In this Wyre Talks, we are excited to host Hansmeet Seethi, Co-Founder and CEO of Fetch. Hansmeet is a repeat entrepreneur having started four companies in the Valley. Hansmeet has been at the forefront of the evolution of UX from the first internet applications to mobile applications. and hopes to iterate on this experience in a crypto product. He stumbled into crypto when he was working on a fintech company having to deal with the limitations of traditional rails. Fetch solves these problems upfront by using crypto rails.

Fetch is a wallet with trade execution capabilities. Fetch is evolving into a financial services firm by pursuing the appropriate regulations to offer securities trading to their users. This will allow them to market US securities internationally and bring international securities to US citizens. Ditch the Wall Street infrastructure and keep the most popular financial assets in the world — all custodied in your pocket.

How the rails that wall street has left, even for fintech companies, have limited their reach.

How silicon valleys multi-decade trend of putting the user at the center of the design process has left a high bar for crypto.

How wallets nowadays are more than just self-custody technology and how Fetch is positioning themselves as a brokerage firm.

We dissect the fat protocol thesis vs fat DApps vs fat wallets thesis.

Abstracting away crypto native nuances like wrapping Ether, and paying gas to create a better UX.

How new-age borderless brokerage firms tackle the regulatory constraints of a siloed jurisdictional environment.

How the non-custodial nature of most wallets can be a regulatory loophole

The go-to-market strategy for Fetch to distribute synthetic financial products worldwide and in the US.

How the crypto winter can present great opportunities to make hires.

Related Links

Fetch’s Website: hellofetch.co

Hansmeet’s Twitter: https://twitter.com/hansmeet

Fetch’s Twitter: https://twitter.com/hello_fetch

Questions or comments?

🗣👋 Feel free to reach out to us on Twitter, Facebook, or comment below!

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Podcast transcription:

Thomas Scaria: Hey everyone, welcome to Wyre Talks the Wyre Podcast where we discuss all things crypto. Whether you’re a veteran or a crypto newbie, we’re all learning together, this is your host Thomas Scaria. I still work here at Wyre in 2019, welcome everyone. Today I’m joined by Hansmeet Sethi, co-founder, and CEO of Fetch. Hansmeet, welcome to the show.

Hansmeet Sethi: Oh thanks for having me.

Thomas Scaria: Cheers, cheers. Jack has warned me that you are one of the few people out there that have a better podcast voice than myself.

Hansmeet Sethi: We’ll take a vote at the end.

Thomas Scaria: Yeah, we’ll let the users decide at the very end or listeners I should say. Why don’t we just get right into it. A little bit of background about yourself. From what I was gleaning on your online profiles, it looks like this is not your first rodeo, right? That you’re a serial entrepreneur. This is in fact if I’m correct, your fourth company, one, two, three, four, yeah?

Hansmeet Sethi: Fifth.

Thomas Scaria: Fifth company okay. Not your first rodeo even in Nielsen technology, I think it’s your first crypto company, but you’ve doubled around and in like fast moving internet startups for quite some time. I think your first company was launched in 1999. Can you take us through your life journey since then and how you got into crypto and then we’ll talk about Fetch afterward?

Hansmeet Sethi: Yeah. I think that’s a short way of saying I have gray hair, but I do. Through the 2000s I started a couple of mobile infrastructure companies, and so that was the time period where they were building out the telecom networks and the smartphone software, that is what we use today. I found the android all that experience we’re used and that was pretty cool. A couple of those companies did well and one of them was acquired by Motorola.

Hansmeet Sethi: About four years ago I helped start a Fintech company. My co-founders and I actually start a Fintech company. That business was an online municipal bond marketplace, so it allowed people to go online and purchase munis very transparently and efficiently. That was a pretty cool entry into Fintech, it was a huge education into how financial services actually works. In particular, I spent a lot of my time setting up a lot of the regulatory pieces for that company, so we were a regulated broker-dealer and we had to live under all the regulatory scrutiny that comes with that. Now, I can go into a whole set of interesting points about what we learn there, but that eventually led Dan and Jack, my co-founders and I into starting Fetch, where we saw the huge set of opportunity around Fintech and financial services that was kind of green field and solving a lot of the problems we dealt with in our previous business.

Thomas Scaria: What particularly interested you about crypto? Just a Fintech component of it or did you align more with the libertarian sort of perspectives?

Hansmeet Sethi: A little bit of both. To some degree, they go hand in hand, the philosophy and then the actual execution implementation. I think over the course of the last four or five years, we’ve been sort of dabblers in it as investors and done ransom minors and different things. What was really interesting to us, what really caught our attention and made us actually want to start a business around it was that a lot of the challenges we faced in our last regulated Fintech company were a huge surprise to us. I can say that now.

Hansmeet Sethi: When we went into it, what we thought were going to be limitations were things, the regulatory rules and operating under regulation. That’s what everybody was afraid of as we got this business off the ground. Then when we got into it, we learned something very different. We learned that the regulation was actually pretty sensible, it puts on limits on what could or could not do. It was reasonable about how you could execute the business. Where we faced limitations and where we saw the hurdles were in the set of financial middlemen we had to deal with to operate the business.

