Episode 481: Alex Harris, Founding Partner of Fiat Ventures & Fiat Growth

In this episode, Mike Townsend chats with Alex Harris, Founding Partner of Fiat Growth and General Partner at Fiat Ventures. Prior to Fiat, Alex led paid growth and partnerships at Chime, flexing his innovation skills and data-driven approach. His deep knowledge of the Fintech market provides superior marketing, business development, and growth strategies for Fiat’s clients.

Host: Mike Townsend

Guest: Alex Harris

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Episode Transcript

Mike: My guest on thepodcast today is Alex Harris, the founding partner of Fiat Ventures and FiatGrowth. We talked about what those two endeavors are, why Alex started them,what they're trying to accomplish in the world, and how far they've gotten thusfar. We discussed the landscape of venture. What Alex would do if he wasleaving a series C or Series D stage company to start a venture company today,or a venture portfolio, venture fund.

We talked about some of the patterns andtrajectories of other venture studios or venture funds and dissected whatworks, what doesn't. We talked about the landscape of FinTech at large,discussing the recent banking crisis from Alex's perspective. How crypto mightinfluence that banking crisis and lead to an integration conflict or how thatwill get resolved with the Fiat world.

And lastly, we talked about what thefuture looks like for the economy and what he has learned in the role. So hopeyou enjoy this conversation. I very much did. And if you do, please give us alike thumbs up or share the pod wherever you listen to it. Here is Alex Harris.  

Mike: All right, Alex I'mexcited to be chatting with you.  

Why don't we kick this conversation offby giving a quick background as to what Fiat Ventures is, Fiat Growth, maybehow much you guys have, have raised for the fund how much you deployed, andjust generally where you guys are and what you're trying to accomplish in theworld.

Alex: Sure. Yeah. Thanks forhaving me. So yeah, as you mentioned I'm a co-founder of Fiat Growth and FiatVentures. We started as Fiat Growth basically myself, I've been in growth mywhole career. A lot of different roles. Most recently prior to starting Fiatwas at Chime, the Challenger Bank. I led paid growth in partnerships there fromseries A to series D.

excuse me. One of the big things I sawin running partnerships was I get to interact with all these great up andcoming brands and we'd give each other advice and try to help navigatechallenges, and I found myself really loving that. So I saw the opportunity todo that at scale. So I decided to, to make the jump and, and start advisingfull time.

So made, made the jump as we wereclosing our D round at. to start advising for some of these companies. Firstcompanies bestow digital life insurance helped them launch Sunday. PropTechCompany helped them launch route Insurance. They were already launched,underway, helped them grow. All three of them had strong success.

Two of them series C companiescontinuing to, to grow. And then root iPod. Though it has been rough in the, inthe. But those were the first few. And then got busy and decided to see if mygood friend of 20 years Drew Glover would come help me cuz I was busy. So wetalked about the landscape and what the needs were and we decided prettyquickly to, to build out a unique product.

We're not an agency, we're not a typicalconsultancy. We're hands on in the trenches with companies who. In there tryingto, trying to grow in the most effective way possible these days, especiallytrying to grow in a capital efficient way. So we listened to the market anddeveloped a company that was based on basically the needs of startups.

Fast forward to today, we have 33full-time employees. We do everything. We're a holistic growth shop. We doeverything from MarTech and analytics, funnel optimization, referral campaigns,lifecycle. All things paid, creative in-house. Our creative director's beenwith me for 12 years, did all my creative at Chime.

Then we have a full partnerships team bothstrategic and affiliate influencer as well. We have a go-to-market function anda rev ops team. We also would consult on how to put together investment docs,both the process who you should reach out to, how you should communicate with., the actual pitch and the docs themselves.

That was a big part of what we didbecause we're so embedded with the teams, really our interests are aligned. Inmany cases, we're getting advisor equity, and often we're getting the right toinvest. So we started taking the right to invest before we have the cacapability to invest in a large and meaningful way.

We're always angel investors, but didn'thave the capacity to really make some serious investment. So over time, Prove.We had proven out our track record of growth and we decided and heard fromenough people, you guys should really start a fund. And we didn't wanna start afund just to start a fund. We wanted to start a fund because we had a uniqueapproach and we felt confidence that we really did.

So we were able to bring in our goodfriend Marcus Fernandez as our managing partner of Fiat Ventures, and quicklygo to market. Marcos led go to market at SoFi. Did some go to market at Brett'searly days. Previously led BD at Ripple and he was kind enough to give us thetime to see what we were doing at Fiat Growth and see the opportunity.

And what we saw and notice is that weactually have a unique opportunity because of our growth arm. So I gave you allthat context. So you can see we're actually in the trenches with companies. Sowe're setting up the analytics, we're we're interacting with all team members.So we see everything. This is past the data room and the.

We actually see the real reel in theanalytics. We see where the funnel is breaking and why we, we have tested andwe have iterated to see can we break through and is there something here? Sobased on that, we raised the fund on our unique, our unique growth trackrecord, and our unique insights essentially.

And so we raised, we announced late lastyear our, our 25 million fund one. We have made over 25 invest. To date, happyto get into those and continue to grow on both the Fiat Growth and FiatVentures sides  

Mike: Yeah.  

So would you guys make investmentsoutside of the growth business?  

Alex: Yes. Yeah. Goodquestion.

Mm-hmm. , so about two thirds of ourinvestments are companies that we have worked with previously, but, so theanswer is absolutely we do. Mm-hmm. . Mm-hmm. . We just try to leverage ouradvantage to an extent. We make it very clear to companies, work with us on theFiat Growth. Because we're the best at what we do because you want to work withus, not because you expect investment at all.

