YouSaid · the spoken record

Mike Cagney

lines on the record: 106
first: 2016-02-08
most recent: 2016-02-08
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Terrible, Mike. I know it's not what I'm supposed to be doing, but we are profitable. So we can control our own destiny as to when we go public, but ultimately we will.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I think if a bank bought us, they would punish me, make me sit in a cube for a year, and I don't want to have to do that. So, I think at some point we will go public. I think with the softbank round of financing, it gives us a lot more runway in which we have to do that. So I think we can do it on our terms as opposed to the market terms. We're profitable. We've been profitable for almost two years now.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“No, no, sure, but Sarah in our domain. I think the London Club spearheading the whole effort has been phenomenal. They've done a great job growing that business out. I think folks taking alternative approaches, especially in point-of-sale, like a firm, I think are very interesting. And we're watching those folks very closely and trying to learn as much as we can from their businesses and their lessons so that we don't have to repeat the same mistakes. And both those companies are great leaders in our space.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“No, I don't think we need the branch. I think that we've tested in microwaves tested pop-ups, and they're actually very effective. But in terms of a permanent location, I think it's orthogonal in everything that we're doing.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“We want to deliver payment solutions to our members, and it's very difficult to do that without a bank. The issue is that SOFI itself cannot be a bank. So we're navigating and exploring other ways to do that as”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I have a laundry list of things I've done wrong most recently. I think most recently we put too much reliance on the securitization market as a way to fund loans. And what we haven't done is some of the longer relationship building efforts that we need to have permanent capital partners.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“In terms of general culture, I think one of the things that we've tried to do is we try to be very aggressive and very risk-taking, it's hard to do that within financial services because of how regulated it is. But there's a lot of ambiguity in financial services. And so as a general organizational principle, we've said, look, we're willing to take risks, we're willing to be wrong. And whether that's the fact that we push code out two times a day and sometimes things break, or the fact that we'll do a loan where it's not clear whether or not we can do the loan, we're comfortable taking those kinds of risks and they're important to us. And I think that in general, the thesis we have at SOFI is you should always have a level of discomfort, right? Not that you dread coming into work, but more that there's always something that you're pushing just a little harder than would make you comfortable.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, we can fly to Montana pretty easily, and we have a good relationship with the folks that we started the effort with. I think one of the challenges of building engineering out of San Francisco, again, a little bit different than customer service, is I was talking to someone the other day and they're saying their average engineer life is about four months. They have that much turnover. They're just constantly getting poached. And up in Montana, nobody leaves. And we have great full-stack engineers, phenomenal developers. We release code two to three times a day. My old software company, we do it once a month. Right. And so over the course of a year, we might do five, six hundred releases. And it's just a very good progressive culture.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“And I looked at that and said, you can't live on $15 an hour up here. And I didn't want folks working for us where they had to work two jobs or they were worried about how they're going to make ends meet. And because at the end of the day, so much rides on our customer relationship that we ended up paying people $20 an hour and up in the Hillsburg office. And what that's meant is almost no transition, very few people leave, but they enjoy being there. And they like talking to our members.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“It's a very nice place, and we run our loan origination and servicing up there. It's very hard to build a loan servicing business out of San Francisco. Cost wages are very high, but also people in San Francisco, that's not their aspiration to work on servicing. Hildsburg, Sonoma County has a very deep service culture up there. What we did that a lot of people shook their heads at when we started the Healdsburg office is I think the going rate for customer service in Sonoma is probably $15 an hour.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Right, absolutely. But you do, I'm going to finish up talking about just very briefly about what you're doing differently from Silicon Valley. You're not really a creature at all of Silicon Valley. You don't have VC funds.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“That's right. And I think the first generation of online lenders, the folks that came in in 2007, 2008, they did try to do that. They did try to take a, you know, we don't need to be part of this regulatory environment. We're going to do it our own way in a different way. And they were very, very quickly shut down.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I think it's extremely difficult. It's one of those things where it's a highly regulated industry and one of the most frustrating things about trying to be disruptive in financial services is you need to be part of financial services first to disrupt it. So, you know, for example, we have a broker dealer. I wish I didn't have to have one, but I do. We have lending licenses in Lenin 49 states. I wish I didn't need that, but I do. And so the more you need to live within the system, the harder it is to change from within. Sure.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“At the end of the day, we've got a high class problem right now. We're originating over a billion dollars of loans a month, and this year we'll do something like $18 to $20 billion of loans. And so we don't have a deposit base to fund those loans. So we need to build other forms of capital that we can place loans into the market, and that's a process that's always happening on our end.