EP 230 – Nadia Ismadi, Co-founder and the CEO at Pod – Value Experiences More Than the Returns

• Nadia’s glimpse of entrepreneurship through her grandfather
• The importance of using a customer-centric strategy
• Why did Nadia leave a big company to pursue Pod?
• The challenges and lessons learnt building Pod
• Some of the financial barriers Pod is trying to solve
• A new way to look at credit analysis
• Understanding consumer patterns and getting feedback
• Having pillars you want to focus on and build everything else around that

1. I Just Wanted to Learn
2. I Would Rather Crash and Burn, Rather Than Wonder
3. I Am Not Responsible for Anyone Else but Myself
4. You Don’t Have to Internalise Everything
5. Taking All the Candies

This episode was produced by Stephanie Ng.

Read the best-effort transcript below (This technology is still not as good as they say it is…):

0:03 Michael Waitze 

Hi, this is Michael Waitze and welcome back to the Asia Tech Podcast don’t make that face at me, today, we are joined by Nadia Ismadi, a Co-founder and the CEO at Pod. Nadia, thank you so much for coming on the show. I really appreciate it. How are you doing today?

0:18 Nadia Ismadi 

I’m great. My pleasure to be here. Thank you for having me.

0:21 Michael Waitze 

No pleasure is completely mine. Before we get into the central part of this conversation, can we get a little bit of your background for some context? Sure.

0:29 Nadia Ismadi 

So I currently run this Fintech platform called Pod, a financial wellbeing platform to enable the underserved, particularly the gig workers to have access to basic financial products. So things like savings, microfinance, and helping them to build credit trail and consume other financial products along the way that they may need at different points in their life. Prior to part I was actually when I was on the dark side, I was with a financial institution. Oh no. It wasn’t it wasn’t that dark. So we were in asset management basically managing money for institutional clients. So pension funds central banks, in markets, including Malaysia, Indonesia, and Middle Eastern Singapore. I was with a Japanese fund manager wasn’t Nomura Nomura asset management, I had a great time there. It was wonderful because I don’t so much. That was my first job. So I was thrown right into the deep end and have to, you know, swim for my life, I was quite fortunate that the managing director who’s now a dear mentor, and a friend of mine, was very open to letting me make mistakes and just have a complete faith in me, not, you know, ruining things or other ruining things, but not as bad as to learn, which is a rare opportunity to have as a young graduate. Yeah,

1:44 Michael Waitze 

you know, I like to I’ve got a daughter who actually is coming to visit me today. But she, you know, one of the things that I said to her as she was growing up and going through school is no individual day is fatal. It was just my way of saying like, today feel so important to people, right? But in the context of like the larger world in your larger career, in this case, no individual day really matters unless you’re doing something really, really terrible, right? And that failure is the only way to really learn in a role like that. Were you surprised is the wrong word. But like, what was it like working in a big Japanese company? I mean, no more asset management is the quintessential Japanese financial services company. Yeah. And was it in Japan? Or was it in Malaysia?

2:22 Nadia Ismadi 

It was in Malaysia.

2:23 Michael Waitze

It was awesome. Awesome. And you’re Malaysian by birth? Yeah,

2:27 Nadia Ismadi

yes, I’m Malaysian by birth. What is it like working for a Japanese firm? I think it was fantastic. You learn all the important skill sets that you need to thrive in? I think both corporate and entrepreneurship. I think entrepreneurship I was quite lucky because the outfit in Malaysia was relatively small compared to the mothership and Tokyo obviously, where you are expected to do a bunch of stuff at the same time and not die. Hopefully, and that was I think, what got me interested into intrapreneurship was actually attacking specific was was because my desk at Nomura was across from the global portfolio equity team, they would have a stand up, I think it’d be Monday to discuss the bias analysts. And I think at that time, Snapchat, when IPO and then they were just discussing about how is this company that is not making any money valued at this amount? What would be the proxy valuation? Is it number of users, active users, etc. And then that piece of conversation was very exciting for me. And I just started, you know, Googling and basically fell into this rabbit hole that is Silicon Valley Tech. And the rest is, you know, history.

3:35 Michael Waitze

What was your exposure to entrepreneurship? Before that, though? I mean, if you ended up at no more asset management, it’s a pretty typical or traditional, I would say, career path, right. But was it that snap IPO is maybe the watershed event where you were like, wait a second, there’s all this other stuff going on? And I can actually start my own company? Or was entrepreneurship something in your family? Were like, your sister was already doing it, or your grandmother were already started? Like, where does that come from?

3:58 Nadia Ismadi

I like the fact that you made me sound so special when you first said like, oh, you know, why, why intrapreneurship. And, you know, you started in the most typical position there is in a financial institution. Thank you for that. Okay. That’s fine. That’s fine. So actually, I have a glimpse of what entrepreneurship look like informally through my late grandfather, when I was growing up, I used to go back to Penang, where my hometown is to basically help him quote, unquote, with his Sunday shop, by helping, I mean, just taking all the candies, right. And logically, someone who’s 10, but I saw how passionate he was about customer service and solving problems for customers. I remember my job was basically scooping the spices that people wanting to buy. And I remember him always asking me to scoop some other spices that the customer has not asked for. But no, he doesn’t want this he wanted this other spice and he said yeah, you know, on top of the spice that he wanted, give him another one in a smaller package. So apparently, that was a cross selling strategy, which was you know, which I didn’t under Standard Time because logically speaking, if the customer asked for a you gave a right and charged

5:04 Michael Waitze

Profit off of it. It’s a really important point though, right? Sorry. Go ahead.

