Starling Bank: Building a $1.5 Billion Business Against The Odds: Anne Boden
Guests: Anne
Full transcript · Read the full conversation in order, with its original context.
§01Transcript — part 1
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If you've been listening to this podcast for a while, you would have heard the episode I did with Tom Blomfield. He was the former CEO and founder of Monzo Bank, one of the big fintech disruptor banks here in the UK. During that episode, he also tells us the story of his time at Starling Bank, the rival bank that he co-founded with Anne Boden.
That episode is dramatic; it should be a movie. They talk about their fallout. In the episode, Tom claims that Anne fired 16 members of staff in the same day. So, in this episode, Anne Boden wanted to come in to tell her side of the story, but also to tell her story. It's an incredible story. It's an inspiring story. It's a story that doesn't quite make sense in the fact that she's achieved so much in an industry where she was an underdog.
At an age when she also admits she is an underdog, confronting stereotypes that make her an underdog. Despite the odds being stacked against her, she's built a multi-billion dollar bank here in the UK. It really is a crazy story, one that I believe one day will be a Netflix show. Think about that: two people came together to take on the banking world. They came together and founded a bank called Starling Bank.
They had this major blowup, they separated and Anne starts again, and they both build incredibly successful, multi-billion dollar banks individually. It is one hell of a story. It twists, it turns, and it inspires you. So, without further ado, I'm Steven Bartlett, and this is The Diary Of A CEO. I hope nobody is listening, but if you are, then please keep this to yourself.
Anne, humble beginnings. Do you think that's an accurate phrase to describe the start of your life?
Yeah, it was humble. My father worked in the steelworks. My father came home from work with newspapers under his arm, all greasy from doing hard work. My mom worked in the local department store. And we were happy.
Brothers and sisters?
No, only child. My parents married late. My father came back from the Second World War, found his dream wife, and they had a really, really happy marriage.
And school life?
I went to the local comprehensive school. It was a very, very new school. I was brought up in my grandmother's house, with my parents and my grandmother, in an older house on the edge of a big council estate. In the middle of this huge council estate, they built this new comprehensive school. It was not a very good school. It was very new, and I was one of the first children to go to university. To be honest, there was a bit of a stigma from coming from that area and that school.
And you were smart, right? Because I know you went on to do computer science, and I know people that do computer science are smart-asses. So, you're definitely smart, right?
Yeah. I think I did most of my studying myself. The school couldn't do a lot to help, to be honest. When I had my O-levels, I think everybody was quite shocked by how well I'd done. But I did most of my studying by buying my own textbooks and reading myself. The house wasn't an academic home; my father left school at 14, my mother at 15. There were no books at home except holiday brochures. We lived to go on holiday. We were a very happy family; we had a touring caravan and we went all over Europe. But it was very unusual for a daughter of that home to be interested in studying.
Why? Why were you studying? Why was it unusual?
My parents didn't push me. My parents were very liberal. All the kids of the neighborhood sort of hung out in our house. It was a very happy home. We were very, very fortunate to have probably a little bit more money than everybody living around us. But there was no emphasis on education. That was something I did. I went to the local academic bookshop. I remember taking a book off the shelf at 14, deciding which subjects to choose. This was all me choosing these things, not my parents.
And you were choosing those subjects because you intrinsically enjoyed learning? Or because you wanted to become super wildly successful as a mega entrepreneur?
I wanted a job with a briefcase. I wanted a job in an office. I didn't actually know anybody that worked in an office. My inspiration was from television. It was very much seeing people on television and seeing that people had jobs in London, in glamorous places, doing interesting things. I could do that. My parents were very supportive; they gave me as much money as I wanted to spend in the bookshop. They went out and bought me a 24-volume set of Encyclopaedia Britannica. The only problem was it was a 1953 edition, so all my knowledge was somewhat outdated. But it was a great home, we did interesting things, and I did well in school and went to university.
At that point, I'm guessing you didn't have a huge desire to become an entrepreneur.
I never thought I'd ever be an entrepreneur. Entrepreneurship is something which is quite recent. Coming out of school, it was very much "I want a job that is scientific or interesting." I actually wanted to be a scientist. I wanted to be doing something with chemistry and computers. My mom said to me, "You're going to try for one normal job. Apply for a job in a bank." I did, and the competition for the job was huge. There were thousands of people applying for a job at Lloyds Bank to be a graduate computer specialist. I got the job! So when I got the job, I had to take it.
This is post-university. Why did you choose computer science at university? And am I right in thinking, because it's still kind of the case now, that that was a very male-dominated subject to choose?
Yeah, it was almost all men. My father thought I could possibly be a metallurgist at the steelworks. A metallurgist studies metals or how metals are made. But there was no concept at home of jobs for women or jobs for men. That didn't really exist. I came from a home where my mother was very capable and my grandmother was very capable. So me becoming a computer scientist and going to Swansea University to study, where they were all men, wasn't something that really phased me.
You go off to university, you study computer science, you do pretty well at university, I'm sure. And then you get this job at Lloyds Bank in the graduate program. You're there for how long?
Four and a half years. I did four and a half years before I quit. I had a four-and-a-half-year thing going on. So, I was four and a half years at Lloyds Bank—great job, did the branch thing, did all the jobs. Then my first boss told me, "You better tone down your aspirations, otherwise you'll get very, very frustrated."
Ooh.
Ooh. That didn't work with me. I was really, really determined that I was going to get on. So I did four and a half years at Lloyds Bank. I did five years at Standard Chartered Bank. I did three and a half years at Price Waterhouse studying banks and advising banks. I went to UBS in the city and then out to Switzerland. Five years out in Switzerland working for a big bank. Joined a big insurance company, worked all over the world, worked in Chicago a bit. Then joined a bank in Amsterdam, ABN AMRO. Worked in all sorts of places from Kazakhstan to Uzbekistan, all the places around the world. Quit again. Spent some time in fintech before going into Allied Irish Banks as Chief Operating Officer.
So that stint across all of those different banks that you worked in, across all of these different territories, how long was that in total before you came into fintech?
Oh, 30-odd years. So, I started in 1981 and I quit to become an entrepreneur in 2014.
That's very atypical.
