Elliot Moss
That was Oscar Peterson with C Jam Blues. Good morning, this is Jazz Shapers and I am Elliot Moss. Thank you very much for joining me. Jazz Shapers is the place where you can hear the very best of the people shaping the world of jazz, blues and soul and alongside them we bring someone in who is shaping the world of business and we call them a Business Shaper. I am very pleased to say my Business Shaper today is Tom Blomfield and Tom is the co-founder and CEO at Monzo and Monzo is the phone only bank service and they are doing some fantastic things in the world of banking. You are going to be hearing lots from him about disruption and related matters. In addition to hearing from Tom, you will be hearing from our programme partners at Mishcon de Reya some words of advice for your business and then of course we’ve got the music and its brilliant today. Cécile McLorin Salvant is in there, the one and only Dave Brubeck is as well and so is this from The Three Sounds.
That was The Three Sounds with Makin’ Whoopee. Tom Blomfield is my Business Shaper today, co-founder and CEO at Monzo, they are the bank but they are on your phone and nowhere else and this is the interesting thing and I am really happy to have you here Tom.
Tom Blomfield
Good morning Elliot, I’m delighted to be here.
Elliot Moss
Now tell me, this is a brave new world that we are in Tom, but you seem to have been sort of in it for a while, in the sense that when I was growing up you had to walk into bank and then you had the chance to ring someone and someone was on the other end of the line and they knew lots about you and then your desktop or your laptop and now the penetration of smartphones is extraordinary, it’s global and you can do pretty much everything you want from your phone.
Tom Blomfield
Yeah. The way I sort of like to think about it, I opened my first bank account with Chesham Building Society back in sort of twenty years ago and you might remember you got a little passbook where you would go in and they would write a, you know you take in your cheque from granny and they would write a credit to your account and then you save up enough and they write a debit to your account and it sums up to the balance and you know it was about sort of the size of a smartphone and it seems like we have come full circle through internet banking and telephone banking back to this little thing that shows you credits and debits and some sort of balance and it doesn’t do very much else. You know in this era where we have this smartphone, this super computer in our pockets, the banks don’t seem to be using all the functionality they could be.
Elliot Moss
And you said, well you know what, we are going to go and do something pretty special and that was a few years. Not that long ago actually.
Tom Blomfield
About two and a half or three years ago yeah.
Elliot Moss
But this is, this is what strikes me and we are going to go back into your dark history. It’s not sordid at all, it’s fine though. Obviously you, this is not your first time round in the world of some start-ups and things, but in two and a half years I believe that you’ve got around 400,000 accounts with some very big objectives as well, very big goals going forward. That’s an extraordinary number of people that have signed up in such a short period of time. Why?
Tom Blomfield
We are still trying to figure that out.
Elliot Moss
I mean seriously though, where have they all come from because it was the old thing you know you change your husband or your wife more regularly or you change your washing machine, but changing your bank, that’s a big deal. It doesn’t seem to be 400,000 people.
Tom Blomfield
No and 400,000 is about 1% of the UK adult population which is pretty staggering really. We’ve not really spent very much on marketing, so it’s word of mouth and I think we started out very intentionally sort of trying to build the community and trying to build the mission and so people, people join I guess because they believe the same things we believe and we are together trying to build a better bank. So I think it really is very mission and community driven.
Elliot Moss
Stay with me to find out how, and it seems like there is an intention there because we all think about banks and probably don’t think about communities very much, but stay with me to find out how Tom and his team have done it; he is the co-founder and CEO at Monzo. Time for some more music right now, this is Cécile McLorin Salvant with Wives and Lovers.
That was Wives and Lovers from Cécile McLorin Salvant. Tom Blomfield is my Business Shaper, co-founder and CEO at Monzo the digital bank. And we call you digital for a minute, you are digital, but you are on the phones really. Tom tell me, you studied law, you went into I believe the world of consultancy and I think you were Chief Technology Officer of a start-up at some point before that as well while you were studying.
Tom Blomfield
That’s right.