5:08 Nadia Ismadi

Yeah, exactly. Yeah, you’re absolutely right. So I was looking at that, and he always solve problems. He does want to sell products. So I said, when customers would say, hey, you know, I have this piece of chicken that I would like to grill for example, you know, what will be best for there? So there’s, there’s a premium and of spices, but he would never recommend that if he knows that it’s not going to be the best for the customers and he will always recommend, oh, you know, maybe try this one and mix it with this one? Um, no, he was always very generous. I mean, not just to me, because I, you know, I took the caddies behind his back, so he didn’t know

5:39 Michael Waitze

By the way, the regular customer definitely knew. Just so you know,

5:43 Nadia Ismadi

He knew because I was so adamant like at 7am I will be standing by the door I’ll be going to the shop today. So it’s time to go most of the time. But um, you know, so he’s always that kind of sense of service and how much he enjoyed it, I think was my first glimpse into what entrepreneurship was like. So when I started my A levels I don’t know for some reason I felt experimental. I saw my friends were carrying different bags to classes every time so I went and did my A levels in tailors in Swansea was a private college and I was a sponsored student, I saw you know, the they were exchanging backs every time and so he will maybe I should sell bags, and then they call my grandfather’s here, the brilliant idea. I want to sell bags to my classmates. And then he said, Okay, that’s 1000 ringgit, maybe you can go and make something work. Let me know how it went. He didn’t say returned to me the money with 20% in a margin or whatever. You just say, Tell me tell me how it went. So three miles, I gave him back 1500 ringgit, but I made 5.5 1000. I gave him extra 500 bucks, like, uh, you know, super generous.

6:50 Michael Waitze

But this is like, this is such a great story, right? Because it almost encompasses everything you need to know about not just starting, but building and running your own business and also raising capital. You didn’t ask grandpa for money, but he you gave him the idea. And he was like, he was like your first angel investor in a way. But exactly, almost more importantly, I think that, you know, your grandfather probably never raised money. He probably just figured out that spices were something that were necessary in his town in Penang. By the way, when was my first time in Penang, what do you think? What was that? When was my first time in Penang? What do you think? When?

7:26 Nadia Ismadi

When probably when you were a teenager?

7:28 Michael Waitze

1991 Maybe anyway, a while ago? Oh, wow. Probably before you were born anyway. But the point is that there are all these little lessons, right? Like we talked so much about entrepreneurship in the context of venture capital and tech startups. And yet, people like your grandfather, and people like my friends in Thailand’s uncles and aunts that had been building and running their own businesses forever did it in a way that was maybe more organic. But also, you know, your grandfather understood customer centric before, like, that was a thing that people got taught at university, and who knows where he learned it. But he figured out if I just do the thing that they want, and they trust me, and it adds value to their life, they’ll just keep coming back. And I give them a little bit of extra, or like, I used to go to this, this restaurant in Bangkok. And every night the guy be like, Hey, I have this new ice cream. You want to just taste a little bit of it. Yeah. Like but all these things you learn along the way, are really important for entrepreneurship. Yeah,

8:29 Nadia Ismadi

Absolutely. Absolutely. And I think that was also embedded within me without me realising that that’s how I look at investors as well, like that was that was my thinking point. When I was looking at investors, I want investors who are genuinely as passionate about the problem as I am, and are willing to say, Go ahead, try it out. We may both crash and burn but you know, at least we learn something

8:52 Michael Waitze

They have to be in other words, again, when your grandfather gave you the 1000 ringgit, he didn’t say here’s 1000. Ringgit, please sign this contract. I’m expecting it back in seven to 10. Do you know what I mean? He didn’t do any of that. He was just like, I know, this may or may not work. But this sounds like a great idea. You seem very committed to it. Like just think about this conversation, the thought process, right. And you felt the level of responsibility because of probably all the neck candy. But still, you know what I mean? At that

9:15 Nadia Ismadi

Time was very, very,

9:18 Michael Waitze

You know what I mean? Right? In other words, he didn’t ask for any specific amount back, but you’re like, I got this. I succeeded at this level. It’s kind of only fair to say thank you in this way. Yeah. Yeah.

9:29 Nadia Ismadi

And he’s the kind that you know, the fact that he said, come back and tell me about it, rather than okay, you know, give me back the money plus whatever else upside you made. I think it gave me some level of freedom to really try and solve the problem at that time. I think the problem was, maybe my friends make more bags, that I should solve it for them. And I found that as there’s opportunity to, you know, double my feet into entrepreneurship at that time, but I truly enjoyed the process. You know, I and I think that was a bit of peace. That caught me addicted, I think into that process of just learning.

10:03 Michael Waitze

Yeah, it’s the learning, I want to, I want to focus on this word learning. Just keep that in your mind, because I want to get to that later. It’s super important to me as well, what was the impetus for you to leave a big company, which in retrospect, must have felt pretty safe. And in relative terms much easier on a day to day basis than building something from scratch? What was the impetus to leave and actually do this?