Oh yeah, it's very, very unusual. I've also done different things in the jobs. I keep meeting people and people go, "I know of an Anne Boden, she worked in insurance." And I go, "That's me." And they go, "No, no, no, there's another Anne Boden and she's a computer scientist, she did computing things." No, that's me. So, I've had a long career doing lots of different things in different companies. But I was a corporate person. When I quit to become an entrepreneur, that was something I'd never done.
And did you consciously make the decision that "I don't want to do the corporate life stuff anymore, I want to start my own business and give it a shot"? When you did that, what age were you?
Fifty-four. At 54 years old, you decide that you want to go it alone and give up all of that corporate stuff and all the perks—you can say perks—all the perks, the stability, the security of the corporate world. I was getting up every morning thinking, "Somebody has to do something about this banking industry." I was sort of ashamed to be a banker. I wasn't quite comfortable with it. The banking industry hadn't embraced tech. Everything was changing and the banking industry was looking backwards rather than forwards.
I started thinking, "Look, I've got a bit of independence now, I can do whatever I want. I'd really like to do my own business. Perhaps I'll start a dress shop. I quite like fashion, perhaps I'll do a dress shop." And I realized I know nothing about fashion. I know a lot about banking. What I should do is start a bank. But nobody ever starts banks.
Yeah, I was going to say, no one goes from "I'll do a dress shop, maybe a bank." People don't do that.
Yeah, I only knew about banks and how banks are run. People don't start banks, and if they do start a bank, they are probably a billionaire. Therefore, I was very different. When I started talking to people about "I am going to start a bank," I could see people thinking I was totally crazy. Of course. First of all, people don't start banks, and a five-foot-tall Welsh woman definitely doesn't start a bank.
Yes. I mean, I hate to support the stereotypes, but I wouldn't start a bank if I was, you know, a 40-year-old billionaire white male that was 6'10", let alone, yeah, a slightly shorter Welsh woman. Just want to be—because I really—this is purely for my curiosity here because I'm trying to understand how—because yeah, I don't have the guts. So, you're 50-odd years old, you're currently in your corporate job, and whilst you're at the job, you start thinking about starting the bank. At some point, you hand in your resignation. At what point did you hand in the resignation? Was it while you were still in the job and the bank had started moving, or did you leave and then start putting in the foundations?
No, I decided very quickly. I left, and within weeks, I was working on the new proposition. It's only last weekend I started unpacking the boxes. I came back from Ireland—I was in Ireland—and I decided, gave my notice in, started the whole proposition, booked the removal vans to bring me back over, put them in the house, and immediately went out knocking on doors. It's only now I'm finding some time to unpack those boxes.
Wow. How many years later?
Seven years.
Crikey. So, you leave, you start knocking on doors. How did you feel emotionally when you leave the corporate system and you hand in your resignation and you know you're going, but you don't have your next move solidified yet? You're still building that thing. You know, they describe entrepreneurship as throwing yourself off the cliff and building the paraglider as you fall. How did you feel emotionally at that phase?
I think you have to cope with the fact that you no longer have that business card, you no longer have a title. I thought it was going to be relatively easy to raise money for Starling Bank. I'd raised money in a job before; I could knock on a few doors and they would give me the money I needed. It was incredibly difficult. Going into lots of offices basically saying, "I have this great idea. It's an awesome idea. I'm going to build a bank like no other bank. We're going to build the technology from scratch. It's going to be really fair to customers, it's going to have a whole new way of engaging with the people that it served, and I'm going to take market share off Barclays and HSBC and Lloyds. All I need is some money." People would—some people told me to my face that I was never going to do it. The people who thought they were being kind would say, "You've never been an entrepreneur and you've never run a bank as CEO before." And those two things are things you can't raise money for.
So, it was tough. There was lots and lots of knocking on doors, lots of people telling me it was impossible. In some cases, it was really hard to carry on sending the emails. But I was determined, and even a glimpse of somebody telling me something positive was enough to drive me on to the next meeting.
And was there a blow at that time that felt the hardest? An email, a meeting?
Yeah, I think that there was one meeting with a set of investors where I just didn't have any of the answers. You've been there, you're an entrepreneur. They ask you all these questions, and I didn't have any of the answers—hadn't got as far as coming up with that part of the plan. That felt awful. But you pick yourself up and you figure out how you're going to find the answers. You find the answers by asking people for help. You ask people for help that are in the industry; you ask people for help that you've worked with in the past.
There's a stereotype that people that build technology are from Silicon Valley, they're young white men, you know, that probably went to Harvard or something like that. You buck that trend. When you were walking into those rooms and having those conversations, were you aware that there was a certain prejudice probably acting against you?
Oh, definitely. People assume that I'm not technical, people assume that I'm not capable of coding. There's code running in big banks today that I wrote. People assume that you have to be from Silicon Valley, you have to be in your 20s or your 30s and look and sound a certain way to build a tech company. You don't look like me or sound like me. But I was determined to build a tech company, and that was very, very hard for people to appreciate.
What was the driving force that spurred you on regardless of the resistance that you clearly encountered then? What was it that made you just "I'm going to keep going, I'm going to carry on knocking"?
I think that at that time, I was talking to venture capitalists and investors about this concept of a new bank. It is possible to build a new bank. It is possible to be a bank that actually has a lower cost base, has a different way of relating to customers. It is possible to do this. I kept hearing those same statements replayed in different ways through different routes. Occasionally I'd go onto a VC website from Silicon Valley and somebody would say roughly the same thing. There weren't any new banks at that stage, there wasn't anybody else doing it. But I felt that there was—whether it was an echo chamber, whether I was hearing my own ideas back to me or other people were thinking the same way—I felt I was onto something. I felt that it was possible for people to create organizations that are going to change things.
And you'd never done it before. So would you describe yourself as someone that has a high level of self-belief at that point?
I've managed to pull off things throughout my career where people thought I couldn't go to the next stage. Throughout my career, people have looked at me and thought, "Hmm, yeah, she's okay, she'll probably get one promotion, she won't get any more." Those people will normally be working in my department a few years later. So, I've always managed to go one step beyond or a couple of steps beyond what people expected. When I started this venture, I was surrounded by people who knew how this new world worked. They knew how venture capital worked, they knew how you behaved, how you talked, how you pitched your ideas. I had to learn that. And I was—as a woman and as somebody who had come from the corporate world—I was not used to over-selling my ideas. One of the things about Starling's whole journey is that we tend to over-deliver because deep down you tend to under-play your ideas or under-play your success. Therefore, Starling's consistently over-delivered and surprised people over the years.
