How TransferWise drives growth

Nick Lembo:

There’s always a lot of testing around that as well. So if in the UK, for example, we invite three people who successfully sign up, they get a free first transfer and you get 75 pounds. That’s the most basic version of our referral program. What should that look like in Hong Kong? Is it simply converting that 75 pounds into however many Hong Kong dollars that make means, or should we actually be tweaking that to make it a more locally relevant number? Or should we be tweaking the amount of people you need to successfully invite or should we be tweaking the amounts that, that first free transfer for the invitee is allowable? It can be 500 pounds, it can be a thousand pounds. So all of those kinds of optimization tests of what is in many ways, a core referral product happen in many places around the world to kind of understand and optimize for making sure that, that’s helping customers save money, but also bringing us new customers in a sustainable way, serving both sides of that coin.

Nick Lembo:

Yeah. So one of the, I mean, it’s a good question and it’s also a very hard question.

Nick Lembo:

No. So I think to step back a little bit, I think there’s two important bits of context to thinking about how we continue to fuel growth. So one is, this has become such a cliche to say, but we are a very mission-driven company and the mission of the company is creating money without borders. So making those transfers and the ability to move your money around the world as cheap, as fast and convenient as possible. And thinking about growth is something we do in the context of how many more customers are we helping save money, how many more customers are we helping get their money there instantly. There’s real people at the end of the day who are sending money for very real things for themselves or for their businesses, so that’s always the overriding lens of growth is how can we help more people save more money.

The second bit, you briefly touched on the question around valuation and expectations of growth in a technology company, a venture backed technology company. We’ve been profitable now for four years, so one of the things that we know is that it’s really our customers who are fueling our growth. It’s their contribution of transparent, low fees that are giving us margin to reinvest into growing the business and growing the business by bringing all three of those products I talked about, the multicurrency account, the send money kind of money transfer, and then the larger kind of business product to more people in more places.

And so that’s a bit of a roundabout answer, but to us, it’s like, we know that like our existing customers are fueling our growth for new customers. And our responsibility for growth is to bring the products to more people and more places that lets them save money, sorry. Excuse me. So when we think about optimizing every little team, like you talked about, you’re asking me like, how do you continue to find avenues for growth beyond just optimizing a referral program or something like that, it’s really about more products in more places. So what is the next country to go to? And what is this thing that might be missing from this product today that we can bring that is going to make it better and it’s going to make the people who use it stickier and more likely to invite others and using us for a longer time and sending, eventually more money through TransferWise?

Because at the end of the day, if we’re going to achieve that mission, like I talked about of making these transfers almost free and instant all around the world, that requires so much scale to be able to drive down the unit cost of each of those transfers and the eventual speed of those transfers. So we know that to achieve that mission, like we’re going to need to be 10X the size that we are today, because that means there’s enough money flowing through TransferWise to pass those cost savings back to customers. So the shortest version of the answer to your question is, more and better products that are better than the competition in more places around the world.

Nick Lembo:

Yeah.

Nick Lembo:

So I will say that decision-making is not driven by, is this thing going to be 10X the size when we launch in a year or two, it’s driven by what is the customer impact today? So I hate to keep harping on the same thing-

Nick Lembo:

It feels like a non-answer to your question, but it’s true. It’s like we don’t … So let’s use a real example. We launched a product this quarter called jars, which is essentially in your balances, when you hold money in the multicurrency account, you can now create a little another balance to save money towards whatever holiday, no, holiday is a bad example in 2020.

Holiday.

But it’s the most obvious one, right?

Nick Lembo:

Or your saving for a new car, Christmas presents. And so the launch of jar is not driven by is the adoption of this product going to be the thing that makes the amount of money held in TransferWise 10X the size it is today, that’s useful. And we have to have an estimate of that to evaluate the success of the project, obviously, but it’s driven by, hey, 30% of customers are asking for this today, who already use balances are asking for this today. And it makes it a better product that affects the NPS. That does all of the things that flow on from there that I talked about when we talked about NPS and word of mouth growth.

So it’s increasingly listening to your customers is like the simplest version of this, it just gets way more complicated to do it at scale across the product suite. That is so broad, but it’s still the core thing in driving growth is what are people asking for? And can we build it in a way that’s better than existing solutions or build it in a way that’s better because it works and integrates with what they already use TransferWise for.

Nick Lembo:

So let me clarify. Like, it’s not that the data becomes harder to get, instead, it becomes harder to prioritize because now you have eight million customers telling you eight million different things. So it’s not that it’s harder to listen to them, it’s that the complexity of our product grows and people have different use cases and therefore we’re getting more requests for different types of functions, features, whatever. So the ability to prioritize those by what is going to have the most customer impact is the part, separating signal from noise here is a classic skill in any team and having a hypothesis, once you have a kernel of the idea from the data, and then being able to test that in a way that validates or doesn’t, kind of this is, it’s the classic insight, iterate, improve cycle just flowing out at a really large scale across a relatively complicated product suite.

Nick Lembo:

So one of the things that I find personally really cool about TransferWise and why I think I enjoy the culture so much is that we are set up in something like 70 different autonomous teams, each working on a specific area of expertise. So there’s not really anyone looking at all of this data from a strategic point of view and saying, go and focus on this thing that’s going to move the needle the most, everything else can wait. It’s these small teams set up like startups within a startup who are looking at a really specific data set on their problem that they work on or for their customer that they solve for building conviction when they listen to those people, backed by data and then going and doing it themselves. So it’s almost the way we work creates agility and creates the ability for the person who’s closest to the problem to be able to solve it, rather than waiting for someone to sort through data points from about eight million people and figure out what’s the best thing to do.

Nick Lembo:

So autonomous teams thinking about this as well is, one of the ways that we are set up is we work really flat and we work cross-functionally. So we had a handful of internal and external people on the press and communication side. And we had a handful of people working in product marketing. We had a handful of people working on the paid social team from London. And then we have these independent teams that are working on SEO is a great example, doing that all around the world, not focused into a specific region because they’re doing that at scale. So when we think about regional marketing or comms or growth teams, it’s really a mix of people who are based in the region, have the local market knowledge and are working on that. And that usually falls for us across product marketing, PR, a handful of other places as well.

