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Jay Tuli – Building from scratch, fintech spinoffs, and the secret power of cost accounting | Episode 1
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Welcome to the first episode of Builder, Banker, Hacker, Chief! The guest on today’s show is Jay Tuli, President of Leader Bank and Chairman of the Board at ZSuite Tech.
On this show, I’m unpacking the stories, decisions, and influences that make people into successful leaders. Jay is a dynamic business leader, son, husband, and father – making him a natural fit for the inaugural episode of this show.
I’m Nathan Baumeister, CEO of ZSuite Tech, and host of this podcast.
Jay and I talk about his background as a child of first-generation immigrants and entrepreneurs. We explore his path through higher education, and the decision to step back from high-powered investment banking and into community banking. Jay opens up about the mistakes and shrewd calls that he made on the road to developing a successful fintech product in-house and spinning that product out into a stand-alone company known as ZSuite Tech. You’ll also hear about the teachers, leaders, and concepts that have influenced Jay’s thinking along the way.
Resources:
Jay’s media recommendations:
The Code of the Extraordinary Mind
Denzel Washington - University of Pennsylvania Commencement Speech
Connect:
Recommended
Transcript
Authentic Leadership Lessons
00:00:00
Speaker
This one professor, he was so amazing. I'll never forget him. And in fact, I visited him when I was doing vacation in Spain because he ran a Spanish bank and they recruited him to HBS to teach basically like an accounting class. But he was the CEO of this really big Spanish bank and he did not know much about accounting. So the classes,
00:00:30
Speaker
Whatever the material was like there's a case study, but you're really supposed to talk about like the debits and credits in this case study. He would skip that whole part and just talk about leadership and strategy and the role of ego as a leader and like, you know,
00:00:47
Speaker
It was a really interesting concept that nothing new the county but he was just such a phenomenal Professor and I really learned like how human a leader is how human a leader needs to be and how like being authentic There's really a great leadership trait and you could just see this in him like he was Such like a famous big corporate person there, but when he was here he was just so authentic and genuine and vulnerable and It was really really inspiring
00:01:29
Speaker
Hi, my name is Nathan Baumeister, and you're listening to Builder, Banker, Hacker Chief, a podcast where executives from the world of finance and technology share the story of how they got where they are and the decisions that made them who they are.
Introduction to 'Builder, Banker, Hacker Chief' Podcast
00:01:43
Speaker
I'm looking for hidden moments of truth and sacrifice, wisdom and folly, and what it's like to navigate treacherous waters in the helm of a growing company.
00:01:52
Speaker
I want to do all that so that together we can learn from their journey and use that insight personally and professionally. This is our inaugural episode, and it's my great pleasure to introduce you to Jay Tooley, President of Leader Bank and Chairman of Z Sweet Tech. Now, my job is CEO of Z Sweet Tech, so I've gotten to know Jay very well over the years. Even so, this interview offers a rare window to who he is. So sit back, listen close, and I'm so excited to share this conversation with you.
00:02:34
Speaker
Jay, welcome to Builder Banker Hacker Chief. Excited to have you on. Thank you. I'm excited to be here, Nathan. Now, you and I have had the pleasure of knowing each other for quite a while, working together in the trenches as we've worked together with Zsuite, as well as our software and systems at Leader Bank. So I get to cheat a little bit in diving into some of the formative experiences of your life that has helped you to become the leader that you are.
Jay Tooley's Financial Roots
00:03:04
Speaker
As we start off this conversation, let's go back a little bit. I think it would be super interesting to talk about a little bit about your upbringing and kind of how you grew up and what are things that now that you can kind of look back retrospectively from those formative years of growing up that really has given you a baseline and foundation to become who you are today in the business world.
00:03:32
Speaker
All right. Well, I give you a little background on myself. I mean, I grew up right outside of the Boston area in Belmont. My parents were immigrants to the US from India. They came here in around 1978.
00:03:51
Speaker
And my dad sort of had some normal jobs. He was a bank teller, sort of grew up within a bank, got promoted a couple of times, and ultimately decided to start his own mortgage company because in the neighborhood he was living in, which was predominantly a Greek neighborhood,
00:04:16
Speaker
Some of his neighbors needed to buy a house and they didn't know English that well. They didn't know the process and he helped them. Then they began sending all their friends to him to try to help them get a loan and ultimately decided, okay, this could be something. Started back then was called Leader Mortgage Company on the side. That was the very beginning of a long, long journey. I'm sure we'll get into Leader Bank at some point.
00:04:44
Speaker
But that was the beginning of that journey. And when I grew up, we would talk about his company a lot. I was very interested. I learned a little bit about business and finance and lending, just hearing him talk to folks. I always found it fascinating. And so then when I went to college, I decided to focus on finance.
00:05:13
Speaker
My first job after Georgetown was actually JP Morgan, which was great training ground. I mean, just learned a ton in New York, learned a lot of analytical experiences, but I ultimately wanted to come back to Boston.
