Monzo CEO On Death Threats, Depression & Digital Banking Wars - Tom Blomfield | E86

Last updated: Jun 2, 2023

The video is an interview with Tom Blomfield, the CEO and founder of Monzo, discussing his experiences with entrepreneurship, including depression, anxiety, and the challenges of disrupting the banking industry.

The video is an episode of the podcast "Diary of a CEO" featuring an interview with Tom Blomfield, the CEO and founder of Monzo, a digital banking company. Blomfield discusses his experiences with entrepreneurship, including being fired from previous jobs for being disruptive and his struggles with depression and anxiety while building Monzo. He also shares a previously untold story about resigning from a previous company and the aftermath of that decision. The interview highlights the challenges and costs of entrepreneurship, including mental health struggles and the pressure to succeed.

  • Tom Blomfield was fired from his first job for being disruptive and not following instructions.
  • He believes in first principle thinking and always looks for better ways to do things.
  • Tom experienced depression and anxiety while building Monzo.
  • Entrepreneurs need to be aware of the challenges they will face, including depression, anxiety, and toxic relationships.
  • The cost of entrepreneurship is sometimes greater than the reward on offer.
  • The Diary of a CEO podcast is a platform for entrepreneurs to share their stories.
  • Being technical, determined, and able to listen to feedback are crucial attributes of successful founders.
  • Tom is impulsive and self-confident, and he has taken big life decisions without much reflection.
  • Tom has experienced depression and anxiety and thinks it's important to talk about mental health and reduce the stigma around it.

Monzo CEO On Death Threats, Depression & Digital Banking Wars - Tom Blomfield | E86 - YouTube

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Tom Blomfield's Entrepreneurial Journey

  • Tom Blomfield was fired from his first job at a consulting firm in London for being highly disruptive and not following instructions.
  • He is better suited to being a founder than an employee because he always looks for better ways to do things.
  • He believes in first principle thinking, which is looking at conventions and finding easier ways to do things.
  • He followed a conventional path in his personal life, but he is not married.
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The Challenges of Entrepreneurship

  • Tom Blomfield experienced depression and anxiety while building Monzo.
  • He resigned from a company he co-founded after six months because of a toxic relationship with a co-founder.
  • The co-founder called a company meeting and fired the entire team in response to his resignation.
  • Tom Blomfield cried a lot during this time and felt like he had no life outside of anxiety.
  • Monzo faced challenges from criminals and had to shut down their accounts, which sometimes led to threats of violence.
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The True Cost of Entrepreneurship

  • The cost of entrepreneurship is sometimes greater than the reward on offer.
  • Tom Blomfield's story is emotional, raw, honest, vulnerable, and gripping.
  • Entrepreneurs need to be aware of the challenges they will face, including depression, anxiety, and toxic relationships.
  • Tom Blomfield would not have started Monzo if he knew the amount of pain and heartache involved.
  • Aspiring entrepreneurs need to be resilient and prepared for both success and failure.
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Monzo CEO On Death Threats, Depression & Digital Banking Wars - Tom Blomfield | E86 - YouTube

The Importance of Sharing Entrepreneurial Stories

  • The Diary of a CEO podcast is a platform for entrepreneurs to share their stories.
  • Tom Blomfield felt that the podcast was the right place to share his story.
  • Entrepreneurs can learn from each other's experiences and be better prepared for the challenges of entrepreneurship.
  • Tom Blomfield's story demonstrates that all that glitters is not gold in entrepreneurship.
  • Entrepreneurs need to be honest and vulnerable about their experiences to help others.
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Early Years and Entrepreneurial Journey

  • Tom Blomfield went to a grammar school and did his exams, got a place at Oxford, and even did a master's at Oxford.
  • He was following the conventional path towards becoming a lawyer.
  • He built a hyper-fast-growing business, which was known as one of the UK's great disruptors.
  • He had already built a company called GoCardless, which is a payment processor.
  • He was an early NatWest user and was deeply disappointed.
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Conviction and Confidence in Taking on the Banking Industry

  • Tom Blomfield had a huge amount of self-confidence, naivety, and arrogance.
  • He assumed that he could figure out how to take on the banking industry.
  • He had a huge amount of optimism.
  • He was deluded to the stats and the probability of success.
  • He was self-aware enough to listen to feedback and not be blinded by his hypotheses.
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Attributes of Successful Founders

