Jack Zhang, Co-Founder and CEO, Airwallex
Passion, Hard Work, and a Little Luck
How Jack Zhang and the Airwallex team built a billion-dollar company in just three years.
By the time he was 30, Jack Zhang had already launched more than 10 businesses, with interests ranging from coffee to real estate.
While many of them were successful, Zhang never got to the point where he left his full-time job.
“I just tried to do different things to see if I could achieve something or feel happy about what I was doing,” he says, “but I hadn’t really found anything I was passionate about.”
He certainly wasn’t afraid of the hard work and long hours that came from starting and sustaining businesses, saying that “work was never a torture.” Despite all that time and effort he invested in each startup, he ultimately felt that none of these businesses ever amounted to much more than a new way to make some extra money. Nothing ever became a greater purpose.
With a passion for technology and a love for writing code, Zhang longed to do something within the tech sphere that would have a real impact. Like so many serial entrepreneurs, he finally found a business he was passionate about by looking at his own personal pain points.
Zhang would become the co-founder and CEO of financial tech company Airwallex, which eliminates foreign transaction fees in an increasingly globalized world. In doing so, he’s created a company that, in just three years, entered the $1 billion club.
While the creation of a fabled “unicorn” company was far more nitty-gritty and far less magical than one might imagine, he still owes a little bit of his success to that almighty and mystical force: luck.
The Magic of the Perfect Team
The idea for Airwallex came from the difficulties Zhang and one of the co-founders ran into while running import businesses between Asia and Australia. Sending international payments through a payment service provider (such as PayPal) not only slowed the process but piled on an unpleasant foreign transaction fee.
So, with his background in tech and foreign exchange trading, Zhang and friend decided to tackle the problem themselves. They soon invited three other friends on board as co-founders, forming the Airwallex quintet: Jack Zhang, Jacob Dai, Ki-Lok Wong, Lucy Yueting Liu, and Max Li.
With $1 million invested between Zhang and his first co-founder, along with an additional $2 million from outside investors, they began creating the first version of their product, geared toward the SME (small-to-medium-sized enterprise) market.
“ believed in the team we had at the time, and believed in the company’s vision, and believed we were solving something quite important in the global scale,” Zhang says.
And as the business grew, so did the team. But Zhang says that as they hired new people, they presented an intentional hurdle to ensure that new additions were passionate about their vision. Every new hire was required to take a pay cut to work at Airwallex.
Zhang says that, for ambitious, passionate, top-tier talent, the money isn’t the deciding factor in where they choose to work. He believes they pay far more attention to whether the work aligns with their passions and if the scope of the work presents an exciting challenge. And these were the kinds of people Zhang wanted to hire.
“I still think that the people willing to take a massive pay cut to join you are the most fundamental people who really believe in the vision,” he says. Even with that condition, Airwallex was able to scale from 80 to 320 employees in just 12 months.
While hiring was going well and the business continued to grow, because the creation of Airwallex cost so much, they flew through the initial $3 million investment and needed another round of financing to go to market. Turns out, building an expansive, global financial network isn’t easy.
Hard Work and a Little Luck
“My personal experience is full of luck, really,” Zhang says, “but also we put an incredible amount of effort into the business in the first 12 months. Me and my co-founders slept in the office every day.”
They put in long days, but that gave them a familiarity with the product that only comes from an all-in, hands-on approach. And the challenges didn’t stop Zhang and the rest of the Airwallex crew. It only made their belief in the product grow.
“When you talk to investors, they can feel your genuine passion,” he says. “That honesty—that genuine transparency—about how you want to solve , and you can describe it in detail.”
Investors ended up putting in another $13 million raised, but they were still only able to cover further development of the product. So they decided to begin pursuing other opportunities that could bring in revenue, rather than focusing solely on the SME market. They created a suite of APIs (application program interfaces) that would appeal to much larger corporations, positioning themselves as more of an infrastructure company. But they were still living on borrowed time.
Zhang says that, for the first two-and-a-half years, they didn’t bring in any revenue, with only three to six months of survival guaranteed at any given time.
And that’s where Lady Luck collided with crazy hard work, and the first signs of the unicorn-to-be showed its face.
“We just went from almost no transactions to processing billions of transactions a month,” Zhang says.