Joining Leader Bank: A Family Affair
00:05:30
Speaker
And then I ultimately joined my father at Leader Bank in his formative early years.
00:05:37
Speaker
When you look back at growing up where your mom and dad were first-generation immigrants in the US started off, I love the fact that he started as a bank teller. I love that as part of his story. But as you saw them going from jobs to wanting to start a business based off of this inkling of an idea that they could help,
00:06:03
Speaker
I know a lot of children that grew up in that environment were like, Oh, I never want to be an entrepreneur because I saw the struggle that it is and how hard it is. Um, and it seems like it didn't deter you, uh, but rather inspired you to want to be in kind of that same general industry, to be able to help people in the financial side. Why do you think that is? I, you know, it is fair question. Obviously, um, I saw times when he was really stressed. I saw times.
00:06:32
Speaker
when he was working on weekends and stuff like that. But I also saw him just have like a lot of pride in what he did. So even though he was working hard, he was really happy.
00:06:45
Speaker
It felt he had a lot of empowerment obviously because of his own company. The other thing that was really interesting in early age I saw is he had these really strong relationships and just really was able to connect with people, clients or associates or whatever it was.
00:07:08
Speaker
And then these relationships would evolve into something much greater when you fast forward 10 or 15 or 20 years. And I find that probably the real interesting thing about his journey, which I think crafted my own view of how to think about relationships and relationship building and things like that. So I think that was some of the inspiration, I would say.
00:07:35
Speaker
Yeah. And so when you went to school, you knew you wanted to be in the financial industry. You went to DC. Any specific driver of wanting to go to DC or anything that kind of helped shape you and your undergrad experiences there?
00:07:53
Speaker
I wanted to be close enough that it would be a short flight, but far enough that you needed to take a flight. So DC was a great spot. I wanted a big city. I love that it had a very international feel to it. I love Georgetown. I wanted a school with an undergraduate business program, which Georgetown had. And when I went there, I just, I don't know, I just like really loved the whole vibe. You know, sometimes you just gotta like feel these things out.
00:08:21
Speaker
So I had an amazing experience with Georgetown. Yeah. I'm curious as you kind of flex those muscles of independence, of moving away from your family, moving away from your hometown and finding yourself in this environment.
00:08:38
Speaker
Oh, did you flex your muscles of that relationship building and kind of following that template that was kind of put forward of what you found is something unique that your dad was able to do. And I'm curious as now you've been able to fast forward from that time period, so many years in the future, if you've seen some of the seeds you planted then to grow.
00:08:58
Speaker
Totally. I got a postcard just recently from my sophomore year professor who taught us a finance class and we're still in touch however many decades later.
00:09:18
Speaker
college roommates and some of my really close friends were still very much in touch. I mean, I just love when a relationship can kind of grow with the test of time and just have like long strong bonds with people. That's one of the most, the things I like the most. So definitely, I think, and I don't think any of this was on purpose. It's just kind of like felt normal to me, you know, to sort of hang on to a relationship for a long time.
00:09:48
Speaker
stay in touch. So Jay, you were able to go to Georgetown and you went and worked in one of the largest banks in the United States and in the world.
Balancing Work and Family Aspirations
00:10:03
Speaker
And through that process, as you mentioned, you had some great experiences, but in the end you decided to go back home and work at a
00:10:14
Speaker
de novo community bank, which a lot of people would think of that as kind of the different end of the spectrum.
00:10:24
Speaker
Pardon my fintech lingo here. Most banks that you see today have long histories, some stretching back 100 years or more. A de novo bank is simply a bank that is starting from scratch. And so when you hear that Jay left a job at JP Morgan to join a bank that had no history, no reputation to fall back on, it's a big deal. Jay and his father have taken Leader Bank from zero to $4 billion in assets in a very short period. They're swimming against the current and winning. This is a glimpse into what makes Jay remarkable as a banker.
00:10:57
Speaker
So I'm curious, what was the decision point? Do you remember the moment kind of when you made that decision to leave what many people would consider kind of the elite thing to do? To then go to what a lot of people would think is, oh, community bank?
00:11:16
Speaker
Yeah, great question. There's actually a small intermediate step. I came back to Boston. I worked for an investment bank, a small boutique investment bank for about a year and a half. The decision was easier than you think because it was a great experience, but I was working really crazy hours, like 80, 90 hours a week, and I was just burnt out. What happened was my dad and I just had a conversation at the dinner table.
00:11:42
Speaker
I was exhausted. I was under slept. I was like, I don't know how much longer I can do this. And he was sort of talking about how he needs help. He needs help to grow the bank. It was a small like two branch bank back then. And his point was, you know, just come and try it. And if it works great, and if it doesn't, you can always find another job. So that was it. That was that was the decision. It wasn't like a whole lot more thinking about it than that.
