The FinTech Report: Episode 61: Damir Cuca, Founder, Basiq

Speaker A: Welcome to the Fintech Report. I'm your host, Glenn Frost. Thank you for taking the time to listen to our conversation. This podcast is brought to you in partnership with Vanta. Vanta helps you build an automated, scalable, secure and compliant program that works for you. Whether it's SoC2, ISO 27001 or managing vendor risk. Vanta's AI powered platform makes it easier and faster. According to a recent IDC study, Vanta customers save on average a over 500,000 a year and compliance teams are over 100% more productive. Visit vanta.com fintech to connect with Vanta. That's V-A-N-T-A.com fintech I also want to thank our friends at Australian Fintech for their support. Sign up to their free FinTech news@australianfintech.com today. I am delighted to welcome back Demir Chucha. He's been our guest, uh, a few years ago. Uh, he's worked in the tech sector for over 20 years. The past 10 has been as founder and CEO of Basic. Basic is an Australian open banking platform that offers secure access to consumer financial data. They empower fintechs, banks and developers to create next generation financial solutions. BASIC was sold to Cusco last year and Demir is now taking on new challenges and opportunities and we'll hear more about that in the podcast. Under his leadership, BASIC achieves significant milestones in advancing open banking in Australia, transforming the way financial data is accessed and utilized. His vision and expertise continue to drive innovation, making him a prominent figure in the tech sector. Demir, thanks for being our guest and welcome to the Fintech Report podcast.

Speaker B: Thank you for having me again.

Speaker A: You're welcome. Um, the last time you were on the podcast, BASIC was in its early years. You were starting to scale. There were a number of challenges as well as opportunities, particularly with the rollout of open banking. Can I just pick up on where we left off? I know it was a few years ago. Can you talk us through that sort of mid period in the evolution of basic? So about five years in when open banking was really starting to being used, what were the challenges and opportunities for you leading BASIC at that time?

Speaker B: Yeah, look, I think running a uh, business every day is a challenge. So there is no kind of uh, like the challenge was five years ago. But if I kind of reflect back, it's interesting that you pick that milestone or that kind of period because uh, it really was somewhat transformative for the actual company itself. And the reason for it is because we as a business had to Transition from a non regulated environment to a regulated environment. And I didn't know what I was getting myself into whatsoever because prior to that to be able to provide access to consumers financial data, which brokers, lenders, budgeting apps, roundup, investment apps, wealth advisors kind of relied on, we would leverage a technology called screen scraping, which is effectively automating the web browser, ah, to go into Internet banking to extract accounts and transactions and then modeling that for a nice consumable API and providing access to it. And then along came the government and said hey, we think that this could drive productivity. And it wasn't an Australian unique thing, it was a global kind of trend within kind of the developed countries that's happening. Although we've got a pretty unique lens on open banking and approach. Excuse me. So, and then they kind of decided that we're going to do that and effectively created a uh, standard for the banks to have to implement. And then as part of that kind of standard came all the rules and regulations and so forth as well. And that's where we really kind of, you know, we kind of looked at and said, what do you mean? Got all these extra rules, all these processes, I have to get accredited. I've been already doing this. What is it going to mean for our business? Does this mean that everyone's going to be able to use an API and there won't be any purpose for us? That kind of stuff as well. So it definitely was a very kind of um, transformative way. But you know, when you go into a business and you're on the forefront of technology, one thing you have to do is you always have to have an open mind. And when things like this happen, you need to kind of look at them not as threats but as opportunities, which is something that we did.

Speaker A: Excellent. Given that you had an open mind, were the customers that bought the service who you thought would buy the service or was it a different group of people?

Speaker B: Look, if I uh, look at the customer journey overall, this is something that I uh, I don't know, I guess like many other human beings sometimes I like to learn things the hard way. I remember when I started Basic itself and prior to Basic I had another company as well and I was servicing was a professional services business. We were building applications for other companies and you know, crawled our way up to the bigger end of town. And then when I started Basic, my immediate thing was I'm not going to deal with small businesses, I'm going to go straight for the top, straight for the jugular. And I did somehow you know, manage to get the right meetings and the right introductions and the right tables and all of this. And while I was meeting with, let's say, banks and other larger kind of institutions, one thing I came to realize is that they love meetings. So. And just because you have a big audience doesn't necessarily mean they're going to buy.

Speaker A: So, yeah, lesson number one.

Speaker B: Lesson number one. And while all of this is playing out, I had all these smaller businesses approach me proactively and say, hey, we want to use your API. And I'd almost give it to them just to go away. I'm like, here it is. Just go. Like, I'm dealing with the big end of town kind of thing. And then I remember looking at it nine months in. I've got none of the big customers that I wanted to have that I've been meeting with these great relationships that are building. And in the meantime, I picked up all of these other small businesses who are doing uniquely wonderful things.

Speaker A: The innovation.

Speaker B: The innovation. They're actually. They knew what the API did. I didn't have to sell into it. They knew how they were going to, uh, utilize it to deliver the value to the consumers and all of this. And it's not that I don't respect. I mean, my roots are kind of small businesses, and I'm a big kind of supporter. It was just that I was looking for the. What's the biggest impact that I could bring to the market. And I figured if I could get a bank to do this for about the millions of people, that we'd be able to reach. And that's. And effectively that's when I had the kind of realization. And one of the things that I learned especially for basic, is that I believe that there's this natural order that businesses have to go through. There's almost like an ecosystem, like an environment, like we have, you know, like the sun and the water makes things grow. And, you know, you can't grow something that's in a tropical environment, in a, uh, freezing environment, that kind of stuff as well. Same thing in business as well. You can't leap straight to the top. You gotta follow the rules.

Speaker A: So this is like, uh, the Charles Darwin of 2019. Evolution.

Speaker B: Evolution. I genuinely believe in it. And it's led me and it's the approach that I take to business as well. And when I had that kind of realization, I was like, okay, screw the big businesses. Um, we'll get there, and by the time we do, they'll come to us. So let's go focus on Grassroots, let's go to the small businesses, let's go support them, let's win that space. And then we did that kind of incrementally. We said, okay, let's go. The small businesses, okay, got, you know, all the ones that our competitors didn't want to talk to because they're too small.