Is that a typical or atypical feminine quality? This idea of not—because people talk a lot about the reason why some of the reason why women in business struggle to get promotions is they're less likely to over-sell themselves and demand promotions in the same way that men do. So I'm wondering if that conservatism and that over-delivering but not over-promising is something that's quite typical of women.
Yeah, I think it's a question of it's a very, very difficult balance. If you come over as arrogant, if you come over as demanding, you're not likable. If you're too soft and you under-play what you have or what you're doing, you're too soft, you can't get it right. But I had to learn how to sell the ideas, and it took years.
It's interesting. I don't like to dwell too much on gender differences, but I think I'm asking that question as well because I remember a VC friend of mine, and also a guy called Chamath, who's one of the big investors, and he says that the female-founded businesses in his portfolio always have—and Kevin O'Leary as well from Shark Tank said the same thing—he said his female founders under-promise and over-deliver consistently. He said when I looked at all of my portfolio companies—I think he's got 40 or 50—the female-led businesses were outperforming significantly because they were under-promising and over-delivering.
So hiring those first few people, Starling Bank, what was that process like? And really sort of laying the foundations of that business.
Well, it was all about phoning up people I knew, explaining what I was going to do and the idea, and really working with every organization I knew trying to get favors. The traditional venture capital route wasn't open to me. Actually going to VCs and saying, "Can I raise 50,000, 100,000, 300,000?" It wasn't open to me because I wasn't like the other people on those schemes. I had to really work with big consultancy firms and tell them that I had this idea to start a new bank and they were going to miss out if they didn't back me. And fortunately, I didn't have any money to pay them; I would pay them once I raised the money, but would they help me? And some of those big firms decided to back me. And lots of people in those firms took big personal risks because most people in those big consulting firms thought that this was just a totally crazy idea. She wants to take on Barclays, haha, it'll never happen. No, let's try it, we may learn something on the way. She's got all these crazy ideas, we may be able to take them and sell them to other customers. Let's just help her. And I must admit, I hung out in their customer lounges for years.
Really? Just chilling?
Yeah.
Okay, interesting. So you raise money in a slightly unconventional way considering the industry. Then you start calling people that you want to hire from the banking world that you've met?
Yeah, I phoned them up. I've always been quite an unusual boss. I've always been quite different to the people that I work with in other organizations. People tend to be quite loyal to me and I phoned them up and said, "Yeah, I got a great idea, we're going to start this bank, do you fancy coming in to work with me and we'll raise some money," whatever. And that's how the team got together.
So who was in the core team?
Yeah, okay, so there was a couple of core teams. There was the first core team, which was the bunch that eventually went to found Monzo.
Tom's, which you read about in the book and Tom's been here. So that was the first cohort.
Yeah. And then Tom left with the team, and I started again. I started again in exactly the same way, phoning people up and saying, "Yep, I'm still trying to start this bank. Please come and help me."
So Tom in particular, Tom obviously sat here, he did the podcast, which I'm sure you've heard, and you've written about Tom in the book as well. How did you come to meet Tom?
I met Tom at a dinner. I met Tom at a dinner in 2011 when he was working with GoCardless. I spotted him as being a very clever, funny, charismatic individual that was running a business. And we kept in touch.
So when you started Starling, you needed—was it CTO? He came on as a CTO.
So I needed a CTO. I'd been a bit of a mentor to Tom. Tom had gone to the states to work for Groupon. We kept in touch. I'd met him for coffee once or twice. And when he was back in the UK, I phoned him up and said—or he contacted me saying he's back—and I hired him as CTO.
So he hires as CTO, he then builds out the technical team, I'm guessing?
Yeah, we started hiring developers, yeah.
Okay. And was there—because obviously it's well written that there was a bit of a fallout here. Take me on that journey. When did the relationship start and when was there friction?
One day Tom decides to go. Unfortunately, we were about to take funding, which meant that the deal was not going to happen and basically at that particular point, the funding and the team fell apart. Looking back at what happened, Tom had a really, really tough time at Monzo. I feel for him. Perhaps that we could have stayed together as a team and I could have done what I'm good at and perhaps Tom could have done what he was good at. But you know, that's history. Both Monzo and Starling have done really, really well. And having a bit of competition does actually lead to probably a better industry.
The Klarna founder that came on said that about Afterpay as well. I read that there was a funding deal early on, but you pulled out of the funding deal because one of the founders was involved in a crime?
Yeah, it was, yeah.
So Starling Bank was going to take funding and you pulled out of the deal because one of the founders of the firm investing was involved in a serious crime, or because Starling was involved in a serious crime? I couldn't quite...
No, Starling was not, you know. This was a fund we were going to take investment from and one of the founders of that firm didn't have the reputation that we wanted. Starling is very—Starling believes in something, we have a mission. We believe in doing the right thing, and I think it's very, very important that we, especially in those early days, maintained a true vision.
And that caused a disagreement between yourself and Tom?
It wasn't that.
It wasn't that. There was a culture clash around a corny video I heard that was being produced? I'm trying to understand what—because I get a point where founders part ways, but typically there's lots of small things that happen leading up into that point, little points of friction or disagreements. What were those points of disagreement?
I think Tom and I have much more in common than people think. Tom and I often sit on panels now. So it's a panel of four and they go, "Great idea, we'll have Starling and Monzo on the panel and we'll have two traditional banks in the middle, Barclays and Lloyds, whatever." And there's lots of questions. And somebody asks the question and there's going to be two answers. There's going to be one set of answers from Tom and myself, who tend to have the same view on things, and then a different answer from the incumbent banks. And sometimes I can see, I look across the panel, catch Tom's eye, and I answer or he answers. There's lots more we have in common. And it's a real pity it ended the way it did. There's lots of places in the book where I talk about Tom's intellect and Tom's energy. It's a real pity it ended the way it did.
There came a day where you turned to Tom and you knew there was something wrong. And you said to him, "Tom, is there—you don't seem happy about something here." And he responds that he's sick of your knee-jerk behavior. How did that feel? What was he referring to when he says sick of your knee-jerk behavior?