While long hours and business savvy played a major role in his company’s success, Zhang is also quick to credit forces beyond his control. He says plain ’ol luck is one of the reasons that his business took off, which perhaps accounts for Airwallex’s good timing and sudden influx of users.
Gazing Into the Future
Because Zhang and the rest of the Airwallex team focused on building a strong foundation and infrastructure, they were able to attract high-profile clients like MasterCard, and retain them when they came on board.
These important connections then put Zhang in the room with other top executives who were excited to try out Airwallex in their own businesses. And as the infrastructure grew through these strategic investments, it only added value to the business.
Today, Airwallex has built connectivity with more than 50 banks across the world, is equipped for international banking through accounts unhindered by borders, and grants access to competitive exchange rates and international payments, with more features on the horizon.
Zhang says he is always looking at least five years out, planning for the future of the company. He also invests time in learning from others who have been in his shoes by attending conferences and interviewing other CEOs.
“I spend a lot of time interviewing people to learn from people,” he says. “Whether they are good or bad, there are things I can learn.”
After three years of explosive growth, and now with the added pressure of leading a billion-dollar company, Zhang isn’t ready to slow down.
With his “get shit done and grow” mentality, he plans to continue taking Airwallex to new heights.
“Not everyone can do it. You have to sacrifice a lot of things,” Zhang says. “Are you willing to sacrifice your house, your time with family, everything to do that? If the answer is yes, then maybe you are born to be an entrepreneur.”
To learn more about Airwallex, check out airwallex.com.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
- Why Zhang didn’t leave his full-time job, even after launching 10 side businesses
- The problem Zhang encountered that inspired the idea for fintech company Airwallex
- Why every new Airwallex hire was required to take a pay cut
- How a pinch of luck and tons of hard work eventually paid off
- What Zhang believes inspired investors to put another $13 million into Airwallex
- From no revenue at all to showing signs of unicorn status
- How Airwallex started to attract high-profile customers like MasterCard
- The journey to securing a $1 billion valuation in three years
- Why Zhang believes in planning at least five years out
Full Transcript of Podcast with Jack Zhang
Nathan: So, the first question I ask everyone that comes on and that we speak to is how did you get your job?
Jack: How did I get my job?
Jack: You mean the first job?
Nathan: Well, how do you find yourself doing the work you’re doing today? How did this all start? We’re here in Melbourne in this incredibly large office. Airwallex has achieved just recently a unicorn status. How did it all start?
Jack: I’m obviously not naturally born a CEO. But I think I always tried to do different sort of things when I grew up and when I started my career. I probably started more than 10 businesses between sort of 20 to 30 really while having a full-time job. I always had different type of businesses, like importing, exporting, retail, online businesses. And just tried to do different things to see if I’ll achieve something or feel happy about what I’m doing. But really haven’t really found anything I’m really passionate about for a long time before I started Airwallex.
And Airwallex is the first time that I seriously tried to make something happen. And then it doesn’t make any money. And at least sort of personally in the first couple of years, and then also for the company, which is quite interesting. So, the idea was started from … While my co-founder running a retail business. And he’s importing a lot of stuff from China, South East Asia that we had to use a payment provider to make imports for the payment, the time taken from making payment, also the cost. It’s around 4% of the transaction at the time, which is quite a big pain point that we had to resolve. We tried West Union, we tried local banks. And we tried a bunch of stuff, nothing that actually worked very well. And because my background is all about technology and foreign exchange trading-
Nathan: Foreign exchange, your background?
Jack: Yeah. So, it’s kind of natural for me to find a solution to solve it. And then, that’s how it all started. And I get my CTO and I pull him out of the retail business he was running, the other co-founder, Max. So, three of us kicked off the business. And then, later on we have two other friends join us to officially launch the Airwallex brand.
Nathan: Interesting. So, you said for eight to 10 years you were doing side hustles on the side, right?
Nathan: But this was the first business that you started that you were truly passionate about the problem that you were solving. What happened for eight years? I’m just curious because that’s a long time to kind of play around.
Jack: Yeah. I mean, the stuff I was doing is very different to technology stuff, right? I’ve done, for example, I’ve done retail open, especially coffee. That’s really kind of impressional stuff, very tedious sort of impressional work. But there’s a lot of design elements and quality element involved that business has been doing really well and making a decent income.
