CEO Series: Larry Diamond of Zip (ASX: Z1P)

HOSTS Alec Renehan & Bryce Leske|28 April, 2021

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

It’s the most eagerly anticipated episode of 2021! We sit down for a chat with Larry Diamond – the founder and CEO of one of the ASX’s hottest stocks and one of the most discussed companies in the Equity Mates community, Zip Co (ASX: Z1P). Prior to founding Zip, Larry spent four years at Macquarie Bank and two years at Deutsche Bank. In this episode, Alec and Bryce chat to Larry, and hear his thoughts on BNPL competitors, his thoughts on regulation, his leadership philosophy and future plans for Zip.

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BRYCE LESKE: [00:00:40] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett status, our aim is to help break down the world of investing from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? [00:00:55][15.5]

ALEC RENEHAN: [00:00:55] I'm very good, Bryce. This is a big episode for Equity Mates very big, very excited. ZipPay probably one of the hottest stocks in the equity markets community at the moment. A lot of chat about it for you means going around about it soon, mainly created by the government since the depths of covid Zip is up over 500 percent. One of the buys now pays later stocks for people who are unfamiliar. And we've got to say, oh, unbelievable. I believe it is. [00:01:28][33.3]

BRYCE LESKE: [00:01:29] Yes, believe it. We've been chasing Larry Diamond now since the summer series of 2020. [00:01:35][5.3]

ALEC RENEHAN: [00:01:36] I'm playing hard to get here. [00:01:38][2.0]

BRYCE LESKE: [00:01:38] I know we promised him in that series and we have delivered [00:01:41][3.2]

ALEC RENEHAN: [00:01:42] nothing if not persistent. [00:01:43][0.8]

BRYCE LESKE: [00:01:43] Yes. We got Larry, who is the founder and global CEO of Zip co. We were lucky enough to spend some time with him sandwiched between board meetings in an office in his ZIP HQ. So, yeah. [00:01:59][15.4]

ALEC RENEHAN: [00:02:00] Before we throw to that interview, two quick pieces of housekeeping. First one tonight is our live show. While physical tickets have sold out, you can still watch the live stream free to watch the livestream. You can just jump on any of our social streams to find the link to the event. Right. So watch us tonight as we break down the alcohol industry. [00:02:22][21.6]

BRYCE LESKE: [00:02:22] 7:00 p.m. [00:02:23][0.4]

ALEC RENEHAN: [00:02:23] seven p.m. kickoffs, the second piece of housekeeping. ASX Investor Day is coming up. And we are the ASX is an official digital media partner. But really, Investor Day is a great opportunity to hear from some of the best investors from around Australia. They are holding investor days in Sydney, Melbourne and Brisbane. And you can sign up and get tickets to go. Yes, price. You have the details. [00:02:51][28.5]

BRYCE LESKE: [00:02:52] That is right, Ren. You can sign up using our code just for you guys, which is ID50 and you'll get fifty percent off your tickets, which brings it down to 27.50. The event is going to be awesome, as Ren said, Brisbane, Melbourne, and Sydney. You're going to get access to some incredible speakers on the day. There's going to be content for beginners, intermediate,s, and experts. It's going to be awesome. The good news is if you have missed our live show, we are going to be at the Sydney event all day, running around doing crazy things, crazy, crazy things. And you can hang out with us on the day, which is going to be awesome. So get your tickets to the Sydney event. If you are in Sydney, it's at the International Convention Center. [00:03:35][42.5]

ALEC RENEHAN: [00:03:35] So Brisbane is on the 8th of May. Melbourne is on the fifteenth of May. Sydney is on the 22nd of May. It will be a good day. If you're in Sydney, come to say hi to us. And wherever you are, if you want 50 percent off the tickets, use the code ID50. I think that's enough housekeeping. [00:03:50][15.1]

BRYCE LESKE: [00:03:51] Yeah, we'll put all of that in the show notes and Ren. It's time to crack into our long-awaited interview with the co-founder. [00:03:59][7.7]