Elliot Moss
How did you move from being a student of law into technology related stuff and then the world of consultancy? You obviously thought, well I am not going to be lawyer. Where you clear while you were studying what you wanted to do when you were about, you know when you were going to finish?
Tom Blomfield
Not at all and I think that’s why everyone becomes a management consultant because they don’t know what they want to do with their lives. I’d built websites since I was really young, thirteen or fourteen years old. I got started building websites for local estate agents in Little Chalfont where I went to secondary school.
Elliot Moss
It’s a fine place. I know Chesham well as well.
Tom Blomfield
It is. And I had sort of grown up with the internet as it was growing up, but I never thought you could do it as a job. It just seemed strange and I grew up in the Home Counties where everyone was a banker or a lawyer or an accountant. My father was an engineer, sort of these professions and so I went to Oxford and studied law because that was a profession, but I realised pretty quickly I didn’t want to be lawyer but I didn’t know exactly what I did want to do. I think starting my own business was something that I knew from a very young age that sort of appealed to me.
Elliot Moss
And why was that do you think? What was the appeal when you was younger because some people do talk about this that when they were little they just kind of know. Was it because you thought you would be unemployable?
Tom Blomfield
Potentially.
Elliot Moss
What I mean in the sense that you needed to do your own thing, were you kind a confident young person?
Tom Blomfield
I think that is probably fair. My first ever…
Elliot Moss
You seem confident to me.
Tom Blomfield
…my first ever job review at OC&C, I was below track because I was highly disruptive. People talk about disruptive business and disruptive technology.
Elliot Moss
It’s a good thing. Yes it’s positive.
Tom Blomfield
I don’t know. I think it can be a real pain to deal with actually. You’ve got this sort of your newest analyst is disruptive and keeps challenging and asking why. It’s very tedious actually, but it’s…
Elliot Moss
But obviously it was irritating you, things were there and you are going but that doesn’t make sense to me.
Tom Blomfield
Exactly. Why are you doing it like that? This doesn’t add up. Think about it in this different way and my brain has always worked like that I guess which can be infuriating, but I think it’s if you’re going to start a new kind of business or in new industry, you really need that challenging mind-set that says actually the status quo doesn’t look right. How can we do this better?
Elliot Moss
How have you been able to move to the Monzo point where you actually set the business up because there were other roles, you’re a co-founder of something called GoCardless.
Tom Blomfield
That’s right.
Elliot Moss
VP Growth. I love that title, whatever that means at Grouper and now it’s a defunct dating site. But all those things there, was it, if you hadn’t had done them, do you think Monzo would not have happened?
Tom Blomfield
I think that’s absolutely right. So I was OC&C for about three years and I left actually to go to another consulting firm, sort of bigger, more prestigious one, I never ended up starting because in my gardening leave I started GoCardless with a couple of friends from Oxford and that was really a crash course in the payment systems. GoCardless is a payment process where it helps people collect direct debits and it is a pretty successful business now. But we started we were three guys literally in a bedroom and we just got the manual on how debit debits works, we read it and we thought, we could probably do a good job of writing software to make this work. And that was my crash course intro to sort of banking and finance and how money moves around. And I didn’t really believe in brand or design or these very emotional sort of human, human sort of professions. And then I went to Grouper which is a dating site. It was this sort of social, they like to call it a social club. So six people get together and go for cocktails and sort of misbehave. It was a lot of fun. And that was all about human psychology. You know they had waiting list, it was an exclusive membership club, you had to be referred to get in, you had to refer your friends to be able to sort of move through the queue. A lot of those mechanics we’ve used at Monzo. And so reductively you could say that Monzo is sort of a combination of GoCard of how the money moves with Grouper how human beings think and feel. So I think Monzo is really the combination of those two things.
Elliot Moss
Stay with me to find out more how Tom has fused the world of humans and the world of technology because that’s exactly what he has been doing for the last few years to great effect. We’ve got the latest travel in a couple of minutes but before that some words of wisdom I hope from our programme partners at Mishcon de Reya for your business.