And I also have a design architecture firm and project management firm. I also have a real estate development company that generate a lot of profit on the side, you know? 10X my salary. But I never left my full-time job because that’s really just making income. That doesn’t have any technology, doesn’t have any social impact. And I just couldn’t … Back then, we were thinking we could maybe build a 50 level residential building in the inner city. But I’m not really passionate about the idea. I know we can make a lot of money by doing that, you know? It would take us five to 10 years to get there. And we know we’ll get there. But just never really fill your life while you’re doing that.
The idea of running a tech driven providing kind of a long-term customer value to our customers is far more satisfied and interested than running a real estate development company. Even that real estate development company from a purely sort of revenue point of view might be a lot more than running Airwallex in the first few years. But running a startup it is a game of scaling, which we think eventually Airwallex will be far more successful and far more impactful and then as a global platform. And that achievements feels a lot more sort of satisfied than running a real estate development business.
Nathan: Okay. Interesting. I just want to talk about that just a little bit more, if that’s okay. So, I was reading that you’re a solutions architect by trade, is that right?
Jack: I started with sort of financing. So, I was working in a fund, a hedge fund. And then the investment banking effectuating technology. So, it’s all kind of combination of financing and engineering or developing, writing code and developing trading algorithm and trading platforms to helping either ourself, which is proprietary trading, or helping our customers on the market making side in foreign exchange trading and sort of fixing kind of stuff.
Nathan: Got you. And all during that time, you were working full-time as a solutions architect, you had other businesses on the side?
Nathan: Yeah, that’s crazy. How come you didn’t go full-time on those? What changed? Was it because you weren’t that passionate about them like that?
Jack: Yeah, well just I always enjoy technology. I love writing code. And those businesses, I can easily manage outside of my office hours. And I work probably 16, 17 hours a day and seven days a week. So, even working as a side job, I still put in full-time hours in there. You know, working was never a sort of torture to me. It was always building stuff. And I got into real estate because I really like design, design beautiful kind of stuff to the customers. Even that, when I was doing real estate development or project management or design and architecture, the stuff we produce is always very, very different to what you’re seeing on the street. It is something that have a lot of vision in the design. And a lot of things about architecture and living and the customer experience. Whereas, it’s not just purely making money, look at P&Ls and that sort of stuff. Yeah.
Nathan: Got you. I see. So, you found this problem because one of your friends was doing importing, exporting. I can relate to this particular problem. Like, for us with our company, we charge for products or the magazine or whatever in US dollars, but then it comes back and converts to Australia. We get hit like 4% or whatever with Stripe. And then sometimes we have to buy USD back because we pay a lot of team members in the US. And we have to … If we use the bank or whoever, you can get between three or four percent on that. And it’s crazy. Even if you use an AMEX, FX it’s-
Jack: Yeah, you should use us. So, with us, basically you can fire up what we call a global account real time. You can connect that global account with Stripe. So, instead of paying Stripe for the 2.7% for that, you’re just doing the local currency in the US. You’re essentially having an account with US bank details with your name to receive the funds. And you can bring it back to Aussie dollar whenever you want at the interbank rate. And we charge a flat sort of 0.5% on top.
Nathan: Yeah, it’s crazy because yeah, the money is made with a lot of these companies that do transactions, the money is made … Yes, they charge a fee, but the money is made in the exchange rate that they give you.
Jack: Yeah, so we’re usually kind of post our rate, what we call interbank rate, which is basically the best rate you can get at the time, which is transparent kind of around the world. You can get that rate from actually Google finance and Yahoo Finance, all that, as a real exchange rate. And we’re also transparent about the fee that we charge on top, instead of telling you a rate, you just don’t know the difference between that to the interbank rate. We tell you straight away. This is our standard price, it’s 0.5%. And if you become a larger business and you keep scaling, then we might able to give you a better rate, a better sort of fee structure as you’re scaling. And it’s completely free to create the global account in US dollar. You don’t have to actually pay anything if you don’t convert it. You can bring the money back and that’s all free.
