talked about travel at the beginning of this thing between all these different countries. And the reality is what people forget is you can be living here and known by your local community and your local bank but you could at the same time be somewhere else across the world in Australia where you know nobody and you pull out your card and you can make a purchase and people let you walk out with the goods. It is quite simply incredible to think that trust is created right there and then because you present a piece of plastic.
Andrew Jamison (08:45):
Essentially it's as good as cash and that's an incredible thing to have created. And it happens in a split second, there's instant trust created between you and the person on the other side of the counter. And a lot of people say, oh well cards are going to move on. Cards are dead. Well, I don't know. How many other platforms are there today where in a fraction of a second you create instant trust? And I think people massively underestimate what it is that MasterCard and also Visa or an Amex have created in creating that ecosystem, that network that allows for that seamless establishment of trust.
Daniel Scrivner (09:23):
Yeah. Well it's almost like a kind of global interconnected world where we're all trading with one another really wouldn't exist without something like that. And it was also interesting as you were saying that obviously these are enormously valuable kind of platforms and pieces of infrastructure. But it is somewhat funny that it's all enabled by this what? Maybe costs 2 cents to produce piece of plastic that you carry around in your wallet. It's fascinating.
Andrew Jamison (09:50):
Well yeah. It used to probably cost 2 cents and then it goes up and up because you have to layer in security layers because of all these different things. So it's interesting as we progress with technology. The folks who want to do something in the fairest just get more and more sophisticated. And that's just the world we live in today. And so security is forefront at anything you try and do now on a digital layer because frankly that's everyone's big fear is your brand somewhat relies on the fact that you have to have security as an underpinning because it's really a matter of when not if that something's going to go wrong and you just have to have that mindset.
Daniel Scrivner (10:25):
Yeah. Well it also feels like as the world becomes more digital I'm thinking as I say this obviously about crypto and DeFi. These become almost purely digital experiences that trust but especially security becomes more and more and more important because one, I don't know there's less to grasp on to. It's harder to understand. It's a little bit more opaque. Interesting to think about.
Andrew Jamison (10:48):
No look, I think there's tremendous excitement on these other payment rails. It's just that unfortunately the average consumer on the high street doesn't know how quite to interact with it. It's still the fact that people are thinking of it as like well, if I invest in where it's like it tells you straight away, it's a commodity it's very different to a currency which unless something major happens like a war that just erupted. And obviously that has a big impact on the ruble and other things. But otherwise, as far as currencies everyone sort of knows them as a fairly stable. Certainly in the Western economy they've been very stable for quite some time. And I think that's why people are struggling to grasp with you can't walk into a bank and pull cash out.
Andrew Jamison (11:28):
How do you get cash? It's all a little bit too digital but we have to just remember, well this is such an early part of that journey as well. And look, it's all about people trying to get into the market and figure out what the next evolution is. But it's not the first time people have tried another evolution and there'll be some failures along the way before we get to really the next big milestone. And we still don't know what that next big milestone is. But there's a lot of excitement as to what it might be. And I think that's really what people are chasing.
Daniel Scrivner (11:57):
Yeah. It's like exploring the problem space and the opportunity space of what that next evolution could look like. And it's messy and it's chaotic and no one actually has a clue where it's all going but we're all trying to participate. So I want to dive into what you're building at Extend. And this was one of my favorite episodes to prep for because I feel like I had to learn a lot to be able to hopefully somewhat competently speak about what you're doing because at the high level it's very simple. You could just say the first virtual card platform for any card issuer. But then I think there's layers and layers of okay, well what does that actually mean? What does that unlock? And so I was going to try, I'm going to try my best. Hopefully I won't embarrass myself to describe what you're building and then I'd love it if you could jump in and help flesh it out a little bit more.
Daniel Scrivner (12:39):
But at the highest level it's you're effectively a software layer that can sit on top of any card issuer so customers can turn one physical card into many virtual cards. And we'll talk about what that unlocks and why that's interesting. And to do that you've basically created enterprise software for developers at banks and card issuers and financial institutions. But then you also actually have a consumer side of the business where you've built an Extend iOS app. And so it's almost you're building the tools for developers in these financial institutions but then you're also threading that experience all the way through kind of the end consumer. Do I have that right and can you maybe flesh that out and help people understand how all those pieces fit together?
Andrew Jamison (13:21):
I think you're hired. We're looking for another product leader. So that's it, you're done. Now look, look, you're absolutely right. And look, it's everything's simple, it's mild in complexity because actually the hard part of making something simple is making it simple. But the reality is exactly that, we've just created really a digital ecosystem that sits around aging infrastructure because a lot of the financial services companies have been around for a long time. And a lot of that infrastructure ain't exactly new. But again, it's worked very well. It's very well embedded in many different places. The problem is it's constrained. It's constrained because it wasn't designed with a digital era in mind. So it's all about actually how can someone take on the work of creating those integration points into these old platforms. And then on the other side of that digital world is really flexibility.
Andrew Jamison (14:15):
And what we've done is created sort of the flexible tools by doing three, four years worth of work. To get these integrations going with these key strategic partners of the banks so that now they have an ecosystem, a tool set that essentially they can put in front of their clients. And because the clients of these banks are increasingly tech savvy and they know how to do things really quickly. And they're only being slowed down by the fact that the banks weren't really opening up these digital channels. So that was our core part of the journey was to say okay, how do we bring those tools? Because the bank can't rip out these old platforms and just replace it with something that is new because it's not just about that. It's about how those platforms are integrated into an end-to-end customer experience.