I think that businesses are very, very stressful. I think Tom is an individual that sometimes has tough times. And every single conversation between founders on the wrong day about the wrong thing could possibly lead to that sort of break-up. But wow, what a story, eh?
How would you describe the differences in your personalities? Because it seems like that's probably at the heart of the clash.
I don't think different personalities lead to clashes. I think that people who have different personalities working together can create great businesses. I think Tom went on to lead a great group at Monzo. And I've listened to the show where he talked to you and he had a tough time.
When you heard that, how did you feel about the way that the events were recounted? Be honest with me, I want to know the truth.
It's a very difficult question to answer. I chose Tom as a CTO. I still believe he is an extremely talented individual and he has grown a great business. Of course, Starling is a better business. But isn't it great that what happened, the story of two individuals come across each other, they meet, one decides to start a bank, hires the other person, there's a falling out, both businesses going on to really change things. It's the story of digital banking in the UK. I keep wondering if that story never happened, would we've all got so much inches in the press to be honest. It was quite a story.
But how did you feel when you heard the way he recounted the events? You're listening to it, it's coming through your ears and you're thinking...
It was the first time I'd heard it, but I knew that that story was being retold in places where I couldn't hear it. But I'm quite philosophical about this. We all see the world and a story in different ways. And yeah, it's another piece in the story of the Starling-Monzo journey.
And at this time when you and Tom are having a fallout within Starling and you've realized, I guess, that you have different ideas and perspectives about how things should be done and where they should be going, you hold a crisis meeting, you come together. I think at some point you realize that there's not going to be a positive outcome and one of you is going to have to leave. And then you offer up your resignation. So you offered to quit Starling Bank?
Yes, I did. And that's—you've talked about how women act differently to men. I was prepared to give up Starling, I was prepared to give up my part in Starling for the good of Starling. And that was a very stupid thing to do.
Why?
Because it was my business, it was my idea. I'd got the business to where it was, but I was volunteering to give up my role in Starling because I wanted Starling to succeed. Tom, I think, didn't think I was capable—somebody like me that has spent so many years in corporate life—that I wasn't capable of delivering and building a big tech company. And I built a big tech company. So he didn't have that faith in me, but I realized that I could do it and made it happen.
Specifically in those days, you decide that you're going to step away for the greater good of the business. Admirable thing to do, some would say. It appears that it's one of the decisions you regret in hindsight, getting to that place. Just gauging by your reaction then, it seems like it's something where you look back and think, "Ah, why did I..."
Yeah, I should never have volunteered to resign. I should never have volunteered to go. That was me saying that the survival of Starling was more important than me. And both things are important: my part in Starling and the survival of Starling.
And what was it that changed your mind?
Well, I think as I write in the book, I sort of retreated. I went to a coffee shop, went to Starbucks, and met a guy that I'd seen in Starbucks every Sunday for the previous 10 years. He's a tech entrepreneur. And he came to me and he sat opposite me and he said, "Chirped about things." And I said that I'd stepped away from Starling because that was the only way the business would succeed. And he said to me, "What are you going to do next?" I said, "I'm probably going to start another bank." And he said, "Well, you don't have to start another bank. You can go back in and take Starling back." And I realized that I'd made a mistake, that I needed—I desperately wanted to create Starling, I desperately wanted to lead Starling. And I had to take Starling back. And I literally ran out of the coffee shop—I can see the street in front of me now—and I got in the car, drove into London, and took Starling back.
And what did that mean, taking it back?
It meant that I had to be totally—well, I had to talk to people and say that I had a vision of creating something which is an organization that does things in a right sort of way. I'd been a banker for 30-odd years and I was ashamed to be a banker. And this idea of Starling was to do things my way. And I really wanted to lead the organization to where it is at the moment. So I had to make that clear and I took back Starling. But the consequence was that I was on my own. I was on my own in the office.
So you walk back in the office and say to the team, or say to Tom, that you're withdrawing your resignation?
No, by then they'd refused to accept my resignation because of certain things. So I stepped in and took control of Starling.
And so I heard around this time you'd also been burgled at home. And this kind of exacerbated some of the emotional components of decision-making. Is that accurate?
Yeah, so this happened around the time of some burglaries. And why that's in the book is that we are CEOs, we lead businesses, we're entrepreneurs, but we're also human. And a burglary is quite personal.
And how did that impact you and your decision-making around that time?
I think it was tough around that time, but all issues and all things you do in a business are complex. And that was an added complication at that time.
Just adds more to the mind and more things to think about and makes you feel a little bit unstable, I guess. I think burglary in your home has that kind of psychological destabilization. While you were away—you'd handed in your notice at Starling and you'd left the office—while you were away, I guess Tom's running the office per se. Is that accurate? And the way that it's framed in press is that there's some kind of coup that's gone on where control of the company's been seized from you in like a low-key hostile manner. Is that at all accurate?
I think you have to read the book. There's a—the book is the story of what happened. There were lots of notes and emails taken at the time, and this was all written from my notes and emails written at the time. And I think it's up to the readers to decide what really went on.
And you go in and you say, "You know, I'm not going to resign. I want to lead this company. I've got a vision for the company's future." And that means that you have to fire Tom essentially. That's the decision you make. You say, "I'm the CEO still of Starling Bank so I'm going to let you go and I'm going to rebuild my own team." And the way that when Tom sat here and spoke to me, he says that you fired the whole team. Is that accurate?
Okay, the story is that we lost the funding. You can't—if you can't pay people, it's very unfair to let them work. We were very, very honest with the people that unless we could raise funding, there weren't going to be any jobs. And I think it's documented extremely well in the book about all the ins and outs, and it's quite a story.
And so you lose funding because Tom's quitting. And obviously when people invest in companies, they're investing in teams and people, and CTO is a critical role, the person that's building the technology. So that's why the funding goes through. And you realize at this point "I've got to basically build this thing back from scratch." I'm guessing you had an inclination that there was a greater allegiance towards Tom with the existing cohort of people?
No, not really.
No? Okay. It was more just you basically weren't going to be able to pay for them because the funding had been pulled. Yeah, so that day, Tom leaves, the team are let go as well, and they go with Tom. And that starts the story of Monzo as he's described it. They start their own bank and that's what we now call as Monzo. That day after you walk into the office—so I'm guessing I don't know whether it was a physical office or a metaphoric home—but you walk in, you're alone pretty much. Is there anyone else in the room? Is there anyone else in Starling as an employee at this point?