Nathan: Yeah, that’s incredible. So, you came up with this. You found this big problem, which I feel myself is in our company. And you’ve got some friends together, a CTO and you said another friend that had the retail business, yeah?
Jack: Yeah, so actually he’s sort of taking care of all the operational sort of stuff, customer success.
Nathan: Okay, and then you kind of work on product, really.
Jack: Yeah, so product and commercial.
Nathan: Yeah, okay. And so, what happened next? How long did it take to build the product, the first version of the product?
Jack: The first version what really kind of go to market, that took about a year to build the first go to market product. That was pretty sort of simple. It was just solving a cross border payment issue. And we covered a few countries and we tried targeting the SME market, but that didn’t really go well because then we only raised like three million dollars in our first round. And building the product already cost a lot of money. Now, we don’t have any money to go to market, you know?
And then, to build a global network, that required even more money. So, we raised another round, which is 13 million. But that only just enough for us to keep building the product. And then we decide to, instead of pursuing the SME path, we pursuing large opportunities that can bring us revenue growth and volume growth to get scale first. So, we decide instead of kind of promoting our web application, which can just log in and start operating, we built a suite of APIs and really kind of … I wouldn’t say changed the company vision, but really changed the direction of the company at that time from a more sort of user driven, SME driven type of business to become an infrastructure company. And I basically started building the infrastructure, the connectivity. And so far we have built banking connectivity with more than 50 banks around the world to offering a lot more than just a cross border payment.
We now have global accounts. We have FX. We have market FX. We have lock FX. We have international payment which you can do sort of send funds overseas and you can also do mass payment to many, many countries with our API. We are in the process of launching our acquiring product, which is online payment acceptance to competing with Stripe. And we also are launching our issuing product, which you can doing kind of programmatic more than card issuing to both smaller businesses and also to internet platforms like Uber and Dotdash. So, that’s really become … Now with the company model from sort of a simple cross border money transfer or collection business to a kind of global platform that touched end to end process of programmatic money movement to more and more become a conveyor of global banking.
Nathan: I see, yeah. So, you’ve got a few different products now.
Nathan: Yep. So, I’d like to rewind for a second because you mentioned too when you went to market, it was a bit difficult. But you still raised three million dollars to be able to fund the development of the product.
Jack: Well, that we didn’t even have a product when we raised three mil. So, we had nothing when we raised the three mil. That was just a team we put together and then the business plan.
Nathan: Yeah. And how did you do that? Like, if this is your first kind of tech startup, how did you … Because it’s hard, especially here in Melbourne, here in Australia, it’s not that easy. Like, how did you raise-
Jack: I was lucky enough, I didn’t raise in Australia. I would doubt that I would able to do that in Australia, even today. You know, me and my co-founder, we put in more than a million US into the business. So, that gave us the first sort of six months of runway. Then we raised the actual two mil on top of the one mil. So, it kind of make up the three mil. Really, external investment is two million dollars. That was at a ten million dollar valuation. That was our first round.
It’s still a big dilution, but we were able to convince the investor. At that time, it just really, we were solving an important issue. And exactly how we’re going to solve it. So, because I’m a product engineer, I can describing the way to solve it very, very clear. But the go to market plan wasn’t clear at that time. I keep sort of describing to the investor how we’re going to go to market. But looking back, what I described, nothing has happened, right?
So, back then, investor keep asking me, “How are you going to go to market? How are you going to go to market?” We tried to explain different things. But then, it’s unrealistic looking backwards because that’s my first time doing the startup. But lucky enough, they still believed in the team we had at the time and believed in the company’s vision and believed we are solving something quite important in the global scale. They’re happy to bet on people, basically.
Yeah, that was a bit of luck as well. And even with our series A, the 13 million, we still haven’t got revenue in anything sort of in scale come in. And just continued building this infrastructure. So, we had to run the company for two and a half years without any revenue to come in purely we rely on raised capital investment.
Nathan: Wow. Was that scary?
Jack: Yeah. So, you know, I was telling to my staff that my surviving pressure was sort of three to six months for the first two and a half years. It was just … Yeah, you always have that less than 12 months runway. You have to raise a decent capital to build the product to scale. But lucky enough after two and a half years, we just went from almost no transaction to now processing billions of transactions a month. So, that sort of 100X growth is just because we have spent so much time on the infrastructure. Even though it takes time to perfect the user experience, that takes iterative research and development. But because of the infrastructure that we have built with all the banks and that becoming a foundation of solving a lot of critical issues, we were able to get a lot of large customers to using our platform, like Tencent and Mastercard, a lot of large sort of internet companies and travel companies and financial service companies that are using our product.