And then we’ll have a central team on some like, let’s say performance channels that we’ll have a global view of the world and we’ll have someone in their team who’s focused on Asia Pacific. And we work as a little unit together on identifying the customer problems that we’re solving and the types of customers in that particular country or region that we need to talk to. And what is the best kind of optimization of those channels to reach that person or target person in whatever different country it might be.

Nick Lembo:

Yeah, where we need to-

Nick Lembo:

Yeah, exactly.

Nick Lembo:

Yeah, I know, I do the same thing.

Nick Lembo:

Yeah. I mean, absolutely. I think, we are, TransferWise as a whole is pretty lean for the amount of customers we have and the amount of money we’re moving. We’re something like 2000 people around the world and our marketing teams are less than 200 people. So we’re good at identifying what’s scalable and putting time and resources into those things that are having the ability to deliver more solutions for more users than something small and kind of manual. Right? So that approach of, hey, this thing worked, this test worked, whether it’s a new channel or a new type of customer we’re thinking about targeting, the strength of some of those teams is turning that information from a test, iterating on it to understand how could we do this in a way that’s going to drive 10X more users for not hiring 10X more people to support it.

Nick Lembo:

Yeah, totally.

Nick Lembo:

Yeah. I mean, I think, this year has revealed how important communication is for everybody around the world. And it’s something I think you definitely, we’ve learned as a company and myself as an individual, being in a region far away from headquarters, whether it’s the time at TransferWise or my job before was for an American company as well. It’s something you learn both at an individual level and at a team level. So we do a couple of things to try and make that distance smaller and make sure that everyone has the amount of information they need to do their job really well, but not so much information that it’s complete overload and you’re swimming in notifications all the time. And you’re just spending all your time reading internal blog posts or 50 Slack channels or whatever it might be.

Nick Lembo:

I’ve turned off my notifications for this specifically, so I don’t have that anxiety-

Nick Lembo:

… to our time during our chat. No, but what we do is the tools we use are not dissimilar to most technology companies. We’ re working on an internal Wiki based on Atlassian. And that’s a mix of Confluence and Jira ticketing systems, depending on what teams are doing what. We run Slack at a pretty large scale with 2200 people and 15 offices. We run Zoom, it’s all the software that you would expect, it’s just doing it at a big scale. And so one of the things that I think we’ve really leaned into and gotten better at in the past year and definitely felt as a growing pain internally, maybe 12 to 18 months ago is documentation, right?

So you have new joiners coming into the team, how do you sure that the success of that person onboarding into the company is not based on picking someone’s brain for one hour, for three months in a row to get all of this institutional kind of legacy knowledge of someone who’s been there a longer time. How do you remove that risk from your business, but also make sure that someone coming into the business can understand this stuff simply and consume the information at their own pace. And really, I have to say, Atlassian has been a huge part of that. Being able to move more teams to every time they’re doing a new project, document the decision tree that went into a test, document the outcome of what that test is, all of that stuff seems small at the time, but it adds up to a picture of six months from now, this is how we market in this place or this is why we launched this thing.

And you can go back and you can read six months of institutional knowledge and see what the debate was in that team six months ago when they’re talking about building feature X or feature Y. You still of course, have to spend a lot of time onboarding people and talking to people on Zoom-

Nick Lembo:

But that has really helped, a lot, I think, in my experience.

Nick Lembo:

Not really. We run pretty start-up like still, when it comes to Slack, choose and join the channels that you need to be in, make sure you’re in the channels you need to be in for your relevant projects. But don’t try to consume all the information in all the world, otherwise, you won’t ever get any work done.

Nick Lembo:

But for the most part, it’s pretty transparent and pretty active across all levels of the organization and it’s up to the individual to, and their lead, right? Like when you hire someone new to make sure you’re telling them what channels they should be in and what’s relevant for them, but it’s still pretty true to the ethos of the autonomous teams that I talked about before, like up to you to find the places you need to be consuming the information that you need to have to be successful. And down to you, TransferWise the culture, no one’s ever going to tell you what to work on. You need to find the thing that’s going to have the most impact for you to work on yourself, with the help and support of your team and your lead and the people around you of course, but that’s a big part of our culture.

Nick Lembo:

Yeah. OKR is used to suppress the organization. Yeah.

Nick Lembo:

Good question. Maybe two years, something like that in various iterations with, we do a team-wide quarterly planning cycle. So every team will do a version of their planning, singles into bigger groups and summaries that are composed for people so you can consume a version of information that’s not overwhelming if you’re not in that team or not technical or whatever it might be. And the simplest version of that is usually the OKR for each group. It should be easily understandable for someone who doesn’t have domain expertise in your team’s area to understand what you’re working on and why, and whether you were successful last quarter or last year or whatever it might be.

Nick Lembo:

Yeah.

Nick Lembo:

Where to start? One thing that I’ve learned is just because you’ve worked somewhere for a long time, does not mean you understand the product in a different place. I understand why most people still need to use our product and the general gist of it, but coming back to what we talked about before, around localization of all these different parts, the payment infrastructure and system in the US is so different to Australia or Singapore or Japan, that really, it took me probably a quarter or two to wrap my head around, how does a product actually work in a different way? And how does that typical customer’s usage of the product affect their perception? How does it affect what they give us for NPS? How does it affect the overall speed of the product? How does it affect how business can use us versus customers?

So that kind of goes without saying, but like relearning the product is not an easy thing, especially if you’ve been at a company for a while and think you know it pretty well. The other thing I would say that’s been definitely a learning curve is, came from a region where so much diversity of language, culture, like Asia-Pacific gets lumped together, but really is how many different billions of people speaking, how many hundreds of languages and different cultures. So coming back to a region where really in the Americas, US is vast majority of our growth and users and it’s part of the world, but we also have a really strong product market fit and a ton of users in places like Brazil and Mexico and Canada. So coming back and trying to reframe your understanding of not just the product, but your customers in those different places, it’s a very general thing to do and it’s a very hard thing to do at the same time.