Speaker A: Are we talking about the early stage fintechs here? You know, the PFMs, all that sort of stuff? Correct, yeah. Okay. And at that time, just to. But in, at that time was there a particular category or a number of organizations that you want to give a shout out to for either being innovative, creating new services?

Speaker B: No, I don't um, and I don't want to intentionally because we had so many different businesses do and I'm m not who am I to judge in terms of value that they provide because they're all solving their own kind of problem. So I think overall I want to thank the Australian fintech community. There's absolutely no doubt about that. And for the. And I can say that when we started, if you remember, Stone and chalk used to be in the Amp Building on Bridge Street. What a phenomenal vibe we had back then. It was fantastic. It was like new and we're going to change stuff and there was a lot of us and there were all kinds of ideas. So it was a great time to launch a fintech business.

Speaker A: Indeed, yes. So I guess in terms of impact, having the ability to get individuals data and certainly that came before business data, uh, what's your thinking on how much it has influenced the ability to be more productive, be more efficient? Are we talking about an order of magnitude of 2 times, 3 times, 10 times in terms of let's say processing a loan or a personal loan or a home loan or something like that?

Speaker B: Yeah, look, I think when, let me just digress if I can to tell you how I actually stumbled on BASIC as a concept and it kind of leads into kind of um, the type of businesses that I like to kind of start and believe in and so forth. So my premise behind BASIC was I reached a peak in my career where love tech, obsessed with tech. You know, I've got a strong engineering background and then I've got obviously my personal background which I talk about quite a bit is, you know, being a migrant and.

Speaker A: Yes.

Speaker B: Um, you know, coming from uh, what I kind of consider a pretty poor background at the time and with very little financial understanding and education and so forth. So when it finally kind of reached that kind of peak in my career and I wanted to do Something of value. And I think about all the pains and the hardships that me and my family went through. My parents, you know, when they came here and ah, you know, and you know, just not being financially literate. And then I look at, and kind of like a stop and a reflect and I look at where software's gotten to. I realized money completely digitized and now it's completely gone. Now if you have cash, you're a drug dealer or you're about to buy drugs or something like that, unfortunately. And I kind of look at that and then I looked at what the consumer was getting and there was like this big discrepancy. And information is power. And I looked at why don't the consumers have the power to make smart financial choices and decisions? And you could argue that it did exist, but it mostly existed for the really wealthy, the ones that could afford to get that kind of advice. But everybody else was kind of like, well, you're going to play by our rules. And um, and the one who controls the information has the power to effectively take the consumers in whatever direction they wanted to go. So my whole premise was like, how do I build this application that is able to tap into your financial, financial circumstances, take all of your financial data and kind of give you the insights and give you the options and the actions for you to take. And it's through that journey that I realized that I realized a few things. One, I realized that the power itself is not in the utility that the consumers are using as per se. What it is, it's about enabling a whole ecosystem of fintech and businesses to be able to solve many different types of problems for consumers. And if my mission is to have the most amount of impact to people so people can kind of have this, I had to kind of realize that not every, not all the same, there's different people in different circumstances. People about to retire, people about to buy a home, people want to buy a car, people want to do something else, right? So, so kind of once you have that premise and you think about scale and that's when it kind of hit me. I was like, I need to build a platform. I need to make it really easy for businesses to be able to tap into that power, into that data, the financial data, and then so they can go and solve many, many different problems over, over and above. And for us, you know, if I kind of reflect back on basic, if I look at the number of businesses that have used basic to solve some kind of problem, we had well over 400 businesses since our Inception and in terms of when I last left and checked we had approximately 1.2 million Australians that were active on the platform platform that we, they were using one of the fintech applications to, to do something that would, they decided to share their data in order to get some kind of value that was beneficial for them. So if I reflect back I think that's great. You know, we've had some kind of the ability to enrich and you know, solve that problem for consumers, whatever that was, by giving them more control, by giving them the ability to get services that they might not have been able to get in the past and to be able to use those to better their life.

Speaker A: That's a great explanation of um, your vision behind the company. And also thanks for sharing some of those stats because I think let's say Australia's got population of say 26, 27 million people. Um, obviously there's a huge chunk of those that um, too young to be thinking about uh, much. Although we'll get on to a ah, conversation later about how do we teach uh, younger generations about money and wealth and all those sorts of things. There's probably only a certain number of people at any one point in time who are thinking or actively seeking a new loan, a refinancing or a new product. Um, so at any one point in time to have 1.2 million people using the services, that's a very interesting stat actually. And does that compare well with other international markets that um, have been using quote, open banking or open banking type services?

Speaker B: Look, it's difficult to compare because the sector when talking about open banking in Australia always falls for the same trap that we're trying to compare it to. Other countries, not the same open banking. In the UK when they talk about open banking, talk about payments, what we call MPP here, real time payments. When we talk about open banking we're talking about CDR and we're talking about just data access. There is no payment element. Uh, so look, it's one of the things you need to kind of realize is that the vastness of the use cases is quite big. Like it could be a one time check where somebody kind of, you know, we have, we. Okay, I'm no longer involved with basic, just a kind of full, full disclosure. But BASIC had a lot of different use cases. Some of the use cases were even at the signup level. Okay, well just as part of enhancing or enriching our KYC process, we want to make sure that you are who you say you are. Uh, or we, or you might Be kind of setting up your account, um, where funds will be deducted from or whatever. So we need to verify that you are the owner of the account. Uh, or it could be round up applications, PFM applications, personal loans, uh, mortgages, any of those things as well.

Speaker A: Yeah, no, I like that. And thank you for explaining that you have now fully left, basically. So let's talk for a moment about the sale. Um, because obviously as a founder, it's very much your baby. You start at that desk at Stone and Chalk with the blank sheet of paper or the blank whiteboard, and you built it and you grew it, you built the team. Um, and you were sole founder as well, correct? Yes. So not only is the pressure on, but you're making all the decisions yourself. What led you to think about, I've reached the stage where I personally want to have an exit. What was your thinking? And was there a certain time when you thought, I've done what I can do. It just, it now needs to go to a bigger parent or something like that.