Andrew Jamison (14:59):
How do I receive a statement? How do I pay down against my statement? How do I query a charge? How do I get a new card? All these are different platforms and they've taken a long time to create end to end user experience looks like so you have to work within that construct. I'd say before we came around, many people were just saying, oh to hell with it. I'm just going to wipe the table clean and start with a whole new fresh ecosystem. Which has worked really well because at the same time we came at an era when neobank were emerging, neo card issuers were emerging. So they were like, well we're starting from scratch anyways.
Andrew Jamison (15:32):
So brilliant, let's find what this best in breed technology might look like. But then they're faced with a different problem which is like, great, now they have to figure out acquisition of clients. And we all know that's not difficult. And our bet to some degree was look, the underlying relationship between clients and banks it's not that broken. It was just missing some of these key tools. And so we made a contrarian bet in saying actually I think just overlaying new digital capabilities is going to be more appealing to clients than for them having to start fresh with a whole new relationship, with a card issuer or a bank.
Daniel Scrivner (16:08):
Yeah. It's fascinating because I get the desire to wipe the slate clean. I feel like any technologist, especially someone founding a startup is like yeah, absolutely because they have such disdain. And they also haven't had the experience that you've had which is being in these institutions. And I think realizing being on the other side of the table and to your point, feeling like you've put in a lot of work. Yes, maybe you don't have all the tools to deliver this experience that you want to deliver but there's a lot of stuff you have right and you don't want to mess that up. And I don't know, just this idea of playing within the sandbox that already exists as opposed to trying to wipe it out and create a new one is fascinating.
Andrew Jamison (16:43):
There's a lot of things in the sandbox which you can't get around. Compliance and sanctions and some of the regulation when it comes to moving money and doing different payment flows. And so my view is all those are there they're utilities. So why do I want to recreate them? The concept of ledgering for the fact that you made a transaction and appears in your statement. And again, that's kind of a utility. And so you have to spin your wheels so hard to get all these other utilities up to speed. My view was that in itself doesn't necessarily make sense if you want to have the broadest impact on an existing client base. And so that was really the bet was to say, no, we will have the broadest impact. It's going to be a much harder journey for the first four years because I have to deal with technical debt. And technical debt is every IT person's nightmare.
Andrew Jamison (17:27):
And it's every business person's nightmare because every time you try and budget for something it sort of racks up into the millions before you even got started. And I think that's the frustration that business folks have is every time they try and touch these platforms it's millions and millions and millions of dollars. And the way that these financial institutions actually like any big company is set up is the investment cycles are too long. And frankly the justifications are just too massive. And then the funds you get are too small. And certainly that's been the case for the last I'd say 10 years where we've had a pretty good run at it from a ventures standpoint and a private equity standpoint because lent in as well. And so it's just been a flow of funds and it's been quite an unfair competition because you have a lot of emerging FinTechs with really, really deep pockets.
Andrew Jamison (18:16):
And some of those sort of older players in the marketplace had to go through their traditional investment cycles. And yes, they've tried to make them fast and they've tried to make them more flexible. But we are talking orders of magnitude of a hundred X difference in funding that drops to your bottom line and effectively that you're allowed to go and use for innovation. When in reality, the FinTechs have little to no revenue versus the banks have a ton of revenue but have to return most of it to shareholders. So it's an odd place to be in. And I compared it to my life at American Express which here was a company dropping billions of dollars to the bottom line.
Andrew Jamison (18:51):
So they're not short of funding but the reality is a lot of their investment then comes in for compliance projects. It then comes in for some discrete projects but they can't guarantee the funding will last for 2, 3, 4, 5 years because there'll be a change of leadership, a change of direction. And so it doesn't play well in the technology world where you kind of got to be all in all the time because things are becoming much, much more siloed in terms of what is the problem you're fixing from a tech perspective. And you've got to be at the pinnacle of the game or you're just going to fall so far behind it's just not worth investing in it.
Daniel Scrivner (19:25):
Yeah, it's a fascinating perspective. I want to hear you talk a little bit more about those first four years. And specifically I think to try to understand a little bit better the tooling that you were building at that time and some of the integrations there so that people get, I guess maybe the size, the scope maybe the ambition of what you had to build before you could really come to market.
Andrew Jamison (19:46):
So look, there's just been a lot of players that have come into the market and one of the obvious ones right is Marketer that's been out there. But then there's been others. I do see Galileo's has done more on the neo banking side of the world. And really the education they taught us all was if you want to bring a compelling suite of capabilities to market it's really from lots of different service providers. And so the new model was very much more of, hey, I don't want point to point connections. I want to have one aggregator that can deliver all of these services through a simple suite of APIs. And so that's kind of the aha moment that they came to that conclusion. If you're going to embed payments, you need all these other services involved in it.
Andrew Jamison (20:26):
And so really the first four years was sort of saying, okay, who are the strategic partners to the banks? And then what are the capabilities they're falling short on? So it was really about how does a startup create relationships with Visa, MasterCard, Amex. And then the sort of the giant in the card issuing business certainly on the commercial side and the largest in the consumer side too, which is TSYS. How do you as a startup earn a right to go into these big old blue chip companies and really earn the right to say, no, no, no, we're building something for the future. Trust me, believe me, we're going to get there. And it's about getting access to their technology to say, we are going to build a better world for you and with you was really what this was about. And then once we had sort of built in those connections and obviously there's a long contracting process.