00:12:09
Speaker
Sure, I did wonder like, hey, it doesn't sound as cool to work for like a small community bank, no one's heard of versus more like a sexy kind of like either investment banking or big brand name bank, you know, that goes through your head a little bit. But as a kid, I always kind of felt like maybe one day we'll work together. So I felt like, okay, maybe this is that moment. Yeah. So you kind of have that inkling even from way back in childhood that it might happen.
00:12:34
Speaker
The idea of multiple generations working together to grow a bank is a common story. It's a common theme. And even beyond that, just multiple generations working to build businesses together is oftentimes a common theme as well.
00:12:51
Speaker
Oftentimes it doesn't end great. So obviously we can fast forward. We can see all the success that Leader Bank has had. But I wonder what was going through your head and maybe what some of the things that you learned or a story or experience that happened is you and your dad kind of had to transform your relationship from father and son to colleagues and coworkers.
00:13:15
Speaker
Yes, it was a journey. I'd say the first six months was a little bit choppy. I wouldn't say choppy, but it took getting used to. I wasn't used to his style. He wasn't used to my style.
00:13:35
Speaker
And then we had the whole dynamic of how do we convert from colleagues to father and son in a family setting without boring everyone else about work talk. So we had some of that stuff to work through. Ultimately, though, I think we got in a really good rhythm. We still have a great rhythm today. And more or less, it's
00:13:56
Speaker
There's just a couple things. No one business decision is so important that if the other person feels so strongly about it that you can't try it and then just be honest quickly if it worked or not.
00:14:11
Speaker
So that's the attitude we took. If one of us feels so strongly about something, well, let's try it. And if it works awesome, if it doesn't, fine, like roll it back and try something else. And then I think the other thing was when we go home, like with others, like let's just not talk about work, which was kind of nice because it created a separation. And we sort of did that because we'd bore other people if we did that, right? So it was good. There were some barriers.
00:14:41
Speaker
I think on the first part, what's an interesting byproduct of the let's try it concept to appease each other, basically put family first over the business was it kind of made us start at the beginning seeds of a culture of like, it's okay to experiment with things. Because again, like, it was more of a like, why not? Then? Why do we want to do that? And
00:15:09
Speaker
And that, that evolved to a lot of cool experiments, I guess, over the years. Do any, any of those experiments kind of come to mind, especially kind of in the early years when you were able to kind of put that dynamic to practice? We, we, um, this was like 2012 back then there was no word for FinTech. So it was like a tech company and they had this idea.
00:15:38
Speaker
called impulse save, where rather than impulse buy, say you want to buy something, but you don't. What you would have spent that's now a savings, you put it in your phone, or actually, I didn't get to do it online. I saved 30 bucks because I didn't go out to dinner or whatever. And it would transfer that from your tracking account to your savings account. And then there were goals attached to it and all this stuff.
00:16:03
Speaker
So I was really pushing to try this, and I think everyone else was kind of looking at me like, what's the point of this? And even if it, like, how is this adding value, is this going to work? All this stuff.
00:16:18
Speaker
So what's interesting about it is it was actually a lot of work to get this up. Because back then, again, there were no FinTechs. There was no partnerships. There was no, like, this is really new territory. So we had to figure out all these controls and all this way to work with them and give them access and policies and yada, yada, yada.
00:16:39
Speaker
And we do it for like three months, six months. And we realized like the counter like really small, wasn't adding a lot. It was actually costing us a lot of money. And we're not sure like this would be a viable like business model or product. So we killed it. So as an experiment, we tried and killed. However, the learnings of that was how the whole ACH system worked.
00:17:02
Speaker
Not ACH understanding, the underpinnings of it actually later led to some of the things we did with ZRent. I don't know if we would have got there without that learning. So that's one example of this. Let's try it and it didn't work.
00:17:19
Speaker
Building a company is all about having a vision, turning it into a plan, and wrestling through all the ways that plan can go awry. As a builder, Jay understands what it means to build something, knock it down, and rebuild something better in its place.
Learning from Failure: Impulse Save to ZRent
00:17:33
Speaker
The road is winding and full of cockholes or blockades. That's what makes the story worth telling.
00:17:41
Speaker
Yeah, every path you walk down isn't going to get you to a success. However, all the learnings that you had along that path, you're going to be able to apply to future experiences. I love that. Exactly. I love that. During this time period as you were working at Leader Bank, I know you've also made the decision to work on your MBA at Harvard. And so I'm curious as you were working full time building a bank alongside your father,
00:18:10
Speaker
What was it that drove you to want to go back to business school and get your master's? I wish I had a really good reason. I think when you work in the family business, you have a little bit of a chip on your shoulder that the job was given to. To go out and get some third-party validation,
00:18:39
Speaker
was a piece of it. So that was a piece of it. I think the second part was I felt at that point in our company history, we didn't have a clear strategy. We were sort of reactive to any opportunity that came past our desk.
00:19:04
Speaker
Every single thing required this big discussion. Should we do it? Should we not? And so I felt like I would benefit from really trying to figure out how does strategy work? What does even that mean? So I think those were the two things. And of course, I felt like if I get in, great. I mean, most people would. And so I got lucky, got in. But then I really focused on the strategy piece. And I enjoyed it.