Speaker B: Look, I think it's like, so there's two parts of that. Number one is a business we're always looking to grow. So we're always kind of saying, okay, well, what do we have now? What are we going to achieve next time? And so forth. So there's always. Growth is the number one thing when you're launching an actual business, how you're going to acquire as much market as possible. So you have to kind of think outside of the box. You got to think, um, who are we going to bring on, how we're going to strategically make that work? And so forth. So that pressure is always there. We're always kind of looking at it. The fundamental answer to your question is what we discussed earlier, that evolution element. And one of the things that someone said to me, and I can't remember who it was but is they said that it's better for businesses to come to you, to want to buy you, than for you to knock on their door and want to sell. And the other thing if I, that I kind of believed in was that when, uh, it was time to go, the market would tell you that it's time to go and we would do for a series B capital raise. So, you know, I was thinking about, okay, strategically, which institution is going to give us the best kind of bang for buck, enable us to grow, launch in new markets, give us new capability and so forth. And, uh, I've always been very selective about picking the investors in that way as opposed to just give me the money and see you later. When I went out to the market and started talking to these where there was kind of, uh, you know, good kind of complimentary services or we could help each other. So forth, almost all of the conversations turned into, okay, yeah, we're interested in investing, but would you be interested in selling? And I got enough signals and I was like, okay, the market wants to buy, it's time to sell. So there was no, there wasn't. Kind of like, you know, I was secretly kind of pulling my hair out. Really wanted to kind of go. Loved what I did. I still love doing that kind of stuff as well. And building. I had significantly more higher aspirations and growth as well for the business. So I was, I was in there for the actual long run. But the market spoke to me and the market said, we want to buy. And I went to the board and I said, look, we just had X amount of offers. I said what their feedback is and I said, if the market wants to buy, then it's time for us to sell. So that's it. And then we entered into that, uh, journey of selling and here we are now.

Speaker A: Fantastic. Well, I won't get into the weeds of the sale process, but would you have any tips or advice for people who face the same situation that you did? And obviously you were very lucky. Sorry. You were smart because you went out and positioned yourself correctly. And then right place, right time, great business people wanted to buy that business. So yes, that's absolutely hat tip to you for making sure you were in that position. Do you have any advice, suggestions for people in terms of dealing with, I mean, cuscal is, you know, been around for a long time. They're a very large institution, they have a different sort of corporate mindset and move at a different pace from, from smaller companies. Um, given that that is probably quite similar to how a number of fintechs engage with, say big banks, financial institutions. There's probably some really interesting learnings that you could share. What's your feeling on that?

Speaker B: Look, I think I recently shared this, um, and I'm, you know, one of the things you want to do is when you kind of exit. And I really, I'm really kind of, I try to be as open as possible about what kind of worked, what didn't kind of work for me. So in terms of investors, I always had a very different strategy and approach in mind. Sorry, just before I get that, uh, the number one mindset that a lot of people don't have is when they start the business is they don't think about the exit. So when I started basic, I was thinking about the exit from day one. Not because I wanted to get out or I knew how it was going to play out. I didn't have any kind of set time period, but I just knew there was something that had to be considered because if you consider it then you're going to, through the decisions subconsciously, you're going to make sure you position yourself for that eventually. And one of the things that, you know, I mentioned it earlier, uh, I think it's really critical, important that you get the right investors on. And I know founders and startups are just happy to get any money on so they can pay the bills and you know, use that as growth going forward. But money is very limited, it's very time bound because you have to spend it and then once it's gone, it's gone. You got to go kind of get more of it. So I've always been very strategic about the investors that actually brought on. So if I think about, I'll give you some practical examples of when we started we're doing screen scraping and also I considered banks as being one of the, they've got all these customers. How wonderful would it be if in their app consumers would be able to aggregate all their financial data and get a complete financial view? So for me it was super critical to get the banks on board. And once I did, not only did it, not only was the capital there, but also helped legitimize what we were doing as well. All of a sudden you can't say screen scraping is bad. Well, you've got, for a reinventure we had Westpac and Navventures and we kind of had them on board and then not only were they great and supportive, but they also opened up other business departments to us as well. So saying you can go work with them or go work with them and stuff, so, so forth as well. So that helps in terms of growth, legitimizes you going forward. And then also, you know, they have a lot of benefit to kind of get out of it. Uh, we brought on Salesforce. Salesforce, one of the biggest software vendors to the financial service industry. Everybody almost uses Salesforce, right? Yeah, so I saw that as a great platform for distribution as well. So we got to talk to their core product team. Uh, we got to work with them locally on deals as well. Um, we were able to develop a data holder solution at the time and bring that to market. The assistance of Salesforce. So that helped as well.

Speaker A: And was your route into that via Salesforce Ventures, their venture arm via Salesforce

Speaker B: Ventures correctly, because all of this house, all of these venture arms that they have, they've got, they've got their own committee they have to report to. There's people within the business in very high positions. Uh, so they, and because they invested, they want to help you succeed. So they're great in that respect. And then you know other uh, other investors that we had was plaid who does what we do but they're worth $25 billion. A few more extra zeros at the end and that was fantastic as well from exchanging um, us sending them leads, they sending us leads. So when there were US companies that wanted to come to the Australian market they would say well we invested in basic, I talked to them and vice versa. We had Australian companies want to go to the US market, we could do the soft intro. We also did some kind of um, product based sketching in terms of what it would look like if we were to integrate this platform and create this kind of global network effect and so forth as well. And then you know we, and then we all. And then I realized somewhere within the business we also needed to expand beyond data because we were kind of looking at well what's next? And what I realized was that uh, and Costco definitely had this vision which is why it played out quite well, was there was this intersection between data and payments. And then I knew that it was inevitable that we had to do payments. So I looked at it kind of like okay, what to do payments, let's bring on who's the biggest in payments world that we could bring on. And we were lucky enough to be able to bring Visa on. So we had Visa on as part of that as well. And it was in that kind of journey when I went to kind of uh, look at the next capital raise, I looked at okay, we need to get serious about payments. And if you scratch the surface of any kind of payment provider that's out there, you'll realize there's this one company that's behind it all that's kind of powering a lot of them and that's Cusco. So Cusco, for the age and the size that they are, you could say that they're a true innovator in their own right because of, look at all the fintechs that they've helped spawn and bring to market. And then I ah, thought well rather than going for an intermediary, why don't we go straight directly to them as well. And it just so happened that their Visual, their kind of view of where the fight, where the financial world was going was also the same kind of vision that I had which is this intersection of data and payments coming together and that. And it just kind of made sense.