ALEC RENEHAN: [00:04:02] Global sales CEO and visionary behind one of Australia's premier by now piloted companies zippay is Larry Diamonds. So, Larry, thanks for joining us today. We love starting these Ceo series interviews off by hearing the CEO describing their companies in their own words. So to kick us off today, how would you describe Zip? [00:04:26][23.9]

LARRY DIAMOND: [00:04:27] I normally like to start with the purpose in the mission. So, you know, thanks for having me on the show. It's good to be here. So the purpose is the freedom to own it. Okay. And it talks to quite a few things it talks to. We give customers the freedom to own the dress, own the moment, own their experience, own their financial well-being. And a lot of our products do that. We also give merchants the freedom to own it, get another customer, grow particularly small business. We own the responsibilities that come with issuing microcredit in real time. And that goes again to the DNA of the product in the org. But the freedom to own and actually talk to the culture that we're kind of building here and how we've architected the org and we can talk about that a bit later. So it really kind of you kind of see throughout our org and our mission is to be the first payment choice everywhere and every day. So how do we get people using zip the digital wallet? We have started out in buying our Pelada, but we have ambitions to be really the wallet that you go to, whether you're a consumer or small business for all your payments and globally. [00:05:24][57.4]

BRYCE LESKE: [00:05:26] So we love hearing the journey of a founder and particularly some of the tough moments, because that's often where you learn some of the biggest lessons. What has it been like founding zip, and have there been any particularly rough moments that you've taken a massive lesson from [00:05:42][16.2]

LARRY DIAMOND: [00:05:43] that is that is a loaded question. [00:05:44][1.2]

ALEC RENEHAN: [00:05:45] Good question. To imagine what's coming. [00:05:48][3.3]

LARRY DIAMOND: [00:05:49] Yeah, there's plenty of moments where sort of seven, seven to eight years in. Yeah. So you can just imagine there have been many moments that, you know, in a parallel universe, in a different galaxy, the car went left instead of right and we wouldn't be here having this conversation. So, you know, we started out very unorthodox in terms of fundraising and our listing, as well as probably another another conversation. But the crunchiness moments, I would say, were running the business on the smell of an oily rag where you couldn't pay salaries, but somehow convinced our core crew to work with either no salary or reduced salary for a long time. Wow. Okay. And you need a lot of passion, determination to do that so that those moments where we were out of cash happened multiple times. You couldn't see it, but it was happening behind the scenes. But you still try and pretend you are, you know, at the poker table. You might have to seven unsuited, but you still you play well. And I think the other one is just in the earlier rounds. We needed a lot of debt capital for if someone went into the bicycle shop and bought the bicycle, we had to give the merchant the money the next day. And we committed to that right from the very beginning that we would pay no later than the next day. And often weekends would come and we had because we start out, we shouldn't have. So we used to have to call around and get the pickup truck and just try and find five grand, 10 grand, whatever we could to make it work. And, you know, but there have been lots of moments along the way inside the company and external factors that have which we can go into. [00:07:19][90.4]

ALEC RENEHAN: [00:07:20] So there's a lot of love for by now, by later in the equity markets community and I guess in the Australian retail landscape more generally. I want to use this interview to correct a misconception, though people often think after pay was first, but it was first founded, what, two years before, after pay listed two years before EFTPOS. Well, does it annoy you that people think about after pay as the first? [00:07:43][22.7]

LARRY DIAMOND: [00:07:44] Uh, not really. I mean, we so we incorporated in June of 2013, our first customer, Naomi, came through cycles. She bought the hipster bike for six hundred dollars. Instead of putting on your credit card and getting stung with 20 percent interest, she paid in six months interest free. So we started out more disrupting the big end of town. Right. And then we came into full sort of digital wallet. I think everyone puts people in this by now, people out a box. But when you look under the hood, you know, a credit card is a form of buying our pilot. This thing has been around since Gerry Harvey and their finance companies pioneered this. So I think the committee likes putting people in boxes. But I think what you'll see is over time, all these companies actually quite, quite different, end up in a very different place, even though they might be named the same thing. [00:08:27][43.4]