  • Being technical and able to write code is a huge leg up.
  • Being determined and resilient is crucial.
  • Being indifferent is the single biggest predictor of success.
  • Being able to find a way around, over, under, or straight through an immovable object is important.
  • Being able to listen to feedback is crucial.
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Investing and Fresh Mindset

  • Having a fresh enough mind to think that an idea can work is important.
  • Being naive and even quite young in your career is beneficial.
  • Having a lot of experience can be baggage that is hard to leave behind.
  • Being technical and able to write code is a huge leg up.
  • Learning to code is a great step into entrepreneurship.
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Tom Blomfield's Confidence and Impulsiveness

  • Confidence is a self-reinforcing cycle that can go upwards or downwards.
  • Experience can make someone less confident.
  • Tom was more confident when he was 28 than he is now.
  • Tom thought he knew everything at 27 or 28, but now he realizes he doesn't.
  • Tom is still a confident person, but he is different from his 27-year-old self.
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Tom's Risk-Taking and Privilege

  • Tom is impulsive and self-confident.
  • Tom has taken big life decisions without much reflection.
  • Tom is privileged because he grew up in the UK with great education and supportive parents.
  • Tom could take risks because he had a safety net.
  • Tom thinks people in the UK with supportive families don't take enough risks.
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Tom's Entrepreneurial Journey

  • Tom started GoCardless with Matt Hiroki because he quit his consulting job and got bored during his gardening leave.
  • Tom launched GoCardless and took it to a nine-figure valuation.
  • Tom left GoCardless early because he wasn't passionate about B2B direct debit software.
  • Tom joined a dating site after leaving GoCardless.
  • Tom was head of growth at the dating site, but the company stopped growing.
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Tom's Depression and Mental Health

  • Tom has experienced depression and anxiety.
  • Tom has received death threats and hate mail.
  • Tom has sought therapy and medication for his mental health.
  • Tom thinks it's important to talk about mental health and reduce the stigma around it.
  • Tom thinks entrepreneurship can be lonely and isolating, which can affect mental health.
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Challenges in Entrepreneurship

  • Blomfield's first startup, a dating site called Grouper, experienced a sudden decline in revenue and popularity after a period of success.
  • Blomfield was laid off from Grouper and took two months off before joining Starling Bank as their CTO.
  • Blomfield eventually resigned from Starling due to conflicts with the CEO, Anne Boden, and was followed by 13 other employees who started Monzo.
  • Blomfield emphasizes the importance of choosing co-founders carefully and being prepared for challenges in entrepreneurship.
  • Blomfield also discusses his experiences with depression and anxiety as an entrepreneur.
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Starting Monzo

  • Monzo was founded in a gin bar called Ask for Janus, where Blomfield and his former Starling colleagues spent two days discussing their next steps.
  • Blomfield did not pull anyone away from Starling; he simply resigned and wished them luck.
  • After Blomfield's resignation, Boden fired the entire company, including the 13 employees who later joined Monzo.
  • Monzo was founded with the goal of disrupting the traditional banking industry and providing a better customer experience.
  • Monzo's early success was driven by word-of-mouth marketing and a loyal customer base.
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Monzo's Growth and Challenges

  • Monzo's growth was initially slow, but it gained momentum after launching its prepaid card and mobile app.
  • Monzo faced challenges in obtaining a banking license and complying with regulatory requirements.
  • Monzo's customer base grew rapidly, but the company struggled to monetize its services and achieve profitability.
  • Monzo faced criticism for its handling of customer data and its decision to freeze accounts without warning.
  • Blomfield stepped down as Monzo's CEO in 2020, citing the company's need for a more experienced leader.
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The Future of Digital Banking

  • Blomfield believes that digital banking will continue to grow and become more accessible to underserved communities.
  • Blomfield sees opportunities for digital banks to offer more personalized and innovative financial services.
  • Blomfield predicts that traditional banks will continue to struggle with legacy systems and outdated technology.
  • Blomfield emphasizes the importance of putting customers first and building trust in the digital banking industry.
  • Blomfield is optimistic about the future of Monzo and its potential to become a leading global bank.
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Starting Monzo

  • Started with a group of 13 people, all there on day one.
  • Five of them became the founding team, with full stock.
  • Paul Rippon became deputy CEO and chief risk officer.
  • Gary Dolman became CFO, with experience at ABN Amro and Mizuho Bank.
  • Jason Bates focused on customer marketing.
  • Jonas Templestein became CTO.
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Importance of Co-Founding Team