Hansmeet Sethi: I’m talking about this set of companies you don’t really know of as an individual. You don’t know about the clearing provider or the custodian or the settlement or the trustees and transfer agents and all these players. It turns out their conventions and their business model and their processes in technologies were actually what limited our ability to innovate for our customers, the end users, the investors. What we saw in crypto, in particular, the rise of, excuse me, programmable money Ethereum and the protocols built on top of that, was the possibility of potentially building a Fintech business that was 100 times more efficient than what we had just done. Kind of unleashing our ability to innovate and serve customers better, and so that’s what kind of got the gleam in our eye and put us together earlier in 2018 to put together Fetch.

Thomas Scaria: Got it. You saw this macro theme of dis-intermediating the middlemen if you will. You thought to yourself, “Hey, I can do more than just mini bonds if I build a crypto wallet or financial services sort of platform.” Hopefully, you might bring it to full circle and introduce mini-bonds on Fetch maybe huh?

Hansmeet Sethi: Yeah, maybe one day. Who knows.

Thomas Scaria: Maybe one day.

Hansmeet Sethi: Never say never.

Thomas Scaria: Yeah. I also noticed when I was kind of stalking you online, the overarching theme of your career’s bringing a great user experience to the applications that you’ve built. How have you accomplished that in the past? I think you tackled, you first tackled this with the mobile platforms and then you did some other work. Can you give us an overview of how you’ve tackled the UX problem in the past?

Hansmeet Sethi: Yeah. I’m really happy to say that over the last let’s say 17, 18 years that I’ve been working in various companies, that this ethos of putting the user at the center of the design problem and solving for their needs specifically which sounds so kind of cliché to say today sitting in San Francisco has become cliché. It really wasn’t in the early 2000s. I was just lucky to work with a couple of folks back then who just thought differently. They had their own view of the world and they had their own view of how software was going to behave and how it was going to serve people. I was able to work with them and learn about the power of when you handed the user a piece of software that solved their problem very elegantly and simply, that users could accomplish so much. You had to do a ton of work to make that possible, but once you did you unlocked possibilities for people.

Hansmeet Sethi: Sometimes you have to make decisions like provide less functionality, but actually take the user to the end of their journey quicker. You have to take some of those trade offs that like I said, I’m happy to say are more common in conversations, in products, in software companies now. It’s been a huge revelation. I mean using a piece of software built in 2019 versus something built in 2005, I mean it’s just night and day.

Thomas Scaria: Yeah. I think I’ve definitely, we’ve all witnessed that, just over the few years just usability of everyday applications just becoming much more fluid. I think we take it for granted. You never think about all the work that goes into simplifying all the different applications that we use every day. I think this is a great little segue into what you’re working on right now. Fetch of course has a very user-centric approach. Can you give us an overview of Fetch?

Hansmeet Sethi: Yeah, for sure. Today Fetch is a crypto wallet that makes it incredibly simple to manage and invest in about 200 plus tokens. We’ve taken all the complexity and the jargon and the complicated interfaces out of the way of the user. We’ve given them a really simple experience with one click to buy, sell, trade and hold these tokens.

Thomas Scaria: Do you think of yourself as a wallet or as a trade execution or financial services platform? I feel like at this point the term wallet is slightly outdated because most wallets are evolving beyond just the self custody technology that they were now. It’s where the users live, and it’s the first UI that they really interact with. How do you think about yourself in that competitive landscape?

Hansmeet Sethi: Yeah, I think it’s probably a good time to talk about where we’re going with the software platform we built and that kind of speaks to the question you just brought up. Today simple wallet that makes trading, investing, holding tokens as easier than traditional stocks and bonds. Where we’re headed is super interesting. Where we’re headed is the ability to offer securities through that platform in a regulated manner, so things like the S&P 500, US treasuries and provide that to a global audience with no fees or minimums.

Thomas Scaria: Okay, very interesting. There are a couple different avenues to provide securities basically to your end users. Are you thinking about distributing like tokenized equities or tokenized versions of securities? Or are you creating like synthetic securities tapping into underlying like augur markets or something like that?

Hansmeet Sethi: Yeah. Our view of the world is that in the early days here in the next say end of Q2 when we regulate and are able to offer securities out to the public, we’re going to offer what you can term as synthetic securities. We’re going to provide a token that represents a security let’s say the S&P 500 and Fetch will provide that to you in a regulated manner. You’ll KYC with Fetch and you’ll be able to do that from anywhere in the world.

Hansmeet Sethi: In the background, we will be taking the other side of that position for the users. They won’t be able to take that token and go to Coinbase and trade it, but we will be able to close their position out. We’ll do that by hedging in the actual stock market on our side.

Thomas Scaria: Got it. To smooth out the user experience, you’ll actually facilitate market making so that the user doesn’t have to wait for the Ethereum blockchain to process some sort of transaction. You’ll have some sort of inventory or either like you said, go make the market and hedge out the position?

Hansmeet Sethi: Yeah.

Thomas Scaria: Oh very interesting.

Hansmeet Sethi: The way we look at it, a lot of people will see regulatory, arbitrage and crypto. They’ll kind of view it under the lens of well if we use these protocols and we put them together, then that’s not a security, we’re not regulated. It represents the S&P 500, but we’re not regulated. We don’t take that view, I guess is the lightest way to say it. We think that is a security, whether it’s backed by security or not, by equity or not in that case.