BRYCE LESKE: [00:08:28] So in twenty nineteen, you guys announced a partnership with Amazon, a massive score for you guys, I guess. What was the process in, like, getting that deal done? How did it all work? [00:08:39][11.4]

LARRY DIAMOND: [00:08:40] So, you know, if I, if I tell you I have to kill you [00:08:44][3.3]

BRYCE LESKE: [00:08:44] because I'm going to take that. Yes. I'm willing to take that long term. [00:08:48][4.3]

LARRY DIAMOND: [00:08:51] So, look, that was a great one for us. And, you know, we had one of our guys who wasn't even in the sales team brought that deal and close that deal. So it just shows that can come from anyone who's got the passion, the hunger, the grit and the endurance and can actually show true partnership, can really do a deal. And so he was in the sales team and he and he landed. He got us live. We were really excited. And it took a long it's really relationship building, showing your cards, being really transparent. We didn't have all the answers, but we are a lot of business analysts. So we'll go into a sales process where and this started right from the beginning when we were pitching sharply cycles. We never had the product. Right. And it was nice. If you wait to have the product, you never get there. So you have to always be ahead of the curve. And I think but by showing a bit of track record and then convincing people that you can do stuff so we can have all the answers, but we love that moment because it actually helped galvanize the whole company to level up to the next level. And so we threw, you know, sixty engineers in. We rebuilt the core parts of our system. We taught ourselves delivery. When you look back, it was quite a pivotal moment for the company in our evolution to the next phase of product engineering and delivery. You know, that's really trying to instill confidence in the other side that you can get the job done even if you just don't have any of the solutions right here today. [00:10:11][80.4]

BRYCE LESKE: [00:10:12] What are you pitching at the moment that you don't have? [00:10:14][1.5]

LARRY DIAMOND: [00:10:15] Plenty. Plenty. You just need a prototype. Yeah. Yeah. Even if there's nothing there's no database. There's no there's nothing behind. There's just, you know, it's all believability. [00:10:25][9.5]

ALEC RENEHAN: [00:10:27] So we've just lived through a pretty crazy year with covid. And I think for you know, for Zip it's been an unbelievable year after the covid. Your share price has been up about 350 percent a great year. You take that that [00:10:42][14.8]

LARRY DIAMOND: [00:10:43] good for the shareholders. Yeah. [00:10:44][0.9]

ALEC RENEHAN: [00:10:45] What's it been like from the inside, like navigating covid, getting through that period and then seeing the year that has unfolded since? [00:10:52][6.6]

LARRY DIAMOND: [00:10:52] I know it has been because basically I've been almost 12 months since the pandemic hit Australia and the markets. I mean, we were I remember because we were actually over in Bali with a few friends and we just watching the share price starting to go down. I think we're at three dollars and then it went to two. And this was really before the markets really shat themselves. And we were I was getting calls from the board, from investors, what's going on. And we actually started dropping a little bit before the panic. The markets really seized up. So we are supposed to go on a ten year wedding anniversary, which we had marked by the Maldives. We had that pinda since the honeymoon. And look, the pandemic was hitting. I had this back home, so we canceled the trip and came back home. Life wasn't super happy about that. And we actually went into a war room. Right. You know, and the share price got down to, I think, low on dollars. Right. And at that point, a lot of the assumptions that you hold true no longer hold true. So this idea that we are, you know, a growth company, we invest for growth. The results come through, share price responds. And where growth capital and underpinned by strong unit economics, you know, the ability raise capital ability to go into new markets. A lot of those things no longer held true because you couldn't rely on markets. And so we actually it was day by day we ended up forming a view that were very uncertain about the future, not just consumption, know people using it, but also credit as well. And so we ended up letting go about 20 percent of staff doing it all via Zoom. And that was an experience in and of itself. And I've had a lot of retrenchment lessons to make to do the best that we could then as well. And then as we started to see the data come through, credit was actually looking pretty good. People were shopping online and then the market started to correct. And so, you know, we really could be in a very different place today. You know, and the other big pivotal moment for us as we were so close to signing the US deal with quite pay. We basically negotiated all the terms and then the pandemic hit and it was all based on share price and we collapsed. So we had to basically abort. And then as we started to see the market recover, I said to Tommy, who's actually a strategy, look, I think there's a window here that we can actually make this happen. But you've got four weeks to find a couple hundred million bucks during that time, it pulled it off. And the rest is history. But to be where we are today, contrasting it is very privileged. And so we're kind of continuing to run. We've stepped on the gas and we're running even faster. [00:13:21][148.6]