Nick Lembo:

For me personally, not everyone would feel this way, but yes, for me personally, I’ve worked in … Go to market in Asia-Pacific countries for seven or eight years across two different kinds of high growth technology companies. Going to Brazil or Argentina, Columbia, feels more familiar than trying to figure out a country of 350 million people with a very outdated financial infrastructure and the competitive, because the other thing that’s interesting about the US that has been a real learning curve for me and frankly is important to how we grow and position ourselves in the market is, a lot of the financial technology products that have arisen in the US are as a result of the financial infrastructure.

So like, you don’t need a product like Venmo in Singapore or Australia, because I can send money directly to you in a domestic bank transfer that is most times instant. So like these different products that have arisen as a result of the financial infrastructure in the US create a different set of mental models and expectations for our customers here that we need to understand, how do they understand and use TransferWise in this broader world of different types of FinTech products that they might be using regularly or semi-regularly in their life. And so, it’s not just understanding our product, how it’s different, it’s understanding how the whole kind of mental model of using newer financial apps is typical for a US consumer.

Nick Lembo:

I think that’s right. And it always comes back to that mission for our customers. So there’s tons of FinTech startups, like set in the US that are building primarily for a domestic customer first. One of our unique things is that we’re trying to solve the problem of cross border money for people in all these different countries, and that boils down to, like I’ve said at nauseum probably, price, speed and convenience. But there is a large part of the customer base that’s going to overlap across both of those. They’re going to have a domestic bank account, they’re probably using a Robinhood for their stock trading. They’re probably using Venmo or Cash App to pay back friends, where does that person’s need for cross-border money factor into their broader kind of use of finance apps, more generally?

Nick Lembo:

It’s a hard thing to understand and unpack, but it comes with talking to customers.

Nick Lembo:

That’s one thing I wish I was doing more of all the time, but we do have a pretty strong culture at TransferWise of what we call side-by-sides. So spending time with our customer support or operations team and booking one, two, three hours a month to sit next to somebody with the headset on, it’s kind of your training wheels. And respond to emails or pick up the phone and do a customer support shift. And there’s nothing better, you can sift through all the data you want and look at all the comments that we get around product should be faster this way, or you’re too expensive or whatever. Nothing is a replacement for in real time talking to a customer on chat or on the phone and trying to solve their issue. Like that is the best way to remember that you kind of know nothing at the same time, no matter how deeply you understand your product, you don’t actually know how people are using it.

And it’s one of the things I think that’s really strong in TransferWise culture, where our CEO, Kristo still does that a couple of times a month. Probably, not probably, definitely. I mean, I just don’t know his frequency, but it’s a regular thing in our culture that people across all teams, product teams, marketing teams, growth teams, whatever, are doing those kinds of what we call side-by-sides with our customer support teams or our operations teams, either answering the queries or figuring out in the operations side, if money movement, something happens, the person puts in the account number one digit incorrect, how do we find that money and get it to where it needs to be? That type of stuff as well.

Nick Lembo:

It’s scary, right?

Nick Lembo:

Yeah, I couldn’t agree more.

Nick Lembo:

Yeah, I think it is. It’s something we intentionally make sure persist in the culture.

Nick Lembo:

That’s cool. Mission days are twice a year, kind of internal company meeting, basically. I don’t know what else to call it. And it’s a side project of mine that I took on and has grown into a very large thing that I still help lead as a side project, but is now like a full on production. And so it’s been cool to see the expansion of that from small inkling of when I took it on to what it is now. So I ended up with this … Mission days used to be basically the same thing as our quarterly planning when we were a smaller company. It would be a couple of hundred people spread out a couple of different offices on Zoom, teams would get up and say, this is what we’re working on in this quarter. And people would raise their hands and challenge them on, is that the right thing to be working on? Why are you doing this? Explain this to me.

Alex Cleathous:

It’s yours.

Alex Cleathous:

What’s cool about that is that normally those days are about the company. It’s about cost. How have we gone? Of course, how many of the customers have we increased, what’s increasing spend? But this sounds like it’s flipping it on the head and going, of course, how have we helped more? And how have we sped up more? And those are not direct, I guess, metrics towards the valuation or whatever else it is. But it’s absolutely at the fundamental core, that’s why.

Alex Cleathous:

Yeah, sure. And so those days are separate to the OKR planning quarterly cycles. And so you still got the quarterly cycles, but then these are on top of that. And these are just about the mission only. And it’s just about mission, about customers, partners, that sounds fun. That sounds like that would’ve been really fun to launch.

Alex Cleathous:

So you’re really into culture. Like to take this on board and when someone goes, well, here you go, it’s yours now take it. Because that’s what happens, but that must mean that it’s important to you.

Alex Cleathous:

And it’s funny though, especially to people who are listening, the power of feedback, because you said, hey, these are things which I think could improve, now all of a sudden there’s mission days and there’s a few steps in between, right?

Alex Cleathous:

But I mean-

Alex Cleathous:

The power of feedback is real, but also just to say something, because I think there’s lots of people who just would think it, but you said it and then because you said it, steps happen as a result of that. So I think like just to not be shy. Because I think you could have been shy and there might not be mission days kind of the way they are now. And so I think there’s something to be said for that.

Alex Cleathous:

Yeah, for sure. Let’s go now, quickfire questions.

Alex Cleathous:

This is the last part. If you had to choose just one channel or tactic for growth, what would it be?

Alex Cleathous:

Definitely.

Alex Cleathous:

Yeah, sure. Of course. So number two, there’s seven questions. Cool. So number two, what book has had the biggest impact on your success?

Alex Cleathous:

Yeah, great. Number three, what’s your number one piece of advice for hiring awesome people?

Alex Cleathous:

A quick follow-up, if you can shorten that, like what is it an example of something which you have kind of defined as a thing for culture, it’s not just someone like me, but this what we’re looking for.

Alex Cleathous:

Got it, okay. Clearer. That’s great. What’s your best time management or productivity tip?

Alex Cleathous:

Yeah, sure. Yes, I’ve been using the Pomodoro technique as well for probably about 10 years, not every day and not a hundred percent of the time, but it’s really, really helpful. And you realize how little you focus. It’s like, oh, bang! Yeah, it’s really hard sometimes to even just do 25 minutes.