00:19:33
Speaker
Did you find that you had a lot of application of education? You'd walk in from the classroom, you'd walk to the bank, and you'd find that there's immediate application of the things that you were learning. If so, I'd love to hear an example of that.
00:19:49
Speaker
Totally. I was bursting with ideas all the time to the point that I was driving the team crazy who was still at the bank because I had all these ideas, but we didn't have people implement them. I couldn't implement them because I was still in school. I actually remember writing this long document.
00:20:10
Speaker
Because at that time, we were like 200 or 300 million assets, and the document was how we get to a billion in assets. And it was like this 10-page thing, and I kept it. The first one was cost accounting. As boring as accounting is, some would say accounting is awesome, but as kind of like fundamental as accounting is,
00:20:34
Speaker
I realized that we don't actually know what pieces of our business are actually making money and what's losing money. And if you don't know that, you don't know where to put the resources. You don't know how to measure. And you don't know how to incentivize. And you don't know just, yeah. So first thing we did was this really big in-depth cost accounting model that we still use today.
00:21:03
Speaker
11 years later. I mean, it's been modified over the time. And in essence, it creates all these tons of P&Ls for different aspects of the business. And that gave us a lot of the information we needed to make the right management decisions.
00:21:20
Speaker
Yeah, that's one example. No, I love that. It's funny, I've told multiple people that from a business application perspective as an entrepreneur, cost accounting hands down has been the most helpful class I've ever taken. I'm glad that we share that particular thought process. It's not a very common one though. Yeah, totally. As you think back about the professors and educators that you had access to,
00:21:48
Speaker
at Harvard, at Georgetown. Can you think of any that created some specific inspiration, more specifically about the type of leader that you've become or the type of leader that you've wanted to be?
00:22:05
Speaker
There was this one professor, he was so amazing. I'll never forget him. And in fact, I visited him when I was doing vacation in Spain, because he ran a Spanish bank. And they recruited him to HBS to teach basically like an accounting class. But he was the CEO of this really big Spanish bank. And he did not know much about accounting.
00:22:33
Speaker
So the classes, whatever the material was, like if there was a case study but you're really supposed to talk about like the debits and credits in this case study, he would skip that whole part and just talk about leadership and strategy and the role of ego as a leader and like, you know,
00:22:53
Speaker
It was a really interesting concept that nothing new the county but he was just such a phenomenal professor and I really learned like how human a leader is how human a leader needs to be and how like being authentic is really a great leadership trait and you could just see this in him like he was
00:23:11
Speaker
such a famous big corporate person there. But when he was here, he was just so authentic and genuine and vulnerable. And it was really, really inspiring. Because usually, at that point in time, I wouldn't associate that with a leader. You would think strong and big and... Knew all the answers.
00:23:34
Speaker
knew all the answers, and he was just so honest. He's like, I'm supposed to teach this class on this specific. I have no idea how to do that. So we're just not going to. We're going to talk about the leadership concepts. It's really interesting. There were two other professors I didn't have, but I got the chance to see them in a broader setting, in some large sessions.
00:23:58
Speaker
One was Francis Fry, who I think is just like an amazing professor in operations management. The main theme that got stuck in my head was in order to be really good at something as an organization, you have to be really bad at something. And you have to be okay with what you're bad and deliberate about it. That just like blew my mind. That wasn't an obvious thing. And I still think about that today. What are we going to be bad at so that we can be good at other things?
00:24:27
Speaker
And then I think Clay Christensen, I wanted to be in his class. I couldn't get in his class, but I heard him a bunch talk. And the one thing that stuck with me is when you're starting a new venture, an existing organization, how you really need to separate it in a way and give it its own leash so that it can form and
00:24:49
Speaker
create its own path and priorities without being gobbled up by the bigger organization and its restrictions, which I thought was a really interesting concept. Yeah. And I could definitely see how that has manifested itself in your career as you continued going down that path.
00:25:09
Speaker
So as you're talking about this idea of to be good at some things, you have to choose to be bad at some things. I'm curious and also talking about humility and openness and vulnerability. So what are some of the things that perhaps the leader has chosen to be bad at?
00:25:27
Speaker
That's a good question. That wasn't on the script, Nathan, but that's okay. No, great question. Okay, I think a couple things. One is I would say the menu of products. So we don't do student loans. We don't do auto loans. We don't do credit cards. We don't do wealth management.
00:25:48
Speaker
So we do a few things we try to do them well. But what that means is we have to not do a lot of stuff. And we have to tell our clients like, when they ask, like, we don't do that. And
00:26:02
Speaker
I think we're unique in a way, because a lot of banks will do all of those things. So we've had to really pare down the offerings. I think another thing that we've historically been bad at, that we're a little bit better now, but we're still generally speaking not great at, is marketing.