You’re listening to Jazz Shapers with me, Elliott Moss. Every Saturday I am very lucky because I get to meet someone who is shaping the world of business, someone who is disrupting things quite naughtily on the whole and they have done it to a very, very good effect. If you have missed any of the previous two hundred and fifty or so, go into iTunes, put in the words ‘Jazz’ and ‘Shapers’. CityAM.com is another destination or if you are travelling with British Airways in the near future you can also pick us up over there. Tom Blomfield is my Business Shaper today, my disrupter, my naughty disrupter, co-founder and CEO at Monzo. They are the digital only, the phone only bank and they have built already over 400,000 accounts over the last two and a half years and we have been hearing a bit about your background Tom and how you got to this point. When it’s your own and it starts to go well early on and it’s clear that people want to get behind you, is it super buzzy? I mean or are you so deep in the, are we going to make this work kind of area to not enjoy it. Did you enjoy those first sort of three to six months or nine months? Truthfully.
Tom Blomfield
I love starting things. I love creating, starting with the metaphorical blank sheet of paper and bringing something to life. Sort of injecting energy and momentum and creating something out of nothing. That’s very, very exciting. But I think you are right that I don’t think we paused to appreciate the good times and successes enough. I think we, because you’re so deep in, and even today, you are so deep in the business and focussed on the detail, you focus on things that are going wrong. Because if you just focus on the things that are going well then things that go wrong kill you. So it’s a real, people have called it a rollercoaster, I think that’s entirely accurate, the ups and downs are even hour to hour sometimes. Sort of uncontrollable, but it’s exciting for sure.
Elliot Moss
And the creation phase and I am assuming you are still in it, I mean…
Tom Blomfield
Oh yeah
Elliot Moss
…that’s going to go on for a while.
Tom Blomfield
I hope so.
Elliot Moss
The innovation, because once you’ve sort of said we make a decision, we are going to be on our phone because phones are everywhere now and phones are super clever as you said, a super clever computer in your pocket. How do you ensure that innovative spirit is embraced every day?
Tom Blomfield
I think you hire people who question everything and you keep trying to hire those people and keep asking them to tell you when you’re getting complacent. Now I’ve got ideas that are now two and a half years old, they might not be the right ideas anymore. So we try to hire very smart, very inquisitive people who challenge everything. And it’s exhausting if you are, if you’ve sort of worked in a bank for twenty or twenty five years and you get a twenty three year old coming along and telling you actually maybe the way you’ve been doing it for fifteen years isn’t the right way. It can be, you need to be the right kind of person I guess to be able to deal with that level of disruption of challenge, but I think ultimately it keeps everyone on their toes and make sure, I think makes sure we are actually building something that people want. I think the problem with banks is they’ve, they focus on selling financial products, they think we’ve got a mortgage book and a credit card book, how do we sell more of these things. Whereas if you start the other way round and say, we have a bunch of customers who have cares and worries and concerns, how do we address those things, how do we improve our customers lives, what should, what kind of problems should we even be solving. I think that’s the key to making sure you’re building something people want.
Elliot Moss
And can you really do that as a bank because I guess that to me is the question that we all have different relationships with our banks, some people have very neutral ones, some people get positively angry because they feels like they are being disrespected and taken them for granted. I don’t know how many people love their bank, I mean I happen to really like, I talk very highly of the bank I bank with, but I think I am pretty unusual. How do you get people to really love you?
Tom Blomfield
I think you design for their problems. My issue with my old bank is it always feels like I had to fit around the way they did things. You know they’ve got systems or processes or the way they think about their products in a very rigid way and if I didn’t fit into that mould, it was going to be very, very painful for me. And if instead you say how do humans think and behave and feel, let’s fit around them and just make it intuitive and delightful. The result is astonishing and the average pretty, pretty sort of techie I guess, the way you measure this is net promoter score. How many people like you versus don’t. The average bank has a net promoter score of around negative ten which is very, very bad. Apple is about plus eighty five.
Elliot Moss
And seventy five plus is world class isn’t it on that scale I think.
Tom Blomfield
I think the last measurement we did was plus eighty three.
