Welcome to Breaking Banks. The number one, Killing It. There’s been a really interesting theme as we talk about Killing It.

Some of the interviews and a piece of consistency I wouldn’t have expected. but the number of founders who stepped away from highly successful, either startups or careers to go do this hard thing. And for those who don’t know, I’d love for you to start with, it’s not, I think, unless they follow you deeply, you started at Clarita in the rocket ship days, and yet you decided to go start True Accord after that.

Can you take us through, what led you to say, hey, you know what, it’s time to get off the rocket ship and go do something really hard again? Yeah. Well, you know, first we sold to PayPal, right, in 2008. And then I left PayPal, and then we sold another company to Klarna, and we were basically in the management of the company, right, when it raised its first unicorn round.

I remember going to the Crunchies with the founders, which, by the way, those Crunchies were won by Grindr, and it was a very, very funny episode in and of itself, because they were very surprised to win. But that’s a completely different story. I mean, very related to your fraud business and that collection, you know.

Well, I mean, you said at the Crunchies, and you’re in San Francisco, and Grindr wins, and they were very surprised. They were themselves very surprised on stage, like, oh, okay. It was funny, but now I know what Grindr is, so, you know, you live and you learn.

I think that people asked for me to be, and I’m just kind of in a way of answering your question, they kind of asked for me to be on this podcast because I’ve been doing this company for 11 years, and I think many times people think, well, you either exit in a few years, or it needs to be a slam dunk success, or you, like, continue to be a VC or something like that, and I understand that perspective. I think a lot of these things were a zip phenomenon, like they were related to zero interest rates. I run companies.

I start to run companies. That’s what I do. I think it’s almost like an imperative or like a way to express myself, and so there was not a question of whether I would stay in Klarna for many more years.

I just need to go and do something of my own, and there’s no question of whether I’m leaving this company, as long as it is meaningful, and it will continue to be meaningful for a very long time, I’m going to continue doing it, and by the way, when you do this for long enough, and we’re going to talk about this, I guess, later, you fire yourself correctly from their specific functions, and you hire the right people, and you increase your shelf life, so to speak. It gets more and more interesting and more and in different ways, and it becomes a huge advantage because you know the business so well, and you can make very, very profound strategic decisions, very, very long arc of execution, so I only see upsides from doing that. Which came first, chicken or the egg, in that you knew you were leaving and looking for the next thing, or the poor debt collection experience.

If I remember correctly, it was a credit card bill that you had forgotten about. Yeah. People keep asking me if this is a real story.

It is absolutely 100% a real story. $120 that I’d forgotten a store credit card. I won’t say the brand, but it’s real.

That specific thing happened as I was starting to research. I was exposed to debt collection as chief risk officer, chief credit officer at Klarna, and it was pretty mind-blowing to me how basic that was, and how little technology was involved there. So, almost hand in hand, almost the same time, a few months apart.

So, serendipity, right? You were searching for the problem to solve, and you experienced the problem and set out to solve it. Exactly. In that way.

And so, talk about the journey. Was it get the band back together? How did you start to go solve it? Because the third time has to be the charm to say, I’m going to do things differently from what I’ve learned the last time. What were those lessons? Well, I was very lucky that most of the people that I worked with before had exited, because we sold the company.

So, not many people wanted to do it again, which I understood them. So, I lured one of my brothers. So, one of my brothers was my co-founder in the company that we sold to Klarna.

And so, I got the other brother to come and work with me, and got another engineer to join as a co-founder. From day one, I felt like I’m doing this again, like I said, for self-expression, and because I want to do it, it’s less about the money. And so, for example, we split the equity evenly.

There was no, hey, I’ve done this before, so I’m going to take this and you take that. We split evenly. And so, that was a big thing.

We have, not from day one, but almost from the beginning, have had a seven-year exercise window for people who leave the company after a certain amount of time, because they wanted them to keep the equity. And that’s actually worked out well. People come back even a year after, three years after, and they’re like, here’s something.

I’m still an equity holder. Here’s something for the company that’s going to make it successful. I wasn’t sure in the beginning whether we were going to have the same trajectory as we did with the previous two companies, which is basically, we are inventing something really, really profound.

We have a huge product risk to show that you can use machine learning in this new area. And once we succeed, someone’s going to come and say, this is going to improve my systems a hundred times. Let me acquire you for low to mid nine figures.

And we go and transform another organization. As I found out, the natural acquirers for this type of business were unable to make those decisions because they were not technology companies. And so we were kind of forced to continue to grow and to find ways to increase their impact.

And kind of leaned into it, starting from, say, a year or two in, figured out that that was going to be the trajectory and leaned into it. You also set it up differently from the outset in terms of the level of flexibility it would give you, right? In terms of two different businesses held under one holding company and your role involved in that. Can you talk about the structure for a minute? Yeah.