00:26:21
Speaker
We always sort of took the trade off of giving up marketing savvy for more of a focus on product savvy. And our marketing spend was always pretty small. We didn't really do a lot of branding. We didn't really do all that, but we did spend a lot more of that energy in trying to build unique products.
00:26:49
Speaker
Yeah. Thank you for sharing that. I think that's great. Also, I'll never forget. I was in the car with you. We were driving to lunch and I remember someone called you up super excited about a loan that they needed.
00:27:04
Speaker
and start asking some questions. And it sounded like a big opportunity to me. And I was like, oh man, this is awesome. And it's cool that I get to listen to this. And I'll never forget, because you said at the end of the conversation, you know, that sounds like you are in great need. And here are the banks that you should call who focus on those particular needs. Because I'm telling you right now, I wouldn't be the best one for you.
00:27:28
Speaker
And I remember sitting there being a little shocked. I was like, did that just happen? Did he say that no to business and refer him to what people would consider competitors. Uh, but you knew that that wasn't something that you were focused on and that you were going to be the best and you did the right thing by your customer. And I'm sure by, you know, your friend, because, because of that relationship, it's cool to see that in action.
00:27:50
Speaker
Yeah, I think that was one of the things I did pick up in school was strategy is actually knowing what you don't do. I try to remember that now, but of course, you always get sidetracked in all these interesting projects you want to do, right? Yeah. Well, just because we know certain things doesn't mean we're perfect at following them all the time. Yeah, exactly.
00:28:18
Speaker
As you look at this amazing growth story that is leader bank, and I think right alongside that growth story is your personal story of amazing growth as a leader.
Leadership During the Financial Crisis
00:28:29
Speaker
And you kind of can think about it retrospectively. Are there any moments that you can point back to as being specifically formative of teaching you what type of leader that you want to be?
00:28:49
Speaker
So these are experiences in my journey at Leaderbank that taught me what kind of leader I want to be. Yeah, just formative experiences that you can point back that you could say, hey, this was an inflection point.
00:29:07
Speaker
Yeah, a lot of lessons were learned in between the years 2010 to like 2013, the great financial crisis. I mean, that was like an MBA, a PhD, like whatever in like these couple of years. So one interesting thing was I thought that, you know, as a manager, leader, boss, whatever,
00:29:36
Speaker
Like you say things and then people do it. You know, like I just thought that like that's kind of how it's supposed to work. And we were in the midst of recruiting like all this great talents really only because a lot of banks were going under. And so like this great talent didn't have a home and we were there. And I quickly realized they did not care about the hierarchy. They're like, if I wanted them,
00:30:04
Speaker
the hierarchy had to be upended. And I basically worked for them in a way. I'm there to serve them and help them because they're such a unique talent. And that really opened my eyes. And then I went to business school and I really saw this concept in so many different lenses. And it obviously makes a lot of sense. But yes, I still think about that today.
00:30:33
Speaker
you know, how does the pyramid work? Is the leader at the top, and everyone's at the bottom, or is it inverse, and the leader's at the bottom, and everyone's at the top, right? Another one was this whole concept of like, what is a true risk of an opportunity?
00:30:51
Speaker
Like is it actually risky or is it just different? And so looking at the odds of the low versus the odds of the success. So in other words, like if we're going to try something and on the downside, it's like, it just doesn't work and can shut it down and you know, whatever. But the upside is like something potentially really great. That's like a great opportunity to do because, um,
00:31:21
Speaker
has unfair odds on the high side. And so thinking about this in lots of different lenses, whether it's a new project, whether it's a team member, whether it's a new location, whether it's a new business, it's kind of like value-oriented investing in a way, where the odds are in your favor. There was a lot of that during the early financial crisis. And I remember
00:31:48
Speaker
you know, I remember talking to someone where it's like, wait, is this really risky? Or is this just, am I afraid? Or is it is just different? When you peel back that onion, you're like, there's not a lot of risk here. So there's really no reason not to try it. And then the last thing I'll say is like, I think one thing I've learned over the last decade is this idea of like longevity, and this kind of goes back to the relationship conversation we had, but
00:32:14
Speaker
The ability to have an organization that is there for the long term that can grow and the learnings can compound and the people there can grow as leaders and their learnings can compound and they don't have to have fear that the corporate parent is going to disappear or be really
00:32:37
Speaker
pull the rug under them in terms of strategy, just going to be stable. It's a really unique thing. It's a special thing, I think. I've learned that that could be a competitive advantage.
00:32:53
Speaker
I can't stress enough what a monumental undertaking it was for Leaderbank to develop a product in-house, release it to the marketplace, and eventually spin it out as a separate company. Lots of startups spend all their resources trying to reach product market fit. Leaderbank did it as a Skunkworks project and has been wildly successful. That's what it means to be a hacker, taking pieces and creating something that works in a way no one saw coming.
00:33:20
Speaker
That's fascinating.