Elliot Moss
Wow! Plus eighty three. You heard it here first. That’s a pretty high score of people that said they love you. Stay with me to find out more about how Tom has done it. That’s Tom Blomfield, my Business Shaper, co-founder and CEO at Monzo. Time for some more music right now though, I promised him earlier, here he is, it’s Dave Brubeck with Unsquare Dance.
That was Dave Brubeck with Unsquare Dance. Tom Blomfield is my Business Shaper, co-founder and CEO at Monzo, they are the phone only bank. I want to talk about the name for a second because it wasn’t always Monzo was it?
Tom Blomfield
It was not.
Elliot Moss
And this talks a little bit about challenges in any business. You had another name?
Tom Blomfield
We did. It was Mondo. Originally we were Mondo.
Elliot Moss
Mondo. Mondo there was a problem with the trademark?
Tom Blomfield
We had a little challenge. Another company decided they had a trademark that was too similar so.
Elliot Moss
So you had to change the name?
Tom Blomfield
We did.
Elliot Moss
Which could have been a disaster. We may not be talking if you would have kind of taken it the wrong way and sulked or something. You evidently didn’t. You are still smiling about it. Tell me firstly what you did briefly and then secondly what you learnt about yourself in that process?
Tom Blomfield
So what I did originally was go and talk to our Board who are very, very sensible people who said don’t fight this, just sort of pick a new name, you are small enough that no one will remember it. And I went to talk to our lawyers who happened to be Mishcon de Reya actually on the trademark side who said exactly the same thing, don’t bother fighting this, just change your name and I dug my heels in for nine or ten months and you know got very emotional as it’s a very personal thing, it’s our name. And ultimately that was a very bad decision and so when it became apparent that we were going to have to change the name we went out to our community. We actually made a very, very positive thing of it so we went out to, I think we had 50,000 to 60,000 customers at the time and said we’ve got to rename, we would like your suggestions. So we asked for people to invent names, take pictures of themselves with the sort of new name with a sort of selfie of their face. We got 14,000 suggestions in about forty eight hours and it had to begin with M. There actually are not that many combinations of M words with vowels in, so I think we probably sort of brute force the entire possible range of M words and six people suggested Monzo. Which we really liked. It was close to Monzo, Mondo now.
Elliot Moss
You see he’s already forgot. You have confined it to history. We don’t even need Mondo. Who are they? It’s Monzo!
Tom Blomfield
Exactly. And we could get the dot com and we could get the twitter handle and you know the sort of practicalities that did matter and we renamed and it was actually a really, really good event. So I think we turned something that could have been a, frankly a real pain into something that was hugely positive.
Elliot Moss
And the learning part for you?
Tom Blomfield
Erm.
Elliot Moss
I’m not letting you off that lightly.
Tom Blomfield
The sort of, those experienced people on your Board and in your legal team are probably right sometimes when they say just sort of don’t fight this one, just be sensible. A little bit too much testosterone probably in the early days.
Elliot Moss
We will have our final chat with the now calm Tom Blomfield. Plus we will be playing a track from Herbie Hancock after the latest traffic and travel here on Jazz FM.
That was Herbie Hancock with Cantaloupe Island. Tom Blomfield is my Business Shaper just for a few more minutes. He is the co-founder and CEO at Monzo. You have been hearing it was called something, he had forgotten himself what it was called, they’re the digital bank, the phone bank. You are very well funded, you’ve been backed by lots of people now and I believe that there is more funding probably down the line. How does that feel in terms of you being beholden to the people that have funded you? How much freedom do you have to do what you need to do? Is it a hands distant relationship or are they quite close to your strategy and the delivery that you say you are going to be able to do?