They are separate entities. And we dojust, we leverage that insight. So, you know, if, if pure numbers, we've workedwith close to 120 companies to date on the Fiat Growth side, and we've made 25investments, about two thirds of which have been feel like growth clientsfirst. It's definitely not, they're, they're independent in a, in a.

It's not a feeder into investment byworking with us on the growth side.  

Mike: Yeah. And now what doyou think of this model? I mean, if you were to talk to somebody who maybe isin a similar position, they're in you know, maybe exec at some series C company,they, they want to branch out and do their own thing.

They're debating doing some advisorywork, consultancy work, spinning up an agency or going out and raising a. Ormaybe taking this kind of hybrid approach, do you have any advice to, to those people?  

Alex: Yeah. Yeah,absolutely. I mean, I, I think it requires that intellectual honesty and, andself-awareness to know what are your superpowers?

What are you uniquely positioned to do?And really leverage that, because in a lot of ways, capital is a commodity. Iknow it's getting harder and harder to raise these days, but you really need tothink about what's your unique approach? Do you have unique insights? Uniquevalue that you can bring. The phrase value add from investors gets thrownaround a lot, but the question is, what really is that value add?

So I think you need to think about whatyou can bring to the market in a unique way and how that can be leveraged andto build a more efficient, more productive startup environment. For, for me, Ipersonally believe I ob obviously am. Supporter of the venture capitalecosystem. However, there's a lot of inefficiencies in it.

I am a builder at heart, I'm an operatorat heart, and it doesn't make sense to spend four months a year raising moneywhen you're leading a company and you really should be building. So there areways to have more efficiency in building, including with venture. We've donethat a few times. We've seen the opportunities where we're working closely withthe.

and we see, hey, there's something here.We see, hey, what would happen if we accelerated this a little bit? Should weraise a little bit of capital here? And kind of have that ongoing collaborativeconversation and then bringing in a lot of our, our fellow VCs who willco-invest with us because they look to us for that signal and see opportunity.

So we've done that many times and Ithink it builds for a more efficient building process. So for us, that's ourunique that's what we bring to the table. So I'd say for anyone out. Just havethat, you know, conversation, that thought exercise and and figure out whatyour unique wed.  

Mike: Yeah, because you'renot the first organization.

I've heard that split this up. In fact,I've, I've gone through a couple different accelerators myself, TechstarsScience in LA and they, they've raised, I think north of a hundred millionscience. Don't quote me on that. Somewhere in there. And so they deploy adecent amount of capital, and then they also have a team of like 30 plus peoplein house that do all the operat.

Value ads, you know, finance, marketing,et cetera. It, it's, it's useful, but you are, as a agency, competing withevery other agency out there. And so once you have cash, you're like, well,what's the, are these people the best for my business? I, yeah. The one thingthat you said that seemed to really differentiate was you have the BD team inFiat Growth side, so like being networked is a real advantage and difficult tocompete with.

Coming up with creative content, it'slike pretty much anyone could do that. But the, the network effects ofrelationships.  

Are there a few aspects of Fiat Growththat you've realized really creates a moat or a, a barrier to entry for other,other people? Yeah. And why you've maybe cornered the space of like fiatFinTech.

Alex: Yeah, definitely. Ithink there's a few answers to, to that. One is just generally the team thatwe've hired, we've hired the best of the. I'll give you one example. Our, ourlifecycle lead LED lifecycle at PayPal, credit Karma prosper and SoFi. We hireindividuals like that and we make sure that we are, are setting them up forsuccess and we hire what the market needs so people know they're gonna getexcellent quality and they also know that we're not treating them like anagency because we're taking an advisor equity in many cases.

Especially in the early stages becauseof the entire setup, our interests are align from the beginning. So we'reactually, they're essentially hiring a team in instead of the in-house teamthat they might be building, but they know that we have this proven trackrecord. So we've done it time and time again.

Our proven track record, both beforeFiat and as fiat is, is a big piece and a big advantage there and a bigcompetitive, competitive. I'd say, you know, the, the other, the other piecethat really gives us competitive advantage is to your point, the on thepartnership side, especially within certain verticals like FinTech, we know allthe players.

We have a conversation. It's easy toeither have a conversation with them and say, Hey, tell me what you're workingon. What are you wanting to see? Typically these days people are saying, youknow, okay, I want to increase arpu, right? I want to increase my revenue peruser, so I need to monetize, but I need to monetize in thoughtful ways.

Here's our demographic, here's theirpain points. I wanna make some authentic recommendations, so tell me what you'vegot so we can sit and have that collaborative conversation. Instead of, I'm oneperson pitching one thing. It's actually a real conversation of, cool, let mebe a thought partner with you.

How should we partner? How should wemonetize? Why don't we plug in these businesses? And we're known for kind ofthat collaborative conversation. So there's a lot of efficiencies in that. Inaddition to just building out those relationships where we've got, I, I don'ttake this for granted. We've got a lot of great relationships where partnersknow, I just want to check in with Fiat and see what they've got going on andwhat's, what they're seeing in the market.

So that, that value does. A ton ofefficiency and there's certain pieces, especially especially partnerships beingone of them, where we simply are the best of the best. Where there are otherareas where, to your point, we're very good, but so are other people. So itdepends on the vertical. I would say in many of those verticals, we still arethe best of the best because we've done it so many times, hired great talentand have done it time and time again, and have the visibility.

You know, tens of companies doing itsimultaneously. So we know what best practices are in a quickly changingmarket.  

Mike: Yeah. Okay. So you'rethinking, again,  

I'm thinking about this less in terms ofassessing Fiat Growth and more thinking. What's the key strategic insight intothe success? And it sounds like hiring good people.

Yeah. Hard to say that. Strategicstrategy, right? Because everyone would, you know, seems to be a littleobvious. Maybe the relationship aspect is a network effect. You know, you canconsciously say one of our, our strategies, say someone were to spin off aSeries C company and go build a network and say, I have this network that youcan tap into that's hard to compete with.