Andrew Jamison (21:14):
There's just the reality of the world then only then can you start to say, great, I now have the foundations where I can build user experiences, whether it's for the web or for mobile iOS and Android. And so it's really been an evolution. And I think one of the biggest discoveries for us along the way which I hadn't caught on to was actually one of the things that FinTechs do really well is make onboarding frictionless. And so three and a half years into the journey we were like this platform works great when you're up and running. But to get up and running is a nightmare. And then we had to sort of realize like actually we've got the onboarding model completely wrong because we're not better than the emerging players. And it's still too much friction for the corporate. It's still too much friction for the banks which is why they failed to grow.
Andrew Jamison (22:01):
And then that's when the penny dropped which was like, hang on a second. Actually all of these customers already have every thing they have in their possession today which is they have either a laptop for web or they have a phone for access to mobile capabilities. And they have a piece of plastic in their pocket. How about we start the journey with the piece of plastic that they already have. And there's tens of millions of those already in circulation. So how about we make that really simple and make that journey all of about a five minute experience through which we enable existing cardholders with these new digital capabilities, with everything they already have in their possession. And that's really what sort of allowed us to finally unlock the potential and to finally start growing its scale because we'd actually solved the biggest pain point which is friction and adoption.
Daniel Scrivner (22:49):
Why I also love that you just as a company and you could be, I don't know, you're intellectually open enough and honest enough to know when to beg, borrow and steal a good idea somebody else has as opposed to trying to... And understanding this really careful balance of you're both taking a very different fundamental strategic approach to the business but you're still recognizing when to kind of borrow this playbook here and there I think is kind of fascinating.
Andrew Jamison (23:16):
I think at the end of the day they built that playbook to go and serve new and emerging companies. Whether there's Uber and other businesses that had just frankly different needs. They were part of this new generation of services. But what I realize more than anything else, that's great. So you're building for that ecosystem but there's a whole slew of companies that love access to digital capabilities and they've just been starved of those capabilities. So it was about saying, okay, what about everyone else? And so my view is I want to serve everyone else. And over time the big question is what do companies do when they become the size of an Uber or Grubhub and suddenly they're international. And so who's going to be their bank at some point, servicing them internationally? And that's where it gets to be really interesting is saying, okay well surely they're going to gravitate back towards the big international multinational players. So surely that's their destination because they can't operate with their existing providers across all these international markets because those players don't have a presence there.
Daniel Scrivner (24:17):
I want to go a little bit further and talk about what virtual cards unlock because I do think it's fascinating just understanding some of the different use cases. And at a high level one of them. Say I run a business, I can take my Amex card and I can create virtual cards for either departments. I can create virtual cards for people on my team which unlocks a bunch of things and each of these can have its own spend limit. And so you're effectively taking one monolithic card and turning it into many small cards. Am I missing anything there? And how do you tell that story to your customers around taking one card and then digitally creating say 5 or 10 cards out of that?
Andrew Jamison (24:57):
Yeah. So again I think it spans the gamut of small companies typically are sitting there going, I don't want to give cards to anybody because I'm a small business, I'm a mom and pop business. But even as you grow to sort of 25, 30, 40 people you've typically grown because you've kept a very tight eye on your finances. And so it's always everyone's always wary of giving cards out to employees as you grow your business. And so it's really about saying, okay but I understand the concern. Now how as opposed to giving someone a card that always has a balance on it month after month after month, how about if you now say well, I give you a card for today. I give you a card for this week. I give you a card. And by the way, I could adjust the limit based on my degrees of comfort.
Andrew Jamison (25:39):
Whether it's for it's $100 today for you to go and buy X subscription. It's $2,000 next month because you got to pay conference access. It's depending on what their business model is that's the early parts of it. And so bigger companies have often had much more flexibility around who they hand cards to. Again, bigger businesses and therefore they have more degrees of security because they have policies and procedures in place et cetera, et cetera. Then you start going into actual businesses who sort of are just not running as operationally efficiently as they would like to. So a good use case for us is let's assume that somehow unfortunately your house got burned down. Now you call your insurance company. Now you need to go and stay in a hotel. How does that insurance company provide and provision a payment to that hotel to basically say it's so okay Daniel, you can now go stay at that property it's paid for.
Andrew Jamison (26:31):
So you sort of end up with these they have a policy with you but they don't have a method to then go and make these payments on your behalf. And so a lot of it was going on invoice. It's very inefficient. So what if now they can tie every virtual card to your policy number and now when the card charge comes through they can tie back to a policy. And so you create massive efficiency under a really strict and tight control that allows to ensure that everything is working the way it's supposed to and people aren't misusing or abusing. Again, because you can start to lock where these cards can be used. And you also limit the damage because you're now assigning a specific amount of credit against the charges that are about to be incurred. So there's some efficiency plays, there's some control plays that will come into play here.
Daniel Scrivner (27:16):
Yeah. One of the other maybe second, third order effects that kind of was apparent to me is also that you get much, much better data. Because just like having a business with say five departments and all of it's running through one card that is not as good as having five cards that you can basically split between the departments and then you know exactly which department is charging what expense. And yes, there are ways to solve that. Typically, it's done with a lot of accounting work after the fact. So literally you're just playing detective trying to go through your bank statements and figuring it out. And so it's just fascinating to me that here you have something that at the surface that seems very simple. And yet some of the second and third order effects seem really massive. Like for myself being able to take an Amex gold card and turn it into five cards for different businesses or different projects. I think is fascinating. Do you think of data as an advantage and do customers think of data as an advantage as well?