Hansmeet Sethi: What we think is really interesting, the regulatory arbitrage that can be accomplished in crypto in the path forward for a large sustainable business year from now, is to take the rails, the blockchain and the platform, the protocols on top of it. Use it to build a regulated financial services business, but free of the middlemen who are causing us all the limitations and fees in the previous incarnation of our business, in the previous business we run. That’s where we’re headed with Fetch.

Hansmeet Sethi: You said it’s the term you started with, is the wallet term outdated? I think it is a little bit. It’s software that enables you to do something interesting valuable to you with your tokens. Yeah, we are a wallet, but I think that’s evolving. What that means is evolving tremendously.

Thomas Scaria: Yeah, definitely. When you think of yourself in a competitive landscape with other players, do you find that your other competitors are going that route as well? Or are you kind of differentiating from let’s say MyCrypto and BRD Wallet and Exodus? I think that’s a good desktop wallet at least. I don’t think that they’re going that route, the tokenized security sort of route. Are you hoping to differentiate yourself by being more of a financial services platform?

Hansmeet Sethi: Yeah, we think of the business we’re building as a Fintech business. We’re in the crypto industry and I’m on a crypto podcast, but only because we use it as rails to unlock the ability to operate our business. When we think about competitors, we actually think HSBC, Citibank, Barclays worldwide global financial institutions that are providing securities and financial products out to a worldwide audience. I think there’s an interesting role for us all to play. You mentioned MyCrypto, BRD other folks out there. It’s an interesting role for us all to play in this world and the way we’re headed is financial services.

Thomas Scaria: That’s so interesting. You’re basically trying to be a person’s own bank in their pocket really?

Hansmeet Sethi: Yeah.

Thomas Scaria: Yeah, okay.

Hansmeet Sethi: Regulated and trustworthy, I know that’s an overloaded term in crypto, but trustworthy. Provide the ability to access investments preserve and grow wealth in ways that you wouldn’t be able to otherwise depending on where you are located geographically around the world or what your socioeconomic status is and how much you have, how much wealth you have to grow and invest.

Thomas Scaria: Okay. Let’s take this kind of one step at a time. Right now when I go on the platform it’s very useful for trading. If you want to buy a token with one click actually I think you have Radar Relay, one could click over the available. Then I noticed that you’ve tackled lending sort of next, I don’t know if it’s live on the platform yet, but I did see a blog post highlighting your lending platform that’s about to launch. What’s going to come next in that financial services stack for Fetch?

Hansmeet Sethi: We think of it as you map it to financial services providers you know today. What does a bank, what does a financial services business really offer you? There’s payments, lending, investment, and deposits. Right now Fetch provides you the ability to manage your own token so that’s essentially deposits, manage your wealth and own it. Investments, the ability to trade the 200 tokens we provide as investment assets today and those will be replaced by actual securities in the future. Then lending and payments come after that. It’s a roadmap to get there. There’s a lot of work to get there and you’ve got to roll it out slowly and methodically.

Thomas Scaria: Yeah, definitely. I’m curious to get your take on something I’ve been noodling on. There’s the fat protocol thesis and the fat DApp thesis now. Then now people are talking about the fat law thesis. I think all of them are going to accrue value somehow. There’s a used case for each of them accruing value, whether it’s a protocol that launches a really spiffy way to trade something and then it accrues value to the token. Or it could be some sort of like basically rent speaking spread model like compound. They actually, I think to take home like 50 bases points in the protocol clean and simple. Then there’s the fat DApp thesis where okay, these protocols are going to ship products and there’s going to be a UI to access these products which are basically DApps. Then there’s the fat wallet thesis where which I’m most bullish on because wallets are where the users really live. Currently, that’s where they’re custoding assets and trusting their provider so much.

Thomas Scaria: It makes a lot of sense for wallets to also be a UI to financial services and basically replace DApps almost. Why would you go to a DA and access it with MetaMask if you can access all of the DApp functionality within MetaMask themselves? I think your opinion here is going to be a little biased.

Hansmeet Sethi: Well I’m biased.

Thomas Scaria: Curious to hear your take on this.

Hansmeet Sethi: Well it’s pretty obvious where I’m going to ascertain the value of cruising the stack. Obviously, I’m very bullish and I think in crypto as well as any other market we look at, there’s a very valuable position stack to serve these directly. To own the customer relationship, to be the place where they start their journey when they have an idea about something they want to do. Obviously, if you bring together a set of services, financial services in our case that are simple to use in one place, it solves a lot of problems for the user. Yeah, there’s isn’t necessarily a need for them to go straight to the DApp if they’re able to use it along with other products that they need access to from a wallet.

Hansmeet Sethi: That doesn’t mean that DApp’s not valuable or that the protocol that underpins it isn’t valuable. I think it makes for a really good blog post folder to write a post about how it all accrues in one place and that does well with social shares and what not. I don’t know that it’s necessary practically how things play out in any markets. You could argue that a user goes to Amazon and buys a toothbrush, Amazon’s obviously a very valuable business, incredibly valuable. Those who manufactured that toothbrush, it’s not an Amazon [inaudible 00:16:44], but it’s still a viable business. In some way, there’s a really good example of a provider, a manufacture of products that doesn’t have an end user relationship that’s incredibly important for the Amazon of the world to have supply products to make it available in one place. It’s just not cut and dry.