ALEC RENEHAN: [00:13:22] Well, speaking of stepping on the gas, could pay has mass is it's doing incredibly well in the US. The growth numbers that you recently reported were pretty incredible. The AFA asked of the question, will zip be dual-listed or will it list in the US if US business gets bigger? Since then, after pay are exploring a US listing. We love to break some news here. So is that something that's on your radar? [00:13:48][26.8]

LARRY DIAMOND: [00:13:49] I'm afraid I killed your partner. No, I mean, you know, for us, no news on that front. You know, we're still very focused on building a massive business over in the US. I think that's that that's really. And look for us as well. We are looking at as our business becomes more global, how do we get we've built up a fantastic retail base here. You know, we've got over, I think, over 150000 investors here in Australia, which is awesome. And that's why we like doing shows like this, because, you know, we actually want to talk more and more to the retail side on the east side. We obviously talk to them one on one, but we're trying to get more US and European investors onto the register to help us on the next phase of the journey. So there are a lot of conversations happening over there. And this week, my body clock, I've shifted a bit earlier, so I've been getting up in the fours and it's it's really shaking things up so I can pretend I'm in America. [00:14:42][53.7]

BRYCE LESKE: [00:14:45] I see. How much of your time is spent on investor relations sort of stuff these days? [00:14:50][4.4]

LARRY DIAMOND: [00:14:50] It's probably more around critical moments, you know, quarterly results for your results or any M&A deals. But, you know, p21, the other cofound is also pretty good. We've actually shared the responsibilities over the last few years. And so that's certainly helped. If I if I can't make a meeting, he can make a meeting. We both understand it can tell the story. He's probably lending a lot harder the last six months and even the four hundred million dollar raise we did last week, he pretty much did most of it. So we have to give him a pat on the back finally. And but it's a key part. It's just just like sales. You've got to pitch merchants, you've got to pitch staff, got to pitch investors. You've got to keep that story going, show them the future. And how are you going to get there. [00:15:31][41.0]

ALEC RENEHAN: [00:15:31] Mhm. Well I can say your team has done an incredibly good sales job in. The equity markets community and we do bold predictions at the start of every year, and the number one bold prediction with a bullet was that ZIP will outperform all of your competitors. So you got a lot of love there. We reached out to them and asked what questions they had for you. The number one question that came back was around competition. And obviously, there's a lot of by now Pilade players, but also PayPal, CommBank, everyone's getting involved. How do you think about competition in the space and how do you think you'll differentiate? [00:16:04][32.2]

LARRY DIAMOND: [00:16:05] Yeah, so a good question. I think if maybe we'll talk global and then we can talk local. So I think globally we have a really good differentiated proposition before we get into the product. I just think the culture here is totally different. If you peel back the hoods of any of our peers, PayPal, I mean, what engine are you going to see right now? You know, the organization that we build here is smaller teams that own their own, their destiny. They get rewarded in stock. They innovate, they move quickly and they feel like business owners. And you see that with the US guys and here. And so I think the passion, what you see under the hood is very different. So whether you lose this battle, you know, we're confident we're going to win the war. [00:16:43][39.0]