Andrew Jamison (28:11):
Massively because there's only so many places that essentially the existing card providers can store data today. And it's usually linked to your profile, it's linked to the merchant and they all give data. And so the limits are what have you got in your profile what we can gather from the merchant. And then we'll shoehorn that into our platform. That's the data you have. But the reality is when you now have the ability to hand the reins over to the cardholder and say, you decide who you sent it to, do you want to put their email address on there? Do you want to put a reference number on there? Do you want to add essentially a booking number on there. Now all that data flows through with the transaction. And so you have much richer data and so you have much better insights.
Andrew Jamison (28:49):
You have a better way of assigning charges. I'll give you a great example. I was actually flying back last week from London because I attended a commercial payments international CPI conference over there because we're about to launch into Europe. And next to me I sat next to a lawyer. And I don't know how we started the conversation because usually these days you're wearing your mask and you kind of get into your own business but we had to swap seats. And before you know it we started chatting and she started asking me what I was doing in London. And I explained to her I was there for a payments conference. I explained to her a little bit of what I did and she was like, "Oh look, I do a lot of different employment law for FinTechs who are trying to bring resources from Canada to these different markets."
Andrew Jamison (29:33):
She says, "I have an absolute nightmare tracking now essentially all of the charges that I incur on my Amex card." I was like hello, what's what's happening here. A sales pitch is about to happen. And I sort of I'd say, look, I'm not here to sell you anything but let me explain to you the value that you're not unlocking today with the existing Amex card that you have. Which is as you do all these court filings you can now assign an individual's profile number and essentially any other data related to the company. So it's like I can therefore tag it is it's Andrew Jamison and it's for company XY who's moving employee from Canada to the US or from Europe to the US. And now you have an easy way every time a charge comes through, an easy way to rebuild your clients for all of the filing costs that you essentially are incurring.
Andrew Jamison (30:24):
She says, "Oh my goodness." She said, "You don't understand. I have an army of people today that are charging against these department cards and we have no idea. It's almost like you have to reach out to the ecosystem and say okay, who charged on this day for this particular thing? And it's just hugely inefficient." And we already know we had a vertical in the legal space because today too many people were sharing cards. And so they weren't getting the data. So actually just being able to actually put in the name of the client or the name of a project or both onto a card, suddenly you have transparency and suddenly you get huge efficiencies in their business because every month it's almost the charges are pre-allocated out the of clients. And so there's complete transparency and there's huge efficiencies for them. So that's just to give you a sense of how that plays out and how important data is to these clients.
Daniel Scrivner (31:11):
Yeah, it's a fascinating example. I want to talk about one other that you brought up before which is GrubHub and the idea that obviously for companies that have contractors. I mean I guess the model's actually very similar to what you just described. So with GrubHub they have the problem of obviously couriers are going to pick up orders. How are they going to pay for those orders? And being able to tokenize cards is a fascinating example there. Talk about the kind of platform contractor use case just a bit more.
Andrew Jamison (31:38):
Look, I think all of these companies that are supporting these food delivery businesses. But again, a lot of it is from a different type of workforce. These are folks who come and maybe work for a month and then they're off and they may be doing it during vacations. And so you have a very transient workforce. And so the idea that you're going to give them an actual physical card is somewhat challenged. And so they want to have something that you can get from A to B. And by the way we don't support that business today but it's something we're looking at. But again, it's a really interesting use case because that whole gig economy it's an economy where you have to get something provisioned to the individual really quickly so they can start working really quickly.
Andrew Jamison (32:20):
And then you need to have all the controls in place. Which basically says okay, well is Andrew at this location to pick up a specific order? Is Andrew even on shift at this particular time? And so you have all these control parameters that you want to apply before when a card is actually swiped or inserted or tapped. And in fact that opens a window that says, does this make sense? Is Andrew meant to have picked up an order from this location right in this timeframe? And that's a whole different technology than how cards have operated in the past which is typically on a profile. It's if you think of when your card gets declined is because you're going off for your profile. Maybe you suddenly landed in a country that the card provider didn't expect you to be in and now you charge your card.
Andrew Jamison (33:03):
And they think, well that's got to be fraud. It's having that additional context and being able to use that information at the point at which you decision a transaction. That's where some of the greatest innovations are happening right now which is the ability to open that window for companies to decide yes or no, should this transaction go through. Don't let it be the bank that decides it or the card networks that make that decision on your behalf. You'll take the risk because you have the system that tells you that Andrew is on shift, is in the right place, charging the right amount. So yes, that charge will go through. It should never get declined. Even if a partner spend might say to you, man it looks like it should be declined. So it's the sophistication that we're getting to is what is so exciting.
Andrew Jamison (33:46):
And obviously that's in that sort of gig economy construct. But you can see how that's going to spill over into consumer and to all these different things. The controls you'll be able to give to your kids' cars or cars that you may issue to your parents overseas if you happen to be repatriating cash to family that's overseas. The controls are getting to be so much more intelligent. And the nice thing is you're actually now giving a digital product to someone that's incredibly usable but transparent. And so it's no longer cash. And I remember that's one of the big things someone said to me, nothing good really happens with cash. And so the idea that you can start phasing cash out is actually a really good thing because of the regulations that sit around it and it does provide that ultimate transparency. And so we should all be in favor of seeing that digital economy really continue to blossom.