Thomas Scaria: Yeah, definitely. Kind of a different flavor of question, but why did you start with the desktop application and then go to the browser? There’s only a handful of other projects that have done that. I’m just curious why that route.

Hansmeet Sethi: That’s a great question, we get it a lot.

Thomas Scaria: Yeah.

Hansmeet Sethi: We started with the desktop app for a couple of reasons. One, we interviewed a ton of users about their activity and how they were trying to solve the problems they were facing. One of the things we learned is, we wanted to just provide a UX that was vastly different from what people were experiencing at the time when we started. That was mostly around going to a browser, having an extension where you sign transactions one by one. There was a lot of confusion around what exactly you were doing. You were approving allowance. What does that even mean? You were setting gas lighters and doing all these things. We thought we could iterate the quickest and provide the best user experience by wrapping the user’s identity in a dominable desktop application and get feedback and iterate on that experience quickly.

Hansmeet Sethi: Then when we felt like we’d nailed the experience, we would expand to the other platforms. As you’ve pointed out we’ve expanded to web late last year. You’re going to see mobile and browser extensions of Fetch that all work together. When you use the Fetch mobile app which comes out in March, it will be synchronized with your desktop app as well as the web app as well as the web browser extension. You’ll see transaction histories that will be the same across those platforms. You’ll be able to start transactions on one platform and get notifications on the other, all that stuff.

Thomas Scaria: Got it. Right now users are starting with the desktop application, the private keys are stored on that computer. Let’s say the user starts out with a browser application or a mobile application that private keys are either stored on the browser cache or on the mobile side, cline side. How would you enable that user to log into their account across different platforms if the private keys is stored in one location?

Hansmeet Sethi: Yeah, it’s an interesting experience. We wanted to make it feel like, and remember we go back to, we’re trying to make investing with tokens as easier, even easier than traditional stocks and bonds. Which means you couldn’t have these weird things in front of you like backup phrases and all these stuff that’s like a new paradigm for a user to use. With Fetch when you want to synchronize across the platform to a different platform, you will use one of the identifying pieces of information you gave us, the email address or phone number. You’ll receive a code to that device which you will enter into a new platform. That will allow access to the data of your account.

Hansmeet Sethi: Now, Fetch never has access to that data. It’s all encrypted, the only way you can see it is by using your password. You’ll enter your password which we’ll make it available to you on the new device and then you’ll be able to go from there.

Thomas Scaria: Got it, okay that makes sense. I think that’s a good segue to talk about user experience in crypto. You’ve spent the majority of your career really preaching about user experience really with the early mobile applications and other traditional applications. Can you give us like your 30-second pitch on why user experience is so important for crypto in the state it is right now?

Hansmeet Sethi: Yeah. It’s often framed as we need better user experience to appeal to mainstream users. I think there are two dimensions of that. One is discussed a lot and one’s not, so we’ll just touch upon the first and spend time on the second. The first is kind of software and design-centric questions. How do you deal with gas and these different complexities around the blockchain transaction versus the regular web experience? Fetch is doing great work there and there’s a lot of other people working on different parts of that problem.

Hansmeet Sethi: The other part of that problem in our minds is, mainstream users need mainstream assets. We think those mainstream assets are securities that have global demand and trillions of dollars of that demand. That’s part of the equation. It’s not all just software design, it’s also business and operational design. Embracing regulation, making those securities available and in compliant manners is a way that you can solve investor or people’s problems around the world and bring them into crypto, even if they don’t realize that what they’re doing is getting into crypto. They’re going down an avenue that gives them access to an asset they may not have access to today. That brings them into this world and oh by the way they’re now a crypto user.

Thomas Scaria: Yeah, I think user experience is often paired with just expanding the market in general. There’s a lot of companies that have done a really tremendous job at this. I think I’ll just say right now, like I think Jewel did a really tremendous job by making of really well designed hardware device that made non smokers into smokers without unbeknown to them really. It’s funny, like I went to a family Christmas, family friend kind of dinner. This kid I grew up with and he’s like one of the dorkier kids I know. He even whipped up a Jewel in between a meal to go basically hit it outside. I was just like, wow, Jewel converted this user into a smoker, like how is that even possible? They did that with great design and user experience really, right?

Hansmeet Sethi: Yeah.

Thomas Scaria: I think that’s how I think about it with crypto as well. If you’re a crypto head then you’re used to copy, pasting addresses wrapping up your ether and you have to know what gas is and everything. You want to remove all of those obstacles so that mom and dad or this nerdy cousin I have can end up using it, actually nerdy cousin’s probably already using it.

Hansmeet Sethi: Yeah, exactly. He’ll probably get rich off Bitcoin already. There’s a value prop, there’s a value that user wants to get to. In our case, it secures investments, but then there can’t be these 17 hurdles of knowledge gaps that they have to get over to make it happen. You’ve got to make it simple. You’ve got to hide the wires. I mean the web is a great example and we’re all power HD [inaudible] SSL users, right, we are. We are all power cartography users. We just don’t know it, Netflix does it for us. The browsers do it for us and we enjoy the benefit of it, and that’s it.