Alex Cleathous:

A lot done, yeah. Dumb social media stuff is stopping our focus at deep work. Cool. Number six, what’s the best piece of business advice that you’ve received?

Alex Cleathous:

Yeah, that’s fantastic. And number seven, how do you relax after a crazy day in the office or the home office?

Alex Cleathous:

Oh, which instrument do you play?

Alex Cleathous:

Yeah, the coolest. I play piano just for fun, not for professional anything.

Alex Cleathous:

Oh, okay.

Alex Cleathous:

Yeah, same. It’s funny, because a few years ago I was like, wait, just a minute, I think my piano is the only thing that I have that doesn’t require power and I can use it because everything else that I have like requires-

Alex Cleathous:

… needs to be plugged in with internet. So that’s really, really cool. Thanks so much for your time. This has been such a fantastic chat today. For people that are listening-

Alex Cleathous:

For people that are listening, there’s a lot of business professionals, there’s founders on this podcast and so on. What do you want them to do? Like if there was one thing that they should do at the end of this, what would you like them to do, sign up at TransferWise or check out some pod.

Alex Cleathous:

Great. Great. I think that’s such fantastic advice and it’s certainly, you got me thinking a lot more about the mission side of things. I think that’s been such a core part of everything that we’ve spoken about and your mission, to make cross-border transactions seamless and cheaper, is that right? Is that what I got?

Alex Cleathous:

Money without borders.

Alex Cleathous:

Yeah, so having that at the core across everything with that, that kind of supports the growth is its fundamental, it’s fundamental and that’s something which you stick by and it’s been very clear in this interview. But thank you so much for your time and have a good evening there-

Alex Cleathous:

… because it’s New York there, right? It’s morning here.

Alex Cleathous:

It’s dinner time. Thanks so much and have a good one, mate.

Alex Cleathous:

Talk to you soon. Thanks for listening to the Growth Manifesto podcast. If you enjoyed the episode, please give us a five-star rating on iTunes. For more episodes, please visit growthmanifesto.com/podcast. And if you need help driving growth for your company, please get in touch with us at webprofits.io.

The way that we always think about regional expansion is focusing on where the customers want to use us, first of all. So there’s tons of data out there around remittances and where money flows. And you can look at big, heavy data sets from the world bank or from these types of bank international organizations that we see, where’s money flowing in all this and that. But what we actually found to be the most accurate predictor of our growth when considering should we launch country X or country Y in a new part of the world was basically listening to our customers.

Nick Lembo:

I’m now based in New York, yeah, South.

Nick Lembo:

I left Melbourne in December 2019 and got to New York just at the tail end of the year and have been here for all of 2020. So it’s been a interesting experience, needless to say.

Nick Lembo:

Yeah, it’s been okay. You find the silver lining as you can in whatever’s been possible this year, I suppose.

Nick Lembo:

Sure. So TransferWise is a financial tech company that lets people manage and move their money from between currencies basically. So we started in 2011, when our co-founders Taavet and Kristo had a problem. They were sending money from one country to another and realizing that doing so through their banks was costing them quite a lot through an inflated exchange rate. So Taavet was based in London, but being paid in euros because he was Skype’s first employee and was remote from their office in Estonia. And Kristo was based in London and paid in pounds, but also originally Estonian and had a property in Estonia. So rather than sending back and forth from pounds to euros with their banks, they realized that they could look up the mid-market kind of real exchange rate on Google and simply conduct two domestic transfers of their corresponding amount out of either their pound accounts or their Euro account.

And very quickly realized that this is a real problem that lots of other people probably face, and nine years later we now have a suite of products, not just our money transfer product, but a suite of products that help people move, manage, spend and send their money all around the world for less money than incumbents, for a faster way to do that and more convenient, we’re a digital first business. So today we have about eight million customers, we’re moving five billion us dollars equivalent to every month for those customers all around the world to 70 something countries around the world.

Nick Lembo:

Yeah.

Nick Lembo:

That’s right. So one of the biggest problems that we solve for people is the cost of sending money abroad is really not transparent, through most kind of incoming providers, whether you’re using a bank or a PayPal or a Western union. And that’s because those providers include a pretty hefty markup on the exchange rates. So they might tell you that you’re paying $10 to send your money from Australia to the US but in practice there’s a 5% markup on the exchange rate as well. So the total cost is actually really difficult to work out. And that’s, if you even know in the first place that, that thing is happening, right? So most people are vastly unaware that there’s this hidden fee as we call it baked into the overall total cost of the transaction. So one of the things we do in most markets around the world where we operate is try and bring some transparency to the sector and help our customers also understand the problem that we’re helping them solve.

It’s not just around the speed of the transfer and the ease of the transfer, but the price in the way we price with a clear upfront fee, the mid-market exchange rate, how it’s different to competition of these traditional providers, like I talked about. So that report you referenced is the latest version of that kind of transparency push that we’ve here in the US, but it’s also something that we’ve done all around the world in the UK, in the Euro-zone, Australia and Singapore. And it’s really trying to solve that problem of are people even aware of how much they’re really spending to send their money around the world if they use a incumbent provider?

Nick Lembo:

At the airports, yes.

Nick Lembo:

Absolutely. I mean-

Nick Lembo:

Even when you show people in a mocked up hypothetical example, let’s say of provider A shows their price this way and provider B shows their price this way, which one is the total cost, a better deal? It sounds so simple to do a little bit of arithmetic, and to do a bit of maths, but it’s actually really hard to do it on the fly, especially if you’re not used to trying to calculate a certain number of basis points on top of an exchange rate. So I personally have actually had this problem, you can tell by my American accent that I grew up in the States, but I think as we talked about before, I spent the past 10 years living in Australia and anyone who knows anything about the American education system knows that most people come out of school with a lot of debt.

And so I was living and working in Australia and paying off my student loans in America, sending money every month through Commonwealth bank, back to my student loans in the US to pay them off and realized after I talked to a friend who had a similar problem at the pub that, hey, this is actually something that’s costing me a lot more money and I didn’t even really understand. And so I was a TransferWise user in that kind of use case for a good year before I joined the company. So it’s a big problem that most people don’t even know they have.