Yeah. And you could also build a networkon the investor side to save investors, or sorry, save founders time forraising money.  

Alex: Absolutely. And wehave in, in basically every piece of the ecosystem mm-hmm. , from from the VCsthat we closely align with to having you know, I'll tell you in some cases, wehave accompany us St.

Stellar Fi we started working with thembecause we had come to know their founder in a previous context as he wasthinking of starting his business before, when it was just an idea on. He cameto us and we started work shopping that together. So the power of our networkhad introduced him while he was at Zen Business, which is, you know, a largeunicorn and introduced him to us where we saw the opportunity to, okay, hey, Ineed to partner with these guys.

Then we built together, introduced toother investors and have been advising along. So it builds great opportunityfor our relationships with VCs, with founders, with partners. There's a lot toyour point, there's a lot of value in that.

Mike: Do you think this is athe inevitable pathway for venture? I mean, I see folks like A 16 Z that aretaking like, clearly a path of value add.

You know, they're not just investors.They have, I think, Hundreds of employees at this point. Like they're, they'rea large organization that does much more than just meeting with founders and,and sending checks. And then I know that they've explicitly said that they'vemodeled the, the business of the is it CAA agency?

There's a very large, yeah, I think it'sCIA Creative Arts Agency. They're one of the largest talents and sportsagencies in LA with 1800 employees. And I know that the founder there was closewith. Mark Dreesen and Ben Horowitz, and they, they've kind of modeled that inventure. Do you see that model?

And when I say that model, I, I don'teven know precisely on how I would describe that, but yeah. What do you sort ofsee as the trajectory of, of the winning venture model? Because I, I, I sort oftake it with an implicit assumption that if you're just raising money, writingchecks, and then doing that over and over again.

That's the old model. So where does thatstay? Do, do you see that as being, can you just do that for another 10years?  

Alex: There are a few basedon name, reputation, sides of funds. I think that continue that can continue todo that. I think that will always happen to an extent. The real value addcomes, I think, where the rubber meets the road.

I think you can have people who willsay, okay, here's the value add that we're gonna bring. And it's an intro to afew people or a few conversations, some insights. I think the real value comeswhen you're in the trenches with the founders and the team's working onproblems. We have a great growth track record.

Does that mean that we know the solutionalways? No. It means we have a process and a plan for iteration and adaptingquickly and, and testing. And this, this playbook, this It's a matter oftesting and learning. And so I think people who can, who can do that with youare that is a true partner. That's a true value add partner.

So there are shifts of people moving todo that. It is capital intensive to hire great people who can do that, youknow? Management fees only go so far. So there are a lot of funds who reallycan't afford to have a staff of a hundred employees who are, who are experts inthat space. Many in that space, even those who who add value will actuallystill send refer to us in areas of our specialty.

And I think there is that power and weactually see in many cases we are that value add for a lot of other venture. ,because of our close relationship, we can come in and help the portfolio ofcompanies grow. So we actually have this opportunity to help other funds betheir value add where they have their own value add, but they may not be ableto do some of the things we can do in a hands-on way.

So I think this is the trend and thedesired movement. However, it is just in the constraints of the current system,not possible for everyone to do in-house.

Mike: Why not? So say, like,say today. Some people, again, like later stage company, they're smart, they'rewell connected, they're experienced, talented.

They have some cash. They say, I wannago and, and start investing. But they say, Hey, we wanna be good. You know, wewanna win. We don't just wanna be an average investor and we wanna have a, afund that grows and a real reputable like agent not agency venture fund. Sothey say, okay, we can't just allocate.

you must change. We have to go and addvalue. So we're going to like, what would you do if you were in that situationtoday? Would you say, Hey, I'm gonna go buy a few different agencies and havesort of this like value add landscape and then raise money on top of that andthen rebrand them all together or, yeah. Would you?  

Alex: Yeah. I think itdepends. It depends on the amount of capital you have and, and that's one ofthe constraints that I, that I meant is just that, just merely a. Affording ateam that can do all of these things in house. I think you, you can have thatkind of high level, whether it's a CMO as a service or kind of model.

Fractional, yeah, fractional cmo,fractional growth leader who can kind of strategize and direct traffic andbring in other agencies. So I think you can, lots of funds could bring in orhave brought in those strategic leaders, those head of platform, they call 'emthe head of marketing and they'll, they'll bring them in and they can kind ofdirect traffic.  

And maybe there's some expertise inhouse, but it's really hard to say, okay, I'm gonna carry an analytics team ofthree who's an expert, who has, has expertise in setting up a MarTech stack.I'm also gonna have someone who's a referral expert. I'm also gonna have acreative team who can do video U G C.

Traditional design, ux, all thesedifferent roles, it starts to, you have a, a deep series of roles that it'shard to justify bringing in house. Mm-hmm. again, if you have enough capital,absolutely. It makes sense. So what I see and what I, what I'd like to see isalso more operators become NVCs. So they themselves can be that kind of thatoperator directing traffic to partners and other sources, and then alsobringing in those.

In-house for funds, I think will be veryhelpful too. So they, they can direct traffic and those who can afford it. Ithink. Absolutely. Again, there's nothing super unique about our model. It can,it can be certainly replicated in, in that way.

Mike: Do,

do you see any, again, I'm just, this is justkind of spitballing here, but if I'm thinking about this from the LPsperspective, say you know, you're pitching me, you wanna raise a 50 millionfund, and I say, okay here.

5 million. But my only concern is thatyou have this side business. You know, if a founder were to come to me, raisemoney and be like, oh, I'm, I'm raising, I'm building, raising for thiscompany. But I'm also like, you know, I'm working 20 hours a week at like mymom's kitchen. I'm like, well, you gotta quit that side thing and go all in.