10:29 Nadia Ismadi

Personally, for me, I keep hearing statistics, because I work in and out financial space, or I’m talking about trying to get people to invest. And at that time, we were was purely focused on institutional clients. So we didn’t have individual investors like you and I, in our portfolio, right. So they were saying, hey, you know, Nadia, you’re young, trying to figure out how to get young people like yourself to start investing. And then we did the whole shebang work of trying out okay, build a platform, and even had like user acceptance test had a bunch of consultants trying to help work out the framework and what the platform should look like cetera, what fun to put in, and then realise by the end of it, that customers at my age and slightly older, they’re not ready to invest because they are barely saving. They don’t have enough if let’s say their job was taken away from them today, they don’t have any buffer to last for three months. And this is the statistic that everybody talks about the government, the central banks, financial institutions, they all talk about the status quo Malaysians are doomed because you don’t have 1000 ringgit in emergency saving. Really what? What is anybody doing? You know anything about?

11:40 Michael Waitze

Yeah. So yeah, so So that was the impetus. But then what did you do so because, you know, we talked about, I don’t want to be so technical about this. But there is the top of a funnel, right? If you’re, if you don’t have enough resources to save, then you definitely don’t have enough resources to invest. And again, I was having a conversation with a guy named Greg Krasnov, who Singapore based, but he’s building a company called tonic bankings, in the Philippines. And, you know, we spent all this time talking about financial inclusion. And I want to talk to you about this as well. But one of the points that he made to me and I can’t get this out of my head, is that people start worrying about saving and investing, as soon as they don’t feel like they’re not living paycheck to paycheck anymore, right? And this idea that it’s not even so much a literacy or financial literacy problem, it’s more like you’ve got to get to, and I think the number he picked was 33,500 US dollars of GDP per capita on average. And then people are like, wait a second, I have extra money. Maybe I should invest it or save it? Does that make sense?

12:41 Nadia Ismadi

Yeah, no, absolutely. I mean, if you are worried about putting food on the table, there’s no way you think about insurance. There’s no way you think about building a portfolio and being diversified. There’s no way right. So maybe you should solve that as a as a hot potato first. I mean, we could always be comfortable and like what you mentioned, right corporate was was relatively easy. Your that it’s

13:04 Michael Waitze

Relatively I want to be clear, but it’s never easy. I believe me, I worked in Tokyo at Morgan Stanley Goldman Sachs for 20 years. It wasn’t easy, but it’s definitely easier than taking zero and turning it into anything. Sorry. Go ahead.

13:16 Nadia Ismadi

Yeah, exactly. No. And when you’re away for a week, compulsory leave by the way, nothing’s on fire. Right. You’re back at the company. So they’re not knows what happened. Don’t know me, I

13:29 Michael Waitze

Went on vacation once with another family. This is years ago. And this is when I was at Goldman Sachs and the guy that I was on vacation with in his family, he was an entrepreneur, I didn’t even understand what it meant back then. And we’re just like sitting in the pool, swimming, playing with our kids or whatever. And he says to me, he goes, I got to ask you this? Because you haven’t been at work for a whole week. He said, Are you still getting paid? I’m not getting this actually happen. And I thought I think about it every now and then. Because I thought he was being a little bit of a wise guy. But he didn’t understand that. Like, you could still do nothing for a week really. It was like, wow, anyway, good.

14:08 Nadia Ismadi

Yes. So I think for me that that was the trigger point that got me to think that is there anything more that I can do using my capacity and financial space always intrigued me, like I don’t think I will ever leave. Finance is something that truly excites me. And you know, in a way it helps me to understand how the world works. But within my capacity of trying to figure that out, Can I at least help solve this problem that Malaysians can’t see if it doesn’t really hit? Yeah.

14:39 Michael Waitze

What was what was your financial status when you decided to leave? In other words, like Were you nervous? Do you know what I mean? Were you concerned like I have a pool of savings because I’m in the asset management industry. So I’ve saved some money I’m guessing Yeah, like were you concerned like what if this doesn’t work?

14:54 Nadia Ismadi

Yeah. So So I think my decision making metrics and then I share this with with friends in a complete a different context, right? I’m the kind of person that I would rather crash and burn rather than wonder what if I’ve tried that? It’s dangerous for sure. But that’s my decision making metrics. Like that’s how I make decisions generally,

15:15 Michael Waitze

Generally. But do you? I love asking entrepreneurs this as well. Do you do other things in your life that are risky? Like do you skydive to use surf? Do you you know, do you ride fast motorcycles kind of thing? Or do you get all of your thrill and speed need from building companies? You don’t? I mean,

15:32 Nadia Ismadi

Yeah, I think I think the probably the best way to illustrate that is probably the way I decided to jump into entrepreneurship, because I remember I was telling my co founder, Yang, she was my classmates in AWS. So we’ve been friends for a very long time. I told her, Hey, this idea that I’m working on, and we always meet each other after work, so you know, you know, but I finish my work in the morning by 839. And then she wasn’t she wasn’t consulting. So she was, you know, not having a, you know, a great day either. And she would come to and we will meet in the central of KL, to start brainstorming about this project, that pet project that we want to work on. And we have this developer that we hire, so we put our, you know, whatever leftover we have from our salary and my bonus, and everything goes into that. Right, right. So now when I was about to leave my job, basically, I sold all you have you have your your survival toolkit. As corporate persons, you have your designer stuff, and you need to look the part where you go in the pension funds, they think, yes, you can do it. So I sold off all those things and fund the business. But the thinking was, it was very nerve wracking. But at the same time, I am not responsible for anyone else, but myself in the sense that are not expected to put food on the table. I still live with my parents at the time. And also I was thinking that I was relatively young in the sense that I could if discretion, but I could still get a job if I want to. So that was probably a combination of factors that got me to say it’s now to go into this thing flew on, right? Yeah.

