The following interview is a conversation we had with John Lunn, CEO and Founder of Gr4vy, on our podcast Category Visionaries. You can view the full episode here: $27 Million Raised to Build the Future of Payments Infrastructure.
John Lunn
Nice to be here.
Brett
To kick things off, can we just start with a quick summary of who you are and maybe just a bit more about your background?
John Lunn
Sure. So I’m John Lun, as you said, CEO and Founder of Gr4vy. Background. Originally I was a marine biologist who ended up in payments, but I’ve been in payments since the beginning of time. So I helped start a company back in 1997 called CyberSource, which was probably their first Internet payment company. I went from there, that ended up being sold to Visa for an awful lot of money. I split, started another company in a security space, sold that RSA split, and while I was setting up another company, got a call from PayPal, who I said no because I didn’t want to join a us company. And they asked me to meet the other three people in Europe so very early.
John Lunn
I was employee four outside North America 16 years ago at PayPal and helped build that from a very bad idea to pretty successful company over the next 14 years or so, and did a variety of things there, including running or being part of the team that founded the venture capital part of PayPal.
Brett
How do you make the jump from a marine biologist to payments? That sounds like quite a leap.
John Lunn
You need to. So I was based in the UK at the time and there wasn’t a lot of people employing marine biologists, so I taught myself to code and kind of right place, right time.
Brett
What was it like being in tech back in the late ninety s?
John Lunn
I know.
Brett
That was a fascinating time and a very interesting time. What was it like for the listeners who are listening in, who were just born around that time?
John Lunn
It was wild, like, it was crazy. I mean, it was like the first over the top, similar to what happened with the cryptocurrency crowd recently. We were pioneers on the edge of something brand new. It was sort of shoestrings and pirates and all the rest of it. I remember tripping over a cable and taking the entire company down once because someone had struck a cable over the front of the room. And just some crazy stories at the time. But were inventing something that never been done before on a medium that was brand new. And money makes the world go round. So getting people to be able to pay for stuff was important. And trying to take a legacy system and make it work with something new, which was the Internet, really, at the time, was super exciting.
John Lunn
But, yeah, we had to do it the scrappy way.
Brett
What about Braintree? Were you working with Brian Johnson?
John Lunn
Well, I was at PayPal, and PayPal actually bought Braintree. Part of the deal was when we bought Braintree, it was my suggestion that we should buy them. Part of the deal with our CEO at the time was, if we buy them, you’re going over there, John. So, went to work over with Bill and the guys at Braintree just after Paypal acquired them.
Brett
Wow. Very cool. A couple of other questions we like to ask, and the goal here is really just to better understand what makes you tick. First one, what Founder do you admire the most and who do you admire about them?
John Lunn
See, I’m one of these people. I don’t like the cult of the Founder. I know it sounds weird, but I feel like the louder you scream as a Founder, the harder you’re going to fall. It’s one of those things. So generally, the people I admire are the people who’ve done it more than once. And it’s not a traditional tech Founder, but I’ll put someone like Richard Branson up there as someone I would admire because he created a category, won that category, went off, created another category, went around the world on a hot air balloon, and then woke up one morning and said, you know what? I’m going to disrupt bridal wear or I’m going to disrupt train travel. And someone like that, it really can take a series of problems, often unrelated, and go, there’s a problem there, let’s work out to solve it.
John Lunn
That’s the kind of individual I admire the most, rather than someone who sort of got it right once. And I always say that my problem with the culture, the Founder, is it’s never just about you, it’s about your team. It’s far more important than you. If you’re a great Founder surrounded by terrible people, you’re going to fail. So it should be about the team that make a company, not just the individual Founder.
Brett
Yeah. And to your earlier point, it definitely seems like the louder you are, the harder you fall. I think we’ve seen that a lot in the last five years, and even just the last one year with know, SBF was all over the, you know, just dominated the news cycle. And now he’s dominated the news cycle for a very different reason. So that definitely does seem to be the case in some situations.
John Lunn
Yeah, for sure.
Brett
What about books? And the way we like to frame this is we got this from Ryan Holiday. He calls him a quickbook. So a quickbook is a book that rocks you to your core, really influences how you think about the world and how you approach life. Do any quickbooks come to mind?