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it has been, and I think maybe a little bit misguided, maybe a little too hot. Because I think at the end of the day, you have to be very realistic about, one, whether or not you have a balance sheet. Two, what your real opportunity set is against the banks.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Because I think they immediately resonate with the opportunity of financial services. I think the Valley struggles a little bit with the concept of what financial services means.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“No, they're great. And I think what's a little bit different about SoFi is some of our big investors, we have Discovery and another large hedge fund, Ren Ran and Chinese Internet Company. It's not a typical”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Well, when Tanlo first invests, and my wife asked me if he was going to write a letter campaign against me, and I said, Only if I mess up.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“That's right. That must be an interesting meeting. They both know each other, so they're both friends. And when Dan Loe first invested.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and one was never taking anything seriously, and they go through college together and they graduate and they share an apartment. And you see one of them go off to work with his briefcase. I don't know if anyone has a briefcase anymore. And the other one's sitting on the couch taking a bong hit watching Kung Fu. And then you say, should you be paying the same loan rate”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Well, it's not that I wanted to do something different. I actually love the ad. I think it's great. I think it encapsulates everything that we're doing. I've always wanted to do an ad where you had two friends who grew up together and you tracked their life and one was very responsible.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“That's right. Those aren't the right. To be in our Super Bowl, as creative as that would have been. That wasn't the case.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“That's right. Again, it goes back to that aspirational concept that we want people to aspire to be part of SoFi. But this goes to the point we were talking about earlier. To do that, we wanted to be very transparent about what it took to be a SOFI member. This is why FICO dropped out of our equation, because that's anything but transparent. And so we tried to.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I think the biggest problem in wealth management today is it's risk based. And the reality is if you go to a typical wealth manager, the first question they ask you is what would you do if the stock market fell 20%? And I think it's a ridiculous question to ask someone because the First off, you don't know what you're going to do until it happens. And second off, I'm not sure what that has to do with investing. Investing is about opportunity cost, right? If I don't spend the money today, I don't buy better wine, it's because I want something down the road. And you really need to put context around it. And so the true nature of investing is what do I want to do with my money and how much risk should I take to maximize the likelihood of that happening?”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“How big an area is this? Well, we want people to refinance their student loans, but we want people to take mortgages from us. We want them to take personal loans from us. We want to do everyone's wealth management, something that we give away, which you started with.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think it's really to raise awareness and it's to get people to look at SOFI to go to SoFi.com and look at what's there and to reach out to their friends and say, hey, are you a SoFi member? How's the experience been? It's to promote our own members, to give them some.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think it's really the idea that rather than a transactional, impersonal kind of obfuscated traditional system go to something where you're engaged, you're local, you're interacting, and your business is valued, and you're getting someone who's aligned with you.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“That's so far short for social finance. We don't use social finance very often because that means people think we save the whales, which we don't. So we go with SoFi.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think that there's obviously a huge amount of reach through the Super Bowl in terms of households. And as much press as we've gotten and as much fanfare as SoFi has picked up, I'm always surprised at how few people actually know what SoFi is. Right. And so this was an opportunity for us to really set the stage. And it was something we couldn't do a year ago because we didn't have a comprehensive set of solutions. It wouldn't be genuine for us to ask people to aspire to something different than banking. I think we're now in a situation where we can legitimately deliver into that. So you're trying to make so far.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“And it's not aligned to your interest. It's not your partner. It's really the person on the other side of the table. The idea that, hey, if I miss a payment on a loan, the bank's going to call me up and tell me they're going to take my car. Whereas at so five, if you miss a payment on a loan, we're going to call up and say, do you have an employment problem? Can we help you get a job? Sure. And you think about how orthogonal those two things are, and the latter is a much better way to deal with credit.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Well, they're impersonal. And I think that they miss on a lot of things that are very important to people. One is keeping your capital local, for example. You deposit money in a bank. You have no idea where it goes and who it's lent back out to. But I think most importantly, it's this idea that a bank has really become a utility.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Sure. And I think the first one was really to set the stage that you could imagine something different than banking. And the second ad was this is what it is. Right. And so the two are very synergistic.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“The first ad you had going into the Super Bowl, though, you were scaring doing the scary bank thing, like the 1984. Apple commercial, pictures of empty banks, scary banks, and everyone's been in that bank.