LARRY DIAMOND: [00:16:45] Globally interms of the product strategy, it is very, very differentiated. So no one is we offer interest-free installments for small dollar baskets and big dollar baskets. We've done that here very successfully as a big differentiator. But you'll see that happen in all other markets. Right now. We largely have pain for in the US, Canada, New Zealand and the U.K., but we will be adding paying six percent or so. We know how to offer interest-free installments of any size, which is really important because some products you'd need to pay back over a longer time, you can't pay back in six weeks. The second key pillar is that we derive income both from merchant and customer and that we are reimagining credit. So the customer fees are fair, simple and easy to understand. In Australia, for example, with zippay we remove the interest entirely and we just have simple fixed fees, it's easy to understand. And then what that does is two things. One is it makes the model much more bulletproof. You might have margin compression, things like that on another site. It also means you can play in many categories, some categories, razor thin margins for retailers, you know, and so we think that works really, really well. The third is that we run both an open loop and closed loop network. So, you know, we integrate into all these merchants online, but we also issue a virtual card, which means that you can buy now paladar everywhere. And so in America, the average customer is transacting 30 times a yes, you actually get a more engaged customer. And then we go back. And I think fourth is, you know, our credit decisioning and global presence is now interesting for retailers to integrate once multiple markets. So I think those differentiating features if you look at Australia like PayPal, they don't really have an offline business. Right. I think there are many others that have come into space who are probably a little bit late, you know, and so retailers, some retailers will have the NASCAR strip of payment options at the checkout. But in reality, that's not particularly helpful if you're coming in fifth, sixth and seventh unless you've got a huge base. So we actually love competition. We wouldn't be here today without the greatness of competitions and really formidable peers and also drives awareness. So sales cycles took four years. Some of the retailers you know, I remember emails that I sent them six years ago coming on board now at that sale cycle. Right. Is being shortened because of the awareness and understanding. So I think that the whole tide lifts. [00:19:07][141.4]

BRYCE LESKE: [00:19:08] Another question from our community revolves around regulation, because there's always that sort of concern about what will happen. And the question is around, you know, what regulations do you anticipate might be put in place and what impact that might kind of have on them? [00:19:23][14.8]

LARRY DIAMOND: [00:19:24] Yeah, it's a good question. So, I mean, if you remember when I spoke about the purpose, the freedom to own it, we own the responsibilities that come with issuing microcredit and playing in financial services in real-time. And that's been at the heart of the business. So how we assess risk having to show the right customers come to the platform and equally, those that aren't ready or don't want it, we have other options for them, you know, pocketbook, PFM and other wallet services that we'll be adding. So our view as well is that we have a duty of responsibility. Okay. And as fintech gets easier, you've got you've got to become better. You've got to put more control into the hands of customer. Australia's been probably a good example of what could happen across other markets right where this starts to take off. And then customers want to use these alternative payment methods. They don't want to use the credit card. It's better for them. And so all of a sudden, the industry starts to appear and then regulators start to understand. Well, first, the first part of I think the regulation is let's understand what this is. And we saw this a few years ago where ASIC spent some time understanding the industry. Who are the players? How are they different? The models are different. And what they validated was that you know, four out of five millennials wanted to use these products and services in the subsequent 12 months. Why, because it is better in the credit card, it pays back faster, it's interest-free, encourages great behaviors, even if you fall behind the account, automatically locks. So this idea that regulation meets innovation and vice versa is really important. And so if you look at if you go for a mortgage or if you go for a car loan or if you go for a credit card or if you go for a bondholder, you should do different things depending on what you're going for. So I think this sort of fit for purpose is is is really important. And, you know, we've continued to push for minimum standards across the industry. We've got the lowest late fees and late repayment rates of all our peers here. And so for us, you know, we advocate it massively. We have a credit license for the big four over the longer-dated product. And so we deeply understand it. So our view is a lot of the globe is going to come through this. Let's understand the sector and let's make sure that we put the right safeguards in place to make sure the right customers come onto the platform. And equally, those that shouldn't are catered for. [00:21:30][126.4]