From the very get go our first customer is Mastercard, right? So, that we can get scale pretty quickly. Obviously it’s a painful process to building a standard of PCI security infrastructure and ticking all the checkbox of RFI, RFP.
Nathan: Even pitching the right person within Mastercard. Like, convincing them to work with you guys.
Jack: Yes. And yeah, we got a bit lucky with joining the Mastercard. It was sort of incubating, they call it Star Pass programme. They had a sort of dedicated person to help us navigating such complicated ecosystem within Mastercard. And we were lucky that Mastercard decided to make an investment in us. So, in our sort of 30 minute series A around together with Tencent and Sequoia. That really kind of a game changer for us because we got some of the best investors in the world willing to backing us, even without revenue come in, which is a big deal for us at the time. And we can keep attracting talents into the company, leveraging the brand of Tencent, Mastercard and Sequoia to keep building our global infrastructure to a stage that we can scale.
Nathan: I see. So, talk to me around the early days getting your first … You did the seed, the three million. And you said you raised from the US. Who was-
Jack: That was from some sort of South East Asia and China investor. So, the first round was … The biggest investor that’s kind of well-known is kind of Gobi Partners. So, Gobi have managing close to a billion dollars probably between South East Asia and China. They’re also managing the Alibaba Entrepreneur Fund out of Hong Kong. The other two are pretty, I guess not famous investors.
Nathan: Got you. But still, I’m curious to hear, what advice would you have to anybody watching or listening that have a product that is purely disruptive, it can be scaled globally, like Airwallex. And incredible team, incredible vision, they believe that there’s something there, deep problem that needs to be solved. And it’s quite expensive to build the product, and they need to raise capital, what advice would you be giving? Especially first time founders. Like, I think it’s really difficult to raise first time founders. People are looking for people that have failed or have done it before, you know?
Jack: You know, my personal experience is it’s full of luck, really. But also, we’re putting incredible amount of effort to the business in the first 12 months. Me and my co-founders, we sleep in the office every day. We’re working 20 hours all four of us sort of doing product or coding code. It’s that sort of intensive obsession of what we do is very, very important. So, what I really believe that when you actually put in that amount of effort, there’s potential returns that you may not anticipated. That you’re able to, one kind of that you’re able to genuinely … When you talk to the investor, they can feel your genuine passion about this such critical important issue you are solving, that owners see that genuine transparency about how you want to solve it. And you can describe it in detail because I actually engineered the entire sort of platform.
So, I know exactly from here to here to here how exactly step by step it happens. So, I’m describing a problem we’ll be solving in 12 months. But I’m able to articulating exactly how to get there. It’s not like you just tell them, “We’ll get there in 12 months.” But it’s like, “This is how it takes. This is the team we’re going to need. This is the solution we’re going to put together. And why this is a such large opportunity. Why is this is such an impactful thing to internet business and to help those businesses to scale globally.” You know, first of all, it has to be a large scale issue, otherwise the investor wouldn’t bet so much money on … You know, if the market is $100 billion, then they wouldn’t spend that much money on solving $100 billion business because we’re solving hundreds of billions or even a trillion dollar plus sort of market. And that kind of giving the investor room to imagine how big this opportunity could be and why you need a bunch of people with this sort of skill to solve it. And why it’s so important to invest in such things.
Basically, an early stage investor will take a bet on you, on people. I would say the CEO is the most important person, I would say. Most of my investors who come back, I was talking to Tencent, I’m like looking back, “Why you would invest,” right? I mean, there’s such a risk, even me thinking back, such a risky decision. And my board of directors from Tencent was laughing. He’s like, “I don’t even know I’m going to invest today to taking such a sort of brave decision because 13 million without revenue is a big investment.” But now in fintech it’s become common. Back then, it wasn’t common at all. Now you get people raising 20 million pre-revenue all the time in the US when you are in the fintech space, because of the regulations, the licencing, there’s regulatory compliance.