If I'm gonna give you this, the agencygenerates cash for you and for the owners. It doesn't benefit the LPs. Is therea, like, a structural concern about, because if, you know, an LP is gonna wantyou to take as many meeting. As many founders possible low to make the bestinvestments. Like does that present some challenge to work around?

Alex: It's a really goodquestion and we get it often. It's I'll say a, a few things. One is there youare correct that for the most part there's no direct cash benefit to an LP fromthe Fiat Growth ecosystem. However one, it is a huge source of our deal. And itis our unique due diligence. So there is that benefit to them.

Additionally, yeah, people often willcome in and we are having that conversation and getting to know them and seeing,Hey, is this an investible opportunity here? We choose who to work with on theFiat Growth side. And there is that a little bit of that pre-screening of like,is this an investible opportu?

So if it is, then we tend to want totake them on as a client, do that due diligence and again, that kind of uniqueprocess that provides value. We do a great question as to, you know, how wesplit our time. We built that purposefully we talked about it. Drew and I atthe time managing Fiat Growth, we knew.

We can't do both things well, we weretaking the right to invest and we, we knew hey, we at this point don't knowenough about venture, nor do we have the time to really do it. And that's whereMarcos came in. Mark Marcos spent, Marcos is the managing partner of FiatVentures. And then in the same time we hired George Fain as our managingpartner of Fiat Growth.

So both of them manage the day-to-day.Gerard manages everything day-to-day, Fiat Growth-wise. Marcos manages everyth.Day-to-day Fiat Ventures wise, they talk to each other a bit, but for, but forthe most part, they're focused on that actual management. Drew and I are outthere doing a number of different things including our roles vary a little bit,but a lot of it is sourcing those deals that come into the whole fiat ecosystempipeline.

And then you know, myself, I'm alsoplaying an active role in portfolio support and helping our, helping ourcompanies grow and through challenges. So it is, it is a great question. Andit's the right question to ask, and it's the question I would be asking too, asan lp. Yeah. And so that's why we built deliberately to try to optimize andwork around that challenge.

Mike: Yeah. No, I think youranswer makes a lot of sense. It's like a unique value prop for diligence andsourcing, and then you also have people dedicated in each of those roles, soyour time Yeah. You know, becomes less critical to the success. I'd love toshift gears a little bit and just get your thoughts on more of the, thelandscape.

So where did you, when you were workingfor Chime and other companies, where did you spend. The most of your timelearning, like where were you most exposed to and, and do you feel like youhave the unique education or insights?  

Alex: Yeah. Yeah. That's agood question. And the answer is, is mostly, is mostly network and having thoseconversations about best practices.

So it's talking through challenges withyour peers. Hey, what tools are you using? What blogs are you reading? Are youseeing what, what tactics are working and, and changing? It, I think it, again,it's just the power, power of, of network. The space changes so fast. We saythis you know, at a high, at a high level.

I'd like to think I'm a half decentgrowth marketer and have, have, have proven that. However, if I'm not in theweeds for even six months, , everything changes so fast that I'm no longer thebest one to go to for you know, what's working day in and day out. So thatagain, is, is, you know, having those, those people in your network, whichtoday I, you know, I would say is, is our team, they keep, our team keeps me ontop of things with best practices because they are the best of the best andthey are learning best practices and testing.

and continuing to keep us informed. SoI'd say it's been, it's always been that network. I'm lucky enough to have themin-house as my colleagues, but in the past it's just been that, that, thatnetwork and you know, yeah. The right podcast blogs. Sure. Twitter who you shouldbe following for these trends.

Mike: Okay. Let, let metweak that a little bit. Can you gimme an example of a time.  

You were at a conference or in some waynetworking with people and what would, what would, what was the conversationabout? What, what did you, you know, was it like, Hey, I noticed this creditcard company is doing a, a deal with this one.

They haven't announced it, we want to goand like, what, what sort of conversation could lead to a strategic insight forthe advantage of a business that would really make make it unique?  

Alex: Yeah. I'll, I'll sayone example that comes to mind was I think general awareness. Just from thechime days, general awareness of consumers for what they're paying in bankfees.

A lot of conversations that we'retalking about, people would be surprised by them or, or their balances wouldchange and they really weren't aware. And I kind of confirmed that with anumber of other leaders in the space. So we decided to bring some transparencyto that. So we ended up building a product called Bank Fee Finder which wasessentially myself our VP of marketing and one engineer.

And what we built out was more or lessit was plaid and then we had to actually clean up a lot of the plaid data, butplaid that would connect five years worth of bank data go through and then pullout and show you, hey, you've been. Hundreds of dollars in bank fees. We putout a report about it. And it was just something I'd say that we realized wasan awareness issue from talking to a number of people, both actually consumersand other leaders in the space.

So that's one. I think one specificexample of something that we built in it and the growth tactic we used of, Hey,there's lack of awareness here. Let's make people aware of this. And thenobviously the, you know, Doesn't have a bank fee. So it kind of work works inour favor there. So I think it's some of those some of those opportunities inthe landscape you'll see of lack of information, lack of awareness.

There, there are, there are othertactics in terms of SEO building other. Other tactics that have come throughthose conversations as well. Happy to get into those, but I, bank fee refineryjust came to mind.  

Mike: Yeah, sure. No, that'sa good example. How, how about from an industry standpoint?  

So what is maybe the top two or threemajor trends happening in FinTech today?

Alex: Yeah, yeah, yeah. Weactually put out frequently a, a trend report. So I'll speak to that, but also,Feel free for anyone listening to go to Fiat vc. And if you scroll down alittle bit, you can see there's our, there's our trend report that we put out.A big one is embedded finance. We see that more and more, and especiallyactually as people are looking to build effective businesses, you have a fewthings happen.