Speaker A: Excellent. Were Cuscala, uh, investor from early days?

Speaker B: No. No.

Speaker A: Okay. And were they ever an investor? I mean so pretty much the, the um, the acquisition or the exit as it were was for fresh to them. Deal.

Speaker B: Correct. I mean they've done it in the past. Don't forget they've got a pretty good track record. 86, 400 which they sold to Eubank and you know, empowered that business to be able to grow. And um, hats off to Craig. I remember when I met him, uh, at the beginning and he said that uh, you know, he's got a man with a lot of experience um, in the field and he said, you know, the way to help these businesses to succeed is to realize that we're different in nature and culture and DNA and so forth. And it's important at that stage to let them kind of flourish on their own. Which is I think one of the reasons why 86400 was so successful. Kuskal said, well, here's everything you need. Kind of bit of hands off, go work your magic. And I remember being in the offices of 86,400, it was vibrant. You wouldn't think that Cusco was behind that. So you know, yes, it is that kind of business that is big and you know, it's heavily regulated as well. But at the same time uh, they have been supporting a lot of kind of fintechs in the actual community. So we have to uh, acknowledge that too.

Speaker A: Sure. I've got a couple of follow up questions. One is about CDR and your view on cdr and the other one is about your experience of being part of the sale and earnout period. So let's just jump to cdr, the consumer data. Right. Is very much about the consumer owning their data. Um, whether it is, I think banking first cab off the rank or telco energy and everything else. Do you think that's an achievable vision? I think is the sort of the kickoff question before we start.

Speaker B: Yeah, look, I think, look, I remember uh, there was always a lot of critics in terms of cdr. Ah, you know, where's it going, is it happening, blah, blah and so forth. And I remember before I left basic and I look at our numbers, look at the stats, the number of consumers that are successfully connecting and I'm like, what's the problem? It's okay. It's okay. So you know, I think from that point of view, I think it was quite, you know, did it accomplish or being able to provide consumers the ability to share financial data? Yes, it did. Would I consider the entire program a success? I'd probably give it a C or a B minus at best. And the reason for that is because I remember when it first got released and I looked at, you know, I had to go and read 180 pages worth of rules sitting there for highlighter. There wasn't much that I had fault with it. I was like, this is a genuinely good program. You're putting consumers in charge, you're forcing consents up front. You know, you've got this kind of time period, you've got this permissioning of data, uh, full disclosure. And I was like this is how it should be, right? And don't forget we're coming from, prior to all of this, we're coming from the world of Cambridge Analytica, which was the worst thing that could happen in the data space. Uh, you know, knowing that other companies are out there selling your data and you know, getting tracked everywhere and so forth and all of a sudden this kind of consent based program kind of comes into play. It's like, this makes sense, this is great. And I would say that that's its biggest value that it has to offer, but also the biggest disappointment because if I had it my way, I would say this is de facto standard for any company in Australia that wants to work with consumers data, period. Whereas what they did instead is they kind of took this very industry based approach saying now we're going to do banking, now we're going to do non bank lending or energy. And I'm like, it should have just been, should have been at the heart of the privacy element and say, look, any company with your social platform or whatever who deals with consumers personal data must work within this consent framework. So one of the things that I was kind of urging them always to do for submissions and talks is to say can you open this up as a standard where companies can also voluntarily adopt it as well? Because I think it's a great program from that point of one. But somewhere along the line they kind of decided there's going to be an industry based approach and it is what it is.

Speaker A: That's a very, very interesting comment. Thank you for that comment. So let's talk about the exit and how you felt or uh, feel about the transition from, you know, selling your business and being still involved in that for the uh, Exit or earn out period. Do you have any, again, do you have any sort of tips or advice for people that are uh, you know, going to go through that? Some. If they're, if they're a founder or co founder, they're going to go through that at some point. Highly likely, yeah. Look, from your experience.

Speaker B: Look, I think so. Something I did a little bit unique and different is I didn't use an investment banker, uh, to manage the transaction. So I took the lead on that

Speaker A: and I'm creating the competition between the potential buyers.

Speaker B: I did it all, but I, I did the actions. But I have to say that I had a lot of support from the board. So there's absolutely no doubt about it. And I had a few individuals on there, they know who they are, who were just fantastic. They were the little, um, a little AirPod kind of feeding me, do this, say this, you know, this is the context, this how it plays out. So with that support I kind of looked at it and we did talk to a few different investment bankers and I've never been comfortable with somebody else selling my product. And the business is my product. And I was like, nobody can sell it better than me. I can sell it better than anyone.

Speaker A: You know, it's, it's, you're uh, at the cutting edge.

Speaker B: Yeah.

Speaker A: So I could understand if it was a widget business or a restaurant chain.

Speaker B: Yeah.