No, it's me on my own. Just you.
And how did that feel going from the climb—"climb, we're building something here"—to ground zero?
I'm very good at picking myself up. At that particular point, I was feeling well, I haven't got the responsibility now of having to raise money to pay these people. I can take my time now to find a new investor and I can build a new team. And it didn't take long before—well, a gentleman called Alan Chandler turned up two days later and stayed and stayed working for no salary at all for nearly a year.
What was—what had you built at that point in terms of on the day when Tom and the new Monzo crowd had left? What had you actually achieved as a company? Was there technology?
No, nothing from the technology side had been really done. We had a banking application. So when you apply for a bank, you have to have a banking application and it was in boxes. So, we had a banking application. We didn't really have much tech.
Okay. So your friend comes in, he offers to do the P45s for the staff that have just left and just to sort of give you a hand, and then you start hiring again. A lot of people would quit at that point. A lot of people would give up. That's a pretty significant blow as far as I'm concerned. How many people had left in total?
Sixteen.
Sixteen people. That's a pretty significant blow to, you know, might be time to go back to the corporate world, no? Did that not cross your mind?
Not really. I'd got to a state of having almost having a banking license. I had the idea, I'd learned a lot, I knew what we needed to do. It didn't take me long and I was starting again.
You say that like it's so easy, like it's just so effortless, and I know it's not.
It was humiliating, okay? It was humiliating reading in the press what had happened because the story has been told in the press and the story's been told now are not actually what happened. But that's history. You've got to get on and you've got to sort things out and you've got to move on. And I was, yeah, I was up for it. I was going to do it again.
You seem reluctant to correct false stories here. That's clearly a decision you've made.
Yeah, I think that what I don't want to get into is "He said that," "She said this." I've written a book which is a very accurate account of what happened and my side of the story. And people are allowed to have different sides of the same story. That's okay. But I wanted to tell my story.
Your friend that stopped by the office and gave you a hand, how emotionally important was that? And how grateful are you to them?
I will be forever, ever grateful to Alan. I think that the one person to come in and be somebody who said, "Yep, this happened but, you know, yeah, you're going to start again, that's fine." And I think one of these symbolic things that happened was that in the early weeks, when they'd left, Tom and the team had left all their debris behind—and they had a hell of a lot of debris—I went out one day to do some fundraising and when I came back, Alan had collected all the mugs and the odd socks and the various medication they were all taking and cleared it all up and thrown it all away. And the office was clear of the old world and we could start again. And that was quite symbolic. And yeah, I sometimes think if Alan had not come in, would it have been so easy? And I'll never know, but that was the start of a new team. And that team—the A-team, the team that left with the B-team—was, we attracted people that sought out Starling. This woman is going to build a bank and she's going to do all these things, and they turned up and they were awesome.
Okay, so the team have left, Alan's cleaned out the office. Is there not a moment in you where you consider packing it in? Is there not a moment where you think, "You know what, this is..."
April the first. That's when I accidentally had an email from the team that left.
You accidentally had an email? You weren't meant to be copied on it?
I don't know, I never know whether I was meant to be copied on it or not. But they were making fun of me. And I thought, "Well, is that the day I'm going to give up?" But I said, "No." And I went back in the office the following day and carried on.
Making fun of you in terms of your management skills, or something you had done or said, or very personal things?
No, it was a question of—you have to read the book about it, but it was a prank about them being arrested. But you have to read the story to understand the nuance. But that was the only day that I thought, "Can I carry on?" And that lasted an hour, but I was absolutely determined.
Were you upset reading that email?
I was panicking about them, I was worried about them. I was worried about the fact that they could be in real trouble. And yeah, I hired these people. They were friends for years. And I like them. You can't suddenly cut off all connection with people that you worked with even though this thing had happened to me.
Did it put a fire in your belly that wasn't there before? Because events like that can send you one of two ways. And they typically send you both ways at the same time, but if we're just kind of broad strokes, they can devastate you to the point where you don't get out of bed, or they can motivate you to the point that you work two times as hard.
Nothing was going to stop Starling succeeding after that happened.
So it's the "work twice as hard." And were there moments you can think of where you just put that extra effort in and you became a little bit more determined because of that? Because I know that I'm a human being and I don't care, if I was in that situation, I swear to God I'd have a picture of their face on the wall. My team would be hearing about it every five seconds. That's the guy I am, like it or not, I don't care. I do that about all the competition we have. It motivates me and it is what it is, you don't have to like me. So I'm asking the question: did they become a real significant competitive driving force in your life?
Okay, as a woman you can't be bitter. You can't show that bitterness. You have to internally put your energies into Starling. Starling has succeeded, Starling is a successful business that I'm terribly proud of. And yes, when I take a lot of inspiration from other people's books and whatever, most businesses have had a near-death moment. It happens so often that the best businesses, the best entrepreneurs have had times when they lost it, they almost lost it but they recovered. This was mine. And it played out very publicly. And I learned a lot from it and I decided to continue and I think Starling and me are better for it.
When you started to re-hire the new team, I'm guessing you made different hiring decisions in terms of because of what had happened. Did it influence the type of people that you brought into the business for the Chapter Two?
Not necessarily. I don't think that I set out to get a different set of personalities. I could focus on getting more qualified people and higher caliber people because I had a better business proposition. It was a year in, 18 months in. It wasn't a blank sheet of paper, it was a fully formed proposition that had almost raised money, where we had an application for the banking license that was almost fully formed. So it was less risk for those people coming in. And I also had spent 18 months figuring this thing out. I was better at selling the idea. So the second time around I could bring in a higher caliber, more appropriate set of people for the problem we had to solve.
I think that's a natural thing. I think even in Monzo's business, I'm pretty sure when I had the conversation with Tom, he speaks about hiring a different caliber of person to meet an evolving business challenge, especially as I know in particular Monzo's case, they did start bringing in people from the banking world and stuff like that. And even in my business, I talk a lot about how we did the exact same thing. I at the very start didn't quite know the caliber of talent that I needed or their experience, and in year three of my business, I realized that the first one to two years of hires that I'd made were not adequately experienced in solving the problem I had to solve. And also the type and scale of problem you have to solve evolves, right? When you're one, two years old, it's a different set of problems to when you're like a thousand employees, right? So that makes perfect sense.