To set up a fintech business in the regulated environment is very different to setting up a normal sort of eCommerce business that don’t have those burdens and it requires a lot of money to do that. Even the licencing, the first licence took us a year to even launch anything.
Nathan: That’s crazy. So, I’m curious around when it comes to raising enterprise value because you said now it’s not uncommon for a fintech to raise 20 million pre-revenue. But that was only four years ago, right? Like, the speed of growth and scale that you guys have achieved in a short period of time is very impressive. So, one thing that strikes me is you as a founder and CEO, you must be very skilled at raising enterprise value, because I said at the start, you guys are now valued at over a billion dollars. Like, what advice would you give to founders that have raised capital? What things should they be thinking about to raise enterprise value of their company? Because that’s what it’s all about, right?
Jack: I never thought about valuation, to be honest.
Jack: Even at this round, I never cared about valuation. My next round is probably the round I’m starting to care about valuation. So, it’s always about what other value they can add to my business. So, that’s why we got Sequoia, Tencent, and Mastercard to invest in us in that series A round. And exactly the same investing advice in the series B and with extra funding from Horizon Ventures and Hillhouse. The value that Hillhouse can bring is going to be massive before we IPO. And Horizon Ventures is the most reputable fund in Hong Kong, which we’re having a lot of business in Hong Kong. So, it’s just a lot of strategy decisions with Visa, Master … Sorry, Mastercard and Tencent is also a lot of strategic relationship there, not just purely financial investment.
For example, Mastercard helped me a lot with building the banking connectivity and network. Not saying they would help me do the work, but they just introduced me to the bank CEO, for example, that generally would took a long time to meet those bank CEO. But fortunate enough that I would attend a few conferences with 50, 60 bank CEOs around the world in a single room and presented to them about Airwallex. And they can feel my passion. And then they try to kind of build that sort of connectivity for me. And then, just speed up that whole scaling process because building a banking partnership is a very, very difficult process and could be very slow. But we were able to build more than 50 banks relationship within four years’ time, which is something I haven’t seen in other businesses.
Nathan: Yeah, I know. It’s incredible. So, you’ve been very strategic with the investment partners that you have brought on because they’ve allowed you, not just from a money standpoint but from a connection and relationship standpoint add value to the product, which has allowed you to scale.
Jack: Yeah, so a lot of investors ask me … The first question they ask me, or the last one they ask me is, “What’s your valuation?” I said, “I’ve got to raise this amount of money. I don’t know what my valuation is.” You can’t tell me what valuation I make, because at series A, I’m pre-revenue. What is my valuation? I want to raise this amount of money, and obviously I’m not going to diluting for 30%. So, it’s kind of you’re working backwards. It’s like, this is the money, you want to raise 10 mil, I want to diluting 10%, my valuation is 100 million. It’s about who want to pay that 100 million. All you’re kind of thinking is about finding the who, rather than to kind of negotiating valuation. I never negotiate valuation.
Nathan: Yeah, wow.
Nathan: Okay, interesting. So, I want to switch gears and talk about building a startup here in Australia, even from a talent perspective, you guys have offices around the world now. But talk to me about the early days, you said you were living and breathing this thing, working 20 hour days, sleeping in the office. But still, it’s incredibly hard to find great talent, great developers. Talk to me about that. How have you navigated that?
Jack: Yeah, so in the early days, it’s mandatory you do a pay cut to join us.
Nathan: Say that again, sorry?
Jack: You have to do a pay cut to join us, which not many company managers are able to do in Australia, but we did that. Even now, there’s people doing 50% or 70% pay cut to join us. There’s kind of … When you talk to other founders in Australia, people are saying it’s ridiculous how you kind of do that. But as a founder, I were able to persuade our employee, we’re building something quite socially impactful and it’s such an important infrastructure in a global scale. There’s no such opportunity in Australia before to building such impactful things and backed by the best investors in the world.
That just resonates with someone, but obviously someone just completely don’t believe it and think we just talk bullshit. But you know, it’s if people resonate and then people join us and they really engage with the company. We obviously have gone through a lot of churns in people. But I would say the most sort of valuable members of Airwallex have never sort of left. It’s always kind of from the very beginning, we’re incredibly good at retaining the good people. We try to keep them around. And obviously when they join, they do a kind of big pay cut. We try to every six months, we do a review and we give them a small amount, but a meaningful increase to kind of give them the recognition of their contribution to the company.