Speaker A: But technology is often, there's something specific about it and you have the passion

Speaker B: and as a family you have to sell all day long. And I'm thinking all of a sudden now, all of a sudden I have to step back and let them sell it. It doesn't make sense. So um, I have no regrets on that. I think we, we got a good, uh, reasonable outcome as an actual result of it. In terms of tips and advice that I would have, I would say, number one, realize that the moment you sell, you're still involved with the business. And it's, and it's. Sometime it can last as much as three to five years where you're kind of involved with the business and still kind of have to run it and manage it. Particularly if there's, particularly if there's kind of like one tranche where they kind of give you the money, maybe they give you half upfront and afterwards it's all kind of performance based metrics and that kind of stuff as well. You're very much in it still. The part that founders need to realize is that uh, when somebody buys your business, you just have to look, you have to look at it from their point of view, they don't know anything about your business. They only know what they've seen outside. And then they kind of get into the weeds of the financial elements and other things as well. But it's always a point in time capture. They don't know what skeletons are buried in the closet that'll kind of come out tomorrow. So the entire process itself is about mitigating risk. Somebody acquires you, they'll buy you, but then they'll kind of put this kind of concept of saying, well, we don't know what skeletons you have. So we're going to drag this period out until we feel satisfied that there's nothing in there, no dodginess, no bad things. And then we can. And then we'll happy to conclude the transaction, uh, on that particular basis. So you have to kind of realize that that's just the actual process itself. The other part that I would say is like, you know, you have to be very careful with the performance hurdles you set in place as well. Um, after, if there is any performance hurdles element, always try and get as much as you can up front. There's no doubt about that. Because one of the things that I realized through talking to people in the industry, they were always like, who've been past this before? They'll say, look, the first money you get is guaranteed. The second one, we don't necessarily know how it's going to kind of play out. So there was. There's an element of that, but we managed that process quite well. And Costco was very fair, um, and it was good kind of commercial element as well of that. And then. And then you kind of, you know, start, you sign on the dotted line. And the analogy I use is you effectively sold your car, you've given the keys to someone else, and you have to accept that. You have to accept that it's no longer yours. And I made sure internally that I could. That I realized that I had that realization. So, you know, they're the ones now that have paid the money. They're the ones that own it. I'm, um, here as a caretaker to make sure that I do the right thing, that I execute kind of going forward that fits within their realm. And then you have to realize that they've got bigger visions and different aspirations that where they want to take the business as well. And you have to honor that. And that's the part that can get pretty challenging and pretty hard. And particularly if it's, you know, your baby, your vision, you're kind of growing and all of a sudden, you know, you might be getting new email addresses or changing domain names, changing the logos. Uh, you know, there's other random people in your office. You're like, what's going on here? You know, their culture tries to kind of entrench in it. That's all part of process of anybody who sells the business.

Speaker A: Yeah, but, uh, I think one of the factors is that cuscal, as you said, they've been in the industry a long time, they know everybody. Um, it must have opened a number of doors for you during that period. That helped you as well.

Speaker B: Yeah, look, it's, you know, I spoke earlier about bringing on the right type of investors and I'm very big on making sure you bring on investors that can provide more than capital. But one thing you have to have an realization of is that no one's going to do the hard work for you. No one's going to deliver anything on the silver platter for you. Just because you have Salesforce doesn't mean you're going to sell to every single Salesforce customer that's in this finance space. Likewise, just because you have NAV and westpac doesn't mean every single business department is going to use it for you. Likewise with Cuscal, I realized that there's this realm of opportunity, but it's up to us to execute on it. And, you know, again, I kind of mentioned that they come from a very regulated environment and they're bound by what they can do and how they can do it and so forth as well. So you have to kind of realize that and work within those constructs as well. So just because you've got the investor on board doesn't mean that it, you know, it's going to happen. You still have to do the hard work. It just so happens that the doors are a bit more kind of open for you. So we've cascaded the, you know, when I was considering bringing them on as an investor was really about, okay, well, we want to launch payments in the, in the, in the market. And we did, we launched payments and we started to see kind of traction. Um, but obviously when you're not going direct, you've got other overheads and, you know, you've got the middleman, you got to pay them as well. And, you know, so from, uh, a profitability or revenue perspective, you're not really kind of making as much. So that's why I kind of felt it was quite important to be closer to the pipe. So had we brought them as an investor, we Most likely would have executed on that and kind of used that and be now doing payments and data and so forth. But you know, I'm here now.

Speaker A: Yeah, excellent. And here now means, uh, you look back as BASIC is now. Um, you're not involved on a day to day basis and you've got time to think of new projects. Um, what is it that's on your mind?

Speaker B: Yeah, look, I suggest just for the record, I'm, you know, I have no more, I have nothing to do with BASIC anymore. So the intro at the beginning was like, you know. Yeah, it'll be kind of out of date.

Speaker A: Um, certainly every. I should have said everyone knows you. Yes, everyone in the industry knows you. I mean, you know, that's so.

Speaker B: Yeah. And what am I doing now? So when I went to sign that the sale share purchase agreement, document the contract, I knew that once a sign, that was it. And I think I consider myself m. You know, quite ill at times. One of the things that I, that I made sure was that there was a business that was registered on the date of the signing. So, and I just did this little side thing and I was like, okay, cool. I was going to make sure. And it has to be on the date that I signed the, the actual share purchase agreement. I've got this business that's just sitting there idle waiting for me once I'm done done. And uh, and I, I did that. And now, now that I'm done with it, I. You know, one of the things that you realized when you sell a business is that it was actually quite interesting. I had a lot of founders who were still quite involved, still in the grind, still in the hustle, reach out to me and say, hey, Demi, what is it like on the other side? So that was, that was really interesting. And uh, uh, I know what answer they were looking for. They wanted me to say, it's worth it, it's great. You know, just keep doing it. And then, you know, all this other fantastic stuff's going to happen to you afterwards. But I went through this insane realization which I would say maybe 99.9% of the startup and the founders that called me kind of go through as well. It's this realization that we're not necessarily, we're not driven by money. We actually love, deep down the journey. We love the concept of building. We love the concept of kind of saying, you know, it's like I'm going to build something and I take it to a direction. It's that journey that we actually love itself. And when that journey ends. It can be a little bit paralyzing. It can be quite hard.

Speaker A: It's like when your children leave home,

Speaker B: I imagine that's what it's like. So don't forget I've got six. So I'm going to have to go for that six times.

Speaker A: But I think it's probably like, uh, uh, the first one is tough because they're the first and then it's a little bit easier. But I think what you're saying is you've got the entrepreneurial gene and this energy flows through your bloodstream. You've got the passion to start things from the blank sheet of paper or the whiteboard.