Pivotal moments then. So Chapter Two of Starling—funding.
Yep. It was very, very difficult again. But two years in, I was approached by a family office. And I wouldn't return their calls, okay? I was absolutely determined that I was going to have a VC, these people I knew, it's going to be in these well-known firms or my investment bankers were going to find me this sort of investor. But I was approached by a family office that had seen an article about Tom in Bloomberg and had investigated what's going on in the new bank scene in the UK and wanted to talk to me.
And I started conversations with them. It took a while for me to actually engage with them; I'd never heard of them and I wasn't going to talk to people I didn't know. Anyway, I ended up getting on a plane to the Bahamas. That's when you know they're rich. It was a yacht, wasn't it? It was a yacht. And spent three days being interrogated by a gentleman called Harold McPike, who is an algorithmic trader. And he asked me the most complex questions that anybody had ever asked. He was really into the detail. And yes, at half-past four, I joined him on his yacht.
How big was this yacht?
It's a big yacht.
More of a ship?
It was a big yacht.
Okay.
And yeah, he asked me lots and lots of questions about me, about the business, and he was very, very detailed. And at 11:15 in the evening, he offered me 48 million pounds for 66% of the company.
Sixty-six percent. I read that he said something to you like, "I'm not going to give you the three million." I was trying to raise three million, okay? Just trying to raise three million to get to getting the banking license. So the idea was to raise three million and then 15 million, then 30 million. I only wanted the three million. I hadn't raised a penny; the only money that gone into the business was my money. So it was impossible to raise money. And he said, "Yeah, I'm not going to give you three million. I'm going to give you 48." Christ, that's like Chris Tarrant from "Who Wants To Be A Millionaire." That's mad. Forty-eight... and how did you feel? So, there's two real things here: that's a huge amount of money, but that's also 66% of your business.
Tough. And at that particular point, you know that all the other things that you're working on, all the other leads are going to go. You may have 40, 50 different leads you're working on. You going to accept this offer and sort of somebody else now controls the company? But with 48 million, you have a situation where you can build the best tech in the world. So, I'd been doing this for two years and it was really difficult, and I had somebody who really understood what I was going to do, was super intelligent, that actually believed in my conviction I could do this. But I was having to give up 66%. But it would mean that I could build something that nobody else had ever built.
I mean, in that moment, he's valuing what is—and correct me if I'm wrong here—essentially an idea?
Yeah, it was a 16-page deck.
He's valuing a 16-page deck at 72 million. How long did you have to think about that decision?
Probably about 30 seconds.
Really? And how do you feel about it? Because a lot of people that look back on those fundraising decisions, it seems that every startup entrepreneur regrets how they valued their business at the start because they always, especially when it becomes a multi-billion dollar company, they feel like they sold themselves short. How do you feel about it? He's not listening. He's too busy in the Bahamas on his massive yacht.
I think that it is more and more important to actually create this vision. I was so excited that I could now start. And we eventually signed the deal on the 21st of December and submitted the banking license on the 22nd of December. It was finally, we could start. It was hugely exciting.
Did you celebrate?
Well, I couldn't actually celebrate because we didn't actually have a term sheet for another three days. So, it was on the Saturday night, I was flying back, and I had the term sheet an hour before picking up the flight.
But once you'd signed the term sheet and it was all signed off, did you?
No, you never—you never celebrate term sheets. You celebrate getting the money in the bank.
When the money came in the bank, did you celebrate?
Yeah.
And how did that look? You look at your—you open up your app, Barclays, whatever, "Oh, 48 million."
Yeah. Back to the Bahamas. It was very exciting, very exciting. And it allows you to do so much.
Was it terrifying as well? Was it scary? It's a lot of responsibility, 48 million pounds of someone else's money.
Yeah. And that's why entrepreneurs that take external funding are so committed to do a good job. There's a huge amount of responsibility to deliver. You can't just walk away from it. Once you got that investment, you have to deliver. It's so important.
And how much money have you raised in total now for Starling?
600, 700 million.
600, 700 million pounds. Wow. I could have done so much with that.
So what have you learned about raising investment? What—if you were to, you know, there'll be a lot of entrepreneurs listening to this who have a lot of like unhelpful stereotypes or thoughts about raising investment—God, some of them will think the only way to do it is like "Dragon's Den," right? What would you tell them now, having gone through this process so many times?
Take the money. Okay, so there's a huge amount written about "You need to go for these sort of investors or those sort of investors" and "You need to pick your investor," whatever. The vast majority of people can't pick where the investment is coming from. Only 1% of venture capital funding goes to women founders, right? So, if somebody offers you the money, you've got to take it, because it comes around so, so rarely. And a lot of people worry about valuation. Not relevant. Most businesses fail, most entrepreneurs don't get their businesses off the ground—not because they don't have good ideas, not because they're not good people, but they couldn't get the funding.
And do you think it's hard to raise money?
Yeah, very hard. Venture capital tend to invest in businesses that look very, very similar. If you look at—if you read Paul Graham's works, he talks about really that teams need to look like this and things are done in this sort of way. I would have never got any Y Combinator VC Paul Graham funding because I'm not that sort of entrepreneur. And a lot of investing by VCs, they're looking for carbon copies of businesses they've invested in in the past. And the really great ideas don't get that investment. And real great ideas from women founders don't get significant investment.
Interesting. But there's a lot of money out there, isn't there?
Yeah, there's a lot of money out there when you're successful. Starling now is a big business—1600 people, two and a half million accounts, doing interesting things, we have a reputation. But the fact that, occasionally, they publish how much money in the UK has gone to women founders, and a lot of it's gone to me. So, I think we have to be very realistic that you get to a point where you're a success and people then want to invest. But the majority of the time at Starling, it's been really tough.
It's been really tough. So what when you reflect on your corporate career and you contrast it and compare it to your entrepreneurial career, what was the really surprising tough part on a personal level? And this is really why I start this podcast, you know?