17:09 Michael Waitze

What? After you’ve been doing this, like, how long have you been working on pod now?

17:14 Nadia Ismadi

We launched the platform in 2019. But we were working on it since the late of 2018.

17:19 Michael Waitze

Yeah, so almost four years, if not slightly more than four years, right. So many things to say, like, do you feel like you’re unhireable? No.

17:29 Nadia Ismadi

In what sense? What does that mean?

17:31 Michael Waitze

Just because because I’m completely unhireable. But I mean, I’ve got an age problem, you don’t have an age problem. I feel like the reason why I ask is because you have all this experience now of building something from scratch in the sense that people would definitely want to hire you because of everything that you’ve learned, and everything that you’ve built. But now that you’ve worked on your own, on your own sort of timeframe and your own schedule, managing other people building this whole infrastructure, going back into a super structured environment, I think, would be really hard. And that’s what I mean. I mean, obviously, you’re hireable. But could you work in that structured environment again? Or do you think that you need to be like in this startup environment where it’s stuffs moving so fast? That’s your excitement? Yeah.

18:11 Nadia Ismadi

Yeah, I think you’re absolutely right, I think to be within that, that flow rate that that pace, the kind of work that you do, the kind of people you get access to, and then have the opportunity to really sit down and and hear them out. I feel like yeah, maybe it will be quite difficult to find another corporate job that give the same kind of satisfaction.

18:35 Michael Waitze

Yeah. What are some of the things you’ve learned about just the challenges around building a company from scratch that’s maybe specific, or maybe not so specific to Malaysia, but just like building a FinTech from zero is hard. Yeah. What are some of the biggest challenges for you,

18:48 Nadia Ismadi

Um, I think specifically for pod is that we’re trying to solve a problem that was important, but it was definitely unsexy and very against the flow of general behaviour of users, or any human beings for that matter. So here I am sitting with you. And then basically, my mailbox is just chiming with vouchers offers and Lazada telling me they miss me because they’ve not seen me for a long time. So everybody is trying to get me to spend money. And here poor outcomes, trying to get people to say no, don’t spend now say first and then, you know, if you absolutely have to spend on something, at least you’ve built that nest for it.

19:31 Michael Waitze

Yeah, it’s you. I’m sorry. You’re just making me think there is an entire infrastructure in the world to just make people do things that aren’t good for them, whether it’s health wise, right, like eat this, you know, candy bar or buy this thing on shopee or Lazada that you don’t need, but because it’s 25% off or 60% off, you have to have it now kind of thing, right? I never thought about it as unsexy because I was gonna interrupt you and just say what do you mean like finance has always been super sexy in a way, right? Yeah, but I get it. So you’re swimming against this tide. Right. But what have you learned by building this? There must be massive demand what? What Malaysia has 32 million people in it? Yeah. And what are their? What are their access to financial services look

20:13 Nadia Ismadi

Like? So majority of Malaysians have bank accounts. So therefore they are bankable. But I think a lot of a large portion of the segment are underbanked in the sense that they have a bank account, but they don’t have any other access to other products, like, you know, financings? Yeah, by the access to you know, what do you call like, investments in some ways? Or pension or insurance? So those are the kinds of barriers that we’re trying to solve for.

20:43 Michael Waitze

Yeah. And do you need financial services partners to be able to do this? Or can you build products on your own? Do you know what I mean? Yeah, so

20:50 Nadia Ismadi

I think part of what we took a stand that we want to get to that we want to solve customers problem really quickly, and get the product to their hands as fast as we can. And by that, we will not be able to build all the verticals and supply all the products ourselves. Because you know how it is with FinTech, the first barrier to entry is licencing. So if let’s say you want to offer five different products, you need probably 12 licences. You know, so, what we were very fortunate, I think we are in the age, in the last few years that financial institutions have been relatively open to working with FinTech companies.

21:28 Michael Waitze

I think so. Yeah. Did you feel if there’s an under banked part of any, any society, right? Do you feel like it’s skewed in one way or another? Like, are females less banked than men are like, what do you what does it look like to you from a financial inclusion perspective, because this is something that’s actually really important to me. And again, getting back to this idea that I was talking to with with Greg about last year, same thing, whether it’s in the Philippines or in Malaysia, or in Vietnam, or in Thailand, in Southeast Asia, inclusion is really important. Yeah, yeah, absolutely.

21:58 Nadia Ismadi

And I think I always like to talk about it from the capitalistic standpoint, because people understand numbers, right. So people within this industry, they understand numbers, make sure I mean, I’m sure they do have, you know, hearts as well, that are, you know, willing to think about this from the more social aspect and welfare aspect of the community. But But numbers are something that everybody sort of know, okay, the gravity of it, or the size of the market, for example, in Southeast Asia, there’s 180 2 million people that cannot get access to credit. I mean, the banks will just salivate listening to this right. But they know they can’t do much to access customer base that do not fulfil the credit scorecard in a way that this person has to fulfil ABC criteria to qualify for the simplest possible loan.