Daniel Scrivner (34:39):
Yeah. Well I love, I'm sure from that experience you now have multiple other items that have been added to your roadmap in terms of functionality. So I want to ask one kind of clarifying question which is so you obviously, your model is all about serving existing financial institutions and helping deliver digital capabilities that they wouldn't be able to have otherwise. But one thing that's interesting to about, and obviously wouldn't necessarily make sense strategically, but I just want to bring it up and kind of discuss it is you are not a card issuer. Was that ever a decision you considered and decided against? Or was that something from day one you were like no, that's not the model, we're providing tools for card issuers?
Andrew Jamison (35:18):
So I think it's a great question. And you wouldn't be the first one to ask it but it's because everyone sees what these neo card issuers have been able to achieve in a really short period of time and it's quite amazing. The challenge for me though is it's easy to ramp initially but then you hit sort of certain headwinds. But what I've also noticed is so many people who played on both sides, who on the one hand were their own issuer and separately they try to partner up and buddy up with other banks, more traditional banks who are doing issuance is it created a very confusing message. And the confusing message is this, what happens when I've been able to move my issuing capabilities faster than the bank partners that I have? Which by definition is going to happen because a bank partner will hold you up on a couple of things and say well, I'm not quite ready to do this launch but I'm ready so you'll go.
Andrew Jamison (36:12):
What happens when that client says, well, hang on, I see this capability exists on your own issuing business. What happens then? And what happens is they start to steal clients going over. And very quickly the other issuents they're going well, hang on, I've just let you in. It's like letting the line into the zoo. And you basically said, well, I've just let you come in there. And so a lot of traditional issues have been burnt in that. And so I've made it very clear from the beginning. And I saw it firsthand even when I was at Amex that I was like, I can't be both sides of the equation. And I need to be very careful that I'm not because it will create a conflict that I can never get over. And so for me it's always been no, we will never be an issuer and I've made that really explicitly clear to all the issuers we work with but also others who we who've come to me and said like, we'll be your sponsor bank. We'll help you set up your infrastructure and platform.
Andrew Jamison (37:02):
That's great. And yes, I'll get a short term, massive injection of growth but it's going to come at a huge cost downstream. So I'm like, no, I'm sticking to the journey of these are hard yards with issues because they make decisions quickly. That's just part of being a big company and a conservative because I'm dealing with money. But I think it's a right path. And we're seeing now four years, five years actually down the line, we're seeing some really big traction coming through. And so the prospect of wanting to be my own issuer is rapidly dissipating because we're seeing now the sort of the fruits of the labor coming through. But yeah, there are times when you wonder, am I going down the right path just because it's hard.
Andrew Jamison (37:40):
It's convincing these juggernauts to move. But we've also found ways of making life easier. And so some of the ways we've made life easier is they were always terrified at this as banks to onboard you as a client because it was an 18 months sometimes 2 years process. And so that was something in which we sold for started contracting through card networks like MasterCard. And we're working with one of the biggest processors to also be able to contract through them. So that now the banks contract through an existing strategic partner we're just a statement of work that's slots in underneath it. And it's just a matter of weeks not months and years before we can get up and running. So there's things you have to do. We'd already solved for the tech part, that doesn't require issues to do any tech work when we launch with them. So you just got to knock off the challenges as you go. But no, the message is clear, we will partner with traditional issuers. We will not go out and issue.
Daniel Scrivner (38:37):
Yeah. I mean I love the strategic clarity there because obviously of course if you were to become an issuer incentives aren't aligned. But I love the point you made as well too that it makes it so that you can't possibly tell a clean story that other people can wrap their heads around which I think is even a better way of stating the same thing. But I also love just hearing you kind of talk about that and talk about a neobank seeing this fast ramp. And the approach you've taken, it's almost like you guys have spent four years pulling back the slingshot and then when you launch it, you can maybe jettison yourself up the growth curve. And you now have a much, much, much, much, much bigger market serve. And so I think it's just a fascinating example of just a very different strategy and how interesting that is in a competitive space.
Andrew Jamison (39:24):
So I mean what's interesting as well is it had an impact on our fundraising. I'd say our seed was a tough negotiation. Our series A was a tough negotiation. Our series B on the other hand was just a much better story for us. And it wasn't just because it was a massive influx of capital happening. It was also because people started to see that the strategy and the light at the end of the tunnel. They were like, hang on a second. I think also bank infrastructure plays became way more attractive to investors because they realized there is a clear modification path in that particular space. It isn't the case of, I have a ton of users. I promise you I'll find a way of modifying them over time and then sure as hell they never actually materialized. These people actually saw and said, no, I can see how monetize this.
Andrew Jamison (40:09):
Yeah, it'll be small monetization. But the potential scale is great because there are hundreds of millions of cards in circulation. And the big evolution that they got their head around was, oh, I get it. You've turned what was a product in an end of itself virtual cards into a feature of the hundreds of million cards that are already in circulation. And so suddenly people were like, that makes sense because actually that's how I'd want my bank customer to think of me as I reach into my wallet and I can pull out my card and I'm off. It takes me five minutes and I get access to all of this. And that's kind of the way that banks want to engage with their clients is just continuing to show them innovation without them having to change anything in their diet basically.