Thomas Scaria: Exactly, no one asks you when you’re sitting on your bed watching Netflix, “How does this all work? How are you experiencing video on your bed right now?” It’s all obfuscated to the user and that’s the beauty of it. If someone has to figure that out on their own, then you’ve already lost them. It’s just not how you win. I think you guys have done a fantastic job at tackling some of these user experience problems. Like the one-click buy feature on Fetch is really amazing. Instead of having to wrap your ether, I think you’ve ruled out one click buy on Radar Relay if I’m not mistaken. You might have to pay for ZRX fees and what not. Why don’t you just actually walk us through the one-click buy feature then we’ll …

Hansmeet Sethi: If you go download Fetch or user it on the web today, and you want to make a trade of a token that we support right now, you’ll see prices, live prices and from about 20 exchanges. First off that’s hard to do on your own. You hit a button, you get an experience of pricing. Okay, great. You want to buy one of them, roughly eight or nine of those exchanges we support for one click buy. Now those can be anonymous exchanges, decentralized and we don’t support centralized today, but we will.

Hansmeet Sethi: Now, the user experience is one click. Now what’s happening under the covers is really interesting, so for Radar Relay specifically or others that are protocol based, smart contract based, we built an entire platform under the covers of this funny little dog logo. That can execute an arbitrate number of smart contract transactions in order to affect an outcome, in this case, a trade. As you alluded to a couple of them right, maybe approving allowance, maybe wrapping or unwrapping ether at the end of the trade, making the trade. That may include multiple partial fills across an order book that’s active at that second when you want to make the trade.

Hansmeet Sethi: Then in the end what the user gets is the resulting token that they traded into and no questions, no complexity with clear delineation of what they paid in network fees, which is what we call gas. Transaction fees if there were any about the exchange itself applied, Fetch doesn’t have any fees for the user. Then the actual exchange rate they paid for that trade. We wanted to make that process so simple that, we wanted to simplify it for ourselves. Actually, we were also traders of that benefitted from it, so we had a selfish benefit for it. We knew that this was, one of the cracks was that we had to solve to build this financial services business. On the front end, you had to make it as simple as stocks and bonds. Then on the back end, you had to cover all the regulatory pieces so that you could offer securities and have assets that applied, that are kind of desirable by the mainstream users.

Thomas Scaria: Got it. I get how that works in the decentralized world where one click can really just mean that you’re making all these other clicks in a DEX EPI or something. If you’re clicking on the Binance button to buy that token on Binance, would you need an account with that provider? Or are you making the market, grabbing the token on Binance and just shipping it off to the customer?

Hansmeet Sethi: That’s a great question. You’ve been doing this. Right now on Fetch we don’t support one click Binance trades. There’s a couple of reasons we don’t, but the way it will work is that, when we are registered regulated entity, we will actually be able to make that trade on your behalf. You won’t need a Binance account because you will have KYC with Fetch and we will have an institutional account at the exchange in question. Now that’s how traditional finance works. You do not or I do not let’s say have a Nasdaq account, that makes no sense at all. I may have a Schwab account and when I indicate a trade, they execute it for me at the best exchange, at the best price. Fetch will be able to do the same thing.

Hansmeet Sethi: I think we’re at this funny moment in crypto evolution where the exchange serves all the rules. They’re the exchange, they’re the kind of brokerage of the end user interface and that’s been a great bootstrap to get us to where we are today. The next evolution is there needs to be a split in a stack and you need to have this brokerage level that’s served by people like Fetch, who are tapping into exchanges which are liquidity sources, whose main business is to build liquidity for a certain asset. Our business is to attract customers and provide them prep guidance, provide them advice and then execute on their behalf.

Thomas Scaria: Yeah. One click buy is definitely just your foray into creating a great user experience for the end user. Are there other initiatives that you’re working on for 2019, new features that you’re rolling out that will be a great UX for the user?

Hansmeet Sethi: Yeah. Through the first half of 2019, so we can look that far and be very specific. Fetch is going to be on every platform, so you can have a mobile desktop. It’s all going to synchronize. We’re going to go on through the regulatory process. In addition to kind of the core coins that have the most global appeal, Bitcoin, Ethereum and what not, we will have tokens representing SP 500 and various equities and securities. That’s the first after 2019 for us. Beyond that, we think it’s a role out of additional financial products that apply to those assets and that we make available in the platform.

Thomas Scaria: Out of all the different steps that a user needs to let’s say buy a token on Radar Relay or really interact with the Ethereum blockchain, why do you think we’re losing non-crypto users right now?

Hansmeet Sethi: Oh man, where do you start?

Thomas Scaria: Yeah, just the first step even.

Hansmeet Sethi: Yeah. The first step in some cases and I think in some companies and some broad teams have done a great job of educating as best they can and providing kind of the most simple guides that they can. In my opinion, it’s still too hard. Even with Fetch, I think some things are still too hard today. We have to simplify them even further, but it’s an evolution. I mean I think part of it is that as an industry we have a set of utilities that sometimes are developer utilities for also service developer utility which then have also become ‘mainstream software products’. There’s a split between those things. There are needs that a mainstream user has that a developer or a hardcore user doesn’t have. We need to solve for those populations separately.