22:48 Michael Waitze

Yeah. Is there a new way to look at these credit risks, though, right. In other words, part of the reason why bank will tell you that they’re not lending money or providing credit services to person A, B, or C is, first of all, we don’t have enough data on them. So we can’t like back test their ability to pay. But is there a new way to look at credit analysis so that people can actually then build a credit history in a way that is more sensible?

23:09 Nadia Ismadi

Yeah, absolutely. And I think what Michael Flynn had always talked about this, but you’re not being evaluated based on the positive behaviour that you have. So she was a funny story. She never had a credit card when she started working up until the year three or year four into the job when she had to go to Australia and then she didn’t have a credit card with her she has to put a down payment for a hotel for like a week cash. And then that was when she was okay, maybe I need a credit card. When she went to the bank, the bank cannot issue a credit card because she’s too clean. She’s never had a credit history in her life.

23:38 Michael Waitze

Like, she hasn’t overspent she’s not just in

23:42 Nadia Ismadi

Money, person saving her money putting money into fixed deposit. But that’s not great from a banking standpoint, like you need to have some level of for us evaluate whether you’re good or not. So she said, Well, I have this, you know, this, this amount of cash in my account, and I’ve been diligent and if you study my behaviour, I have been quite consistent in putting money into, you know, pockets of savings or investment tools, but that wasn’t looked at,

24:07 Michael Waitze

Right. Yeah, it’s so strange, right? Like you get punished for having great behaviour. I’ve never had a credit card. So I’m a perfect credit risk. I’ve saved like 40% of my salary and bonus. So I’ve got a tonne of money in the bank. And now you’re telling me I can’t have access to credit because I don’t have any credit history. That’s what I’ve been doing for the last like five years is trying not to waste money.

24:28 Nadia Ismadi

Exactly. Exactly. And but but on the flip side of it, when some of these customers who are living paycheck to paycheck, right, especially the blue collar gig workers we see in multiple different emerging markets. That’s the primary economy, people are self employed. So they have a different set of problem where everything is cash based, and they are definitely living paycheck to paycheck did not have extra cash to put anywhere else. But I think there are so many different tools today that it Listen, the market that could actually help these guys though credit trail in just different format. Yeah, so you know, all these micro financing institutions that have been, you know, existing in a community based setting could actually be one of the ways in which we could solve for the underserved.

25:15 Michael Waitze

So how do you measure this idea of financial well being right? And how does pot help people do this? Let’s just dig in a little bit deeper on this.

25:22 Nadia Ismadi

So yeah, we started with savings, right, because at that time, I think that we was, you know, very laser focused on trying to solve for that stats that people can’t save money. So let’s figure out how they can. So there are definitely two segment of individuals. One is people who live paycheck to paycheck, which to have extra by the end of the month means they have to either increase their income or reduce their spending. But the latter is really, really hard to do. But there are also a segment of individuals who have just been used with money teachers, they technically they can say, but if not just been looking at it as a priority, right. So that was our low hanging fruit when we first started, then we realised that actually, we’re cheapskates. We don’t want to go and pay, you know, customer acquisition costs of $50 to onboard a customer and get them to save 10 pounds. So we were starting to figure out how can we get this to scale and introduce some form of forced savings or automated savings in a way that they don’t have to think about saving? Because nobody wakes up every day thinking I should save money? Nobody, not even me, honestly, right? Because you wake up immediately you think about spending your bills, your you know, obligations, you don’t wake up thinking about investing or saving. So when we first started, we realised, okay, let’s help people to see through the touch points. That is the easiest for them to do the act of saving, which is at the point of earnings. So if we can get some form of deductions done, when they earn, then it’s automatic, and then they just basically have the leftover to spend, and that has been quite effective. So do

26:47 Michael Waitze

You do this on the company side? In other words, as opposed to going to the individual and saying, I’m asking, right, I don’t I don’t know how it works. I’m asking you. Like if I if your grandfather had said to you, I’m gonna give you 1000 ringgit, but it actually only given you 800, you would have automatically saved that 200 ringgit, because he would have put it away somewhere for you. I actually know some parents who did this for their kids when I was growing up, right? Yeah, but do you work with the company? So it is like, is it like a b2b to see thing? Or is it directly b2c? You go to individual people and say, Hey, we’re gonna help you save? Or do you go to the companies and go, we can take some percentage of the income and put it into a pod account where then they can invest it and save it and do that kind of?

27:21 Nadia Ismadi

Yeah, so we did the b2c model first. And then we realised that actually, it doesn’t make sense because you are basically you have a few different frictions that you’ve got to solve for before they put the savings out. So then we realised, okay, let’s talk to platforms. And at that time, we already decided that we want to zero in on the GIG workers where they are the most vulnerable to economic shocks or economic events. So we realised I mean, people who have studied please live there not to worry so much, but people who basically it has income erratically fluctuating, we can we probably need this a bit more. So we started working with platforms like Shopify food, food panda to get an all this rider platforms to basically integrate our solution into the rider app itself to help them save what they earn. And how did that go. It’s been great because these people they don’t feel let’s say they earn 800 ringgit that week, and then they decide 10% will be saved. And then they will get the remaining amount being sent from the platform to their bank account. And that’s the amount they spent.