You have businesses who are looking tomonetize, and then at the same time you have. new, new businesses that arelooking to grow in a cost effective way. Going to direct to consumer is veryexpensive, and you can build great tech in a cost effective way, distribute itthrough embedded partnerships. So we've seen that time and time again.

We bestow life insurance, for instance,who we worked with. They power actually, if you go to lemonade lemonade lifeinsurance is actually white label best. It's not very obvious, but that's agreat embedded play. Same thing for a company called Trellis that we've workedwith. They power the insurance platform for truebill now rocket money for Chimefor several, several others in the space.

We see this move to to grow withouthaving to basically spend. 50 million to acquire this massive base you canstill acquire and then you're sharing that revenue. So for these, those whohave acquired the bases, they have these embedded plays to monetize in other ways,to provide unique value adds.

So I think the embedded trend issomething that we see we've seen growing and we see it only continuing to grow.I think another, another trend that we see that's exciting is FinTech bleedinginto. Industries, we kind of say, you know, every company's gonna be a FinTech.One in particular that I really like, especially during this economic climate,is how it comes to play with health, the intersection of health and FinTech.

So you'll see companies one parachutecomes to mind. They they have built a better platform for collection of blood.They've selected markets where it may not be easy to have a side hustle likedriving for Uber or DoorDash. And so it can they can connect with local people,help them earn few thousand dollars a year in donating blood plasma that'smaking life saving medication.

They've used technology to build,they've provided you know, a variable pricing model. Offering you differentpricing, different times of day for you to come in. So they can reallyoptimize. They've used technology in that way. They've also put a payment cardin the platform so they can actually pay directly.

So they are a financial platform. Youcan actually have that payments within this, this process.  

Another that we see is a company calledD a n i. They are making dental insurance free for free for the 90 millionAmericans who don't have dental insurance. All you have to do is watch a videowhile you're brushing your teeth.

There are  

Mike: advertisement. Yeah.You're  

Alex: saying ? Yeah. Yep.And there, there are these products that can, that can do that and kind ofrealign interest. And you can have that, that financial support, that insurancesupport based on different behaviors and interactions and kind of that, inthat, in that incentivization, that can help solve real world problems ofhealth.

It's a big problem that 90 millionpeople don't have dental insurance, and that can be solved through platformslike Danny. .  

Mike: As a side note on thistopic in particular, my mom's a dental hygienist. I've had braces multipletimes, and I'm just about halfway through this book called jaws, which iswritten by.

It is written by a orthodontist and a, aguy who studied evolutionary biology, and together they wrote this book andthey recognize that there's a, an epidemic of mal malocclusion, jawmalocclusion. So jaws not properly aligning, which is the root cause of why 60to 65% of people in the west or in America have had braces or some other ordonwork.

If you look a few hundred years ago andbeyond for tens of thousands of years like our, our caveman ancestors, theypretty much all have perfectly aligned jaws and the, it's not like back thenthey were all crooked and broken and they needed braces but didn't have 'em.It's that, no, we. We now, due to a few different reasons, have malalignedjaws.

The, the substance, the density of ourfood is very soft. From a child, young age, you're not, you know, digestinghigh fibrous food. And it's actually the chewing of really high fibrous foodthat aligns your jaw. And we, you know, children will drink smoothies insteadof chewing on, you know, whatever.

They used to chew on hard meats. Youknow, we cook everything and really process it. The other thing is likebreastfeeding is small compared to what it used to be. You know, like, sure.Our, my parents' generation, they'd even do it. That was like, that was likethe mainstream advertising was like, give 'em formula and now it's starting tocome back.

Correct. But that actually helps toalign the jaws a young child. And then when you rest, when you rest your mouthand you're not talking, breathing through your nose, closing your mouth,letting your tongue rest on the top of your mouth and. Touch your jawstogether, like applies pressure and starts to form them.

So even in a few hours of working toanyone listening, do it. I, I do it. Wow. I used to breathe through my mouthall the time. You're actually more, yeah. They looked at the, the death rates.You have a higher chance of dying if you breathe through your mouth becauseyou're not using the filtration system of your nose, which has all the hairsand fibrous components that filter out the, the, you know, Stuff in the air,and so that gets in your lungs and then you, you're more likely to get sick.

So, so I boil it down to like the dietsof our times and the ergonomics. And c varying so, That's really little, littlethings.  

Alex: So what you're sayingis cavemen would not have wanted to use Danny because they Yeah, no. They haveperfectly aligned teeth.  

Mike: Yeah, no, I would, Iwould view it as like what the root cause is.

Not the, the Yeah. It's a, it's a, it'sa problems on top of problems. On top of problems. Yeah. Not everyone hasinsurance and they probably should, but why? Why is there so much dental? Whyis the whole market of dental so big in the first place? Yeah. And could youaddress that cuz the end solution is like, give people properly aligned teeth.

Alex: Yeah. Yeah. I mean, alot of, a lot of that also comes too in which actually we see across the, theecosystem it's an access issue. And so I think, you know, a lot of issues canbe prevented with preventative care, but many people can't afford preventativecare. Yeah. So I think there, there, there's many, there's many aspects that wesee in this industry of, of access issues and we see it, you know, FinTechreally is one of.

The biggest tools to build back to, toaddress incoming equality, access inequality, whether it's access to productsand asset classes that were previously unavailable, whether it's like a Dannygiving you insurance when you otherwise couldn't afford it whether it's anawareness and an education piece.

I think that kind of democratization ofwealth building is can come, can come from the, the FinTech ecosystem  


Mike: And do you wrap cryptointo FinTech or would you put that in a separate bucket entirely? Do you lookat that? Do you have thoughts on Yeah. How they merge?  