ALEC RENEHAN: [00:21:37] One aspect of, I guess, speaking to these CEOs that we really love is learning about your leadership philosophy and about the people and culture of the companies that you run because as retail investors, it's often hard to get that information. Yeah. So would love to pick your brain a bit on that and to kick it off. Do you have a leadership philosophy as CEO? [00:21:56][18.7]

LARRY DIAMOND: [00:21:56] You know, I've worked in a lot of corporates, so I really know how not to do it. So when I started this, it wasn't to suggest I knew how to do it, but I knew how not to do it. This idea that you've got to create an environment, a playground where people like coming to work, they can speak openly, you know, they might make a mistake, but that's okay. It's a learning environment. And they feel at home they can stretch themselves. They can really shoot for the stars. They're supported. And it's just the obvious stuff, right? If you want to hang out with friends and you want to learn and kind of grow. So so for me, it was around creating a playground where you could actually do that. And so if you look at zip, it's very flat architecture. We speak openly. We have a concept called zip back fast, fair, transparent feedback. And again, as long as you are willing to listen, be self-aware, learn and then, you know, improve just a little bit, you know, each one of us can improve just a little bit. The team improves just a little bit, company improve just a little bit. Those compounding effects become unstoppable. So I want to say there's one philosophy, but we certainly it goes we have some values that we've now instilled in the business. And we're at the stage now, which is quite interesting. When you're a small company, everyone knows the vibe, they know the culture, but they get it because they see how we all behave, how we act and what we do. But as it gets bigger, that becomes much harder, different markets as well. So actually going through a phase now where we're trying to codify who we are, you've got to call it out. And so therefore, if you're hiring people, you can check do they have these ingredients? Because every company is going to be different is it's not for everyone, right? We've had people come and it hasn't been right, but we've got a lot of great people who are here. So you've got to make sure you can check who's coming in and make sure that we call it we call each other out if we aren't embracing the sort of principles. And so as a leader, as a leader, you've got leadership principles. One is you've got to be you've got to understand people and be empathetic to is you can't be in that ivory tower. I need all these layers. You've got to know the detail. You've got to be in the weeds. You've got to play the long game and the short game, and you've got to grow your people and then own it. You've always got to be above the line. So we're starting to put these things in. But I think, you know, we've done a good job, a long way to go. But I think for us, the definition of success in three years and in five years won't be 50 or 100 million monthly active users in developed and developing markets. But it's an organization that can move at the speed of zip like a start up. But when you're a big global business, so you've got small teams optimizing for speed, they can make their own decisions, like get you to know, management has to get out of the way that teams that no parts of the business need to make their own decisions. They can innovate, they can experiment and run fast. [00:24:33][156.6]

BRYCE LESKE: [00:24:35] Equitymates isn't quite as large as Zip. We're looking at, you know, in the process of hiring. And you've spoken about, you know, a few times passion and hunger within your staff. And at one point you're able to convince them to work without pay. How do you think about employing based on that passion and hunger versus actual skill set and the dynamic between the two? [00:24:58][23.5]

LARRY DIAMOND: [00:24:59] It's a great one. The system is more important than the individual than any one individual. So we would always go for attitude over aptitude if you can't look at it that way. But it's more about have they got the demonstration? A lot of great businesses. I wasn't doing this seven years ago. Some of our best people in this company came through customer service. Right? So they came in through customer service. They learned the business on the phone. They're listening to customers, they're hungry. And then it's like a secret sauce. Then they're in product, they're in strategy, they're in sales, and they're just leveling up, leveling up, leveling up. So I think if you've got a willingness to work hard, a curiosity, push yourself that is worth way more than a particular discipline of subject matter because you can actually teach most things. And so that's why I think if you can actually call out what your culture is and the types of and you make sure that you kind of define that build that diversity in, that's what's more exciting. [00:25:54][55.1]