28:20 Michael Waitze

Yeah, that’s that was gonna be the point that I was making is that if you cut and I’m putting it in quotes, somebody’s salary or somebody’s income by 10%, it’s painful, particularly at the lower levels, but at some point, they adjust to it and just go, all I have is 700 ringgit, or whatever it is. And I’ll figure out somewhere to live on that. And then they do and then they’re like, wait a second, and now I’ve got 800 rain in a bank account somewhere. Yeah, feels cool.

28:42 Nadia Ismadi

Exactly. Let me give you an example. So during pandemic, what we did was we started the withdrawal patterns, obviously, that indicates that people actually need to go back to their savings and then top up for some other emergency, they need to use the cash. But there are some users who were telling me because everyone is basically on lockdown, the kids have to go and learn in true virtual lessons. And they need instruments, right? They need laptops, or you know, some form of technology and device to get connected to school. And there are so many riders who are telling us to say, Hey, do you know I would never be able to afford a laptop for my kids to study. And then because of the saving that I had stashed somewhere that I been keeping for a couple of months, I can now buy a secondhand laptop. And we hear this story multiple times. And that was probably the spirit for us to keep going during tough times as well.

29:33 Michael Waitze

Sorry, but this is why it’s so important because it’s this nuanced. Part of the story of like that saving is not for a muzzle radi right. Yeah, that saving is to help my daughter get educated in the only way that she could have been educated during the pandemic, which was remotely and I don’t have a computer. Yeah. Right. So it’s not about like buying shares in Apple or in Google. Yeah. Yeah.

29:56 Nadia Ismadi

It’s not about that, right. It’s not about discretionary purchases. because you have so many different avenues to go and do that, right? You have final pay laters you have so many other avenues to go and spend on on discretionary items, but essentials. And then the fact that you have you can manage to do that because I asked them, What are the other options? Hypothetically speaking, if you do not have the savings, what are the options that you have to go and buy your kid a laptop, and honestly, nine out of 10 people told me that either borrow from friends and family which probably might not have a lot during pandemic as well because their income would have been affected too. So they would have to borrow from no chunks. Yeah, and I see and some of them were quite frank and then they just showed me the terms of the previous loans that they took. So imagine for 1000 ringgit loan they have to put up 200 deposit and then they would probably be cut down like another 700 bucks and they would get 100 ringgit, you imagine they will get 100 ringgit and have to pay 1000 ringgit in the next 30 days or 15 days some have even shorter terms, which is bizarre. Yeah,

30:58 Michael Waitze

There’s a flip side to this as well, when you’re trying to save as you start because part of the problem, it’s just like losing weight, right? If in the first week you lose a kilo and then it’s a kilo and a half and you just start feeling better, more fit and then you start feeling more financially fit right. In the case of savings or small investments. There’s a demoralisation factor. I think that happens when you know if you start in April, and then in July, boom, you got to go out and buy something big that you didn’t anticipate. How do you deal with or how do you help people deal with that demoralisation? You don’t I mean, we’re like, they wake up and like, Oh, I forgot about that thing. And now all this work that I’ve done is for not it. That’s what it feels like. Yeah,

31:37 Nadia Ismadi

Right, right. No, I mean, we we don’t exist in an echo chamber, or vacuum that say, oh, everything’s sunshine and rosy, save, and then you spend and then you keep saving, there are times when life throws you curveballs and you’ve got to be able to, to address those. And that’s part of life, right. And we recognise that part we’re not, we’re not delusional, trying to get people to save all the time. So we saw this as what during pandemic where people have to withdraw their savings to maybe pay for a birth tire, because they were doing delivery or non stop, or maybe someone was not well, they had to send, you know, their children or spouse to the hospital. So there are all these bills, right, so we understand that, and then they had to claw out their savings with us and go and pay for those emergency expenses. So when during pandemic, we launched our Shahryar micro financing product, because we knew that if these guys don’t have any other option, they will go to the loan shop. So we started rolling out this micro financing product that basically tells them that if you have emergency, you can get access to some cash without any compounding interests, you just pay a small processing fee upfront, and then you pay over, you know, a couple of weeks to, you know, two to three months, depending on your tenure directly from your earnings. So it’s not going to add more burden to you because of this emergency expense that you’ve got a cover for.

33:01 Michael Waitze 

We talked a little bit about financial inclusion before. And there is a literacy factor that does play a role here. Yeah. And even if you’re rolling out Sharia micro, I want to get this right micro financing products, people still need to be educated and learn about what that means and how they’re fee wise and price wise, different, right? Yeah, yeah, absolutely. And it’s super important. Particularly in this in this region, right? Yeah. How do you handle the literacy side of this is like part of pod teaching people, what all these terms mean, and how all these products work as well.