Alex: It's a really goodquestion. I think at a high level, they're one and the same.

Because it is broadly speaking, youknow, movement of, of money and how, and how it powers various pieces of our e.. That being said, they behave very differently. And I think we're at thebeginning of seeing how they will merge together, you know? Mm-hmm. , we sawnot very long ago everyone saying, okay, everything with Fcx crypto is dead.

As we've heard, you know, 10 timesthroughout the years that crypto is that, and and that everything needs to bein in fiat. the irony of our name, I realized , which we, we can get into laterif you want, but then you have everything with SVB that has, and the falloutand that we're seeing in our current banking system.

So you have two platforms that are bothimperfect. You have have seen collapses in both and I. and what I hope is thatwe will, we will see them converging in a lot of ways to build kind of the bestof both worlds that are properly protective of consumers in the way we movemoney. So I think they, in answering your question, high level, yes, they'rethe same today.

There are a lot of differences and Ithink those differences will become less and. Overtime. Mm-hmm.  

Mike: This is one questionI'd love to ask. Gasa come on, is I, I sort of view them just as a, a backdropas it's like water and oil, where they, you can put them in the same platform.You know, you can use Robinhood and buy Bitcoin right next to your you know,Tesla stock or Fidelity out offer the same.

And so companies can offer themtogether, but they're, they're, they're as different as different can be.They're completely decoupled from each other. . I, I wonder, and this is my questionI put to you, is do you see a, a, an inevitable conflict of interest betweenthe two emerging ecosystems such that people in the US dollar effectively relyon the political agenda, especially as the banking industry seems like it'sgonna become more.

Consolidated and thus more closelyaligned with the political agendas, which to me presents a greater instabilityfor political printing of money and political influence of interest rates, etcetera. And. If and when a politician might just abuse that power, it createsan incentive for the nine out of 10 US dollar holders that don't live inAmerica to move into another currency.

And Bitcoin seems to be just sittingthere with open arms just, just offering people the exit ramp. Right. We, weare in, in a wild time recording this because, you know, SVB and, and credit Suand other banks have collapsed and it seems to be unsettled. But what's yourcurrent thoughts on how those, how, how that, if it's a transition or if it'show, how that gets navigated?

Alex: Yeah. Yeah. It, it, Imean, it is such a complicated. It's such a complicated question. There are somany stakeholders, very powerful stakeholders. So I think.  

Mike: Are you worried foryour life?  

Alex: I gotta watch what Isay. . No, I, I think it's you know what, what you have, I joke with ourlawyers on the venture side.

We were talking about AI replacing themor replacing everything. You know, they, we were saying lawyers do a good jobof keeping themselves employed. Right. And so in the same, the same time,there's a lot of powerful government institutions that aren't gonna simply letthemselves be replaced. So I think through regulation there will benecessarily, because of the way that governments are set up there will begovernment intervention, whether, whether there can be , that hybrid middleground and how they can work together.

I think it will require forward lookingleaders who can look to the value of both ecosystems and how they can bebrought together properly. They can live to your point they can coexist in aplatform, right? They can be in an app, and you are both in fiat and cryptowithin the same. . We're working on the industry is working on being able toswitch in between seamlessly and many, many providers are, are working on thosesolutions.

I think it's not just, I guess my, mypoint is it's not just a technological challenge, it is a societal,governmental, regulatory challenge. Oh, yeah. So, so I, so many unknowns.  

Mike: That's a big.  

Yeah, I mean, the question to me islike, does the US Federal Reserve or not Federal Reserve, federal governmentview Bitcoin as a threat to the dollar?

And if so, how would they ever not stopit? I mean, how, how, what, what, what are we thinking is gonna, they're gonnablame it on, you know, E S G, or they're gonna blame it on climate change, orthey're gonna blame it on national security. There's gonna be some politicalnarrative, but it's gonna be like we have to stop people from leaving ES dollarto Bitcoin.

and I, I want  

Alex: I, I think FTX is, FTXhas been a great, well, and, and others have been a great example of, you know,the need for regulation and oversight. So I think the question will be at a, ata high level it should be, should there be regulation and oversight? Who shouldbe that regulatory body?

Should that come from within theindustry? Should that come from governments? Should it be some combin? But Ithink that, that the whate whatever the, the reason and, and I'm not sayingthat the reason isn't legitimate. I think there is, you know, a lot of peoplelost their life savings and lots of money.

There's been a lot of, of, you know,tragic consequences of, of the downfall of FTX and others. And so I, I thinkit's it, it's a matter of can these sides come. and discuss you know, aproperly optimized financial system that can be properly regulated. So I guessthe question is, will that regulation come from within the financial ecosystemor will it require government intervention?

and then also what, you know, whatgovernment policies will exist to either enable or impede those mm-hmm. .  

Mike: And how do you thinkabout your time management with this? Because it is so, so much information andso much change does affect the businesses that you work with and the capitalthat you will have access to.


How do you distribute your time to bothpay attention to what's happening in a collective level, and then also get youdone on a day-to-day. Do you, like, do you have a healthy suggestion or, or wayyou budget time?  

Alex: That is, I'll just behonest. That is one of my biggest challenges.

Absolutely. And it is one of our teams,and so I, I do have some suggestions because it's something that I worry about., as I was talking about, when I'm not in the weeds for six months, then I loseall these best practices, right? When I am not paying attention to everything.Look, look, there's, there's a lot of a lot of people talking about the spaceright now.