Thomas Scaria: I was reading Mary Meeker’s ‘Internet Transfer 2018’ yesterday. One of the repeat things that showed up on that presentation is the increasing personal aspects of most apps. The personalization that most apps provide. If you go on Spotify right now, they already know what I’m listening to. They’re going to suggest some new songs for me to listen to. Same thing with Netflix for video right? Do you think personalization is something that’s left to be kind of tackled in crypto? Does Fetch have any plans for creating a personal experience for your end user?

Hansmeet Sethi: Yeah, that’s a really good question. I think that crypto’s interesting in the sense that the public availability of your activity allows the same data set to be available to a number of players to build products and experiences on top of which is kind of cool actually. Like I can start a music company and know your Spotify playlist to start to provide you this great customized playlist that you want to listen to. If I think specifically in the realm of financial services that we think about every day, absolutely. We’re going to know what you’ve done and perhaps what you intend to do and maybe provide you guidance or advice on something you may want to do. Some investment you may want to make, something you may want to buy. More broadly because of that availability of the dataset, I think you’re going to have a really cool set innovation that can come about. Different teams, different companies can now mine it to produce different experiences and they’ll be able to appeal to users in different ways and back to the sort of wallet and various sets of wallets that are out there right now, locking just doesn’t exist.

Hansmeet Sethi: You can migrate and move across these things very simply and you should because some of them serve very specific roles for you. I think we’re going to see a set of end users software products that provide value in perhaps not financial, maybe they’re related to collectibles or something, games or whatever it might be. That are all running off the same publicly available dataset to create customized experiences that solve for that problem, which is kind of cool like open innovation.

Thomas Scaria: Yeah, I really think that’s going to be a trend with wallets as they sort of evolving. Like hey, you used us to get a loan to pay off your student or to pay off your existing student loan. What do you need next, right?

Hansmeet Sethi: Yeah.

Thomas Scaria: I think that would be really cool. Let’s shift gears to regulations. I think it’s really awesome that you guys want to bring securities, let’s say to markets that don’t have access to those securities right now. A classic example would be, I think everyone in the world should be able to buy Apple stock if they really wanted to. Can’t really do that right now unless you have some high flying broker let’s say these end users in Vietnam or something. If you have a broker’s relationship there and a national security’s account, you need a whole kit and caboodle. Apple’s also I don’t know what it’s trading at today, but it’s well over $100 which might not be accessible. One share of Apple is certainly not accessible to the average Vietnamese citizen.

Thomas Scaria: I think that’s really cool that you guys can fill that demand, that on met demand. Then you get into the soliciting and marketing of securities internationally. Do you think just getting and this might be a better question for your lawyer almost, but do you think getting a broker deal or license here in the US is a good start in the right direction just to show good faith to the regulators, to market securities internationally? How do you think about attaining licenses so that you can meet those end goals?

Hansmeet Sethi: Yeah, we’re biased here, right? We think yes. If you’re focusing on the area we are, we think you should treat these things as securities. The regulation that will live under here puts us in a really good position for the cases and the various countries when we do need to touch the regulatory rails. We won’t always have to and there’ll be some cases where we do. Very pertinent to Wyre. If we want to touch the banking rails, then that’s a regulatory rail we need to touch. Hopefully, we can go through partners with that, but we may have to do it ourselves in some places. We as a regulated entity in the US we’ll be able to open international accounts and we’ll be able to sell securities to those individuals.

Hansmeet Sethi: Now we won’t be able to do that in every single country in the world day one, it will be a little bit of a process. Obviously, there are some countries, in fact, regulate that will never provide services to. The idea that we as a lean software company can provide financial services on a global basis, just 10 months into the evolution of our business is mind-blowing. That’s just not something you could even conceive of without this essential piece of infrastructure underneath us and these great protocols that everybody has been working on.

Thomas Scaria: Yeah. How are you going about getting a license or you’re just applying for it in the traditional channels? Or are you buying a shell company?

Hansmeet Sethi: No. We’re applying regular channels. I’ve actually gone through the process of buying in the past and I’m happy to go through the regular channels to create a new one at this point.

Thomas Scaria: Yeah, I’m sure it’s not an easy process, but just so our listeners are aware, I think a lot of our listeners are young entrepreneurs. How long does it take to go through that process if you’re just starting out with not too much business history kind of like in Fetch?

Hansmeet Sethi: Yeah. Well, specifically we’re registering as an investment adviser, so we’re not going through the broker deal of process. In the scale for folks listening, like on the scale of regulatory burden, that’s lower on the total poll. We purposefully crafted our solutions so that we could target that regulatory kind of spot. I think it always seems big and scary, but actually, it’s not. You need to go and do a bunch of diligence on, in a piece of publicly available information, a bunch of diligence on what the rules are that apply with the regulatory licenses you might need or what the accounts you might need to have setup. There’s a bunch of companies out there that will help you through some of the compliance processes setups. Then execution of that is 45, 60 days.

Hansmeet Sethi: Now that’s to get you started. The hard part is, how do you run a regulated business at the velocity of a software company as San Francisco started a software startup? That’s the hard part. That’s what Dan, Jack and I spend a lot of time learning by fire in our last business. We feel really good about that, but I think that’s the part where there isn’t a guidebook. There’s no compliance expert that can help you with it. You really need to craft the operations of your business very specifically to be able to execute fast.