Innovating with Z-Suite Technologies
00:33:24
Speaker
As I look at Leader Bank and some of the things that you've done, you've had success in some initiatives that I really haven't seen many other banks be able to do. It has to do with innovation and technology and doing some of that actually in-house versus licensing everything that you're doing.
00:33:45
Speaker
Um, you know, for those that are listening that don't know kind of where the Z-suite technology story comes together with the leader bank story, we actually spun out from leader bank in 2019. But the predecessor to that was a lot of in-house product development that you've done. And I would, I would have to guess that as you thought of that internal product development, which you touched on a little bit on your impulsive savings product.
00:34:11
Speaker
But was that an example of where you looked at the risk and it's like, well, if we tried it, what's the worst that could happen? Kind of take me through some of the thought process to actually do something where most banks have never tried it. And those that have tried it failed. Yes. It was, it was that concept of, um, like Z rent was the first sort of like,
00:34:40
Speaker
Project we tried here right and of course like we're very naive We didn't know like what all would be involved right if I find you everything I knew now like there's no way we would have tried that back then but the initial the initial like prototype to kind of try it to see if customers would take to it was extremely cheap and
00:35:05
Speaker
There was a lot of manual processes, but to get the learning of if this could work or not was pretty cheap. So when you look at that, the odds of it failing, well, it's just the cost to get this prototype. That's not a lot of money. If this worked, okay, that could be huge. So yeah, that was an example. We're like, all right, let's try it. Let's just give it a shot and see what happens.
00:35:34
Speaker
Then the result was a success. In the end, you were able to have a lot of success with that product, which for anyone that's not familiar with Z-Rent, it's a product that helps to automate rent collection for landlords and property managers. Went on to develop other product in-house, Z-Deposit, which brought to I think this interesting crossroads that I think a lot of people could probably relate to.
00:36:01
Speaker
where you had a bunch of success building these capabilities, building a team, building some services. And then all of a sudden you made a decision to like, let it go and pull it out of your organization.
00:36:20
Speaker
And that idea, no matter what it is, is something that I think a lot of people would have difficulty with and probably wouldn't even contemplate. So I'm curious if you can share a little bit of that experience and journey and how you got to that point, why you got to that point. Yeah, I mean, it's a good question. I mean, I think there are two parts to it. One is the intellectual understanding of it and the other is the emotional, right? And I think on the, on just the analytical side, like,
00:36:50
Speaker
we were seeing that there was interest from other financial institutions. And we were seeing that us owning it in the bank was a hindrance to other financial institutions adopting it. We were also seeing that
00:37:12
Speaker
We didn't have all of the use cases. This product wouldn't evolve fast enough if it was just us driving the product development. The ability to bring a lot of financial institutions into it as clients would make this a much more robust platform. So we kind of knew either this is going to stay small or if there's a chance of it going big, we got to let it go.
00:37:40
Speaker
On the flip side, emotionally, it was like, how could we let this go? This was like our baby. We started this thing from nothing. We put so much blood, sweat, and tears into it. To sort of let it go, it felt like giving away your child, you know?
00:38:00
Speaker
That was the emotional part of it. That was harder. But I think, well, there was a journey to get over that, I guess. But you sort of take one baby step at a time. And ultimately, that was just a fear. I mean, that was just some sort of fear. And I'm so glad we did spin it out. I mean, I think it's better for everyone.
00:38:27
Speaker
You all are off to a really interesting journey now that couldn't have happened if we're still part of the interbank. Thank you for sharing that. As you went through this path and this journey that hadn't been walked by many people,
00:38:46
Speaker
and was difficult. Did you have help along the way? Was there anyone that you kind of brought along to be able to work through those hard questions and hard decisions and working through some of both the business side and analytical side, but also some of that personal side?
00:39:03
Speaker
During that process, for me, it was particularly hard. I will say the reason why was I was very comfortable at that time. Bang was doing good. We had this in-house product development team that created a product no one else had. Leader was getting a lot of press for it. Life was good. I was very worried about
00:39:27
Speaker
trying to really put this product out there, and if it failed, then I'd be in a worse off position. Honestly, it was more about would I feel shame to my other peers. There were two things that really helped. One was this YouTube video by Denzel Washington. It's actually the University of Pennsylvania commencement speech.
00:39:57
Speaker
He talks about, you know, the ghost of the dreams that you never
00:40:05
Speaker
You never tried kind of haunting you when it's your final days. Another one is Tom Shen. Tom Shen is on our board and Tom Shen is a FinTech veteran and I flew out to Calabasas, California. We had had a couple of conversations. I flew out there and he just gave me like two or three hours of his time. He was so genuine and it was just that nudge I needed to be like, okay, we should do this.
00:40:38
Speaker
Yeah, that's great. Thank you so much for walking through that story. Now, as we changed lenses a little bit in the conversation, we focused on education. We focused on your upbringing. We focused on your professional experiences at Leader Bank, as well as some of the other places that you worked.
00:40:59
Speaker
As we switch gears and think about how has your personal life, your personal interests, your family, whatever it might be, how has that shaped who you are as a leader in the business world?