And obviously we have to be managing the skill very fast because if you kind of slow down for a year, then people were thinking, “What is the up side?” And that sort of stuff. Then that might creating important employee to leaving the company. But you have to get that. Our valuation gets three to five X every year. So, that sort of movement, able to kind of help us to hiring people with a quite conservative salary but a lot of good talent. And I’m still thinking that the people willing to take a massive pay cut to join you are still the most fundamental kind of people that really believe in the vision. I mean, why people want to join you, right? There’s money, there’s upside. There’s people think about upside, but they also truly believe in the vision. I mean, I think a lot of people that did a massive pay cut really believe in the company vision.
Nathan: You do like ESOP too though, right?
Nathan: Yeah, yeah, okay.
Jack: ESOP is obviously a massive part of our package. It could be a lot more than the cash component we’re offering to people. But we found it’s very difficult to tell people about ESOP in Australia, what exactly it is.
Nathan: Really? Why?
Jack: People just don’t understand. It’s not a common thing in Australia. And there’s no such success in Australia before, right? So, apart from . Alasin is probably the only company who have got a successful axis. But what other companies got that sort of 100X, 200X axis in Australia before? There’s not many.
Nathan: So, talk to me around kind of … You said that it is difficult to maintain good talent with the speed and scale that you guys are growing and trying to move. What have you learned? When somebody … For us at our company, we’re hiring, and we’re bootstrapped. We’re trying to hire like one, maybe two people a month. And even that alone, it’s a lot. So, I’m curious, anything you can share that you’ve learned around kind of this blitz scaling? Like, that Reid Hoffman talks about when it comes to blitz scaling. I’m not sure if you’ve read that book, but even hiring people that aren’t even really that great because you just need so many people because you’re trying to move so ridiculously fast and take the market.
Jack: Yeah, so there’s roles that you could compromise, there’s roles that you couldn’t, right? So, it’s getting that first sort of 10 engineers, getting the fundamental core people at your company is very, very important that you can’t compromise because once you get those core people, those talent will attract in talent, right? So, that’s very, very important. So, if you kind of start compromising on your senior management and they are attracting that kind of multiplier effect, I think that’s very, very bad.
I think one of the things we did extremely well is to get the very top talent to join us with a massive pay cut and believe in a company vision and upside of the company. And we will prove to them that it’s worth for that sort of short term sacrifice on cash. But it’s a very big opportunity to rapidly scale the company and their career. And not just the financial. I mean, for these sort of top talents, the financial side is the last thing they look at it. And most of them already achieved financial independence.
I mean, if you look at it, probably half senior management to even consider money as an element when they’re choosing a job. They look at the two important things. The first thing is this something they’re really passionate and they’re actually happy to work there? Obviously the happy kind of considering many things, right? Whether you get valued, you are impacting and you’re doing really interesting stuff and solving a very big problem.
But the other thing is about the scope of the work that you could be doing, you know? Like, whether you have a very large global scope or you have a very large vertical or market scope to scale your team from one person to 10 person to 20 to 100 in a very short period of time. And to achieve something that sounds like impossible, you know? We’re growing from like 80 people to 320 people within 12 months. That sort of scale is very interesting to some people. And the cash is the last thing. You just need to give them upside. So, when the company succeeded, that you align everyone’s success with the company’s success. So, we keep having very aggressive sort of short term incentive and long term incentives to offer to employees and management. I think that’s the three sort of key things I would say.
Nathan: How do you make sure the culture scales?
Jack: That is difficult because if you want to scale the culture, you have to have the people in the top management that understands scale. So, it’s very important at some stage of your company to get in people from other startups who have done it before that kind of mix with your original employees who haven’t don’t it before. That makes this very important for your organisational scaling because those people who have done it, who have scaled from 1 to 10, 10 to 1,000 can bring those experiences to kind of demonstrating how to scale the company. And because you hire very intelligent people, your founding team are very intelligent, you can learn very quickly and mix well with those people then to build a scalable organisation.