Thomas Scaria: There’s no clear resource for that, banks aren’t just putting their broker dealer KYC email programs out to the public. You have to really basically pay a bunch of lawyers to make this in-house.

Hansmeet Sethi: Yeah.

Thomas Scaria: I might be mistaken, but I think you also need like 12 months of operating capital for broker dealer. I know some startups have come against that snag in the past. Have you heard of that?

Hansmeet Sethi: Broker dealers do have some minimums net capital requirements, depending on what business you’re operating. VRAA which is what we’re setting up does also have some of that capital requirements. We didn’t talk about this, but Fetch is a noncustodial solution. When you download or you use Fetch in the web, you’re the only person who has access to your keys. We as a company have none. We have no recourse to take funds from you in any way. We did that for a couple of reasons. The first is to want to get points earlier, we believe in ethos, the philosophy of that. We think that’s a great end case for a user.

Hansmeet Sethi: It also means we as a regulated entity, a noncustodial which lifts a lot of the burden of the rules we must follow, because we don’t access to your assets. You can imagine generally regulation kind of defines how I treat a customer's assets, how I speak to them truthfully and honestly in a fair balanced way. Then how I safeguard their information and [crosstalk 00:38:33].

Thomas Scaria: Okay, so the noncustodial nature, I think that makes sense for getting an RIA. If you were trying to make markets, let’s say going back to that Binance example in the past where you might be fetching that let’s call it a security from Binance and then getting it over to the end user. Would that not be a broker dealer sort of scenario?

Hansmeet Sethi: Depends on how you do it and what you charge for it. It can be executed by either of those regulated entities, but it may be charged for differently and declared differently to the users, so communicated differently to the user. What you’re required to tell the user you’re doing. Absolutely either one of those entities can affect that trade for a user.

Thomas Scaria: If you’re a registered investment adviser you have to go out and do the Series exams right? Hope you’re ready to take your Series set.

Hansmeet Sethi: Yeah, it’s been a while since I studied for a test, but you’ve got to do what you’ve got to do.

Thomas Scaria: Yeah, you used to work at a bank before you went into software correct?

Hansmeet Sethi: A long time ago, I traded derivatives on the S&P 500. I did not have to be licensed for that.

Thomas Scaria: Yeah, you don’t. You’re at the big boy's table.

Hansmeet Sethi: As you know, yeah.

Thomas Scaria: Yeah. Okay makes sense. Yeah, thanks for answering those questions as they’re always like …

Hansmeet Sethi: Yeah, you’ll sometimes see me in a café around San Francisco reading out of this giant book, that’s what I’m doing. I’m studying for a test.

Thomas Scaria: It is no fun.

Hansmeet Sethi: Yeah.

Thomas Scaria: Yeah, I still have all my licenses because they don’t expire for a couple of years. Hopefully, maybe Wyre will get our broker dealer license before then and then I can hang it up with Wyre.

Hansmeet Sethi: For folks trying to figure that out, one good thing today that wasn’t the case five years ago is there’s a bunch of software companies now who have become broker dealers.

Thomas Scaria: That’s right.

Hansmeet Sethi: People on the pay it forward mentality of the valley, there are a lot of people you can just tap. You send me an email I’ll happily spend time with you talking about what we did in the nitty-gritty details. People are willing to share with you and a lot of people helped us along the way for sure. We couldn’t have figured it out as quickly as we did in the last company or this company without everybody’s help.

Thomas Scaria: Yeah, absolutely. You did mention to me beforehand that you’ve bootstrapped this entire company. I was trying to go on Crunchbase to see where you guys raised capital from, couldn’t find a thing. How did you do that? Are you planning on raising capital at any point? What are the advantages and disadvantages of bootstrapping? We’d love to hear all about it.

Hansmeet Sethi: Yeah. I don’t know if it makes us crazy or what, but we did bootstrap through the course 2018. There were a couple of reasons. One is, we had a notion of what we wanted to build, but we hadn’t really figured out how to put the Jenga pieces together. We knew we wanted to use this infrastructure to remove the need for the middlemen that we had depended on in the previous business, but we needed to make all the little pieces fit. The process of doing that we wanted to stay very lean. We knew the target of the software platform we were trying to build and luckily we had all the [inaudible] had great skills as a team to be able to put that product together. We wanted to be able to just iterate freely and so that’s why we chose to bootstrap.

Hansmeet Sethi: I mean there’s definitely, you’re watching ISOs fly off the news every day during the course of the years. Every once in a while you’re thinking, “Maybe I should just make up a Fetch token,” but that thought would get kicked out of our heads very quickly. It wasn’t our DNA nor was it the right way to build this business. Yeah, we’re going to raise money at some point, like this is now a business we have a path to execute on and that path is going to require some more resources on what we have in-house now.

Thomas Scaria: How big is the team right now?

Hansmeet Sethi: There are three co-founders? Dan is the CTO, Jack is the lead engineer, myself and then we have a couple of designers on contract. We want to grow that team, not too big through the course first half of this year. It’s only going to be about five or six people.

Thomas Scaria: Do you focus on product and strategy or do you get behind the computer and code sometimes?