All jobs are tough. A corporate job is very tough. I think that being an entrepreneur, it's far more personal responsibility. As an entrepreneur, there's nobody that—all the hiring decisions somehow ended up with you making that first hiring decision. We have 1600 people, but somewhere up in the chain, I hired one of those people that made that hiring choice. Anything that goes wrong is my responsibility, and all mistakes are probably down to me, okay? So there's a lot of personal responsibility. And that responsibility gets more and more as more and more people depend on it. But isn't it fantastic? Isn't it a wonderful buzz, isn't it? Isn't it wonderful to have a platform, really? I fundamentally believe that financial institutions lost their way and Starling is doing the right thing. And somehow people have said to me that I've created the organization that I wanted to run because I quite like running organizations and I wanted to do things in a different sort of way. So finally I'm running the organization that I've been wanting to run for the last 35 years.
And that you wish existed as a customer?
Yeah, I think that, you know, I've been very lucky. I've always had a great relationship with money, but the vast majority of people in this world have a bad relationship with money. It doesn't go well for them. And they deserve a better bank. I went into banking because I wanted to do interesting things, I wanted to come to London, and I wanted to be in tech. But I also wanted to do something that was respectable, worthwhile, doing the right thing by people. And banks stopped doing that. And I'm much more comfortable being accountable for the organization that is Starling.
And it helped you to, I guess, alleviate that taxi cab shame you reference where a taxi driver asks you what you do and you don't want to say "banker" because there's so much stigma and shame around the sector. You're proud to talk about?
Yeah, I'm proud to talk about what I do, I'm proud to talk about what I stand for. And having a bit of a platform to nudge things in the right way—I'm only a small cog in this whole world, but if I can do my bit to make things fairer in a couple of segments, I should do that, and I'm enjoying doing it.
You talked about the buck stopping with you. All problems are your problems or hiring decisions ultimately lead back to you by X degrees of separation. When you're—and especially, you know, the other part is the industry you're in is not an easy industry. Customers—you have millions of customers that are, and you're dealing with their money, which is one of the most emotional, sensitive things you can deal with with any customer. The emotional toll must be extreme. I mean, Tom sat here and it was the first window I'd had into how brutal, emotionally brutal, fintech and managing a bank could be.
Managing a bank—yeah, I listened to what Tom said. And all the things that Tom said happen in all banks. Right, that is what happens. But it's my job. It's what I do. It's what the people I work with do. And sometimes you read emails of people that have been scammed out of their life savings. You have emails and you have cases where gamblers have lost all their money. You have to deal with people who have lost their son in some tragic circumstances. We have a window on people's lives in all sorts of circumstances. And we have to be responsible, we have to be empathetic, and we have to guard ourselves from the bad guys out there. What we do means that we touch people in all sorts of ways when they're most vulnerable—whether they've lost somebody, whether they gambled all their money away, or whether they've been scammed. That's a responsibility. But it's not just me that has to take that responsibility; we have hundreds of people that talk to customers every day, that see customers when things are going well and things are going badly. It takes a huge amount of energy, and sometimes I listen in on calls and it really impresses me how young people, who are new to their careers, are so empathetic, so in touch with real people and really helping them. I take my hat off to them.
What do you do to protect yourself mentally from the chaos of running such a big business that has such a sensitive topic for people? How do you protect yourself from not losing your sanity?
I had a great mentor in this: my father. My father was brought up in a home where his father was in the First World War and he came back from the First World War with what you now call post-traumatic stress syndrome, and they didn't call it that then, they called it shell shock. And he was brought up in that home where his father had good days and bad days and things were quite fragile. But my father had a great way of talking about feelings and emotions and what you do to talk yourself up and how you make yourself happy. And we had a home where we talked about this and how you count your blessings—we weren't religious at all, but how you took energy from what's going right rather than what's going wrong. And he was a great mentor, he taught me this.
And I think the dedication in my book is all about thanking my parents for teaching me that happiness is something that you can cultivate and treasure because not everybody has it. And I think when I am in a situation where things are tough, you can do things to change the chatter in your head to realize that you're not the center of attention. Sometimes, it's not about me. Not everybody is looking at me. Everybody is looking at their own life and thinking about their own problems. And I am very, very fortunate. I have a huge number of things that are going right for me and I have the privilege of running Starling. And it is a privilege and there's lots of things going wrong and lots of pressures on me, but it's a great privilege to have.
So you see that as your coping mechanism there is almost like a childhood disposition that was taught to you. Like it's a perspective that kind of defaults to optimism, seeing the glass as half full, defaulting to gratitude. That's kind of acted as a protective—mentally sort of protective. Have you ever been to therapy, have you ever had any professional support in that regard?
No. I read a lot. I read hundreds of books. I read every self-help book I can get my hands on, I read every single banking strategy book. I've always done it; I love understanding things.
The personal—so this is interesting. One of the things that you said—well, kind of two points—is that you don't have work-life balance. It's just all work. When people hear that, they go—they feel sympathy, like they think you're—no, because I feel a similar way to some degree. Maybe it's changed recently, but that was my life and I don't want sympathy for it because I actually love what I'm doing every day. But then I read into your story and there's sort of connected points there where you say about how women are sort of conditioned in our society to think happiness equals having 17 kids and a husband and how you'd like to buck that narrative. Can you talk to me about that, the personal balance you have in your life, and also, you know, you talk openly about not having kids?
Look, the right man never came along. It wasn't something that I decided against, but there was never any assumption in the family home that I would get married or whatever. But the right man never came along. And as far as children, I never made the decision not to have children, just that I was busy and then it was too late. But I think that people compare to quite an idyllic state of, you know, marriage and two children and them all living in a wonderful home and everything being fantasized life of a family. The majority of families are not like that. I am really, really happy that I've made the right decisions. And yes, I get asked about it occasionally and brave people ask me about it—you know, people who are not brave try to go around it. But one day, perhaps I will marry, you never know. The right man may come along. It's unlikely to happen with children.
I always struggled in—when I was running my business—to have any kind of relationship with anybody. I was a total failure because I was obsessed, as you say, work-life balance—it was just all work. I was in the office Saturday and Sunday and I found it incredibly hard to find someone that understood the peculiarity of my life dynamic. It was only upon leaving that business that I actually managed to, you know, like piggle something together—higgledy-piggledy, you know, like put some pieces together, which probably resembles a relationship now. But...
