QED's 14th annual CEO Summit: 10 takeaways

I was thrilled to welcome more than 70 QED portfolio company CEOs, 25 LPs and the entire QED team to our 14th annual CEO Summit in Washington DC this week.

I gained so much energy from the summit and from listening to the conversations between our entrepreneurs. I wanted to share our agenda as well as my takeaways and personal highlights.

Agenda

Monday

• Cycling – Shenandoah National Park, Virginia.
• Golf – Gainesville, Virginia.
• Hiking – Great Falls, Virginia.
• CEO Welcome Reception

Tuesday

• Welcome Session: Nigel Morris
• Fireside Chat: Mark Zandi (Chief economist, Moody’s) and Nigel Morris

• Market Update with Bankers:

Moderator: Chuckie Reddy

Keith Canton (JP Morgan), Jigar Patel (Morgan Stanley), Lisa Ellis (Moffett Nathanson), Ari Weisband (T Rowe Price)

• NFTs with a focus on Real Assets:

Moderator: Frank Rotman

Milana Lewis (Stem), David McDonough (CommonStock), Christian Limon (QED)

• Lending in a Crypto Winter:

Moderator: Matt Burton

Josip Rupena (Milo), Amr Shady (Tribal), Brandon Arvanaghi (Meow)

• Leading through Headwinds:

Moderator: Lauren Morton

Allan Jones (Bambee), Eduardo della Maggiano (Betterfly) , Shane Holdaway (Mission Lane)

• LP Meeting and VIP Welcome Reception
• Friends and Family Dinner

Wednesday

• Whats going on through the eyes of a later stage investor:

Moderator: Mike Packer

Jade Mandel (Goldman), Prateek Bhide (D1 Capital), Oliver Goldstein (TPG)

• Fireside Chat: Ken Lin (Intuit) with Nigel Morris, moderated by Bill Cilluffo

• Group breakout sessions:

1. Going Public vs Staying Private
2. Early Stage M&A: How to Go from our first M&A Process to becoming a seasoned M&A veteran
3. Customer Centricity with Susan Sabbot (ex President, AmEx)
4. Partnership Models and How to Make them Successful

• Fundraising and Recession Planning:

Moderatora: Matt Risley, Laura Bock 

Derek Colla (Cooley), Deepak Chhugani (Nuvocargo), Nare Vardanyan (Ntropy)

• Maintaining Sanity and Balance as a CEO (closed-door CEO session):

Peter Briffet, Moderator

• Closing Remarks: Nigel Morris
• QED Team Dinner

To end the second day, I abandoned a slide presentation in favour of an unplugged set of observations and advice to the 70-plus CEOs in the room. Here’s what I said.

1.Mental Health in the startup ecosystem

On Day 3 of our CEO Summit, after our entrepreneurs had a chance to connect with their peers, we dedicated an hour of the agenda to discuss mental health. It is incredibly important to destigmatize being able to talk about these topics in an open and judgement-free way.

To that end, myself and the QED team stepped out of the room and gave our CEOs the chance to speak with one another. Vulnerability is so important and we wanted to afford them an opportunity to talk candidly without having to worry about what their investors might hear.

The people who seek an entrepreneurial lifestyle, and the unstructured nature of it, often notice stresses on their bodies and minds that they may not otherwise have in other walks of life. Be aware of what's driving you and what gives you your energy and power to out-work people. But also be mindful of the issues that may cause and don’t be afraid to ask for help when you need it. De-stigmatise it; talk about mental health. 

2. A challenge 

I challenged all of our CEOs to catalog two or three things that they would do differently once they return to their office and their teams as a result of the content they heard and the connections they made at the Summit.

I constantly do this when I attend conferences or have offsites with my management team. What has changed in my mind? What behaviors am I am now going to change or double down on? What actions am I going to take next week?

What I find really useful is getting my senior team around the table and talking about what I learned. If nothing else, you raise awareness along the dimensions that you think are important. Your team should always know what you’re most focused on. Share your top four or five issues or opportunities.

3. We are here to support our CEOs

I spoke about the QED brand promise – to provide the best advice you can get in fintech – on several occasions through the Summit. 

Our CEOs will know several members of our team incredibly well, but I wanted to reinforce and give permission for them to be more assertive in tapping into it. Our deal champions can give you access to a full repertoire of skills and functional capabilities -- if we don't have it – and we have a deep skill vista – we can go find it. We have a broad and deep network in the fintech ecosystem. Please take advantage of it. 