Authenticity in Leadership
00:41:14
Speaker
Especially in context, I think there's a lot of people that say things like, oh, it's not personal, it's just business.
00:41:21
Speaker
I've always thought that that's incorrect. We are who we are. Though there might be different norms of acting in different situations, we still are the same person. I'm curious how those things have shaped who you are as a leader and as you've grown up, has there been shifts based off of things that you've been doing personally? Yeah, definitely.
00:41:52
Speaker
When I grew up as a kid, I felt like I lived a double life a little bit, because at home, my parents were immigrants, I was sort of first generation. And so I didn't know like,
00:42:11
Speaker
the pop culture, the music, I didn't know the TV shows, I didn't know the sayings, I didn't know the fashion, none of that. And so when I went to school, which this particular school I went to really didn't have much diversity at all, I really felt out of place. And so I felt like during middle school and high school, I kind of lived a double life. It was very uncomfortable in a way because I just
00:42:38
Speaker
I felt like I couldn't really be the real me, but I had a sort of safe face at school. Anyways, it made me uncomfortable. When I went to college, all that went away because it's very diverse and there's so many people with so many different interests. I finally felt what it was just to be myself. I think the lesson I got from that was,
00:43:01
Speaker
I dislike a situation where I can't be authentic, something that pushes me to fake it, makes me really uncomfortable. I try to stay away from that. I want to be in a situation. I want to be with people who are going to be real, who are going to be their true selves.
00:43:19
Speaker
Um, I don't like to do things just for the sake of doing them or a check the box. It's like, if we're going to do it, let's do it. Cause like make sense. Um, so I think, I think that, that piece of it had a, had a lot for me. I think obviously, you know, like children, you learn a lot from children. Um, I don't need to tell you, you, you have way more children than I do, but, um, you know,
00:43:48
Speaker
One thing I got from that when I became a dad was I really have to evolve myself. I have to constantly be in a state of learning. It's not like you go to school and then you stop learning and there you are, you know everything you need to. I have to learn how to be a parent. I have to learn how to teach my kids things. I have to learn how to take care of myself. I have to learn how to calm my own stress and anxieties and all those types of things. Constant state of learning.
00:44:18
Speaker
So I think the kids helped me realize that a little bit. Yeah. I appreciate that. I think the other thing that I've found with having kids, as you mentioned, a few more than you, is
00:44:36
Speaker
Oftentimes, I'm more unguarded in those moments with my family, which helps me to realize some of my own flaws that I don't like about myself that don't necessarily come out in professional settings because I think when you're in a professional setting, you kind of have all your walls up. You don't necessarily have that on the personal side.
00:45:03
Speaker
So as we talk about that idea, as you think through your career, I think we could all agree that we probably get most of our learnings when we make those mistakes, whether it be with our families or in business. And so I'm curious if there's a couple
00:45:20
Speaker
Epic fails in your life, you know, mistakes or regrets or things that you were wrong about that as you look back helped to shape who you were and taught you some really important lessons that you were later able to apply. Um, you've already shared us your, uh, impulse savings idea. Um, obviously that one didn't go to market across all the different, uh, financial institutions in the U S but love it. If there was some other ones that came to mind, the, the, um, biggest like,
00:45:51
Speaker
I think most of the biggest mistakes are probably all around people and in terms of
00:46:09
Speaker
not recruiting the right type of person or not knowing how to recruit or hire for a specific role and either bringing in someone who didn't have the skill set or who had the skill set but we weren't ready for them or whatever the case might be. But the challenge with those types of mistakes is
00:46:39
Speaker
It can have kind of like a bigger effect than it may seem because it takes a while to realize there's a mistake. There's a team under. It just creates a much bigger issue. And of course, every mistake comes learning. And so I think over the years, I've really tried to focus and hone in now on how to interview and recruit and hire better. Because at the end of the day, it really is all about the team.
00:47:10
Speaker
This distinction is critical. It's about leading people, not just the strategy, bottom line, or competitive landscape. At the end of the day, a chief executive is just one person. He or she can't do it all. They have to enroll others in their vision and see it through to the end. There's no one moment in this conversation that represents who Jay is as a thoughtful, authentic, and capable leader.
Recruitment and Hiring Insights
00:47:32
Speaker
It's sprinkled throughout.
00:47:35
Speaker
and getting the right team in the place, a team that's going to be inspired and has a right skill set. And so I think those early mistakes helped kind of refine that process for me personally. Any key nuggets that you'd share that you've learned and that you've incorporated in your hiring processes to try not to avoid similar mistakes?
00:47:58
Speaker
I used to have this issue where I would get like star struck by a person like you know like you're talking to someone and they have like this great name on their resume and this like big role and so you wear those glasses and then everything they're saying is like through those really nice rose colored glasses and you're just missing all sorts of warning signs you're missing the fact that their interpretation of the role
00:48:23
Speaker
is not how you've explained it or you haven't explained it well enough or whatever, whatever the case might be. And so you make that higher and it's not good for them and it's not good for you. Like I made that mistake many, many times.