Speaker B: Yeah. And that excites me. That excites me so much. Ah, just kind of knowing that. And, um, while some people might find it daunting, I'm like, man, the people that are kind of cut out for this or that enjoy it. We kind of go head first in. We're like, let's get that, um, let's get that kind of a four blank piece of canvas, get that beautiful pen and say, you know, write those first words. What is it going to do? Let's start drawing those little clouds and bubbles and diagrams and so forth.

Speaker A: You alluded to it, I think, in the opening words, about the influence of, you know, your upbringing, your parents, different attitudes towards income and wealth and investing and saving both. How that is taught by parents to their children, by grandparents to their children and grandchildren, how the schools teach it, how, quote, the industry, the finance industry teaches it, or as you pointed out, almost gives it. You've got this, here's your choice. You know, it's like the Model T Ford when it first started. You can have a car, it's in black. You know, that's the color you get. Um, you can have any color you want as long as it's black. So I think we're going down the track of what it means to understand finance and money. Is that right? Is that where you are at?

Speaker B: Look in terms of kind of understanding, um, finance and money, I think that we've had, first of all, I mentioned it earlier and, uh, we have to kind of acknowledge that the transformation, the shape shifting of money from being something in a pocket to being something that's literally records and bits and bytes in a database is an, uh, insane transformation that's happened as a whole. Because what it effectively does is it reduces the accessibility barrier. And then when you overlay it with software, you've got this abundance of information that's kind of screaming at you as well. But it's really important they have the right tools and the right data and so forth kind of going forward. So I would say that, you know, that's really kind of. It has changed a uh, lot. One of the things that I've been trying to do is to work out for my own kids, how do I empower them to have that knowledge, how do I enable them to be smarter with money or do a different perspective? Because when I came into it, I was incredibly illiterate from that point of view. I thought that there's certain rules and you have to abide by them. There's only one way to be able to do it. I'm not saying we'll break rules, but I'm just. The way I kind of viewed it was that there was only one pathway and that was it. So one of the things, for example, that to correct my wrongs with my children that I did was instead of giving them a savings account or helping open up a savings account, we actually open up an investment account instead. Uh, so all six of them have an investment account and the earliest one they had it was six and all of them have it. And what we do on a semi regular basis is we look at how their stocks are performing when they earn money from doing specific chores that we reward them for. I deposited across and then they have to sit there and work out what are they going to invest in. So they're learning so much about that. So the first one was like, you know, I love, I love these particular brands. Are they public? Yes, some of them are. Well, I want to go invest in them because I believe in it. Others were quickly picked up on the charts. Why is this one look up and then is going down? It doesn't look good. Why is it red not green and so forth as well. So that's been a phenomenal journey. Like my 14 year old, my 14 year old, all the money that he's earned working has invested and has a portfolio that's approximately $15,000 at the moment, which is really kind of proud. Um, and you know, and he'll kind of check it regularly and he's sold it when he's realized things are going down and bought things at kind of semi right time as well.

Speaker A: So really investor?

Speaker B: Yeah, he is, yeah.

Speaker A: Ah, is this the next opportunity for you?

Speaker B: So the next opportunity they want to do is like I'm very, I'm a very big believer in doing something that's really kind of important to me and close to the heart as well. And an experience. And if I look at this next business, which I'll, ah, which I'll reveal shortly, and I look at the similarities that it has with basic, it has one common thread in it and that's, and that's enabling people to do things with software that wasn't possible before. And particularly from a lens of kind of what I call uh, balancing out the power bases or kind of giving people access to something that was maybe impossible in the past. The next business that I'm working on at the moment that is really kind of close to me is in the educational sector. So what I'm doing at the moment is I'm building an educational platform that will enable parents to give to their children, the children can use to be able to excel at school and do better at school. So leveraging AI technology, leveraging all the power of software to be able to do what I call kind of personalized learning. So the ability for the software system to be able to work out where the student is and what their aptitude is within the range of different subjects and being able to dynamically fine tune that uh, to deliver the coursework that's suitable for them. And the reason why I wanted to do that is having six children and looking at kind of where I, uh, look at education's going. And what I realized is that this kind of great divide, and the divide is if you have the money, you can afford private schools who will provide better facilities, um, you can afford tutors, you can afford to spend money on all these different extravagant things that will help better educate the individual. And if you don't have money, well, we're gonna stick you in the public system and good luck kind of thing. You're on your own, kind of go kind of work it out. And it's a struggle and I don't think that that's fair at all. Uh, and I think that education should be accessible to everyone. Just like with basic, you know, giving people the ability to be able to control their data. I want to give people to have the best possible education that they can as well. Because if you can help educate the kids while they're young, think about the wonderful things that they could bring to the world tomorrow. So that's, that's what I'm working on at the moment.

Speaker A: Lovely. My kids are a bit older than yours, but they were really influenced by this mathematics game called Mathletics. It was sort of gamifying basic maths really, but it took off um, in a way that um, I found as a parent, I found Very interesting. And uh, although I liked maths when I was at school, both my m. Daughters didn't really, but mathletics certainly helped transfer them from being. Well, this is okay, but a bit dull too. It provided a level of excitement given what you've just said around the ability of AI to personalize things. And I think you raise. That's a very important point because a lot of what you did with BASIC was to personalize banking to the people that really were given mass market products. Right. Uh, so how do we use technology to offer a cost effective way to customize banking services to individuals in a mass market way? So I understand the parallel between uh, BASIC and what you want to do for education. The idea that you can use software plus AI is very intriguing and I also love, because you've got the background in finance, you understand privacy and permission based systems and I think there's a lot of people in education that are worried about those sorts of issues and obviously parents. Completely. Completely.

Speaker B: Which they should be.