Thomas King, our talent acquisition leader, is accountable for helping you build your teams or recruit for senior positions; 

COO Tommy Blanchard is accountable for leveraging our platform function more – joining the dots and providing connectivity intra-portfolio; 

Bill Cilluffo, Frank Rotman and myself will continue to be available to provide hands-on support and help navigate the turbulence you may face in the coming weeks, months and years; 

Ash Marshall is accountable to helping you with brand messaging, content and PR;

And if you know of founders, peers, friends who are building a business and are looking to meet specisalist fintech VCs like QED, please introduce them to members of our team: Ale Piedrahita for the UK and Europe, Ana Cristina Gadala Maria for LatAm; Sandeep Patil in Asia; Gbenga Ajayi for Africa and Chidinma Iwueke for the U.S.

4. Control what you can

One common refrain from the CEO Summit was that while the world has clearly changed, it doesn't mean it's an awful place. What it does mean is that you have different issues to wrestle with. 

You’ve got be realistic about where the world is. There are some things you can control and there's some things you can't control. Don't fret and bite your fingernails about things you can't control, just focus on product-market fit, strong unit economics, your cash and runway, and building an amazing C-Suite team and culture. If you do that really well, you'll power through this. 

5. Content remains king

I was thrilled to see so much interest and engagement in the sessions that we hosted this year. 

From panel discussions on fintech headwinds, lending in a crypto winter and how bankers and late-stage investors are seeing the ecosystem to breakout conversations on talent, M&A, partnership models and customer centricity, the breadth of topics and expertise was wonderful.

We spoke about the physics of lending money, the likely lack of a meaningful IPO window in 2022 and possibly the first half of 2023, and the need to be accountable, honest, authentic and vulnerable as a leader.

We also discussed headline valuations and structures that can lead to massive misalignment, and we debated whether there is liquidity out there today for the companies that have great user economics, wonderful growth and a large enough total addressable market.

Several CEOs said they would have had FOMO had they not been able to attend. That’s a good signal that we’re discussing the things that are most relevant to them with the people who can add as much value to the conversation.

6. Think customer first

I sat in on one session in particular on customer centricity. I've known Susan Sabbot for a long time through a combination of boards on which we both sit, so I knew she was a passionate torch bearer for the consumer. 

I want to underscore that having somebody on your team who is the voice of the customer, who has the credibility around the table, is vital. When your CFO says X and your compliance team says, Y and your ops people are saying Z, you need somebody to advocate for the customer. Have someone who asks what a decision does to your network, to your NPS score and to your relationships with the customers. 

7. VC got Sloppy

One of our panelists, in describing last year, said things got sloppy. When you’re hiring too many people too quickly in a grow-at-all-costs mindset, you may drop the standards of the people you are hiring. Be discipled and intentional. Similarly, never relax your unit economics to the point where you’re stretching the elastic too far. Solid P&Ls are built one customer at a time – always be laser focused on unit economics.

Many of us were sloppy last year. And part of what we’ve done in the past six months is clean up that mess. Get back to true north and keep your discipline. 

8. Regulatory is your responsibility

Another statement that stuck with me through the Summit was that regulatory relationships are not the lawyers’ job, they’re the CEO’s job. I couldn’t agree more. You can’t leave these issues to other people. As leaders of organizations, CEOs have to be aware of the pitfalls and triggers.

Legend says that famous escape artist Harry Houdini died when somebody punched him in the stomach. If you know that you're going to get you hit, you can prepare for it. At my time at Capital One when we got hammered by the regulator, it was straight out the blue, we had no preparation for it. CEOs have to own regulatory risk and you have to be about to read the tea leaves to sense when you have to brace for impact. You can’t avoid what you never see coming.

9. Specialists > Generalists

Specialist skills matter. It’s clear that the generic skills of product-market fit, hiring and HR are important, and there are a number of incredible world-class generalist VCs who can help there. 

But if you’re in fintech, you've got to understand fraud, credit, regulatory risk, AML/KYC and asset-liability management, among others. Having specialists along is vital and when you are in developing markets, you need people with a developing-market mindset. This is where QED can help.

What entrepreneurs do is incredibly hard. They don't do it because it's the only thing they can do. If they wanted an easier life, they could get a 9-to-5 job at a bank or a strategy consultant and do very well. But they’re building something bigger.

The issues they’re wrestling with – and there's probably 10 or more of them – all of their peers are either wrestling with them now, or they just wrestled with them in the past couple years, or they are going to need to wrestle with in the coming months.

We hope the relationships our CEOs built while they were here – not only with the specialists at QED but also with fellow CEOs and LPs – adds tremendous value in the future.

10. Know your NPS

Make an effort to track your Net Promoter Score. Know, with empirical data, how your customers think about you and whether they are your advocates. The absolute number is not that important in itself, but by focusing on it, your team will focus on it. What gets measured gets done. 

I believe very strongly that you will come out of this current environment stronger and leaner with less competition. The people who are pretending to do what you do, those whose fundamentals are not as strong, are not going to make it. In the end, the market will be right in the long run. You'll be able to come out stronger and leaner and faster.