Tom Blomfield
Very, very close. I think that’s important when you are raising investment. You’ve got to take the time to find people who really are aligned with where you want to take the company with the vision and if you do that then actually it’s a big help because they can kind of keep you on track and remind you of your shared vision. I think if you have conflicting goals, it can become very, very difficult. But luckily our big investor’s passion and thrive are both totally aligned with where we want to take the business I think in the next seven or eight years. And of course we do crowd funding so we have six or seven thousand individual sort of customers who are shareholders. We did a big crowd funding round that sold out in ninety six seconds which I think was a world record at the time which was amazing because it meant so many of the people who had supported us from the early days could actually invest and buy real stock at exactly the same terms as these professional investors. The only disappointment was that we were six or seven times oversubscribed so we had thirty odd thousand people who wanted to put money in, but couldn’t so I would love to do something to address that in the future.
Elliot Moss
In terms of the money and obviously this is a long play and I think I have seen you quoted saying you know we want to build a British Google or a British Facebook and I have spoken to a few people like that over the years here. What is the most important thing to you, is it the legacy that you will leave of being the team behind the British equivalent? Is it the money? Is it just the fun? Is it this rollercoaster? I mean what is the thing that is now driving Tom forward?
Tom Blomfield
I think it’s about having an impact on the world. Sort of, we are only on this planet for a defined period of time I guess and you can choose how you spend that time, you can try and accumulate wealth or whatever it is, and I think we have the opportunity to in some small way improve the lives of potentially millions of people around the world. And I think if you are thinking, you know, it’s a rainy day and you’re in bed and you sort of looking at the window thinking do I really want to go to work today. What’s it all about, why am I on this planet. Having the opportunity to create something that positively impacts the lives of hundreds of millions of people or a billion people potentially is a pretty good reason to keep going.
Elliot Moss
And I imagine that obstacles aren’t obstacles to you, they are just, well we are going to make it happen?
Tom Blomfield
Annoyances.
Elliot Moss
Annoyances. Irritations. They are sort of glitches in the matrix and you are just going to fix them.
Tom Blomfield
Yeah.
Elliot Moss
I sense that you almost, it’s kind of, you have a bring it on attitude?
Tom Blomfield
I think that’s probably right. You find a way around or under or over or just straight through the middle of it. Yeah.
Elliot Moss
A final, a couple of things just before we have to round things up. You’re growing at a rapid pace, the team is growing, I believe you’re going to be opening a customer service centre at some point in Wales.
Tom Blomfield
Potentially. We haven’t decided, we are looking at a few sites.
Elliot Moss
Right. But as it gets bigger inevitably you will lose some control.
Tom Blomfield
Oh of course.
Elliot Moss
Are you happy with that?
Tom Blomfield
Yeah.
Elliot Moss
It doesn’t bother you?
Tom Blomfield
Very happy.
Elliot Moss
That’s not the issue for you, that’s not an issue?
Tom Blomfield
No. No, no, no. I think the potential, the benefit of growing bigger is we get to attract more and more and more talented people to make our vision a reality. There is no way that three people in a bedroom can build a bank that serves a billion people around the world. We need to collect hundreds and then thousands of the brightest minds in the world to make this a reality. That’s exciting.
Elliot Moss
It’s very exciting and I believe you are going to do it. Just look at your eyes, this is a guy you don’t want to muck around with. Tom thank you so much for chatting to me today. Just before I do let you go, what’s your song choice and why have you chosen it?
Tom Blomfield
My song choice is I’ll Build a Stairway to Paradise by Sarah Vaughan. This was another democratic process, we put it to a vote within the Monzo office and it was the popular choice at Monzo and I think it reflects what we are trying to do at Monzo.
Elliot Moss
Excellent and here it is just for you and the democratically chosen team that have decided this is what it is.
That was Sarah Vaughan with I’ll Build a Stairway to Paradise. The song choice of my Business Shaper today, Tom Blomfield. A challenger right from the get go, someone who was always questioning things, great set up to become an entrepreneur, super determined. You should have seen the look in his eyes with pretty much every word he said. He is very clear what he wants to achieve and ambitious, a huge objective to become the next Facebook or Google but the UK version of it. Brilliant stuff. Do join me again, same time, same place, that’s next Saturday at 9.00am sharp for another edition of Jazz Shapers. In the meantime stay with us, coming up next it’s Nigel Williams.