In this week’s Observer, I wrote about BankSimple, a very new kind of bank that two 31-year-olds, Josh Reich and Shamir Karkal, have been building this year in a Brooklyn basement. Last week, 26-year-old Alex Payne left Twitter to join them. It was fun to write about the three, although on the downside I had to cut out a good chunk of our interviews. Here are some excellent tidbits that I wish had made it in:
Mr. Payne on Bank of America: They’ve hit me with fees constantly over the years. But like I said, I was a broke college student, I was a struggling 20-something, and they were just absolutely brutal… They’re still my bank for lack of a better alternative. I’ve looked at Ally, but none of them are compelling enough that I can switch. … I want to scratch my own itch.
Mr. Reich on Chase, his old bank: Your bank, really, isn’t doing much more than a wallet. You look into the brand advertising that the banks do: They’re selling you on this lifestyle that if you join Chase Sapphire you will have a pretty wife, you’ll be a sexy handsome man, and you’ll have a lifestyle enabled by this card. And that is a crock of shit. A bank does its thing, and the more a bank tries to insert itself into your lifestyle, the more annoying it gets.
Mr. Payne on his peers: They see the bank as this necessary evil. And they like the idea of a bank that actually gives a damn.
Mr. Reich on what BankSimple is (considering that it’s not technically a bank): I don’t know what we’re going to call it. A banking marketplace—the word marketplace is kind of wrong. I don’t know. It’s a new type of thing. I don’t know; it doesn’t have a name yet. We’re starting BankSimple.
Mr. Karkal on BankSimple’s mission: You put together some fantastic technology, and go out there, and find your customers, and try to do what they need.
Greg Yardley on Root Markets (where he was Mr. Reich’s boss): Root had a lot of ideas, which is probably the reason it doesn’t exist at the moment.
Mr. Reich on his video synthesizer hobby: I’m more about building the machines than actually doing anything with them. … Whereas building a bank is kind of different.
Mr. Yardley: If they can keep their early adopters happy, they go from there. It’s their business not to screw up. … If you attract B-rate people and they’re 9-to-5-ing it you’re fucked.
Mr. Kakral on financial reform: The closest thing that probably affects us is the Durbin Amendment on Interchange, which was passed last week. It basically regulates interchange by the Fed. And even that has an exception for banks under $10 billion in size. We’re far from $10 billion, and we probably will be—for another four or five years.
Jerry Neumann, BankSimple’s chairman: Josh and Shamir are essentially living off their savings. … This isn’t the kind of thing that most people invest in. You’re going to compete with some large institutions in the country, and that’s crazy.
Mr. Payne on pessimists: The thing is, when I started at Twitter, I was one of the first couple of engineers there, no one had heard of it. The handful of family and friends I showed it to thought it was ridiculous. … People were saying, ‘You’re killing yourself over this. Why?’ And then a year or so later it kind of clicked. … I’m used to people saying, what do these people think they’re doing taking on a fundamental problem? With Twitter it was communication; with BankSimple, it’s banking.