ALEC RENEHAN: [00:25:55] So I guess Bryce and I are co-founders of Equity Mates. You have a co-founder. Peter Gray would love to know what the dynamic is with Peter and like what it was like to sort of grow the business and how that relationship has to grow and change. We read that you refer to him as DR No. So we would love to know the origin of that nickname as well as DR. [00:26:16][20.9]

LARRY DIAMOND: [00:26:17] No, it's interesting. Yeah, we met probably in late 2012 and did not know him at all. So it's not like growing up together. We knew each other, we had friends and family. So he was pretty much yeah. I met online, went for a coffee and the rest is history. But you know we've got common values I. That's the thing, even though, you know, totally different ages live in different communities, different parts of Sydney and back different sporting teams, you know, the values are actually quite similar around the type of business that we wanted to create with a common goal of, you know, disrupting banking and financial services. So that's actually the same, even though we're completely different styles of thinkers and decision-makers. So I probably learned more around you. I started in sales. So, you know, I do say yes to everything and then we fix it, make it right. And he'll he's morally OK, you know, compliance, legal, regulatory, commercial. And he's run these businesses before as well. So it was a great marriage of the minds, but I was pushing the best customer experience, really pushing the envelope. How do we deliver the best customer experience, you know, talk to our customers the right way, have great tech behind it. And he was on the other side making sure that it was feasible and viable. And I was probably on the desirable. And so when you kind of the magic actually happens in the middle, and that's why complementary skills are actually the magic happens in the middle of that diversity of thought. And so that's really, I think, got us to where we are today. It's it's the balance. And so we do see how the jigsaw is really important in building great, great companies. [00:27:53][96.3]

BRYCE LESKE: [00:27:54] So we'll close out today's convo with a few questions about the future of Zipp. So what is the next sort of 12 months look like for you? Any product pipeline that you can tell us without killing us? What's your go for the short term? [00:28:07][13.1]

LARRY DIAMOND: [00:28:09] Let's I want to see you guys in 12 months. Not really. The big focus is, you know, we raised 400 million dollars last week, which is the biggest rise we've we've ever done. A lot of runway there. Big focus is USA becoming a real player over in the US. And we've got a great team there hiring very, very fast. And the business is growing phenomenally. So we really have to become a serious player in the US, UK. UK is going to and you're starting to see us play some bits in other markets. Right. And so that's important because again, we have ambitions to really be that digital globally. We've got to sequence how we get there right in in the right way. So in 12 months' time, you know, you'd expect to see the US doing really, really well. UK, which we just launched recently, that we've arrived on the same in terms of product strategy in in in Australia. If you look at here, we're much more horizontal in our strategy, got more things for consumers and more things for merchants. So that ecosystem play we really want to nurture. And on the consumer side, we've got, you know, between two to three million customers. How do we get more? Well, in summary, we are giving any forecasts, right. We need more. And so we need to find a way to talk to more customers and make the will that appealing to get them into the into there. And we've just kicked off ZIP business, which is really exciting, says it businesses, small business. There's three million who have been locked out of a lot of financial services. It's hard to get credit, it's hard to deal with banks. And what a great team. We've actually carved out the business as a separate tribe. So it's not going to be slowed down by the mother ship. And they're autonomous. They own it and they come back to us. And so they've just integrated with Facebook now so small businesses can pay for the ads, get some sales and then pay back later. We think it's a huge opportunity on the on the small business front and you'll see a lot more activity happening there. And if we get that right, we'd like to take that global to this is almost a place to play. And we've got other things that, you know, other features in the wallet that we're kind of trialing, like subscriptions. And, yeah, it's going to be an exciting night, 12 months into it. [00:30:15][126.6]

ALEC RENEHAN: [00:30:16] So if you think about some of the risks of the business to the business, so what would be the biggest risk for Zip at the moment? [00:30:22][6.9]