33:38 Nadia Ismadi

So the first step that I did, when before we roll out the micro financing product was to basically call all the banners by the roadside by the alarms, I actually call them and ask, if I were, you know, pretending to borrow what sort of conversation I would have to have and what sort of information or they’re gonna give me. So few people that I call it, we’re saying, Okay, let’s say I needed, you know, a quick cash of 1000 Bring it, and they’ll tell me that like, okay, it’s, it’s just 10% 10% Of what 10% over how long? They just tell me a day. Yeah, per minute. What is it right. So then when i It’s that kind of information that people don’t have ability to process and then we realise that if you have all this terminologies, number one that they don’t they don’t understand this percentage base, and you know, they couldn’t really piece it together, because at the end of the day, what they needed was that 1000 ringgit, and that’s all they’re focused on. So how can we make it simpler for them? And then also along the way, I think part of financial literacy that we discovered is, people don’t really care for information when it’s not relevant to them. Yeah. I mean, you can teach a whole syllabus of all the financial jargons and financial products, but if it’s not relevant, it’s just going to pass over their head and just, it’s noise, you know, it’s noise. So what we’ve discovered is bundling is really important. So what people really want is more money, what we want them to one as platforms, financial institutions is for all this other products that could help make their financial lives better. So this includes insurance, investment savings, etc, children education fund, so how can we bundle product, we want them to one with product they actually want, which is more money or credit. So I think that’s the route we took, to say credit is a tool is not a good or a bad thing. It’s just a tool to help to do whatever you need to do, right? But how can we make you better by having the access to credit from us is that we help you to say hey, you know, if you have savings in the past, you would be able to unlock a higher tier of financing at a lower fees. And people get that say, okay, you know, more money for cheaper, if I say the financial goal, you know, those kinds of things. So that’s what we’ve, we’ve done internally, we’ve, we’re always tweaking, trying to figure out the different triggers the different behavioural nudges that we want to make all in the name of helping people to get access to better financial products, which currently is to credit.

36:00 Michael Waitze

You’ve been at this now for almost four years, or maybe a little bit more than four years. And I’m curious, how would you characterise the state of sort of diversity and inclusion in Malaysia, in the FinTech space, and maybe in all of Southeast Asia, if that makes sense

36:14 Nadia Ismadi

From the user perspective, or from the provider or

36:17 Michael Waitze

From the founder perspective,

36:19 Nadia Ismadi

It’s so bad, it’s so bad, like we’re still underrepresented. And we’re still get asked questions. That’s so bizarre that when I sit down and think to myself, that was such a waste of time having to

36:29 Michael Waitze

Tell me, tell me, what do people ask that’s weird if you don’t want so So Okay.

36:34 Nadia Ismadi

Caveat to let me just give you a disclaimer, right? I’m not a sentimental person, like I would walk into a room pretty objectively unless this blatant discrimination then I wouldn’t be able to argue on the other side, and it’s okay, this is discrimination. Right. So one of the case in point was that I remember an investor, we sat down have a conversation, I think he liked the business. And then he asked, okay, so when do you guys meet my co founder? When do you guys plan to settle down? Okay,

37:06 Michael Waitze

Settle down, meaning what stopped travelling? Is there a way to make? Is there a way to make humour from this? Yeah, I don’t know. Because I’m not in that situation.

37:12 Nadia Ismadi

Yeah. Then I just, you know, okay. Well, what do you mean? Is it oh, here, you know, I want to know, how long are you fully invested in the business before you have your attention being taken, you know, taken away to focus on something else? Like what yeah, you know, then I said, Well, I think that’s a quite a movie. But that’s a conversation of a gender role, which is so complicated to get into. And I say, No, No, but seriously. And I find it really weird that when I check in with my other, you know, male counterparts, they never get asked this question.

37:42 Michael Waitze

I’ve never been asked this in my whole life, right?

37:44 Nadia Ismadi

And then, you know, in the moment, is that always, for female founders is always starting with the question of doubt. And then you always have to just clarify and break through those doubts. But the questions that our male counterpart get asked is this point forward? So it always got interesting, the question about growth, the question about where do you see this going? But for us, it’s always can this really work? You know, what about this hurdles, that hurdle, your personal life? What about all those things? It’s so weird. And another example that is even funnier than this one was, I remember we had a, we had a CTO at that time, who was living abroad. So because we’re a tech company, and I’m aware that that’s a crutch, that we’ve got a supplement, I keep mentioning over and over again, that we’re trying our very best to bring him back here in Southeast Asia. So I keep iterating during the pitch, and by the end of it, the point that he got instead was you keep saying that you’ll bring the CTO of yours back here isn’t your boyfriend? And then I’m like, wow, yeah. So you know, those things?

38:45 Michael Waitze

Is there an avenue? And again, I mean, if somebody said that, to me, I think I know what I would say. But is there an avenue to just like, pretend that the commentary that they’re making is just so senseless? Do you know what I mean? Yeah. Is that like, if someone like if someone says to you like, is that your boyfriend? Isn’t there? Is there a way and I’m not saying isn’t their way? But is there a way to just say like, I’m sorry, I don’t understand the question. Just talking about my CTO, what’s the relevance? I don’t get? I

39:09 Nadia Ismadi

Think I replied in those nuances, but the response has always been around us just joking. Oh, oh, that was just, you know, that was just a funny thing. I say, because I’m such a funny person. You know,

39:22 Michael Waitze

They know it’s not though. Yeah, they know it’s not

39:25 Nadia Ismadi

But but the thing is, I don’t understand. So sometimes I you know, at the end of the day, I just figured, like, you try to navigate as much as you can. And then it’s not just a question about whether they want us as investors whether they want to invest in us, it’s also a question whether we want them as investors. But throughout all this world, before this particular round that we recently did, all my investors will mail and they were fine. And they were really supportive. And they were the kind of people who are genuinely passionate about the business. And those are the kinds of investors that I would like to add into the team.