Daniel Scrivner (40:53):
Yeah. Speaking as a consumer, that's what I love. I love it when I don't have to change a thing, it just gets better and better and better.
Andrew Jamison (41:00):
Yeah, that's everyone's ultimate dream. I think we've all got to a place of fatigue where it's sort of slamming net new, net new, net new. It's there isn't always something good that comes out of something net new.
Daniel Scrivner (41:10):
No, no, but there is always work. I think that's what people see through and see right to the work. I want to ask two questions around I think unique parts of your model. And one of them is that obviously what you're building is software centric. Was your role at American Express software centric? And if so, what was it like to move to Extend where you're basically in a lot of ways building a developer toolkit and an API and thinking much more code forward?
Andrew Jamison (41:39):
So look, I think I've always been on that side of the equation. I mean even when I was working alongside SAP as a consultant I was always trying to help and understand what was the end game that the company was doing. And SAP and all the ERP's got a bit of a bad rap at one point which is I just replaced my old system with this new system and it doesn't seem to work that much better. And it's like, well, if you put your old IT stuff onto this project, they'd probably try to replicate what they had before in a new technology and therefore it didn't work. So it was all about, no, no, you need to get the business folks to step in and then you can actually design something for the future. And I applied this same principle when I went and joined American Express.
Andrew Jamison (42:17):
And again, I went into that commercial division. I came at I guess which was a really interesting inflection point. We'd come through the sort of eCommerce sort of bubble and e-procurement was really growing. And so everyone understood already that more of these technology tools were going to be at the heart of how businesses make decisions and therefore how they're going to have to pay for things. So I took that approach and I was really handed a really unique opportunity when we brought this e-invoicing company down in Atlanta which is how about you go build a startup inside a really big company. And the reason why it was a startup was look, I spent my first two and a half years here in the US pretty much commuting to Atlanta. And I was really operating as a consultant within Amex and it was odd because I swore I was going to leave consultancy and never go back.
Andrew Jamison (42:59):
And here I was being a consultant. But it was great because it was a journey of sort of like A, looking at the technology that they had, understanding that because we hit the financial crisis, we were not going to focus on parts of businesses that were not going to return the type of returns that we needed. So we ended up killing off the invoicing piece and just keeping the payment engine. And then I had to go and rebuild it from scratch. And I was able to bring in some of my former SAP colleagues in because we were like, no, no, no, we need to think outside of a mainframe mindset. So I'd already started to do that. So I was always much more on that software side. I mean I'm not a coder, I did six months of coding when I started with SAP. Very quickly realized that was never where I was going but it taught me all of the foundational pillars of how you need to think if you're going to build scalable software.
Andrew Jamison (43:48):
And I've just used that right over the years. And that helped me inside of Amex. And so that was my competitive advantage was understanding that mindset. And it just handed me more and more tools to play with. And one of the ones was actually the virtual card capabilities that we actually bought from GE back in 2009. So I had my first taste of virtual cards in 2009. It was a small business for Amex back in the day but it grew, we grew that thing really fast. So 30X what it was in five years. And that really helped me to understand the value of virtual cards. Now, it was in the context of enterprise clients. It was massive volume for companies like Orbit and Expedia who were securing people's bookings in hotel properties not on your card that you gave them when you paid for the service but actually how they were holding bookings with the hotel properties in the background.
Andrew Jamison (44:38):
And so that had me spinning. But the reality is I also didn't leave Amex to create Extend. That came 15 months further down the line when I finally decided what I was going to do post Amex. That was a very different journey for me, one that I completely had not anticipated. I thought I would go back into the workforce, back into a large bank or potentially into a completely different line of business. Really the Extend opportunity sort of developed over time. And suddenly I decided that's what I wanted to do. And I'd luckily had the support of my wife to say, no, that's what you should go and do. And so off I went on that journey.
Daniel Scrivner (45:17):
Was there a tipping point as you were in that 15 month period where you were finally like, okay yes, I need to go build this now or I need to start this now?
Andrew Jamison (45:25):
It was a good say 10, 11 months. And look, one of the things I've shared with many people I left Amex because of my mother's health. My mother had suffered from cancer since I was 10 and it happened at 20 and 30 and 40. And so she was a trooper because she was a true survivor, the definition of a survivor. But this was the end of her journey. And it's interesting, even though I was whatever it was back then, 43, 44, 45, you sort of think you've grown and you should know what you want and you should feel unencumbered. The reality is I didn't have the freedom that I think I needed to be able to go and do this. I think I'd just been trained in enterprise. And as my former boss at Amex said is that every time I went to meetings is, "These are great ideas. I can see clients are very responsive to you but you know you make my hair hurt every time we go into a meeting."
Andrew Jamison (46:09):
And she's like, "There's a beauty in simplicity." And so the irony is I sort of took a lot of that experience of like I've lived in the land of complex. There is a more simple way of doing things. And then it was just like do you have the courage and conviction that you can go and build this yourself? And for me that was life's not a dressed rehearsal. And it's look, it's as I said, none of this is possible at my age with two kids. And when you think about education and college and those things unless you have someone who's there supporting you. And the reality is my wife was that support. She had a great job and had the conviction that this was going to be. But trust me as a CFO, she said set pretty clear milestones for me.
Daniel Scrivner (46:47):
She gave you her virtual card and metered out your expenses.