Nick Lembo:

So the majority of our, let’s say cross-currency transfers are still with consumers today, but increasingly small and medium businesses is a really large part of our business. It’s mostly because once a business understands that they have this problem, it’s a regular recurring need every month, right? Whether they’re paying payroll or a supplier or a freelancer, whereas you or I might send money abroad maybe a couple of times a year, once that business realizes there’s a better way to do it, they’re coming back every month to use us for all of their kind of foreign exchange needs. And the ability to do that is really because over time we built out the product suite to be more than just sending money abroad. That’s still one of our biggest products, but we’ve heard over time from our customers that they have these other problems that they would love for us to help them solve the same way we’ve solved this really simple experience … made this experience of sending money really simple and cheap and fast.

And so, over the past nine years, we’ve launched a business product, like we’ve talked about. We’ve also launched what we call a borderless account, which is a multicurrency account that lets you have your own bank account details all around the world, regardless of where you are and increasingly, enterprise and like really large scale business solutions. So now even challenger banks and really large enterprise companies like Zero and QuickBooks, and these types of accountants or firms are starting to integrate TransferWise natively into their apps and solutions so that their money flows over TransferWise and their customers get all the benefits of cheaper, faster, more convenient transfers without having to leave whatever that ecosystem or app might be as well.

Nick Lembo:

It’ll be four years in January.

Nick Lembo:

So I was one of the early hires in the Asia Pacific region and I was really brought into grow and build our marketing and communications team across that region. So I was based in Melbourne, Australia. At that time we had a small, very small office in Sydney as well. And we had a small office in Tokyo and so over time, my role in Asia, Pacific focused on how do we bring brands to more customers in countries where we launch, for example, how do we tell that story obviously, PR and communications through the media and to all the people that need to know about us in that kind of sphere as well. And we went from operating in Australia and Japan, launching in Singapore and Malaysia and your number of other countries around the region. So grew that team, grew the functions. Have launched a bunch of new markets and bring TransferWise to new people in that part of the world, which was super fun, before relocating here to New York in end of 2019.

Nick Lembo:

At the end it would have been more than a dozen, can’t remember the exact number. So there’s some pretty quick-

Nick Lembo:

Yeah, there’s some pretty quick regional expansion across Australia and New Zealand and then lots of countries in Southeast Asia and Japan and Hong Kong, India, pretty rapid kind of rollout across the region was a big part of my time in that part of the world.

Nick Lembo:

Yeah, sure. So I think it’s important to step back and say the way that we always think about regional expansion is focusing on where the customers want to use us, first of all. So there’s tons of data out there around remittances and where money flows and you can look at big, heavy data sets from the world bank or from these types of bank international organizations that we’d see, where’s money flowing and all this and that. But what we actually found to be the most accurate predictor of our growth when considering should we launch country X or country Y in a new part of the world was basically listening to our customers. So it still exists today, we call it a currency wishlist. If you come onto the TransferWise website and you live in China, for example, and you can send money out of China from TransferWise today, you’ll type in your currency or your country, you’ll see a little message that says it’s not available and there’s a little box pops up and says, leave your email address.

And when we’re in beta testing, and ready to launch we’ll let you know so you can be one of the first ones to use the product. Now, it’s a very imperfect proxy. Especially compared to, like I said, these huge data sets, but we always found with a few exceptions, but for the most part that the countries where we have the most latent demand that we hadn’t yet tapped into because we haven’t launched it there were places where we were going to have really strong product market fit. We were going to be able to scale quickly and we knew people wanted to use it. So that’s how we prioritize on a regional level roll out, let’s say, from one country ahead of another. So it’s why we launched Singapore before we launched Hong Kong, for example, things like that.

Nick Lembo:

Yes, exactly.

Nick Lembo:

Yeah. So if you want to send money to that country or from that country, if it’s unavailable, we’ll have a little module pop up and we’ll say, hey, this isn’t available yet. Leave us your details and we’ll let you know when it is. And just collecting that data and aggregating it and looking at the total kind of demand was really the best predictor of where we would see pretty quick adoption. And then when it comes to, let’s say, we’ve actually decided, we’ve looked at that data in the next country and we’re ready to launch. I think of one in the last launches I worked on before I left Asia Pacific was Malaysia. And then really what we do is, not dissimilar to how many other kinds of growth or teams would operate in a expansion basis.

We put together a launch plan. We understand who our customers are, what use cases we’re solving for those people that are the same as all of our customers around the rest of the world and what’s different. Who did they want to send money to? Where are they planning to send money to and create a multi-channel plan of how do we let people know about the product, and that usually encapsulates all the normal things like product marketing teams and all of our kind of performance marketing channels, but also we make sure that we try to create some element of bringing those early adopters in, having some type of event, getting to meet founders, creating a bit of that kind of community buzz as well. It’s really usually part of how we roll out.

Nick Lembo:

Yep.

Nick Lembo:

Yeah, how you get that traffic in the first place.

Nick Lembo:

Yeah. So to go back to the first part of your question, it’s a good insight into how we kind of grow globally around the world, right? So people like yourself or someone sitting in Malaysia who’s hitting transferwise.com and can’t use the product, why are they going there in the first place? Like you said. So there’s a couple of things that are happening. So one is just good old fashioned word of mouth. Something like 60% of our growth today still comes from word of mouth channels and our kind of organic growth channels. So it’s hard to validate that in a new market, but we know almost everywhere where we launch that percentage of word of mouth and kind of friends and family referral growth is the bulk of our growth. And so we know that it holds true in terms of when we’re seeing latent demand in a new country where we haven’t yet launched. Most of that is going to be from word of mouth.

The other half of it is, I’m not an SEO person by background, but we have a really good SEO team that’s done well to capture and understand search traffic and search terms all around the world. So there’s a very strong chance if you’re Googling, send money from Malaysia, you’re going to hit a TransferWise page even if our service isn’t yet live in that country. So combine those two things and I think you account for how and why most people might end up in that place where you said, for the first time that they’re landing on our direct webpage, TransferWise, but we don’t actually solve for their use case yet.