39:56 Michael Waitze

But you made a point earlier, and I want to make it even more explicitly today. is that there are 150 I mean, right now there are 150 some 200 million people that are underbanked. Yeah. Which is like having a pizza restaurant in a town where no one’s ever had pizza before. It’s like, why wouldn’t you want to make the pizza for these people? Because even if just 10% of them eat your pizza, it’s a massive business, right? Like you looked at this from a capitalistic and an economic standpoint, it’s not so much like I want to do. Only social good. Yeah. The reason why impact investing and social enterprise are so important today. I’m not saying that this is, is because there’s a massive economic possibility out there. Yeah. To make a tonne of money. Yeah. And real investors get this. Yeah. Without saying is the same to your boyfriend? Sorry. Yeah. Is that fair?

40:47 Nadia Ismadi

That is fair. So I think that is, that is the baseline way to filter. Whether we get where do we take the next meeting? It’s like, we don’t have any questions, then. Yes.

40:59 Michael Waitze

Oh, I love it. I was on the phone with the with a, an entrepreneur in Costa Rica last night. And he was making a kind of related point. And that was money is a commodity investment. Money is definitely a commodity. But if you find the right investors, and he was sure that he had that they had so much more value than just the money that they give you. And he was like, what he was like We borrowed not we didn’t borrow, we raise $400,000. From them, we’ve only spent 200. So we’ve been able to use the money superficially, but this other stuff that they gave us was so valuable. Yeah. And I think that’s part of what you’re saying as well, right? Is that like, and I believe this really deeply that founders should do as much due diligence on their potential investors as investors do on you. And you’re right, if they ask you stupid questions, you should just be like, Yeah, thanks. But no, thanks. No,

41:46 Nadia Ismadi

Yeah, exactly. And I have been, we have been very privileged to have investors in the early days that were just phenomenal individuals. So these are the people who are either within the FinTech space, or in the financial industry, who saw the same problem that needs solved. They just either are too busy on their own business, to help solve this problem, but they want to enable people who are interested in solving them. So those are the early stage investors that I have, which I’m very, very fortunate,

42:15 Michael Waitze

Good for you. When you you must be super busy, right? But how do you affect your own learning? Right? The world is not a static place, it’s a dynamic place and just stuff keeps changing? How do you eliminate the noise around you and just learn the things that you need to learn? It’s

42:30 Nadia Ismadi

Genuinely very difficult at first, like I wouldn’t know, because I think you know, being in corporate, you have a set of stuff you have to worry about, all you have to know. And that’s it. You don’t need to know any other thing beyond that. And you’re okay to do your job. And you can kind of accelerate and climb the corporate ladder relatively efficiently. It’s a bit different. When you are a founder, you’ve got to know literally everything, but you don’t have to know everything. It’s a bit weird. Like, you don’t have to take everything you don’t you don’t have to internalise and do something about the information. But you’ve got to have the information, if you know what I mean. Yeah, that’s what it feels so hard. It is difficult. And I asked my investors the same thing, right? Because they see probably 100 companies a month as angels, right? They go and you know, trying to find investment deals and see, but how do you reduce the noise and to see what good founders versus bad founders, so you know, founders who needed a bit more work? How do you synthesise that, and I think they say to have a set of pillars that you want to focus on. And then you just 00 in on that, right? So have a bunch of stuff that you need to absolutely worry about, let’s say five to 10, a handful. And then that’s what you build everything else around

43:41 Michael Waitze 

When you were younger, and in school, and you saw the bag opportunity and your grandfather funded you want to use the words, right? Yes, there must have been a certain amount of joy you had when you made enough money to go back and pay him back in spades. Right? So you paid him back extra? Do you feel? Do you think about that, that sometimes today, when you’re way further along in building a company, do you feel that same feeling of I have now raised money from these people, and I feel the same joy as my business grows, because I can then go back to them as well and give them back way more than they gave me?

44:20 Nadia Ismadi

Yes, that’s exciting. But what’s more exciting, based on my experience with that my late grandfather, he doesn’t even care. Like he just want to sit down and say, hey, you know, here’s the money. And he said, Yeah, but tell me, tell me what happened. Tell me why you started this thing. And, you know, tell me what your customers were like and what they value and you know, how did you end up like the one person by more than one? You know, it’s it’s those experience that he valued more than the returns? And I feel that generally my angel investors are the same way and I’ve had it I’ve had one of them say exactly that in a different context, because I asked him so so he was this. He is this board member of a bank and A few financial institutions. And I asked him I said, out of curiosity, why did you decide to invest in us? Like? Like, why? Yeah. Why? I mean, I mean, I know we’re great, but you know, separately. I mean, I was curious as to his personal motivation. And his answer was I just wanted to learn. It’s like, you know, this money I could have used in, you know, to maybe get another MBA or go to a shortcode course, and maybe have some prestigious university, but it wouldn’t be the same. As you know, if I put this money to a group of people who are genuinely passionate about doing something and then I can hear about their adventure, and that’s still that’s the only reason why I do this

45:38 Michael Waitze

That I think it’s going to be the title of this. I just wanted to learn I really want to thank you. Nadia Ismadi, a Co-founder and the CEO at Pod. That was awesome. My

45:47 Nadia Ismadi

Pleasure. Conversation

 

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