Andrew Jamison (46:51):
It was supposed to be. It was like if you don't this by then, you're packing up. If you're not hitting this one, you're packing up. Because she made the right assessment which is, these are to some extent the most productive years in your career. And so you don't want to throw it all away just on a whim of an idea. It has to be a good idea. And that's where the practical pragmatic thing comes into play. And look, that's where having a great network of mentors along the way, many of which are former Amex alumni, people from my old SAP career days who essentially kept me on the rails in those first three to four years but were instrumental really in that sort of once I decided 11 months, 12 months in that this is actually the journey I wanted to take were really instrumental and sort of helped me create sort of what are the founding pillars and what did I want this company to represent?
Andrew Jamison (47:38):
What did I want the team that we were going to build, how did I want to embody that team and what were the values that I wanted to bring into the company so that we could be competitive despite being little tech. In a world of really big tech who could offer massive salaries, how was I going to convince people to come and join us in this tiny little company? And it had a lot to do with really the way we thought about building a team and really what we wanted to embody.
Daniel Scrivner (48:05):
Amen to your wife and to all the husbands and wives out there founders because the truth is I think anyone with a significant other building a company or embarking on building a company needs a thousand percent support because it's a massive challenge.
Andrew Jamison (48:19):
Well I think that's why typically folks who are 22, 23, 24 they're unafraid and there's nothing there for them to have to worry too much about by themselves. And I think that's obviously why you have that freedom. But that rapidly starts to move away.
Daniel Scrivner (48:35):
Okay. I want to ask a couple of closing questions. One was around that transition of so you spend well you have SAP, you have Amex, both of these are large companies. And then you have this kind of transition period but then you're on the other end of the spectrum where it's a hyper small company, hyper small team you're building. What surprised you the most about founding and scaling a startup after so many years at larger companies. And I think what I'm looking for there is like what surprised you positively and maybe what surprised you negatively about just being in a different environment, a different end of the scale?
Andrew Jamison (49:13):
Yeah. So look, I guess I had two helping hands along the way. Number one is my father was an entrepreneur in a very different space like shop fitting equipment for supermarkets and hypermarkets in France. It's about shelving, it doesn't get less sexy than that but it was a grind. And so at least I knew what I was in for in terms of the commitment, the weekends and those sort of things. So that bit was fairly familiar to me. I had also seen the benefits of having done a startup with an Amex in terms of this company in Atlanta that okay, I could see how you could get this done. And then for me the key was I couldn't, I don't know how people would ever do this on their own.
Andrew Jamison (49:53):
So actually having really two founding partners in my mind. It's interesting across the investor community they were like, you can't have two, you'll dilute yourselves in equity too quickly. This never works. And I was like, well hang on a second. It depends on if you are three sales guys setting it up or three marketers. So yeah, I get it you're kind of overlapping each other. But I was really lucky in that in Danny, who's a great friend of my wife's for many years he really was really a sort of full stack engineer with really a preference around design and specifically iOS. And in Guillaume I had someone who I had worked with at Amex and we both funny enough spent 12 years there who was a strategist and worked in strategy office for the then CEO, Ken Chenault.
Andrew Jamison (50:32):
And then they'd worked in ops and how we integrated new startups into Amex. So really three separate legs of a stool and so instant trust. And what I loved about it was there was instant trust. And I didn't have to second guess it. I knew these two individuals really well. We knew we could get in our swim lane. We knew we were all in our forties and so we could cut corners from experience standpoint and we wouldn't fall down some of the pitfalls. The hardest thing for me was getting commitment from investors initially. Because I begged and borrowed to get budgets in a large company. But you're kind of doing in a fairly safe way because you have a salary and you've been around for a while. And so you're doing very well and life's pretty comfortable actually.
Andrew Jamison (51:16):
And here we were sort of bootstrapping it for the first year not paying ourselves and bumping our head against brick wall after brick wall which is kind of like you come out of large court you wouldn't know how to do this. And then say well, you've also never created a startup. So it's like well those two things kind of go hand in hand. And that was really hard those initial I'd say 18 months trying to convince people that yes, you were industry experts. Yes, you had a great vision as to where the platforms could be even though you kind of lived in the old you kind of knew where the future was going. That's probably the most demoralizing side for me was someone who I thought you were trusted, somebody you went in a world where it was like yeah, I don't trust you because you've never done it before.
Andrew Jamison (51:56):
And so ironically the path to our success was getting friends and family to invest. And that's why I now understand that it's like actually investors want to see that your friends and family wouldn't take a bet on you before they stick their dollars in. And then number two was really about could we show them a couple of milestones really quickly? And fortunately yeah, we were able to show a couple of milestones really quickly. And the irony is now it's funny. Every investor we talk to it's like well, you guys are experts in this space. So it's almost, it's now five years and so we're now part of that trusted ecosystem of folks. But you have to earn your stripes. And that's really hard from someone who comes from a decently successful career. And so that sometimes is probably the hardest hump to get over and you just got to keep backing yourself.