Most of us, myself included, are noteconomists, and so there's a lot that we want to learn more about. Theseecosystems are so complex that we are naturally curious, but to, to your point,like you can't spend all your time going down these rabbit holes and learningeverything and becoming an expert, especially when you have

you know, a job to do, business to run.And so I think it you know, a big piece, one thing that we do internally, wehave a Slack channel for sharing learnings and things that you should know. SoI think there is, again, the power of community and network for, hey, these arethings you should know. So I think you know, align yourself with the, the rightexperts and the right network who can digest and Synthes.

So I think you can have informationoverload if you, if you, if you, if you read articles today, you'll, you'llhave people talking about, you literally have, right now people talking abouthyperinflation, that bitcoin's gonna be at a million, at a million dollars inwhat, 90 days. At the same time you actually have people talking aboutdeflation and how that could occur and be the biggest risk to assaultsimultaneously.

Mm-hmm. . So depending on who you trust,you're seeing these different perspectives on these complex issues. And so I, Ithink it is a matter. Choosing the right sources to, to read and having thatnetwork that can inform you on the, on the important issues. So yeah, for, forme, it's it's a bit of reading and leveraging the team in our network to, tohopefully inform me about the right.

The right pieces. I'm doing my best.It's, it's a challenge.  

Mike: Yeah. No, I appreciateyou admitting that and, and interesting to hear how you, you know, think aboutit.  

Does it affect or should it affect yourinvestment outlook when you say maybe a, a, a new bank is coming to you andthey're trying to raise money, but you know, the banking crisis is, is nowhappening, whereas two weeks ago, they would've.

You know, the waters are perfectlyplacid, but today they seem to be choppy. Does that, that would be the firstand most obvious type of company that would be affected. But there otherindirect externalities from the volatile market that you're seeing on theinvestment side.  

Alex: I mean, I'll tell youin that scenario that, that someone comes to us, I'm a big believer inintellectual honesty, self-awareness.

Of, if you don't know something, that'sokay, but say that you don't and tap on people who do know. So we do when, whenthere is something that we see, if we don't know the space really well, we tapour experts. We've got a deep network of advisors. And we'll bring them in fordifferent pieces. So in this case, it's obviously well known that there arechallenges in the ecosystem.

We do know the space, this particularspace fairly well, but there are a lot of complexities here. Additionally we'llsee solutions that, that pop up. And we think about, Hey, is there, is there areal moat here? What's the competitive landscape look like? What regulatorychallenges might pop up? We try to tap our experts who know way more than wedo, so we know enough to know what we don't know, right?

Mm-hmm. . And so, we tend to, toleverage that as, as we go through these processes. So I think in the situationthat we had a, you know, a brand new bank coming here, there's a lot of,there's a lot that we know in that space, but there's a lot of expertise andprobably economists that I want to bring in to understand.

What is likely to happen. I know no oneknows exactly what's gonna happen, but how this might impact this new business.So we kind of take that approach to, to any new opportunity we're lookingat.  

Mike: Mm-hmm.  

and, and are you seeing any particularwave of categories of companies, you know, they tend to go in waves. Is, isthere waves that are hot on the early seed stage now?

Alex: I mean, I'd say, I'dsay though well two things. One, one is we're seeing a wave of, of response,and I, I love that the reason that the government had to step in and protectstartups is because startups are how we can continue to innovate and protectourselves.

You see, I, I love, one of the bestexamples is, is Mercury over a weekend upped their F D I C insurance to 3million from 1 million over a weekend, over, over the, you know, the chaotic. .And so you're seeing people trying to immediately, immediately respond to thischallenge and seeing, okay, we need to diversify our treasuries.

This is how we can do it. We need tohave this F D I C protection. So I think you're, you're seeing you're seeingthat response immediately. A huge trend. You know, the buzzy, the buzzy thingnow, but I believe in it is AI . And so that is the biggest thing, pop poppingup. Mm-hmm. . And again, that becomes you know, because we're in the verybeginning stages in many ways of ai, you have the challenge of seeing is thereactual utility here?

Is this just cool because the theunderlying technology. Or is something unique and defensible here? So I'd saythe, the, yeah, the most immediate or respon responsive to everything going on.In our financial system. And then you know, AI is certainly the, the, the trendof the, the moment I think will continue to be

Mike: mm-hmm.  

and, and with ai you know, so much, somuch is, is spoken about it, but, but one thing I'm curious from yourperspective is, do you see it as a, a consolidated market? On, its on itslowest level. So there'll be like two or three open ai and there'll be a fewthat develop really sophisticated large language models.

And then there's just a, a wave of whitelabels on top of that that utilize the API layer. Is that the generaltrajectory of how the, the market is, is growing?  

Alex: Yeah. I, I think so. Ithink, you know, everyone wants to have their solution. Everyone in like the,the biggest players of the space, they want to have their

solution. And it's, you know,understandable they want to own the ecosystem or it's, you know, it's relevantto search or their core business models. I think there will be a few playersjust like, you know, maybe there's a few internet browsers that we all use anda few languages that people use that engineers use.

So. , you know, there, there's that kindof consolidation, but the biggest approach will be actually how it is uniquelyapplied. And I think there's someone who can say, just like, you know, there'sa phase of like, okay what's, you know, I'm Uber for weed, or Uber for whatever,and so people will just apply you know, chat G p T for this, or AI for this,or, Hey, I have a traditional business, but I'm just gonna say that we're doingAI so we can get mm-hmm.

you know, a different valu. , the, thechallenge will be looking and seeing, okay, is there something differentiatedhere? Do you have the unique capability to win? Say it's implemented in afinancial space. Do you understand? Have you spent time with these big banksand understand all the compliance pieces, all the fraud and risk pieces, allthese underlying challenges of the system?

And if so, are you uniquely situated tonavigate those challenges. So I think it will be, there will be a ton ofbusinesses, a few, a few of these building blocks will be consolidated, butthere'll be a wide range of businesses, and the winners at the end of the day,are gonna be those who are uniquely situated to, to navigate those ecosystemsand execute on both the build and the the growth. Of, of those businesses.  