Speaker A: Which they should be. I mean it's absolutely an issue. Right, so where do you think the sort of either the happy medium or the opportunity lies? What is that sweet spot for as you say, perhaps people that are in the public system, the mass market? Because I think despite the prevalence of private schools, I think they're about 20% of the uh, kids, so that's 80% are uh, still in the public system. How do you think edtech Fintech or edtech around finance is going to fit into what is, I think quite a rigid system of here's your Model T Ford, you can have any color you want, but as long as it's black, which you, I mean it's like you were uh, at the beginning of your journey with basic, where you are now thinking about how is this going to change.

Speaker B: Yeah, look, I've got, as I said, through my own kind of children, I've got children in high school and in primary school. I get to see the lens for their view and their exposure and so forth. So look, I think the intersection between technology and education I would argue isn't there yet. If you look at the way schools are using it, I would almost say in a very. There is, it was a very pathetic way. For example, we have this kind of government jurisdiction, sorry, this government kind of ruling that all kids should be tech literate and therefore their solution was to BYOD bring your own device to school. So you bring a laptop, um, you open it up and what did they do there? They look at PDF files and these PDF files are effectively files that they took the original textbooks and scanned them in and gave them PDFs through Google Classroom. When I kind of reflect back and look at that, I'm thinking, what was the point of this? We were trying to save money on printing costs. You didn't want to buy the books anymore. So what is a great way to do it completely? And they've got these devices with this insane CPU processing power, uh, the ability to do so much. And they open up PDFs and kind of look at it that way, or Google Slides or something like that. It's. And then on top of that, you know, when those kids kind of open up those laptops, the teacher can see what they're looking at. They could be, uh, watching a basketball game in the middle of a classroom or something like that, which happened in

Speaker A: Covid, of course, because I'm sure m.

Speaker B: And you know, the kids are very, very technologically savvy. You don't need to give them devices. They already. That's. That problem's been solved. So I think that there's a huge discrepancy between the intersection of technology and education. So what software's capable of doing and what they're actually getting. And I looked at as a parent, uh, one of the problems that I've got is like, I can't scale to give all six of them the attention that they need. There's so many of them. How do I. So I went out on the market and I was looking for these tools. True.

Speaker A: I mean, I've got two. And I'm thinking, my goodness, what. What is the dinner table conversation like for you?

Speaker B: It's crazy. You know, I looked at it, I'm like. I went out sort of. I'm like, I'll buy, I'll pay whatever software is out there that can kind of help them and so forth as well. And obviously having a strong engineering background, I was like, software will be there because software can remember how they answered a specific question, whether it's correct or wrong, can kind of dynamically kind of adjust things for them, can give them the right type of guidance kind of going forward as well. And, uh, uh, I didn't see systems out there like that. There were maybe a couple that I was quite kind of saying, okay, this is great. I like the direction it's going. And the rest was all kind of m. More traditional means, so to speak. So. And I think, you know, and you look at what AI has to offer effectively, we build a database of the Internet. We've got Infinite knowledge now. And you know, there is so much capability to be able to tap into that in a structured way to deliver, uh, content and material and engagement to students that will enable them to learn better, understand, uh, more leveraging the power of what we have out on the market. And they kind of see that that's my next, that's my next venture.

Speaker A: Thank you for that. I think one of the things that I remember as a kid, probably the, one of the big standout things was my parents used to play Monopoly with me. And it's such a, I mean it's a fun game because you can win and you become a property guru or you go bankrupt sort of thing. So it teaches you some great lessons about cash flow. Um, but there's also some great solid lessons in these games about the importance of investing. And you mentioned earlier that you've, instead of saying, here's a savings account, you've had this focus on investment account. Do you think that's the key to financial education is to almost, you know, give kids a few dollars and say, don't save, invest it. And they have to be active investors. So it almost forces them to think and read and do and engage. Do you think that's the secret?

Speaker B: Yeah, look, I think. I don't think it's the only secret. I think there's. As a parent, one of the things that I think about is that there's a little bit too much cradling kind of going on at the moment.

Speaker A: That's interesting.

Speaker B: So in terms of, in terms of kind of like holding, uh, kids back.

Speaker A: You mean wrapping them in too much cotton wool? Yeah, they've got to make a few more mistakes.

Speaker B: Correct. So for example, one of the things that I, ah, was quite adamant about was I said the moment any of my kids enter year seven, they have to get a job to work on the weekend. They have to understand what work is, they have to understand what money is. They have to understand, you know, shifts and all this other stuff, the value of money working, how to deal with people and issues as they occur and all this other stuff as well. So that's kind of really important is to give him that practical experience. The other part is to kind of expose them. As I said earlier, uh, I was a dolomite child, you know, where I was given a, uh, Commonwealth bank bank account. I'm still a common banker customer. So talk about moat and stickiness and. But to kind of say, well, okay, that's one way, but there's a better way. You need to kind of realize that money needs to be put to use. So as I said earlier, I gave him an investment account as opposed to savings account. And even now, like, I don't know what they need a savings account for, to be honest. And the other, the other thing that's also kind of important to look at from an educational sense is one of the other issues that I've got with education is the lack of context. Like so much emphasis on tools and less about the emphasis on the problems themselves. So one of the things is that in order, when I help and dedicate time to my older kids, particularly when it comes to maths, one of the things I was able to do was to leverage AI to contextualize whatever mathematical thing that they were learning. And so an example of that is my child was studying statistics and I looked at the maths book that they had for this PDF on the laptop and I was like, this is horrible. And what I did was I went to the NBA website and I took the Nuggets stats and if you go to the NBA website, they've got a phenomenal amount of stats, the number of passes, who the players were and so forth. Literally took a screenshot of that uploaded to AI told it, my child is studying statistics in this year. Can you please generate a series of questions that relate to this statistics table? And it did. And the moment I said, hey, you've got an exam coming up and it's going to study. And it's like, roll his eyes. And I put this in front of him and he saw Denver Nuggets and all of a sudden his eyes just lit up. He's like, whoa, what's this? And I was like, that's the last game. And questions. All of a sudden it wasn't maps anymore. Yeah, it wasn't maths. Now it was about learning. Now it was about like getting to answering, you know, solving the problem that he wants and he wants to know who's the best player. When should they be put on? Like, did the coach make the right decisions at the right time? He was doing things without realizing it. I did something similar for them, you know, for this business that I'm launching. I wanted to teach them business concepts and. But for maths as applied to them. So I've been to, you know, I gave him this thing about kind of being able to measure Tam Tam Sam som all different kind of concepts.