Daniel Scrivner (52:45):
Yeah. I mean that's not uncommon. And so I'm glad you're willing to open up about it and share it because one, I think a lot of investors struggle early on but it's often not talked about, so it's good that you're talking about it. So thanks for sharing that. But I think it does just go to show you too that one of the favorite perspectives I like to share with founders that feel like they're struggling is just the fact that companies are built in stages and in chapters. And because I think number one, it kind of lets them know that you might just be going through a funky, challenging bit at this moment in time. That doesn't mean it's always going to be that way. It's a finite moment in time
Andrew Jamison (53:21):
On that one side I would say look, the one interesting part is when we did raise money we were really good stewards of capital. And I think that's the difference was we didn't get enlightened because suddenly we had 10 million or suddenly we have the 40 million from the last round. The one thing is we've known how hard it is to get the dollars but we also know that you get dollars because you have to stand on your own two feet as a business. And so actually being able to commit to your employee base which is to say, that's our mission is to be a standalone business. And so we will recruit in phases rather than saying hey, we got 40 let's just flood the market with people only to then having to pull right back. And we're seeing that in the market. The public markets today are being pretty brutal to the folks who've just gone out there, got over excited, spent a ton of money and now having to pull back.
Andrew Jamison (54:10):
And I think again we're going through this normalization phase where again, people are having to remind themselves why it is you raise capital. You don't raise capital because you're going to raise more capital later. You're supposed to be starting up a business. And look, that is certainly an important piece of the pie. And that's also an important part of recruiting people. We have been really lucky so far in that we've now grown. I think pandemic we started at 20 people, we're now 60 people, we'll be a hundred by the end of the year. We have suffered from almost no attrition in that phase. And the more I talk to people, the more unusual that is. And so one of the big things I'm trying to do as I build a company is to create space for sharp individuals who don't necessarily fit the mold of the large corporate.
Andrew Jamison (55:00):
It's how do you allow individuality and how do you allow people to turn up as their best selves? But their best selves is not a mold, it is an individual because one of the biggest successes I felt I had inside of Amex in my 12 years there was building teams out of folks that wouldn't. If you had to go and create an event of like let's go to the bar or let's go and play this sporting activity or whatever it is, half of the people were like what, why are we doing this? And so everyone kept on getting pushed out of their comfort zones in that piece. And through that you build really strong teams actually because you have lots of different points of view and perspectives.
Andrew Jamison (55:35):
And I continue to answer that because as we grow I always say look, it's about trust and it's about trust in the people because you run through walls for people, you don't run through walls for a company. And so if we create the right culture around the right people we will continue to grow. And look, I touch wood I hope that growth continues and we continue to have that low attrition because I think it talks back to the values of the company and how we think about the business and it's resonated with a lot of people which I think has been very rewarding certainly for us as founders.
Daniel Scrivner (56:07):
Yeah, that's an incredible step and an incredible accomplishment because I don't know any other company that can be said about at least where I know the founder. So that's incredible. Last question, what has been the most fun part of this journey so far?
Andrew Jamison (56:23):
I think the fun part of the journey is every day is a new day. It's like every day you're starting a new company almost, or at least the emotional rollercoaster that comes with it. Within one day you can have the best news where you think you're set to go to the moon and within a few hours that dream got punctured because something broke, fell over or a relationship turned sideways. And it's really rewarding. It keeps you on your toes every day. And that sort of all in piece around it, for me it's like being at a top of a sport. You are just always connected, you're always in the zone. And it really means that you are sort of running along and really focused. And I love that.
Andrew Jamison (57:02):
Personally I think that focus is really compelling as an individual and you feel like you genuinely have skin in the game. And I think that's something which I find incredibly rewarding. And again, I try and instill that in the folks who join the team of look, you have stewardship, ownership, I'm hiring you because you have experience. And so I'm not here to run your show, your shop. Make sure it's yours. I will take your guidance because ultimately you should know better than what I do. And so empowering people and trusting people becomes the central part of the journey and just seeing what we can actually achieve as a small team in the grand scheme of things. 60 people is not a lot of people but you can move an awful lot of weight with 60 people if you're all pushing in the same direction.
Daniel Scrivner (57:45):
Yeah, so well said. It's a perfect note to end on. So for anyone listening that wants to learn more about Extend, you can learn more at paywithextend.com and you can also follow paywithextend on Twitter. And I don't think unless I missed something Andrew that you have a Twitter profile that anyone could follow?
Andrew Jamison (58:02):
No, you are not wrong. I'm constantly reminded of that. But look, I think there's just for me the usual channels of LinkedIn have worked really well. And look, our team certainly has created their own handles across the business. And I like clean lines. And so yeah, no, I don't want to overcomplexify my life. I do very narrow channels. Again, because I'm old clearly.
Daniel Scrivner (58:29):
No, it's just about incentives and alignment and it's all about Extend. Thank you so much for the time Andrew. This has been so much fun.
Andrew Jamison (58:37):
No, thank you Daniel. Really enjoyed the discussion. Cheers.
Daniel Scrivner (58:41):
Thank you so much for listening. For links to everything we discussed as well as the notes and transcript for this episode, visit outlieracademy.com/one hundred. At outlieracademy.com you can also find more incredible interviews with the founders of Levels, Superhuman, Eight Sleep, Rally, Common Stock and so many other incredible companies. You can now also find us on YouTube @youtube.com/outlier academy. On our channel you'll find all of our full length interviews, especially the video versions we've been doing for the past few months, as well as our favorite short clips from every episode, including this one. So make sure to check out our YouTube channel. And if you haven't already, follow us on Twitter, Instagram and LinkedIn @outlieracademy. Thank you so much for listening. We'll see you right here next week on Outlier Academy.
On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today.
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