Nick Lembo:

Pretty specifically with the SEO team. I mean, I can in broad strokes tell you that it centers around understanding what the search volumes inquiries and terms are, of course. Understanding the countries, of course, like we said. Also understanding competitors is a big part of this. And then there’s this other area around who are our customers in the first place and creating content around that, that’s going to rank. So things like we might not solve for, but if you Googled, if you lived in Australia and you Googled how to open a bank account in the US, chances are you would probably land on a TransferWise page, that’s more around if you Googled what are taxes like in France as an expat. These types of like lifestyle things that we know fit our customer base are areas where we create lots of content series around them so that they become scalable. And they’re really talking to the type of person that typically would end up being a customer of ours, or at least they don’t choose us, we’re in the consideration mix, if you know what I mean.

Nick Lembo:

So we use personas when we’re going to a new country and thinking about trying to understand what’s different in the cultural landscape that we need to understand. I think it’s super important and it’s hard to overemphasize how important that can be when you’re an American trying to launch a product in Malaysia, you need to understand what’s going on. But mostly what we focus on is capturing the data, that would normally be put into a persona anyway. And what I mean by that is, so we might not say, Alex, the expat is a persona of a person living in Australia, sending this much money for his business, but we might understand deeply that business customers who have between X and Y employees and are sending money from one currency to multiple currencies or a single currency will have all the data points that we consider around their use cases of their average, how much are they sending every month? What is important to them?

Is it all about paying people who might be working for them on a freelance basis, or is it also about receiving funds for things that they’re selling through third party platforms and things like that? So we’re a pretty customer led business and spend a lot of time talking to customers, which is one of the things I like to do almost more than anything at TransferWise. So we utilize the same type of data that would go into a persona, but kind of down to different teams, if they choose to actually put that into the traditional persona framework that you would learn in business school or in a marketing boot camp or whatever that might be.

Nick Lembo:

I mean, I think any good marketing or growth team would be optimizing for that. Like I think about our growth strategy more broadly, I think, it can really boil down to three pillars and each of those pillars is going to have their unique data points that they’re looking at to optimize that. So one is, like I said, word of mouth and are kind of people telling friends and family. We know that that is still even nine years later, which is kind of crazy, the majority of our growth today. And we see that kind of referral trend or virality kind of graph, whatever you want to call it in new markets unfold as well. But we only see it unfold if we know that NPS is going to be above a certain point. So we have a lot of data from country launches when we think about our organic growth that we know if NPS of the product in the early stages sits at this level, we’re going to see a really strong word of mouth growth graph tracking that. So we focus a lot on how we optimize word of mouth growth.

Nick Lembo:

It’s product led, right?

Nick Lembo:

Yeah. So happy to dive into that. That’s definitely one pillar, is optimizing word of mouth and organic channels and how people talk about TransferWise to their friends and family and why. The other kind of second pillar is obviously paid. We run up pretty strong multi-channel performance marketing team. I already talked about SEO, but paid social is a huge part of that strategy as well as organic channels falling into this space. Knowing where our customers are on the internet and trying to give them relevant information about TransferWise at the right point in their customer journey. And then the third part that I think about, after kind of paid and organic growth really comes down to, like I said before, product.

So what started as a money transfer business, like I said, I’ve already talked about this, but nine years ago, over time, we’ve heard from customers, the addition of extra use cases and bringing that insight from listening to customers into product teams so that they know to, what’s your debit card? And build this multicurrency account and that small medium businesses are using us in this way. And actually they might have a totally different need around integrating with accounting softwares or adding multiple users to their account so their business partners can be on there. All these types of things, it’s hard to overemphasize, how much growth comes from listening to your customers and building what they need back into the product as well.

Nick Lembo:

So we know when we think about NPS and how it relates to word of mouth growth, we know that just for the vast majority of our customers, there’s three things that move NPS in a meaningful way. Price, speed and convenience of the product. And so we know really well how to move price down. It doesn’t mean it’s always easy, but we know that if we’re, eight, nine, 10 times cheaper than the competition, that delta is going to be enough that people are going to … price led growth is, where you’re the cheapest in the market. If we’re not the cheapest in the market, the other two leavers we can follow around are speed and convenience are really important as well. So speed, typically international payments, if you send them through a bank three to five business days, right?

Like something like 30% of TransferWise payments around the world are now instant because we prioritize building those integrations into faster payment systems and things, we’re prioritizing those things that let us speed up the payments on the product roadmap. And then the last one of convenience is the murkiest, price and speed are very obvious. Hey, make it cheaper and make it faster. It’s not always easy to do, but like customers tell you what they want. Convenience really comes down to understanding the customer, I think, in the local context a lot. So how’s that person used to paying for things? If it’s a market where people use debit cards and credit cards more than bank transfers like America, we need to prioritize building those methods for them to pay TransferWise.

If it’s a market like Euro-zone where hey, actually sending a bank transfer to a company is a very normal financial behavior for people paying bills or whatever, it’s prioritize building that. So it’s a small example, but there’s a lot of things that are not always obvious when you’re new in a market that might make the product way more convenient for people and drive up the NPS, along with the price and speed, like I said. So pay in methods are a huge part of that around building convenience and the product for us.

Nick Lembo:

So there’s a good anecdote that localization is not translation, right?

Nick Lembo:

And localization of the product, translation is definitely a big part of that, but it can mean so many more things. Do you have the right colors? Are the right types of case studies your showing on your pages, the things that will resonate with people? I mean, those are bad examples, but-

Nick Lembo:

The point stands, right?

Nick Lembo:

So all of that is to say, when we think about translation, we’re not always fast in that space, but we really think deeply around what is the, not just the amount of people using us in whatever language today, but what is the total kind of addressable group size of people who want to use us in a new language? So we have obvious data points that we can look at for things like that. Like language settings for people on our apps and things like that. Mobile web as well. But when it comes to a rollout, like a brand new country, we’re almost always in English first. And then, I don’t want to say playing catch up, but like working backwards from there, knowing that translation is a thing we’re going to have to do, but we run lean product teams, lean growth teams, lean marketing teams, figuring out where the translation is as the kind of next thing to do. But we always kind of prioritize for speed to market and that means English always comes first.