It's very difficult finding a man who is prepared to listen to me going on about my career for three hours. We've had a lot of guests here that are female founders that have said a very similar thing. And also an interesting narrative which I want to talk about, which is like "men can be emasculated." Is this true? Chrissy came here and she's a successful founder and she said that men can be emasculated by the success of a woman if she's bringing home the bacon or if she's the career-driven one. Do you find this to be true?
Well, I had a lot of coaching from friends before going out on a date and they'd say, "For goodness sake Anne, don't ask for the bill, okay? For goodness sake Anne, don't leave the table to answer a call. For goodness sake—" "Yeah, but I've got a really, really good deal coming up!" "No, no, no, this is how it works, Anne. Okay, you go on a date and you pretend he's awesome and you don't go off and answer your phone and you don't try and pay the bill, okay? That's how it works. That's how it works for most people." But you know, sometimes work is more important.
Wow. And you—I read somewhere as well that you said that you could write a separate book about your dating experiences?
Yeah, I've done a lot of that, yeah. Done a lot of dating. Doesn't work. Doesn't work.
And you pinpoint the way that you are in terms of your focuses, your ambitions, all of that stuff as making it difficult.
Look, if I put a lot of effort into it, I would have probably made something work. The trouble is I put a lot of effort into my job and my career and I probably get a huge amount of satisfaction with that, and it's sort of taken priority. But that's great, you know? I've got a great job. You know, I'm doing this sort of stuff. You know, what could be better? You know, sort of being in the situation where you can talk about things and you have success. Yeah, it's good.
As you look back on the Anne that started her career as an entrepreneur and the naivety that she must have undoubtedly had, what was some of the key pieces of advice you would impart on her and say, "I just wish you knew this and be careful of this"?
I think it's the question that people always give you the wrong sort of advice. What I caution about is that there's a lot of people out there giving bad advice. Because when you ask somebody about what you should do or how you raise fundraising or whatever you do about your business, they haven't got a good idea so they give you something because they feel as they can't say "I don't know." So be cautious of those mentors that actually don't know anything. And there's so many people who have—the VC world is full of people who are, you know, finished their careers that are wandering around VC-land trying to tell you what things work and how things work. Most have never run a business. A lot of that is absolute rubbish and you have to just stop it. One of the biggest lessons I learned is a lot of the things that I knew, what I was absolutely 100% certain of, was actually wrong. Right? So forget about it. The world's moved on. Be relevant.
And do you want to sell Starling Bank? What's the plan? Do you want to list it on the stock exchange? Do you want a big incumbent bank to come along and buy the company so you can sail off to the Bahamas with that guy on the boat?
§02Transcript — part 2
No, I think that we'll probably list in a couple of years' time. You know, I want it to be important. I want Starling to be something that changes financial services forever. I'm enjoying myself; I'm not ready to quit. This is—I'm on a roll.
And you must have had some offers, right? Because you know, a couple of people coming along saying, "Hey, brown envelope, 100 mil, see you later," no?
It's a unique opportunity. Imagine putting yourself in my shoes. 1981, I came to London to start my career in banking and rocked up at Lloyds Bank as a graduate trainee. Nowadays, I'm running an important bank in the UK. And I founded this bank. And it's much better than the incumbent banks and it's at the start of its sort of 300 years rather than at the end of it. Yeah, it's incredibly exciting. I have to pinch myself. It's really happening.
Yeah, you know, it is truly remarkable. And you're right, I did give you a grilling there a bit on some of the key points because there is such an interesting banking war narrative going on in the fintech space at the moment. But the overarching thing is just I find your story to be just so incredible. And I find it to be genuinely unbelievable because you say it in such an effortless way. You talk about these events and even the fundraising stuff and the stereotypes of being a female founder that doesn't fit the existing stereotypes of tech bros out in Silicon Valley that are all 21 from Harvard and they're all dropouts. And to persevere against it all, I suspect is significantly, maybe 10x harder than you actually make out. Because like I know how hard it is anyway, but then when the deck is stacked against you in the ways that I know it is because I understand stereotypes and the climate, and especially in the banking world—like what kind of lunatic starts a bank, right?
And I was fortunate enough to be slightly privy to some of the early processes of like getting a banking application because we had a lot of fintech startups including banks like Monzo approach us very early and ask us to help with the marketing. And when I was sitting in the room maybe five, six years ago, they're all talking about eventually getting their banking licenses or something. And that corner was turned eventually. But it's just remarkable and it's unbelievable. And there's very few entrepreneurs in the UK or really anywhere in the world that I've encountered that really manage to take on a really stubborn incumbent as it relates to the banking industry here. Spotify is one of the examples I sometimes think of because there was no way you could move away the rights and the music rights and move it to digital and then charge people. Like so that again, I consider Daniel Ek to be a lunatic. Yeah, incredible. It's—I consider this to be the same.
So yeah, thank you for the inspiration, thank you for the courage, and I think your story is one of, you know, it's one in a hundred million. I do have one request though, and this is where the diary comes in. Okay. So what we do with all of our guests when they come on the show is they all write a question in the diary for the next guest. Right. So our last guest wrote a question for you: Do you really understand the purpose of your life here on Earth?
No, I don't. I think that nobody ever sort of discovers their purpose until probably too late. And I think thinking about that question too hard is probably too difficult. I think the purpose of your life will only be discovered once it's too late.
You don't think it's what you're doing now?
I think I'm on the start of a journey rather than the end. I think I want to do more than just make Starling the best bank in the world. I think Starling will do its bit to help people with their financial health. But I think it's also important to nudge society in the right direction. And I can do that with the platform of Starling.
Nudging society in the right direction in terms of what?
Yeah, fairness, equality. I think the world is very unfair in lots of different ways. And it's not just fair between countries; there's very, very different people have different experiences of this life. I have been extremely fortunate, but the girl growing up next door had probably had a very, very different life to me. And by an accident of birth, we experience a very, very different life.
I'm getting Prime Minister vibes.
I have no, no intention of becoming a politician. It's far too hard.
Okay. But you can, as you say, you refer to Starling as a platform and that's, you know, being able to influence the electorate is equally important as being the puppet in charge. So I'm going to ask you to write a question in the book. Thank you so much for coming today, it's been a wonderful conversation.
Thank you very much for inviting me. I really enjoyed it. Thank you very much.
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