John Lunn
Yeah, I mean, it’s weird. I read a lot of Sci-Fi, and I always have. I think science fiction has massively influenced how I think about things. Probably too much if you ask my wife. But I think, like two books, Snow Crash is the obvious one, which I think lots of people would come up with. But that really got me thinking about how humans and computers interface. And then, as a Brit, the whole culture series by Ian M. Banks was like, right at the early days, it’s like, how does humanity interact with what we are now calling ais or artificial intelligence? In a future world where technology solves all your problems, how do you stop being bored? Those books still now, when I’m thinking about what we should do in certain situations, or new technology, I often think back to those books.
John Lunn
And if you look back at them, and I mean written 20 years ago or something, they are really quite prophetic on how they predicted where we would be.
Brett
I’ve still not read any of those books yet, but I would say probably ten to 20% of podcast guests, when I ask them these questions, like, they do have a Sci-Fi book that they recommend. So I’m slowly coming around. I have to cave, and I have to give them a chance, at least. To me, it just feels like so outside of my world that I have a hard time wrapping my head around it. But I’ll give it a shot.
John Lunn
Well, sometimes you have to get outside your world if you want to discover the new. You have to get out of the comfort zone. So go for it.
Brett
Yes, very true. Very true. Let’s switch gears now. Let’s dive a bit into Gr4vy. So just to start off, can we talk about the problem you solve? What is that problem?
John Lunn
Yeah, so the problem is, payments are really hard. And I think every retailer in the world has this payments team or group of individuals that are out there trying to put all the spaghetti together. So how does Apple Pay work? How does Google pay work? How do I connect different payment service providers, banks, alternative payment types? How do I choose where to send my money? All of this has kind of been done traditionally by a small or big payments team at a particular company. And it kind of struck us that everyone’s doing the same thing independently with custom code. So why don’t we build that?
John Lunn
Why don’t we build a tool we can give to any retailer, merchant, shopping cart, bank that allows them to add remove change payment methods, route how they flow, determine how to get into a new country, accept the local payment types without needing this big army of engineers and this big payments team. Because essentially, if you’re a shoe rate, early, should be selling shoes, not trying to navigate the hellscape that is payments.
Brett
What made you decide to focus on this problem? I’m sure after your whole 20 plus years in payments, there were a lot of different problems that could be solved. What was about this problem or these problems specifically that made you say, yes, that’s it, I’m going to go launch a new company around it.
John Lunn
Frustration. I realized this was a bottleneck, right? And I was out investing on behalf of PayPal and going to retail and saying, look, I just invested in this cool company that has this technology, why don’t you use it? And just hearing, we would love to, but, and I just got frustrated. I think there’s been some really great payment innovations that never got off the ground because of adoption and the difficulty of rolling out in a multipressured environment. And I was frustrated. I’m like, this isn’t that hard. Let’s make it even easier. Let’s just make it super easy so people can experiment and play around with new payment types and hopefully that will get the payment world moving a little quicker and allow more innovation to be created and bigger problems to be solved.
Brett
Can you think of a payment innovation that you were really excited about and you thought just had a lot of potential and then in the end it ended up not really delivering or succeeding or having the impact that you thought it would have?
John Lunn
Yeah, I mean, like open banking has had such a slow start and you look at it and I mean, a bank to bank payment from one bank to another bank by a trusted, I mean, it’s direct replacement for cash and it’s just taken so long to get off the ground and it still is struggling. Like stuck in regulatory areas in some places and user experience in other places. That frustrates me. And then it struck me yesterday, I think next year is the 15th anniversary of bitcoin and blockchain as we 15 years. Everybody’s talking about it as an emerging tech, like saying 15 years old is not emerging anymore. That should have properly emerged. And again, little frustration around the things that could have happened with it and.
Brett
Didn’T makes a lot of sense. What are your views on bitcoin today and just crypto in general today?
John Lunn
My view is it’s solving a problem or a set of problems. I wish it was a bit more environmentally friendly. That would make it a lot easier to swallow. And I think there’s people working on making that happen, but I still think there’s big place for it. And taking the power out of a small group of very powerful central banks is not a terrible thing.
Brett
And if we just look at the payment space. How would you summarize the state of payments today?
John Lunn
It is growing. I mean, there is a lot of innovation happening. I think there’s a lot of innovation that’s been stifled. I’m excited by it. You look at the Pix experience down in Brazil and UpI and India, there is some big things that could happen if it’s only allowed to happen. And the other side is those innovations might be stifled by companies or groups that don’t want the world to change. So I’d say it’s more evolved than it was. But we’re still going through the same sort of dance that we have been for the last 20 to 30 years, where new innovation comes along. Incumbents don’t want the world to change, and it’s an uphill struggle. But you’re starting to see it happen, especially when governments get behind things like an UPI and pics, you really do start to see some excellent changes happening.