So I don’t know if that’s very rare, but from day one, we knew that we needed to isolate the IP from the collection activity just because it’s getting a lot of regulatory attention. So from day one, we had a holding company called One True Holding Company, now DBA TrueML, that I was CEO of. And we had a subsidiary called TrueAccord Corp.

That was a licensed collection agency, still is. As the years went by, and a few years ago, the TrueAccord entity had its own CEO in terms of there’s an entity and the CEO runs that entity and our retained product has its own CEO that runs that. And we have a shared services entity and so on.

And so these things are separated and working together because, number one, the most important thing. As we grew, I had multiple iterations of my executive team. And at some point a few years ago, I got to a point where I could, in terms of the scale of the business and the, frankly, the compensation I could afford, I could hire people who wanted that breadth of responsibility and really wanted me to not get involved in their business, have a relationship of giving KPIs and goals, and I’ll come back and report to you whether I hit them or not, which is very healthy.

So I could have these people and also it made sense from a regulatory perspective because our retained product is not a debt collection product. It’s a software product that people use for servicing. Our TrueAccord product is a debt collection product.

So they don’t need to be valid in the same way. And as we’re doing more acquisitions, it just made sense to have that structure and can operate in different separate entities. What it’s led to is that it led to people saying, oh, you stepped away from the business or you did this and you did that.

Because I think, again, we have a perspective of, oh, the CEO needs his fingers in everything. Larry and Sergey personally interviewed the first 500 employees or the first 500 hires at Google. Again, I don’t do that stuff.

I hire people that I trust. And part of my evolution, and by the way, people will tell you, people who have worked with me will tell you, it’s an evolution. I didn’t start this way.

Part of my evolution is I let them do their job. And it may be relevant to you, to a podcast. Of course, I’ve had to make that adjustment and I’ve had to learn how to make that adjustment in a way I perceived myself and what my role was to do business, for sure.

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Learn more at AlloyLabs.com. Alloy Labs, banking unbound. How hard was it to let go, right? Doing it once is hard enough. A third time, bringing a company to life, it becomes so much of the identity that you’ve breathed life into this thing and gotten to a point now to let someone else take over strong roles that you may agree or disagree in terms of direction.

100%. 100%. And when you see, for example, the All Hands, right, which is, you know, usually I would run it, right, in the Q&A and so on.

Now Steve, our president, he runs it now. I have my CEO update and reflection and so on. But it’s not exactly the same thing.

It’s better, but it’s not the same thing. And I’ve had to go through that process of realizing that. I think that, number one, something that really helped me is that my closest friends are not from tech.

So they don’t really care what I do. There’s no rat race. There’s no, I didn’t upgrade my friends.

You know what I mean? It’s like, these are friends from school, from when I was a kid. And so whether we make $5 million or $500 million, they don’t care, right? They’re like, okay, cool. You run a company, you know, let’s go.

I don’t know what, let’s hang out. And I think that’s very healthy and that’s helped me a lot. And I’ve also realized that it was time.

Like I was flying back and forth from Sweden to the U.S. every other week. I was living in my own time zone. I needed everything to be right, like the temperature and the light and the sounds and everything in order to be asleep and stay asleep for more than six hours.

Because if I woke up and started thinking about the business, I wouldn’t go back to sleep. But listen, this is maybe time, you know, to hire someone and take some of that stuff away. For sure.

Yeah. So if CEO was not part of the identity, do you feel like, you know, TrueAccord, now TrueML, having done it now the third time, was it easier to compartmentalize and say they have their own identity? It isn’t necessarily my personal identity. Well, this is my first time running a company for as long as I have and to this size, right? Yeah.

And so it’s hard to compare and contrast, or I can compare and contrast the beginning of the business. When you sell a company three years in or a year in, it’s still tied up in your identity. People are still acquiring you.

They may be acquiring a team and a product, but they’re not acquiring a market, right? Where we are now is, I know people don’t think about debt collection very often. We are the leaders in a market that we redefined, among other ways, with federal regulation. It took 11 years.

I am not in my 30s anymore or my 20s. So, I mean, there’s also, like, I’ve evolved as a person and I think that’s helped a lot. And as you think about those that are going through the journey, either it’s having a positive exit or not-so-positive exit, and they’re beginning to think about that extraction of their identity and reinvention, what have you learned about reinvention along the way? Because you are such a reflective person and tweeter.

I think you’ve got to come to some wisdom underneath there. I hope. I think that it’s a platitude, but it’s true.

Those who matter don’t care and those who care don’t matter. And you’ve got to accept it first and foremost. Like, if you start a company and the company doesn’t work out, I get it.

It’s painful. By the way, even when it works out, it’s painful. It’s a lot of stress, a lot of issues.