Nathan: I see. And when it comes to some people that haven’t been exposed, especially here, it would be hard to find people that have been exposed to this level of scale, some of these people, they might be in the first, let’s just say batch of 50, but when it gets to 300, 400, or even 200, all these levels of management come in. Some of these people may not be managers. What do you do there? Not everyone might be a great manager, but they’ve been there for a while and…
Jack: So, that’s the balance between management and speed, right? So, if your company is growing exponentially, right? Then you can using that growth to overcome the management issue because the company is growing so fast, people don’t even have the time to think about those management issues because you’re just telling them, “We need to grow 10% this month. We need to grow 30% this month.” And all they try to achieve is growing 30%. Any other things is not important. So, you only have one priority, which is growth. There’s no … You know, don’t think about anything else. All you try to do is this one thing, you have to do it well. That’s it. There’s no other things you wanted to think about.
But that’s one element. So, you have to make sure you can achieve that growth. And when you’re kind of slowing down, that’s where the risk could happen where you could just blow up, right? I mean, but when you’re kind of growing as a CEO, you really need to be thinking year, two year. I mean, now I’m thinking sort of five year ahead, you know? When my growth’s kind of slowing down, then I know … because you’re never growing 1000% every year, right? So, you kind of need to know when that going to coming a year, two years ahead. You bring those people right before that curve so that you’re elevating the company’s culture together sort of matching with the company growth.
That is a tricky thing that as the CEO, you just have to kind of have that instinct of when that will happen, thinking really long term to keep the company accelerating rather than … I’d never want 100% growth in three to five years’ time. I still want to achieving 300% growth. How to get there is about … because any product, it takes time to build the product, to launch the product, to grow the product, to scale the product, and one to two years to do that process.
If you’re kind of thinking about next year, you’re already too late. You really need to think about three years to five years ahead, where’s that extra 100 million revenue going to come from? And then you’ve got to do it this year. So, right now, as a company, we’re investing 80% of our time and money on the three to five year growth, not the growth this year and next year.
Nathan: Yeah, wow. Interesting. Look, we have to work towards wrapping up. I’m curious more around your personal growth as a founder. This is the first time you’ve done and scaled a company this size. Who are you learning from? Obviously you’re learning from experience. Do you have a lot of mentors? Do you read books? Where are you learning this stuff? Because-
Jack: I think because we’re fortunate to invested by a lot of top venture capital that there’s a lot of communication and conferences for founders to catch up within the Tencent or Sequoia or DFC’s portfolio that kind of learn from that. And also one of the key things I’ve learned things from interview. I spend a lot of time interviewing people to learn from people, whether they’re good or bad, there’s things I can learn. That’s very important.
Also, self-reflection. Just be really, really honest about your weaknesses and strengths and try to hire people that can complement with your skillset is very, very important. And be extremely honest and transparent to everyone that you work with. And not just telling people the good things, but telling people the bad things. And also, admit your failure and your weakness I think is very, very important.
Nathan: Awesome. Well, look, last question or two more questions. The first one is, best piece of advice or something you’d like to share with our audience? Or any parting words of wisdom? And lastly, where’s the best place people can go and find out more about Airwallex?
Jack: The first one, I would say to founders, at the single point in time, there’s only one priority in your company, which is get shit done and grow. Don’t think about anything else. Think about anything else when you kind of have the scale. So, just doing everything you can. Have that obsessive intensity in every day of your job. I mean, not everyone can do it, you’ve got to sacrifice a lot of things. But you’ve got to ask your question, are you willing to sacrifice your house, your time with family and everything to do that? And if the answer is yes, then maybe you are born to be entrepreneur and doing a very fast growing startup. And the last one is around … Sorry, the last question is-
Nathan: Yeah, where can people find out more about Airwallex?
Jack: Yeah, so Airwallex, I’m on Twitter, I’m on WeChat. Also on LinkedIn, people can kind of contact me through LinkedIn or Twitter. More about our company, our website is the best place. And we have a career page and we have a lot of interesting product that you can know more about Airwallex. And the rest is just Google the company story. I think there’s a lot of interesting things to read.
Nathan: Awesome. Well, look, thank you so much for your time, Jack. This has been an incredible interview.
Jack: All right. Thank you.