Nick Lembo:

I’ll give you an example. We just launched traditional Chinese this quarter, nine years. And that’s a long time, if you think about how big of a language group it is and how long we’ve also been present in markets like Hong Kong. So it is something that’s always on the roadmap, but it’s not always the first thing we get out the door.

Nick Lembo:

I am the worst-

Nick Lembo:

So I think localization in product teams comes down to a lot of those things that I’d talked through for convenience. Understanding what are the financial tools or the financial mental models that people use already in the given market and how could we, or how should we integrate with those? So I’ll give you a good example from Singapore, one of the first things that we did in Singapore was integrate with their equivalent of the faster payment system, so you can now send us money instantly. That’s an open API that we were able to integrate with. We did another thing in Singapore where they have a, I forget the name of the system, but basically the government’s database of citizens. So when you’re signing up and you’re verifying your account, you can just send us your information.

It makes an API call to the government’s database and then you’re verified, you no longer have to upload a photo of your passport and do those types of things. So those little things make a big difference in the organization.

Nick Lembo:

And even on the product side, it’s not just for people who use us. Earlier this year, we integrated with the ability to pay out to Alipay users in China. So that is a localization, even though we’re not available in China, you can send money to China, but not from China. So if you’re a Chinese national living abroad or not even a Chinese national, but you have friends and family there, you can still pay them in the most convenient way so that money just ends up in their Alipay wallet rather than in a bank account. And so the localization sits on both sides, whether you’re paying the money and registering yourself as a user, or thinking about the recipient as well.

Nick Lembo:

That’s right.

Nick Lembo:

Yeah, absolutely.

Nick Lembo:

Small thing, small example, but a function that just removes that friction to usage that would otherwise exist. There’s also other things when we’re thinking about localization that are not just being translation for us, really comes down to TransferWise customer might be unique in this context. It’s important to think about the product and who your user is. So coming back to personas and what we talked about before, if I’m launching a gaming streaming service for people in Malaysia, I am going to need local language support from day one, but our customers are, this is a bit of a generalization, but in most countries where we launch about half of them are immigrants and expats, the other half are locals.

So we know we’re going to be able to serve those customers in English from day one and therefore translation can wait a little bit. That might not be the case depending on your product or your service. But for us, we know that about our customers, like, hey, we can capture all of these early adopters in English and we can solve for the other half of our upcoming users when we have time and can build that into our kind of development roadmap.

Nick Lembo:

So the answer to that question is a little bit of column A and a little bit of column B. Like it’s a bit of a flippant response, but really like most people who are sending money around the world are doing it a couple of times a year to friends and family, that is the overriding use case. However, that long tail of other use cases is still many millions of people and many billions of dollars moving around the world that they could save. So it’s not just one or the other, but the vast majority of the amount of people might sit in this camp, but 10% of your users are sending tons of money cause they’re doing it for their business or they have a property abroad or they have kids studying abroad. They have something that’s making them send money every month.

Nick Lembo:

So you have to manage that balance of who’s sending how much in other places.

Nick Lembo:

We think about those leavers that we have that we can pull on NPS around like I said, price and speed and convenience. We know that those product pillars influence our NPS score and we know that our NPS score closely correlates with our word of mouth, kind of contribution of growth from word of mouth in most markets around the world. And so we include in that things like our invite program and our referral program. So when we talk about optimization, we’re optimizing on the product side for things that are going to boost NPS, because we know that has a flow on effect to word of mouth growth, but we also optimize for things like, what is the right amount of incentive on the referral program? How many … Running AB testing around the amounts of reward, how many people you need to invite, should there be a separate type of rewards or separate invite program for different parts of the product?

There’s always a lot of testing around that as well. So if in the UK, for example, we invite three people who successfully sign up, they get a free first transfer and you get 75 pounds. That’s the most basic version of our referral program. What should that look like in Hong Kong? Is it simply converting that 75 pounds into however many Hong Kong dollars that make means, or should we actually be tweaking that to make it a more locally relevant number? Or should we be tweaking the amount of people you need to successfully invite or should we be tweaking the amounts that, that first free transfer for the invitee is allowable? It can be 500 pounds, it can be a thousand pounds. So all of those kinds of optimization tests of what is in many ways, a core referral product happen in many places around the world to kind of understand and optimize for making sure that, that’s helping customers save money, but also bringing us new customers in a sustainable way, serving both sides of that coin.

Nick Lembo:

Yeah. So one of the, I mean, it’s a good question and it’s also a very hard question.

Nick Lembo:

No. So I think to step back a little bit, I think there’s two important bits of context to thinking about how we continue to fuel growth. So one is, this has become such a cliche to say, but we are a very mission-driven company and the mission of the company is creating money without borders. So making those transfers and the ability to move your money around the world as cheap, as fast and convenient as possible. And thinking about growth is something we do in the context of how many more customers are we helping save money, how many more customers are we helping get their money there instantly. There’s real people at the end of the day who are sending money for very real things for themselves or for their businesses, so that’s always the overriding lens of growth is how can we help more people save more money.

The second bit, you briefly touched on the question around valuation and expectations of growth in a technology company, a venture backed technology company. We’ve been profitable now for four years, so one of the things that we know is that it’s really our customers who are fueling our growth. It’s their contribution of transparent, low fees that are giving us margin to reinvest into growing the business and growing the business by bringing all three of those products I talked about, the multicurrency account, the send money kind of money transfer, and then the larger kind of business product to more people in more places.

And so that’s a bit of a roundabout answer, but to us, it’s like, we know that like our existing customers are fueling our growth for new customers. And our responsibility for growth is to bring the products to more people and more places that lets them save money, sorry. Excuse me. So when we think about optimizing every little team, like you talked about, you’re asking me like, how do you continue to find avenues for growth beyond just optimizing a referral program or something like that, it’s really about more products in more places. So what is the next country to go to? And what is this thing that might be missing from this product today that we can bring that is going to make it better and it’s going to make the people who use it stickier and more likely to invite others and using us for a longer time and sending, eventually more money through TransferWise?