LARRY DIAMOND: [00:30:23] Look, I think as clichéd as it is, it's very much internal it's an internal governance one, which is around. Okay, we are taking on more and more. We're increasing the surface area of the business. And it's making sure that as we invest and as we drive results, it's underpinned by good unit economics and that we're investing that marginal dollar in the right place. Now, at the same time, we're scaling this business. So, you know, we started out two years ago with an Aussie team. We then bought the US business and we got the US team. How do we make a global exec team? How do we build the connectivity and really get the synergies from a global company? How do we make us feel like one so that we do have the benefits of global but running as fast small so that for me, getting that internal rhythm and I went to URL is how do we maintain that startup hunger and velocity at scale with great foundations, with security, reliability and so that's a lot of that stuff's happening at the moment so that we can flourish everywhere. [00:31:24][60.7]

BRYCE LESKE: [00:31:26] So I ready to close out. We've asked you about the short term, but the next ten years, what does success look like for you? Ten years. Yeah. [00:31:35][9.5]

LARRY DIAMOND: [00:31:36] As well, hopefully, having got a full head of gray hair. OK, you know, they've invented some, you know, anti-aging techniques. Zip is in your pocket and, you know, there's hundreds. If we are going 10 years out, we've got hundreds of millions of customers that that go to it for their wallet. We've made a huge difference to the developed and growth markets, which in 10 years time will become formidable parts of the universe. And we've built intense customer love, you know. So, you know, for us, it's not about vanity metrics. It's around engagement metrics. We really want to be making a difference to people through payment. So you just every day that gives us a reason to be their best friend. And then we help them make sense of this crazy world. They've probably got coins and crypto in their wallet. They've got shares. They've they're helping drive economic growth themselves through these amazing tools in the wallet. And hopefully, it's just all just works just doing [00:32:39][63.0]

LARRY DIAMOND: [00:32:43] and, you know, maybe Zip's on Mars, you know, if we could find out later integrated with Amazon, you've integrated with Facebook, you just go to integrate with Tesla. I bought a Tesla, so I had a crack at convincing him? so we're totally working on it. [00:32:45][2.9]

BRYCE LESKE: [00:33:02] Well, Larry, it's been an absolute pleasure chatting with you today. Thank you for letting us in between board meetings and who knows what else is going on. But we do appreciate the time and we know our audience who have got a lot of value out of that. And getting a sort of a look under the hood at what's going on in the way of thinking about it has been great. So thank you very much. [00:33:19][16.9]

LARRY DIAMOND: [00:33:19] Thanks for having me. And we'll do it again. [00:33:21][1.7]

ALEC RENEHAN: [00:33:22] Going to hold you to that [00:33:23][0.8]

DISCLAIMER: [00:33:28] Equity mates investing podcast is a product of equity, makes media all information in this podcast is for education and entertainment purposes only. [00:33:34][6.3]

ALEC RENEHAN: [00:34:24] Bryce, we have three policies here at equity markets. What's number one, we hate fees and we love brands that are finding ways to reduce fees for everyday customers. And that's why we're here today to talk about afterpay who in 2020 saved Australian customers. 110 million dollars in consumer fees and interests by using afterpay rather than traditional credit cards. [00:34:51][26.3]

BRYCE LESKE: [00:34:51] That is the right, Ren. It's been a great investment for me. And afterpay is changing the way we pay for the better by helping us all manage our money and to take back control. [00:35:00][8.7]

ALEC RENEHAN: [00:35:00] You just had to slip the investment thing in. [00:35:03][2.8]

BRYCE LESKE: [00:35:03] Though everyone knows I love afterpay. [00:35:05][1.8]

ALEC RENEHAN: [00:35:06] Yeah, well, look, you may not be able to love afterpay as much as Bryce, but you may love afterpay because you can use it online or in-store and it's really easy to get started. Just head to to sign up or download the app to pay up from your app store. Pay better choose after pay. [00:35:25][19.3]

BRYCE LESKE: [00:35:25] late fees, transaction limits, and eligibility criteria. Apply to visit for more details. [00:35:25][0.0]


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