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I think what we're trying to show is SOFI is really an aspirational model that we want people to want to be part of that community. They want to aspire to be part of that community. I think there's so much of that in branding today where it really falls short. It's not genuine. And so I think the ad really captures that idea that there's a lot of people out there that have tremendous potential and we want to align with them and be their partners.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I think that there's a couple of different threads in which this could manifest. But the other is I think there could be what we're trying to accomplish, which is a recasting of what the expectation of a bank is. It's no longer transactional financial products. It's a much broader set of services where they're aligning and they're sitting rather than across the table from you next to you to help you accomplish what you need to in your life.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“But that's okay. And that's the thing I'm not going to harangue you until you come to my house for wine. When you want to, you come and when you don't, you don't.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“So it's interesting because Arthur was very skeptical about these social events. They are always oversubscribed. Yeah, universally. And I just sat one in my house a few weeks ago wine tasting, and it was great. And I got a chance to meet a bunch of folks I never would have been able to meet.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Sure. I mean, sometimes it's a happy hour, sometimes it's a dinner. We had a great one in New York recently where Arthur Levitt chaired the dinner, former SEC commissioner. And what we like to do is deliver information to our folks. We like to get a lot of information back from our members in terms of what's working for them, what's not, what they need in the marketplace, helps drive a lot of our product roadmap. And so it's...”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“And so, if I'm a risk in data, other cell phone members. And it's not just because I want to run an ad saying, when did your bank ever get you a date? But it's because I think there's actually value to it.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Well, you have a responsible credit history and you make more money than you spend. That seems like an attractive characteristic. I think there was some recent writing that that actually is a necessary component to good relationships. But what happens is these two to three events we hold across the country every week, a lot of reasons people come there are professional reasons for networking and so forth, but a lot of it's personal. They want to meet other people. And we've said this is happening so much, we're just going to codify this. So we are going to have ASOFI dating application.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think that technology is critical to what we do and it's integral to what we do. And I think social is integral to what we do. But I think at the end of the day, what we're really trying to build is a lifestyle company. So, and it goes back to this concept of money, career relationships. And that's what we think the value proposition.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“That's right. And on the insurance side, it's the same premise. There's no mutual concept that if you can get a pool of people who know each other, who have a common deductible, Then you can address issues of moral hazard and adverse selection. You actually generate a much better insurance.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. Yeah, and insurance is a very interesting one where you can leverage the community aspect. And the idea, a lot of what we do, I joke, is it's going back 60 years. So from a lending standpoint, we kind of lend like Jimmy Stewart did, and it's a wonderful life.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“That's right. I mean, there are different elements of technology. So there's technology from an infrastructure standpoint, which we would be facetious to think that a bank couldn't replicate some of that technology, but it's critical to us in terms of being able to scale. I think the advent of social has become so integral to customer acquisition and evangelism. And that's really where it is. It's your presence within the social landscape, social media, and building evangelists within the company to go out and carry that message. And that's incredibly powerful.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“You know who that person So, why is this a technology? Why are banks nervous about technology? And where's the landscape? What happens to the modern bank? It's not the same as in music here, where it is, you know, technology does change the situation.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I think the internet can help you with fraud. And so I think things like LinkedIn are effective mediums to address fraud so that you know it's a legitimate person. You know who that person is and not 300 fake accounts created out of Bulgaria. So you can get some legitimacy off of that. But from an underwriting standpoint, the most important thing is that you make more money than you spend.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Deep trouble. So, what's the most important thing around credit? What's the indicator? Is there anything in the internet or data can do? It's just you make more money than you spend. That's pretty much how it's been since the beginning of time, right?”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Kitty Berry, your country music, you're in deep trouble. And so I think, one, you have to be cognizant of that. You can't be lulled into a false sense of complacency. But two, you're actually not allowed to do a lot of that. And if you're very small, the consumer financial protection bureau isn't going to come after you, but as you get larger, it's a bigger issue. And you have to be very, very careful about what goes into the underwriting methodology.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“I've joked that my daughter could come up with a scoring system based on what band you like and it would look like it works right now. Like my chemical romance, you get the best rate.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and the problem is that we're an extremely, first off, we're an extremely virtuous credit cycle right now. And so I've said that.”
2016-02-08 · Decoder with Nilay Patel · Recode Decode: Mike Cagney, CEO, SoFi · IDENTIFIED FROM THE TRANSCRIPT