00:48:38
Speaker
I think the other big mistake I made is being in a conversation and something will come up, a story that's a little inspiring for me. And then I imagine what that person could do, not what they have done, not what they know, what they could do. And that's gotten me in trouble before because that's, well, it's possible, but you know,
00:49:06
Speaker
Ideally, like the person's done it before they've shown proof that they could get there. And so you kind of like missing all that. So those two things have gotten me in trouble before. Yeah, I appreciate both of those. Thank you for sharing them. Alright, so, oftentimes, leaders are asked, you know, what's their favorite leadership book that they've read and what lessons they've learned from it.
Recommended Reads for Personal Growth
00:49:27
Speaker
I want to flip the script a little bit, though. I'm curious, do you have any non business book recommendations?
00:49:37
Speaker
I have, I ordered a mattress, right? And with that mattress came this book called Why We Sleep.
00:49:45
Speaker
And I put it on the side for a long time because it was a free book with the mattress, right? It's like, how good could this book be? And then finally, I picked it up one day and I just read through the whole thing. I was shocked by how critical sleep is and how important it is for so many other things. I was just really surprised. It's a great book. So I talk about that book sometimes. There's this book, I don't know, is this business or not?
00:50:12
Speaker
I probably call it more personal growth called The Code of the Extraordinary Mind by Vishan Lakhiani. I love that book. It's really a lot about how you think about your own dreams and your own goals, not really from a business perspective, but more from a life perspective. And so I found it really inspiring.
00:50:39
Speaker
There's another one that I thought was, despite the title, really interesting book called The Conscious Parent. I read that last year during Thanksgiving and there was a lot of nuggets outside of parenting in it. Yeah, those are probably the three. Well, thank you for sharing those. I definitely was not expecting one of the recommendations to be a free book that came with the mattress. That's awesome.
00:51:06
Speaker
Jay, thank you so much for spending some time and sharing a lot of your personal stories of what's created you to be you. As we close out in the last couple of seconds here, curious if there's any last words of wisdom or parting stories that you want to leave us with.
00:51:31
Speaker
We had a cool story about a bike ride and an investor. Is that worth talking about, Nathan? Yeah. Yeah, I think so. I think it ties really nicely to what you talked about on the relationship side.
00:51:45
Speaker
So when we were spinning out Z-Suite, Nathan and I were out raising money.
The Power of Personal Connections
00:51:54
Speaker
And I don't think this, well, this definitely wasn't planned, but we went out for a bike ride with some folks, you know, it was like late at night through the city. It's a group of friends. Let's just paint the picture a little bit more. Paint the picture, go ahead. We parked.
00:52:12
Speaker
And we pulled some rented bikes off of rack where we went from what city did we started? Yeah, we started in Somerville. And by the way, I'm doing the Boston area and we're just all biking down the road, passing MIT, passing Harvard, going over the bridge, going into downtown Harvard. It was this completely surreal experience that Jay's like, Oh yeah, I do this all the time. I'm like, what, this is amazing.
00:52:38
Speaker
It was like your first couple weeks in the city, right? You were kind of new to the whole thing. It was. It was. And during this, we were just having sushi and we're talking about like, okay, why Nathan's like in Boston, what we're trying to do.
00:52:56
Speaker
He's telling his life story. There's really no agenda. But the funny thing was about the whole thing. The next day, the folks we were with were like, yeah, we want to invest. And they put in a considerable amount of money. And I think it was an interesting story because it just goes to how much relationships matter at the end of the day. And even in an investment,
00:53:22
Speaker
who your backing and what they're about and how they lead their life is just as important as the idea. And so yeah, I remember that story often.
00:53:34
Speaker
Yeah, that was a special memory. And the big thing that I took from it was, as I mentioned before, I don't think there's a difference between you as a person in the business world and you as a person outside the business world. It's all one and the same. And I saw those all come together that night with you, with me, and with the great people that we were able to spend that evening with.
00:53:59
Speaker
Yeah, thanks. That was fun. Thank you so much, Jimmy. I really appreciate your time. All right. Thanks, guys.
00:54:09
Speaker
Now you have a taste of what a wonderful human being Jay Tully is, as well as how he became such an influential business leader. I hope that you've enjoyed this deep dive into Jay's journey. You'll find the book recommendations he made in the show notes. Thank you for listening to Builder, Banker, Hacker Chief, a podcast produced and distributed by Z Sweet Technologies Incorporated, All Rights Reserve.
00:54:29
Speaker
I'm your host, Nathan Baumeister, the CEO and co-founder of Z Sweet Tech. This show was recorded using Zencaster and was written and edited by Zach Garber. If you enjoyed the episode, please take a moment to leave us a review or show the episode. This helps other people to find our show. You can also find us on Apple Podcasts, Google Play, and Spotify.