Mike: Yeah. Yeah.  

And it seems like given how frequentlyhyper bubble cycles seem to happen, I, I would imagine that people are wellaware of that, you know, that they're, they're thinking, you know, as soon as Ihear AI qu quickly, the conversation goes to, well, how do we know we're not ina bubble?

So that, that gives me a littleoptimistic take on it that people will hopefully at least be thinking, Whenwould this be a bubble? Like what would be the potential valuations at whichwe're not gonna go beyond, or how, how do we not make the same mistake we made,you know, a few years ago?  

Alex: Yeah. , I don't, Idon't think that's possible for people to not be al right.

Like I yeah. We've seen, I, I, I've beensaying as of a lot of people, as we've been watching everything unfold, itwould be wonderful to live in a, a rational market. When everyone is, you know,irrationally too excited about something and then at the same time,irrationally too down on everything. I think we're seeing a lot, a lot ofspaces, InsureTech being a big one.

InsureTech is like a dirty word at themoment. People don't want to invest in it. But actually it's, you know,insurance is core to a lot of how we function, but people don't want to touchit because, you know, valuations are down and it's gotten destroyed in thepublic markets. There, there, there are these you know, there's exuberance init and now there's, there's too much pessimism.

So it'd be nice to live in that kind ofrational world. That being said, ai, I believe I believe, and again, there'ssome regulatory risk here too, as well put in you know, a lot of jobs at risk,but AI has the, the power Really to, to bring in actual utility and actual costsavings immediately available.

Not a hypothetical in the future, but itcan provide real cost savings when businesses need it most. So I think there isa ton of exuberance and it certainly will probably. bubble in a sense. But, youknow, a lot of that's honestly justified because of the use cases of AI and theutility that they're, that they're bringing.

Mike: Yeah. Yeah. And, and agrowth is not necessarily a bubble. I, I think that's important to recognizetoo. Like there can just be a massive technological innovation like the iPhone.I, I don't think it was a bubble. Mobile wasn't a bubble, but mobile was veryhotly anticipated and hugely invested in.

Alex: Totally. Totally. AndI, I think, yeah, the, the bubble can be the, maybe on the outskirts or of theI dunno, maybe people who tried to create maybe apps without any utility aspart of the, the broader bubble. The hardware itself, the iPhone itself in noway was the bubble. But there's things in the periphery that maybe could be.

Same thing for ai when you have youknow, maybe. Some companies feeling they need to have an AI application when itactually isn't core to their business. And, you know, maybe those will bewasted, invested investments. But you know, the, those who have it at at itscore for the business functionality.

I, I think it's, it's a very real, yeah,very real answer.  

Mike: One, one litmus test,I think about when gut checking whether we're in a bubble, is, can you, can yousee in the n in the, in the very near future how this technology, whatever isbeing proposed, is going to directly make. People's lives better, faster,cheaper.

And so like NFTs, they're gonna begreat. They're, why are they gonna be great? Because someday they're gonna bevaluable. When's that? Someday? Oh, it's like in the future, you know, don'tworry about it. It's far, far away. Same thing with the.com bubble, whereaslike, it's gonna be valuable, you know, don't worry about it someday, it'sinevitable.

Whereas like, like you made a reallygood, good and sort of subtle point, which is that it immediately affects thebalance sheets of companies today. So yeah, that's where I'd be. Yeah. Deploycapital  

Alex: de definitely, yeah.The speed at which it's moving is literally, I've had conversations with thecompany and, you know, three days later they're like, oh, next iteration isout.

Mm-hmm. technology has changed the, theway things are advancing so quickly. And then also, you know, exactly to yourpoint, the utility it can provide in real time for, for these businesses thatare looking to. shore up their financials. Yeah. It's real and immediate.  

Mike: We've covered somegreat ground. I appreciate your time.

Alex, are you active Absolutely publiclyon Twitter? Anywhere On a personal level, we'll have links to Fiat Ventures,Fiat Growth, you show knows.  

Alex: Yeah, absolutely. Iwould say my networks of choice or LinkedIn and, and Twitter. Yeah, feel, feelfree to connect with me on there. And. . Yeah.

I'll, I'll happy, happy to sharethis.  

Mike: What is your Twitterhandle?  

Alex: My Twitter is@AlexHarrisFiat.

Mike: All right. And is fiatin reference to fiat currency?  

Alex: You, you, really goodquestion. So, so Drew and I, my co-founder, we met at uc, Berkeley. When wewere students there, we wanted to make a reference to Cal.

And so the motto of Cal is actually Fiatlux Let there. So actually it was let there be growth like kind of as we werecreating this, we wanted to make that reference. It did, because we do a lot ofFinTech. It was nice that it also had that double meaning, but yeah, it, itactually isn't to say that we only touch on fiat and not crypto.

We own fiat crypto.com. I bought thatbecause, you know, I thought it was, hey, there is a world that we do. We doboth. . So yeah, we, we get that often, especially from anyone in the cryptospace is and my, my favorite is someone a, a well known well known cryptocrypto investor said was looking at our deck to potentially invest in us andsaid what'd he say?

He said you might as well say we investin dinosaur. He didn't take the time to see that. Like Marcos actually led BDat Ripple for four years and we actually do stuff in the space. He just saw thename Fiat and, and made, made some assumptions. So we made a, a joke logothat's actually fiat with a dinosaur. Be behind it.  

Mike: Ah, that's great. Ilike that a lot. It's, you know, contrarian. Fantastic Alex, well, reallyenjoyed this and wish you nothing but the best.

Alex: Likewise. Thank you somuch for having me. Appreciate it.