It’s important to remember and recognize that you could be highly successful. I guarantee you that a CEO whose company is making half a billion dollars a year is having the exact same issues if she’s not making an adjustment. Yep.

So you have to remember that people are not looking at you like a microscope and examining everything, and you have to lose that perspective. You have to lose the, what will people think? I got divorced once. I don’t talk about it often because it’s just not a part of my life anymore.

I’ve been married to my wife for a decade and I’m very happy. But when you go through a divorce, you feel the same. But what are people going to say? People don’t care about you.

You’re going to be supportive and people are not going to be supportive. What are you going to do? Let them live their life. And so I think it’s exactly the same.

You think about how bad it’s going to be until the moment when it happens. And then you give it a little bit of time. And after a few months, you get some distance from it and you realize it was the end of the world and you didn’t die.

And things just continue. And I used to say, which is true, every week I have a crisis that I’m sure is going to end the company. And also the crisis from last week didn’t end the company.

So somehow I’m consistent in the things that didn’t happen, but this week is absolutely going to happen. So we have to recognize those patterns and we have to give ourselves a little bit of a break. But also, if you’re a founder or a CEO and you tell me I can’t do it, I can’t turn it off, I would agree with you.

There’s something that I wrote a few years ago that’s on my blog called Bad Monkey. Because I described a business, if you’re running a business, like a monkey sitting on your shoulder 24-7 and yelling. It doesn’t matter how many adjustments you make, you still have a monkey on your shoulder yelling.

Doesn’t matter if the business is going well, if the business is not going well, the monkey on your shoulder. And then it’s not going to go away until you execute yourself on the situation in a way. And so for me, it was, let me hire very talented people and put them between me and the problem so that I can focus on what I do best as a founder and CEO for the business, which is plan ahead.

Think about the next big thing. Looking at individual client relationships and how we’re doing there, that’s not my strong suit. So maybe someone else is better that can do that.

So did it quiet the monkey when you put someone between you and the monkey? Or is it a different monkey? It never goes away. Never goes away. But when you are not the person that everyone comes to with every fire, it’s a little bit easier.

Yeah. So you don’t experience it on a daily basis. You may be experiencing it on a weekly basis.

You may be experiencing it on a monthly basis, depending. You reduce the cadence of how often you meet these issues. And by the way, it’s not because you pretend they don’t exist.

It’s because you have people that you really trust, that you have a performance-based relationship with that are actually dealing with these things. Then you can start to realize that, oh, actually my attachment to looking at Google Analytics on a Sunday morning and then driving everybody nuts was not healthy and not productive. No, just not productive.

And so I literally, I don’t have access to our dashboards anymore. I only have access to the dashboards that I’m being given because I realized that if I do have access, I’ll look and then I’ll ask questions. And then inadvertently, those will not be the right questions anymore.

Or even if they’re right, somebody else is already asking them because I hired very good people. So that’s how I did it. Last question on this.

How do you know when it’s time to fire yourself? I love that phrase that you use, but do you have a rubric now that you think about when is it time? Two ideas here. One is something that Jason Lemkin wrote once from Saster, that if you reach the end of the week and you’re exhausted, find the thing that makes you exhausted and hire a VP to run the area of the business. And I think maybe a week is too short, but you get the idea.

You have to continuously reflect and say, what is the thing that is taking away my energy and I’m not doing a good job on because I’m not an expert on or because whatever it is, hire someone to run it. Now, granted, you cannot hire someone to run a dumpster fire. If something is broken, you’ve got to fix it first and then you’re going to get someone good to continue to grow it.

Fine. But still, you can hire someone to do that. So you have to reflect.

And number two, I think of organizational development as an upward spiral. It’s improving, it’s moving in the right direction, but there’s always this cycle. And by the way, the cycle is shorter, the faster you’re growing, the faster you’re moving, that you’re coming back to a function and you’re asking, well, do I have the right person leading it? Do I have the right structure there? Do I have, am I measuring it the right way? And so on.

And if you’re doing that in the right cycle, then you end up continuously improving. This is why they say CEO’s job is to hire the executives, organizational design, strategy, and make sure that we have money in the bank. And those responsibilities, they take different shapes and different levels of abstraction based on the page of the company.

Well, what I love about this is the advice that you can’t outsource the putting out the dumpster fire, but you can, after the fire is out, hire someone to take care of the dumpster, right? I think that is true across so many different levels related to growth and evolution. So really appreciate you taking the time to share the story today and the growth and look forward to seeing more great things come out of True and changing the face of debt collection. Sounds good.

Thanks for having me. That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks. This episode was produced by our US-based production team, including producer Lisbeth Severance, audio engineer Kevin Hirsham, with social media support from Carlo Navarro and Sylvie Johnson.

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