Because at the end of the day, if we’re going to achieve that mission, like I talked about of making these transfers almost free and instant all around the world, that requires so much scale to be able to drive down the unit cost of each of those transfers and the eventual speed of those transfers. So we know that to achieve that mission, like we’re going to need to be 10X the size that we are today, because that means there’s enough money flowing through TransferWise to pass those cost savings back to customers. So the shortest version of the answer to your question is, more and better products that are better than the competition in more places around the world.

Nick Lembo:

Yeah.

Nick Lembo:

So I will say that decision-making is not driven by, is this thing going to be 10X the size when we launch in a year or two, it’s driven by what is the customer impact today? So I hate to keep harping on the same thing-

Nick Lembo:

It feels like a non-answer to your question, but it’s true. It’s like we don’t … So let’s use a real example. We launched a product this quarter called jars, which is essentially in your balances, when you hold money in the multicurrency account, you can now create a little another balance to save money towards whatever holiday, no, holiday is a bad example in 2020.

Nick Lembo:

But it’s the most obvious one, right?

Nick Lembo:

Or your saving for a new car, Christmas presents. And so the launch of jar is not driven by is the adoption of this product going to be the thing that makes the amount of money held in TransferWise 10X the size it is today, that’s useful. And we have to have an estimate of that to evaluate the success of the project, obviously, but it’s driven by, hey, 30% of customers are asking for this today, who already use balances are asking for this today. And it makes it a better product that affects the NPS. That does all of the things that flow on from there that I talked about when we talked about NPS and word of mouth growth.

So it’s increasingly listening to your customers is like the simplest version of this, it just gets way more complicated to do it at scale across the product suite. That is so broad, but it’s still the core thing in driving growth is what are people asking for? And can we build it in a way that’s better than existing solutions or build it in a way that’s better because it works and integrates with what they already use TransferWise for.

Nick Lembo:

So let me clarify. Like, it’s not that the data becomes harder to get, instead, it becomes harder to prioritize because now you have eight million customers telling you eight million different things. So it’s not that it’s harder to listen to them, it’s that the complexity of our product grows and people have different use cases and therefore we’re getting more requests for different types of functions, features, whatever. So the ability to prioritize those by what is going to have the most customer impact is the part, separating signal from noise here is a classic skill in any team and having a hypothesis, once you have a kernel of the idea from the data, and then being able to test that in a way that validates or doesn’t, kind of this is, it’s the classic insight, iterate, improve cycle just flowing out at a really large scale across a relatively complicated product suite.

Nick Lembo:

So one of the things that I find personally really cool about TransferWise and why I think I enjoy the culture so much is that we are set up in something like 70 different autonomous teams, each working on a specific area of expertise. So there’s not really anyone looking at all of this data from a strategic point of view and saying, go and focus on this thing that’s going to move the needle the most, everything else can wait. It’s these small teams set up like startups within a startup who are looking at a really specific data set on their problem that they work on or for their customer that they solve for building conviction when they listen to those people, backed by data and then going and doing it themselves. So it’s almost the way we work creates agility and creates the ability for the person who’s closest to the problem to be able to solve it, rather than waiting for someone to sort through data points from about eight million people and figure out what’s the best thing to do.

Nick Lembo:

So autonomous teams thinking about this as well is, one of the ways that we are set up is we work really flat and we work cross-functionally. So we had a handful of internal and external people on the press and communication side. And we had a handful of people working in product marketing. We had a handful of people working on the paid social team from London. And then we have these independent teams that are working on SEO is a great example, doing that all around the world, not focused into a specific region because they’re doing that at scale. So when we think about regional marketing or comms or growth teams, it’s really a mix of people who are based in the region, have the local market knowledge and are working on that. And that usually falls for us across product marketing, PR, a handful of other places as well.

And then we’ll have a central team on some like, let’s say performance channels that we’ll have a global view of the world and we’ll have someone in their team who’s focused on Asia Pacific. And we work as a little unit together on identifying the customer problems that we’re solving and the types of customers in that particular country or region that we need to talk to. And what is the best kind of optimization of those channels to reach that person or target person in whatever different country it might be.

Nick Lembo:

Yeah, where we need to-

Nick Lembo:

Yeah, exactly.

Nick Lembo:

Yeah, I know, I do the same thing.

Nick Lembo:

Yeah. I mean, absolutely. I think, we are, TransferWise as a whole is pretty lean for the amount of customers we have and the amount of money we’re moving. We’re something like 2000 people around the world and our marketing teams are less than 200 people. So we’re good at identifying what’s scalable and putting time and resources into those things that are having the ability to deliver more solutions for more users than something small and kind of manual. Right? So that approach of, hey, this thing worked, this test worked, whether it’s a new channel or a new type of customer we’re thinking about targeting, the strength of some of those teams is turning that information from a test, iterating on it to understand how could we do this in a way that’s going to drive 10X more users for not hiring 10X more people to support it.

Nick Lembo:

Yeah, totally.

Nick Lembo:

Yeah. I mean, I think, this year has revealed how important communication is for everybody around the world. And it’s something I think you definitely, we’ve learned as a company and myself as an individual, being in a region far away from headquarters, whether it’s the time at TransferWise or my job before was for an American company as well. It’s something you learn both at an individual level and at a team level. So we do a couple of things to try and make that distance smaller and make sure that everyone has the amount of information they need to do their job really well, but not so much information that it’s complete overload and you’re swimming in notifications all the time. And you’re just spending all your time reading internal blog posts or 50 Slack channels or whatever it might be.

Nick Lembo:

I’ve turned off my notifications for this specifically, so I don’t have that anxiety-

Nick Lembo:

… to our time during our chat. No, but what we do is the tools we use are not dissimilar to most technology companies. We’ re working on an internal Wiki based on Atlassian. And that’s a mix of Confluence and Jira ticketing systems, depending on what teams are doing what. We run Slack at a pretty large scale with 2200 people and 15 offices. We run Zoom, it’s all the software that you would expect, it’s just doing it at a big scale. And so one of the things that I think we’ve really leaned into and gotten better at in the past year and definitely felt as a growing pain internally, maybe 12 to 18 months ago is documentation, right?