Brett
And when it comes to Gr4vy and your ICP, how do you think about your ICP and what was that process like to cover the ICP and get that right? Because that’s something that I know a lot of founders really struggle with, I think.
John Lunn
I mean, absolutely, it’s really difficult. So we came into this with the assumption of what our ICP was. I don’t think were wrong. And for us, an ICP is a mid to enterprise sized retailer looking to either expand geographically or increase their payment options. And that hasn’t changed a huge amount on the retail side. What has changed is we’ve realized that another large part of our client base is the people serving those peoples, as it were. So rather than selling directly to the retailer, selling to the shopping cart that services the retailer is a different route to get to the same place. But we actually realized that the suppliers to our ICP were just as important as our ICP. And I think the other thing that took us a long time is don’t sell to people who aren’t shopping.
John Lunn
And I think that’s an easy mistake to make. When you’ve been in the sort of consumer payment space, or just the consumer space, people will drive past the poster of the flashy new car every day and lust for it. That doesn’t really happen in enterprise software sales. And so unless you’ve got a problem you actually need a solution for right now, there’s really no point trying to sell to you. And that took us a while and a lot of wasted effort.
Brett
What about messaging and positioning? How did you see that evolve?
John Lunn
Yeah, another hard lesson to learn. So when you’re building a product that could eliminate roles or positions organizations like a payments team, don’t go off and sell to the head of the payments team. There is some vested interest there for no change. And I think early days we came in with what we would thought was an amazing solution for a lot of people’s problems. But some people quickly realized that problem and dealing with that problem was their role. So even if it was going to solve their problems, they weren’t going to buy it.
John Lunn
So we had to definitely really think about how we positioned our product as a tool that will help payments teams move quicker, that will help companies innovate faster, rather than coming straight out and say, hey, we’re going to replace your payments team or your engineers in this division, because ultimately you’re possibly selling to the person you might be putting out of a job.
Brett
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John Lunn
So we’re enterprise sales. So we’re very account based marketing. We do brand marketing online, but we’re not sort of stack them high and sell them cheap company. We will go after particular accounts, we’ll go over particular businesses. We work with payment consultants and teams around the world who are working with retailers who are looking to add new psbs or expand, and they know about our product and how we can help those merchants. So we have a small amount of very big clients, and that’s by design. I believe orchestration is something you need when you get a bit bigger as a merchant, somewhere in the 50 million above of revenue, that’s when you actually start caring a lot about the rates you’re paying, having multiple psps, having alternate payment types, and really trying to optimize your payment flow.
Brett
What about your market category? I introduced you as a payment orchestration platform. I think I stole that from your LinkedIn. Is that the right category or what is the market category?
John Lunn
Yeah, I mean, that’s where we’d put it. So it’s a bit of a broad church. So when we started, I mean, lots of people claim they were the inventor of the term payment orchestration, but when we started, it was us and a few others in a similar time. Payment orchestration had a particular meaning and that was really between the merchants and the psbs and helping to do everything I’ve talked about before. I think since that time, a lot of attention, us and some others, got in this space, a lot of companies that don’t really do that of cycling and sales payment orchestrators. So I think it’s a broad term, it’s a bit like cloud and other things that get widely applied to things. But we would say we are a pure payment orchestrator.
John Lunn
We would also say we’re a cloud based payment orchestrator and we’re infrastructure as a service. So unlike anyone else in this space, the way that we do orchestration is infrastructure as a software service rather than a SaaS service. You don’t connect to Gr4vy for Gr4vy to do your orchestration. Gr4vy rolls out instances of Gr4vy for you within your same region, your same area that allows you to manage orchestration. So it’s a different way of doing it. So there was a category of the cloud based infrastructure orchestration, and it’s a bit different and it’s a bit of a different way to do it, but it really does work for the enterprise retailer.
Brett
What about growth? Are there any numbers that you can share?