  • Core team is the most important factor in determining success or failure.
  • Biggest mistake is hiring anyone without proper consideration.
  • Assembling a skilled co-founding team was luck for Monzo.
  • Debate on whether to try again or go back to previous jobs.
  • Fortunate to have a great set of skills in the founding team.
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Challenges in Disrupting Banking Industry

  • Initial feeling of competition with Starling Bank.
  • Had to rewrite code base and regulatory submissions from scratch.
  • Rebuilding process was nice because it was on fresh ground.
  • Never thought about competition, focused on taking market share from big banks.
  • Had a convoluted negotiation process with Starling Bank.
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Importance of Mental Health in Entrepreneurship

  • Experienced depression and anxiety as an entrepreneur.
  • Received death threats and had to involve the police.
  • Importance of taking care of mental health and seeking help.
  • Entrepreneurship is a rollercoaster with ups and downs.
  • Need to have a support system and take breaks when necessary.
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Entrepreneurship and Childhood Insecurities

  • Tom Blomfield's childhood insecurities about wanting to be rich and successful drove him to start his own business.
  • Money played a part in his motivation, but it was not the driving force.
  • Blomfield had a deep hatred for NatWest Bank and the frustrating experience of traditional banking.
  • He believed that banking could be much better, like the magical experience of apps like Spotify and Uber.
  • Blomfield wanted to prove himself and be seen as successful, seeking validation from family, friends, and teachers.
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Validation and Attaining Success

  • Blomfield has tasted what it feels like to be successful and validated, but the need to prove himself has disappeared.
  • He is not sure if he has a purpose now, but he is enjoying life and being more mindful.
  • Blomfield worked incredibly hard from a young age and rarely paused to enjoy the journey or small things in life.
  • Society conditions people to chase success and defer happiness to future achievements.
  • Blomfield had to reprogram himself to live in the moment and be more mindful.
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Frustration with Traditional Banking

  • Blomfield and his team at Monzo had horror stories about traditional banking, such as incurring fees for being 10p overdrawn for a day.
  • Traditional banking was frustrating and did not have to be that way.
  • Apps like Spotify and Uber felt magical, but banking was not like that.
  • Banking was a poor experience, requiring forms to change addresses even for online banks.
  • Monzo felt deeply that banking could be much better.
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Entrepreneurship and Mental Health

  • Blomfield experienced depression and anxiety while starting his own business.
  • He received death threats and had to deal with the stress of disrupting the banking industry.
  • Blomfield believes that entrepreneurship can be a lonely and isolating experience.
  • He recommends finding a support network and being open about mental health struggles.
  • Blomfield believes that mental health is a critical issue in entrepreneurship and needs to be addressed more openly.
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Entrepreneurship and Mental Health

  • Leaving his company caused deep anxiety and bordering on depression.
  • To recover, he took a year off and traveled around Europe.
  • He still gets urges to start a company or become an MP, but he quickly comes back to enjoying his life at the moment.
  • He struggles with the drive to fix something that's broken.
  • He volunteers in the vaccination program and thinks the smart use of technology could improve medical care.
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Favorite Times at Monzo

  • Being able to quickly prototype and build a product feature and seeing people use it.
  • Enjoying the quick iterative product development cycle.
  • Believing in brand and marketing after working at a dating site.
  • Taking a lot of the power of human psychology and brand into Monzo.
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Death Threats and Security

  • Monzo has a team that deals with security and death threats.
  • They have protocols in place to protect employees.
  • They have a good relationship with law enforcement.
  • They have a responsibility to protect their customers' data.
  • They have to balance security with convenience for customers.
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Disrupting the Banking Industry

  • Monzo is trying to make banking more transparent and customer-friendly.
  • They want to make it easier for customers to manage their money.
  • They want to make banking more accessible to everyone.
  • They are competing with traditional banks and other digital banks.
  • They are constantly innovating and improving their products.
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Building the Brand and Product

  • Started with a mission and values like transparency and community orientation.
  • Worked with a small team to build the brand and product.
  • Got into users' hands quickly and saw them enjoy it.
  • Hot coral Monzo card was unconventional and intentional.
  • Shared internal information and published product roadmap to build trust and humanity.
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Authenticity in Branding

  • Early marketing hires didn't work out.
  • Tristan Thomas, a 23-year-old community manager, was there from the first few months.
  • Authentic representation of who they were and what they believed.
  • Intentionally positioned themselves as a part from big banks.
  • Everything they did was human and transparent.
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Authenticity Over Marketing Books

  • Did well in the marketing industry without any experience.
  • Hadn't been diluted or polluted by conventions.
  • Authenticity gets you a long way.
  • Standing out and having a point of difference is important.
  • Authenticity is important regardless of target demographic.
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Best and Worst Times at Monzo