Speaker A: Total addressable market.

Speaker B: Yeah, that's right. The service obtainable market and all of these other things as well. But again, through the maps that they were Learning and they were learning this kind of concept. So the what, you know, when you contextualize the learning for them and you show them the things that are important to them and kind of focus more on the problem rather than on the tools, can definitely kind of increase the knowledge that they've got. And I think this is where we have a big kind of failure, which is. So these are tools that we use, uh, not looking at the problem widely. And you know, we have so much technology that's evolving so quickly. There's many different ways of being able to solve these things as well. So even for my personal self, like I don't use a wealth advisor, I don't use any of these things. Not saying that they don't have a purpose. I'm sure they're wonderful people and they have great jobs. But I've been using the AI models so I've been kind of, very, kind of selective with the information that I feed into it, the way I engage with it, you know, doing kind of deep analysis, then kind of doing my own research to balance that. But I've got something that's available that I can interrogate continuously without getting billed for as well.

Speaker A: That's interesting. Um, what's your favorite A.I. tool?

Speaker B: Um, I don't have one. So one of the things that I've realized is that they all have, they all solve different things in different ways. So for example, my go to for general stuff really quick is ChatGPT. If I want to know relevant information about what's happening in the world right now, I'll go to Grok because I know I've got access to x Twitter.

Speaker A: Yeah, ChatGPT. Some of the data is a bit dated.

Speaker B: Yeah, it feels that way, but it's also the way it kind of gives you the result back as well. If I want to do development, I recently switched from Claude over to Google Gemini. It's doing fantastic at this stage. So different tools that kind of evolving for different kind of elements that kind of work back. But one of the other things that I do is that if whatever information they give me, I'll actually take that information, feed into another model and tell me what's wrong with this. So I'll kind of see what get them to give feedback off each other as well. So I mean they're evolving quite a bit.

Speaker A: They are, that's true. It's a great way to think about how both that we can lift up people in the public education system as well as what are the business opportunities for people involved in tech and software because I, um, think it's very challenging to sell into the public education system. They constantly talk about how there's no money and you know, schools, public schools are run on the smell of an oily rag. Yes, the big, the budget is big because 80% of kids go to the public school system. But um, when you talk to uh, teachers and the people that run the departments in each state, uh, they often talk about how there's no money. And I think that's. If you look at Mathletics, uh, or my experience with Mathletics was that um, initially the, the parents paid up for it, um, you know, before the schools got the ability to do school subscriptions. And even then it was a sort of add on. Um, but anyway, what's, what's your. And look, a final question. What would be the dream outcome for you for the edtech business?

Speaker B: Just before I answer that, I just want to kind of elaborate a little bit on, you know, if what you said about selling it to schools. One of the things that I decided after fintech was that number one, I no longer want to work in a regulated environment. So, so that's really, really kind of important. So um, I said to myself, I'm not selling into schools, so, you know, I'm selling indirect to consumers, to parents and so forth. I just don't want to go through that. Um, look, if we end up selling to schools, we're so be it. But right now it's definitely, you know,

Speaker A: I didn't realize you had this huge war scar down the side of your face that said banking regulation.

Speaker B: Oh man, it's, it's um, look, it's, you know, you can call.

Speaker A: It's a moat though. It's a, it's a moat.

Speaker B: It's a phenomenal moat. Yeah, it is. You can call it necessary evil, not necessarily evil, but you know, it's, there's elements of it. I, I just. As a software engineer, as an innovator, as an entrepreneur, it's beyond us to think any step you take, you need to go read 180 page PDF to see if you're allowed to take that step. That's very challenging when, you know, it's kind of fraught with, you know, there's minefields everywhere and that's, you know, that that's not what I, how I want to be able to do it. If I want to deliver a true kind of difference, I want to be able to run at my own pace and do that as well. And that is very challenging to do so look, what's the best outcome kind of going forward? Number one, I love the fact that I've picked something like I did with basic. I never had a single financial service customer when I started basic, never worked with them, didn't understand the field or anything like that. I love deep diving into something I don't understand and learning as much about as possible at education. Sounds really interesting. Something that I would love to kind of learn um, a lot more about. So I'm looking forward to the learning element of it in terms of kind of outcome. Look, I think as a, um, as a, ah, kind of serial entrepreneur, founder, uh, we tend to criticize everything we've done in the past. So everything I've done in the past right now as it stands, uh, in my head is a complete failure. So it's like, oh, this is crap, you could have done this bigger, uh, harder, better, that kind of stuff. Even though we gave everything we possibly could and we're not trying to prove it to anybody else but ourself. So to me it's kind of taking this next business and really kind of going hard at it. Harder than I've ever gone before. Taking it to the next level, trying to success looks like having as many different users on the platform as possible, where we're helping remove those walls, remove those barriers and making education, quality education, accessible to everyone. And I think that in terms of the North Star and Metric, the only thing that I'll look out for is how many people's lives that we touch. I think that that's the most important part.

Speaker A: Yeah, um, and even if those people don't realize it's you that's helping them.

Speaker B: Yeah, that's fine.

Speaker A: I mean, I think that's the thing about a lot of fintech is that people might have a consumer app with brand X, Y and Z. They don't necessarily know, you know, who's delivering that service underneath the hood, so to speak.

Speaker B: Which is completely fine.

Speaker A: Yeah, yeah. Well, look, I hope you can still be involved in the fintech sector, uh, in many ways because, you know, your energy, your passion and your willingness to share your stories with others, I think, I mean, as you said, there's always going to be founders that will want to speak to another former founder. You know, I mean that's just, you know, I think human nature. Um, but look, thank you for sharing that journey with uh, basic, your exit and um, best wishes for whatever you do next to me.

Speaker B: Thank you very much, I appreciate it.