John Lunn
I mean, we’re growing transactionally. We’re doubling month on month at the moment, so every month we’re doing twice as many transactions as we did the month before. Revenue, I think we’ve tripled in the last quarter. So we’re growing nicely. But it’s a hard time to be in enterprise sales. I think if you talk any startup doing it now, when there’s a recession, it’s hard to sell to enterprises. So, yeah, we’re growing nicely. I’d love to grow quicker, but find me a Founder that wouldn’t.
Brett
Yeah, so the Gabriel Founder wants to be able to say they’re having growth like that, and I don’t think that many are. So that’s especially impressive given the market today. What do you attribute to that growth, and what are you doing to rise above that noise and really hit this level of growth that you’re hitting?
John Lunn
It’s about concentrating on doing a few things well, and I think early stages, you’re chasing after every squirrel, really, while you’re trying to find your market position. I think we’re very clear on where we fit in this market and where our clients fit and what the problems our clients are trying to solve. And we target those clients, and we work with our clients very closely. And I think the rise in volume is not because we’re adding hundreds and hundreds of new clients, it’s because we’re growing with the customers we’ve got today, and we’re helping them do things better, and therefore they’re giving us more volume, and that’s growing our revenue while we add a few other big clients and we grow with them as well. We’re very hands on. We work very closely with our customers.
John Lunn
We help them in all different areas, aren’t necessarily something we do. But you talk to a Gr4vy customer, they’ll say, Gr4vy feels like it’s part of our team, and that’s by design.
Brett
And when it comes to fundraising, both from your time as a corporate vc and from your journey raising over 27 million so far, what would you say you learned about fundraising, and what advice would you have for founders as they begin their fundraising journey?
John Lunn
Yes, I sort of had great big megaplan to start with. So I became a VC because I wanted to learn what it was like to sit on the other side of the table. So that was part of it. I wanted to sort of learn the game from both sides, as it were. And I kind of wanted to see what would get vcs excited. And by working at PayPal Ventures and meeting hundreds of startups and seeing what would get us excited would get us interested in fundraising, I was able to take those learnings and apply them to when went out and fundraised to start with. It didn’t hurt that I’ve made a lot of great contacts in the VC environment during that time when were kind of investing with others, et cetera.
John Lunn
But my number one lesson, and it’s not my wisdom, someone told me, it is, when you pick your vc, pick one you like. As people don’t just look at the money. And that’s because there’s a good chance that person is going to be on your board with you for the next eight years or so. And they’ve been the nicest they’re ever going to be when they’re trying to invest in you. When things go get tough, which they always do, and things aren’t looking rosy, make sure you pick someone you feel like you can trust to be on your side. Because I think that is it. They are more attached to your team than your employees because you can’t fire your vcs, right? They will be there. They’ll be in the board. They’ll be part of the future of your company.
John Lunn
And so pick them as well as you would be picking your founders.
Brett
If you were starting the company again today from scratch, what would be the number one piece of advice you’d give yourself?
John Lunn
Probably go a bit slower to start with. We raised and launched during the boom times, and I think a lot of the advice, the time is grow very quickly, spend, grow, get as big as you can, as fast as you can. And then the wheels fell off that sort of model. So I think in earlier days, I would have liked to perhaps grow a little bit slower rather than growing to a larger number of people embarking on a larger amount of projects, because I think getting it right and then growing from there based on revenue is a better way to grow, and that’s what we do now. But right at the beginning, we took the advice of grow at all costs, grow quickly, get market domination as fast as you can.
John Lunn
And I think that ultimately hurt us when that stopped being the way that people wanted the world to work.
Brett
Yeah, I’ve heard that from a lot of founders. It went from grew at all cost to survive. What it was all about.
John Lunn
Yeah, it was a bit of a shock.
Brett
What about skills? What do you think is the most important skill for a B2B Founder to have to be successful?
John Lunn
Versatility, I think, and resilience are the two things.
Brett
Right.
John Lunn
Versatility. Like as a Founder, you wake up every day and you have no idea what you’re going to be dealing with that day. Right. Or working on. And so you will be going through spreadsheets and maybe doing fundraising. 1 hour. Next hour, you might be working on your next marketing campaign, then you might be flipping over to sales numbers, pitching to some clients. You’re constantly going to be changing context over and over again very quickly. And being versatile and able to do that to start with is super important. As you get bigger, hiring people who do that better than you is more important. But right at the beginning, you’ve got to be super versatile. You can’t just come and say, I’m a really good engineer.