Hansmeet Sethi: Oh man, I’ll do a bit of everything, but I don’t think they would let me code anything. We all play all kinds of hats, wear all kinds of hats, but I don’t actually write any code anymore that anybody is ever going to use. I tried a couple of times, I got squashed pretty quickly.

Thomas Scaria: Yeah. Shifting gears, so you’re building a product on top of protocol layer liquidity right? You’re going to be sourcing liquidity at least from the crypto components from the Dexcom system for the security token kind of components. If it’s a synthetic market, you’ll have to make sure that augur market that is tracking, that’s scaling the augur market that’s tracking the price of Apple shares is going to be liquid AF. How do you plan on helping with that liquidity problem? Do you think the onus even lies with the product themselves or is this something that like the protocol layer like an augur 0X should be tackling.

Hansmeet Sethi: Yeah. Specifically, to our situation, the synthetics we offer and have hedge we’re going to act as a counterparty when the investor wants to close the position out. We don’t have liquidity defined. It’s going to be there for that customer when they want to close. Now, I think more generally to your point, your question about the protocol versus the app layer, it’s really hard to see examples in both cases. You see say like 0X doing market maker tools, I just saw I think yesterday.

Thomas Scaria: That’s right.

Hansmeet Sethi: Obviously trying to help you trap, provide tools at least to help you trap liquidity on their platform on the various relays on their platform. I don’t think there’s a one size fit all answer to that. I just think it really depends. I mean you see what maker’s done with CDPs and dye is pretty impressive. I don’t know this, but what if they had to do in the background to help facilitate the arbitrage to keep diet a buck in the early days when there just wasn’t as much interest. Maybe that’s declined I assume quite a bit over time as that product has grown. There’s usually a bootstrapping phase that everybody has to go through to get something that’s two-sided off the ground.

Thomas Scaria: How do you think about your go-to-market strategies, is it all about user acquisition or is there like a Fetch API to distribute to other DApps or UIs I want to build on top of Fetch’s technology? Yeah, if you can answer that, once you answer that I have a few more questions about go-to-market as well.

Hansmeet Sethi: Yeah. That’s a great question. We’re thinking about going to market directly at first, not necessarily API or partner route in terms of who’s building on top of our platform. The value prop is really about access to financial services, financial products in places the way you don’t have access to a broad array. The Vietnam example, US treasuries, but you can actually flip that example around. Let’s say that we wanted to offer a US investor or a US investor chose to invest in a basket of worldwide internet stocks, where are you going to do that today? You can’t, but actually, Fetch could assemble that and put it into a set protocol token and make an index available to you. Absolutely a security, something we can legally compose and legally sell to you.

Hansmeet Sethi: What we think is really interesting is that, if you build for these products with the first principles of crypto and the composability of all these wonderful defined protocols being built, then you can offer financial products that just don’t exist today or are unmatched. Those are the value props we’re going after as we think about going to market. Tactically we’ll do a bunch of test marketing. We’ll identify the geo as we first want to target with the first products. We can’t do everything at once particularly that’s how small we are. Then those will be the ones we’ll roll out day one.

Thomas Scaria: Got it. Yeah, I think you’ve kind of answered my following questions there. Yeah, I was just going to ask you if you’re going to go target fringe markets or focus on the US, but it sounds like whatever you’re split testing sort of tells you right?

Hansmeet Sethi: Yeah.

Thomas Scaria: Yeah. Great. Any key of roles that you guys are hiring for in the future?

Hansmeet Sethi: Engineering is always the answer to that question for us. I mean that’s the dimension the team will grow in as we grow through the first half of this year. As well as if there’s any capital markets people who love crypto out there, we will be hiring for that role too. That’s a little bit of a different one that doesn’t exist in too many companies, so definitely reach out if you fit that profile.

Thomas Scaria: Yeah, I will be sure to refer any capital markets people to you and all of the engineers will hopefully be stealing them from you.

Hansmeet Sethi: Yes, out there who are wondering what to do.

Thomas Scaria: Yeah. We’re hoping that with the whole crypto into a sort of playing out that this will actually be a decent time for us to do some hiring of our own because they’ll be some turnover with companies that perhaps fail but not due to those individuals. They’re just the wrong place, the wrong time kind of thing.

Hansmeet Sethi: Yeah. We’re hoping so. I think it’s unfortunate that, that’s what’s happening, but the end result may be that. Also, the markets had, legal systems just had a few years now to build skills generally like understand how to work with Web 3, [inaudible] all these different things and gain interest in that. Now there’s a bunch of businesses that are popping up that could be good homes for those folks.

Thomas Scaria: Yeah, exactly. That’s how we’re thinking about it too. For the first sort of year, you can actually put on the job description like crypto experience preferred or crypto experience required. Yeah, now there’s actually a market of people out there with those skillsets like you said. Well, thanks so much for joining. Where can people get in touch with you or read more about your work or find out more about Fetch?

Hansmeet Sethi: Yeah, you can go to the web at hellofetch.co or Twitter at hello_fetch.

Thomas Scaria: Thanks Hansmeet, thanks for joining us today. To learn more about Fetch, check out the show notes included in your podcast and remember to subscribe to get the latest episodes. If you have any questions or comments, reach out to us on Twitter, Facebook, LinkedIn or the Wyre blog, whatever works for you. If you liked this episode, share with your friends and colleagues. Thanks again for listening.