  • Best times were when the company was small.
  • Worst times were fundraising and dealing with the press.
  • Raised around 600 million and CEO did around 400 million of that.
  • Fundraising was never fun.
  • Press spent the first few years building them up as the next great hope.
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Challenges with Press Coverage

  • Monzo received negative press coverage despite doing good things.
  • British press has a tendency to build something up and then tear it down.
  • Monzo had to freeze accounts of people using it for financial crime, but couldn't tell them why.
  • Watchdog ran a program about Monzo freezing accounts and even commissioned an ice sculpture with a frozen Monzo card in it.
  • Press coverage had a negative impact on Tom Blomfield's mental health.
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Investment and Regulation Challenges

  • Regulation got really tough because Monzo was a bank and if it failed, the government had to refund everyone's money.
  • The rules were very strict because Monzo got so big so early and wasn't profitable.
  • Investment was also not fun.
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Depression and Anxiety

  • Tom Blomfield experienced depression and anxiety as a result of the challenges he faced as an entrepreneur.
  • He had to take a break from work and seek therapy.
  • He learned to prioritize his mental health and take care of himself.
  • He also learned to delegate and trust his team.
  • He believes that it's important for entrepreneurs to talk about their mental health and seek help when needed.
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Disrupting the Banking Industry

  • Monzo was founded to disrupt the banking industry and provide a better banking experience for customers.
  • Tom Blomfield believes that the banking industry is ripe for disruption because it's slow, bureaucratic, and doesn't prioritize customers.
  • Monzo's success has inspired other fintech startups to enter the market.
  • Tom Blomfield believes that the future of banking is digital and that traditional banks will have to adapt or die.
  • He also believes that fintech startups have a responsibility to be transparent and ethical in their practices.
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Challenges of Scaling

  • Organizational politics became a challenge as the company grew to almost 2,000 people.
  • Teams developed their own subcultures and rivalries, which hindered collaboration.
  • Some senior people started building their own "fiefdoms."
  • People from big banks brought toxic culture to Monzo.
  • Hard decisions were not made early enough to turn the corner towards profitability.
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Marketing Strategy and Profitability

  • Monzo's marketing strategy was to give away features to customers that cost the company money in order to acquire users without paying for marketing.
  • Operational losses were hidden in the marketing budget.
  • Hard decisions were not made to reduce costs and drive revenues earlier.
  • Investors' reinforcement of Monzo's business model became self-reinforcing and created an echo chamber.
  • Blomfield suggests seeking out doubters and interrogating them about the business to think through potential problems.
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Depression and Mental Health

  • Blomfield experienced depression and anxiety while building Monzo.
  • He felt like he was failing and that the company was going to fail.
  • He received death threats and had to take a break from work to focus on his mental health.
  • He emphasizes the importance of taking care of mental health and seeking help when needed.
  • He also suggests being open and honest about mental health struggles to reduce stigma and encourage others to seek help.
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Disrupting the Banking Industry

  • Monzo's goal is to make banking more transparent and customer-friendly.
  • Blomfield believes that traditional banks have not kept up with technology and customer needs.
  • He sees Monzo as a way to challenge the status quo and create a better banking experience for customers.
  • He acknowledges that there is competition in the digital banking space, but believes that Monzo's focus on customer needs sets it apart.
  • He also believes that there is room for multiple players in the market and that competition can be healthy.
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Challenges of Disrupting the Banking Industry

  • Transitioning to a profitable business model by cutting costs and driving revenue through hard decisions to limit some free features and charge for others.
  • Merging of startup and banking cultures to get a banking license, which is necessary for disrupting the banking industry.
  • Customer service is a big cost, and the benchmark is to provide it for less than £12-13 per customer per year.
  • Revolut's customer service has declined over the last two years, while Monzo's service is variable but still pretty good.
  • Automating more and using chatbots is the drive to cut customer service costs.
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Depression and Anxiety in Entrepreneurship

  • Tom Blomfield struggled with depression and anxiety while running Monzo.
  • There wasn't a specific point when he realized he wasn't enjoying it anymore, but rather a compounding of several issues that slowly wore him down.
  • He talked to his board and investors about it for a year or two before approaching them with the decision to step down.
  • Hiring good senior leaders was part of the potential solution, but they didn't do it fast enough.
  • Covid-19 was the straw that broke the camel's back, and about six weeks into it, he needed to be subbed out.
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