John Lunn
You’ve got to be a good engineer that can do a bit of marketing, understand what the hell is going on with finance, do some pitches, and go and meet clients. You need to be able to do all those things. As a Founder, CEO, you got to stick to it. You get beaten a lot. I’m an endurance athlete, and it’s very similar to that.
Brett
Right.
John Lunn
Just like the last 5 miles of your marathon, it hurts like hell.
Brett
It’s a sensitive topic. I have an ultra race coming up on Saturday. What’s the longest ride you’ve ever done?
John Lunn
I cycle from San Francisco to LA every year to raise money for AIDS life cycles, AIDS charities. So I do that and there’s a 100 miles day in the middle of it, and which was my longest until this year, where I did Paris to Geneva this year. So I’m cycling from London to Australia over 25 years and doing a leg every year. First year I did London Paris, which was relatively sane. Last year I did Paris Geneva, which was 80 to 90 miles every day with a mountain in the way. And that was pretty tough.
Brett
Yeah, I can imagine you get a massive high at the end of that, though, too. Right? Or like the buzz that you’re feeling after the pain wears away.
John Lunn
Yeah, it’s generally the buz comes first, and then you party, and the next day you wake up like, what the hell?
Brett
That’s awesome. Something that I’ve read a lot in the media, I’m sure you have, too, is this idea that Silicon Valley is in a state of decline and it’s the end of Silicon Valley. You’re obviously not from Silicon Valley as we talked about at the start. You have a very different accent, a very pleasant accent, but you’re not from here. So I want to ask, how important do you think it is to be based in Silicon Valley? And maybe a better way to ask that is if you were starting your career again today, imagine you were 20 years old. You could move anywhere. Would you move to Silicon Valley or would you move elsewhere?
John Lunn
Yeah, I’d still come here, and I think perhaps less so than it was five years ago. That not everybody is here. Five years ago, everybody was here that you needed to talk to. I think Silicon Valley, a number of different things. Lifestyle is great. That’s part of it. And that does help as an entrepreneur, being able to do something other than staying indoors with your laptop. I think it really helps. I think also being surrounded by other entrepreneurs, being surrounded by people who’ve done it before, the breadth of experience you can tap into here is huge. There’s a lot of vcs here. I mean, I think it’s still eight times more venture money in Silicon Valley than anywhere else in the world. So, look, it is the place to be.
John Lunn
But I think also the work attitude here, the inquisitiveness, like you can go to a pub or a bar or whatever and sit in a stool next to someone and have a pretty inspirational conversation. Whether they’re a fireman or an entrepreneur and other parts of the world, that doesn’t necessarily always happen. I moved here eight years ago. Before that was in London, and then I was brought up in Switzerland. So I’ve lived in many different places. But I do find here I just have better conversations.
Brett
Yeah, I found that as well and how I heard it described. And now repeat this to people, because they really nailed it. At least if you’re just looking at the US, they said in New York, you’re measured on how much money you have. In LA, you’re measured on who you know. And in Silicon Valley, in San Francisco, you’re measured on your aspirational level and how aspirational you are. And I think that’s just a very exciting environment to be in. And I’ve seen that just from my time here the last two years.
John Lunn
Absolutely. And it’s not just tech. Right. I think as well as cycling, I swim in the ocean and I remember a swim club, and you’ll go into the sauna after getting very cold in the water, and you’ll be talking to people who’ve been world records or swam from Hawaii to wherever. It’s just amazing concentration of talented people in the Bay Area.
Brett
Yeah, 100% agree. Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision that you’re building?
John Lunn
I think where Gr4vy will be is we will be the central point of integrations for retailers around the world with their payment types. And I think we’ll be at a trusted integration route that people will use. When you go and create a website and you want to sell things online, you’ll go, okay, the logical place to start is Gr4vy from a payments perspective and then take it from there. And I think we are positioning ourselves well to be that central hub into the payment ecosystem.
Brett
Amazing, John. We are up on time, so we’ll have to wrap here before we do. If there’s any founders that are listening in and they just want to follow along with your company building journey, where should they go?
John Lunn
I mean, LinkedIn is probably the best place know podcasts like this. I’m dyslexic. I prefer not to write. I’m preferred to talk. But on LinkedIn you’ll often find me hanging out there rather than any of the other networks.
Brett
Amazing. John, thanks so much for taking the time to chat. This was a lot of fun.
John Lunn
Sounds good. Cheers.
Brett
Keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast and for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening and we’ll catch you on the next episode.
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