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As a serial entrepreneur, Alex Mashinsky raised over $1 Billion in financing across his eight startups, generating over $3 Billion in exits and authored over 35 patents that cover aspects of Smart Grid, Ad Exchanges, Twitter, Skype, and Netflix. But his journey was everything but easy. Raised in the USSR — Ukraine, a communist country at the time, he saw first hand the struggle his parents went through. They both had jobs and incoming money but the lack of food was a constant worry. On many occasions, his family would wait in line for whatever food was available and by the time they got to the front, there would be nothing left. A common occurrence in communist countries. That was his first seven years of life.

Then his parents decided to migrate to Isreal, where the political environment continued to be tumultuous. Within the first six months, the Yom Kippur War (also known as the Arab-Israel War) was in full swing and the country was nearly overtaken by the opposition. To intensify things, national military service is mandatory for all Israeli citizens over the age of 18, and when the time came, Alex was called to duty. The things he saw and experienced were unimaginable, but he credits much of his perseverance and winning mindset to his early year experiences. He learned to trust himself– to figure things out and survive — two foundational skill sets you need as an entrepreneur.

At some point in his young life, he decided to come to New York, with just a few dollars in his pocket and never left. Since entering the US, he founded a total of eight startups including Groundlink, Transit Wireless (a $1 billion business that powers the wireless system in New York City’s 300 subway stations, bringing 4G and WiFi coverage to 8.5 million daily commuters), Governing Dynamics (a venture fund that invests in promising tech companies), and his current venture Celsius Network — a crypto wallet which pays interest on the top 20 blockchain coins.

Tune in to listen to Alex Mashinksy’s incredible entrepreneurial journey.

In this episode you will learn about:

• • • Resilience
    • Leadership
    • Leadership mistakes
    • Building a company
    • Exiting a company
    • Managing and scaling a team
    • Raising capital
    • Failing
    • Entrepreneurship

 

Alex is one of the inventors of VOIP (Voice Over IP) with a foundational patent dating back to 1994 and is now working on MOIP (Money Over IP) technology. Alex is a serial entrepreneur and founder of seven startups, raising more than $1 billion and exiting over $3 billion.

Alex founded two of New York City’s top 10 venture-backed exits since 2000: Arbinet, with a 2004 IPO that had a market capitalization of over $750 million; and Transit Wireless, valued at $1.2 billion.

Alex has received numerous awards for innovation, including being nominated twice by E&Y as ‘Entrepreneur of the Year’, in 2002 & 2011; Crain’s 2010 Top Entrepreneur; the prestigious 2000 Albert Einstein Technology medal; and the Technology Foresight Award for Innovation (presented in Geneva at Telecom 99).

As one of the pioneers of web-based exchanges, Alex authored over 35 patents that cover aspects of the Smart Grid, ad exchanges, Twitter, Skype, App Store, Netflix and many other popular web companies.

Connect with Alex Mashinsky:

• Website
• Twitter
• Linkedin

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Full Transcription:

Alex Mashinsky:  I think part of the secret for the disruption and the innovation that I’ve experienced my entire life is being – behaving like a kid, asking a lot of questions, and challenging all the perceived realities that most adults get used to pretty quickly. Growing up, I was born in communism in the Ukraine, was part of the USSR, going back to the USSR. My parents struggled. It was a very difficult environment in the late 60s, early 70s. Basically, we were worried about are we going to have any food to eat.

It wasn’t so much just because we weren’t making money; both of my parents had jobs. You would stand in line and many times they ran out of product by the time they got to you, so you didn’t know what you were bringing home every day. My parents would put me in one line and they would stand in another line. This abundance that we’re all used to on the Western world is something that I definitely recognize is not for granted. We have to appreciate every day that we have where you can just walk into a supermarket and get 100 of any item without even thinking about it.  

Tanya:  Yes, 2%, whole, almond milk, coconut milk. Yeah, like you say, there’s a bazillion choices.

Alex Mashinsky:  That was my first seven years as a child. Then my parents decided to immigrate to Israel, which was a good/bad decision. Obviously, completely different mentality, different environment. Six months after we landed there, they had Yom Kippur War. Then the entire country almost got overtaken by the enemies. It was really a very tumultuous upbringing. I then served in the military. I had a lot of different experiences going through this again communism, socialism, and then spending my last 30 years in capitalism.

Tanya:  I can’t even imagine how your upbringing and the whole messing of products, and that am I going to eat today scarcity, and then moving to Israel, and the fights, and the danger, and then military. How do you think that affected and influenced who you are today?

Alex Mashinsky:  Just to give you one example of a story right. When you leave the USSR, they take away your passport. They give you this one-time visa to leave and never come back. You can’t leave with any of the assets because assets all belong to the communist revolution. I had two toys that were my entire possessions. At the border when we were just leaving the Ukraine crossing over to Austria, we were on a train to Vienna, the Russian guard grabs my toys and says, “These are Russian toys. You don’t deserve these.” My entire possessions just got taken away from me.

These visceral experiences, I think especially when you’re a child definitely help structure who you are. I think I mentioned I have six kids. I definitely challenge them as much as I can to get them out of their comfort zone and try to get them to appreciate all of the things that they have every day.  

As you know, everybody has to join the military. I spent three years there. Definitely again, it’s an amazing opportunity for young people to take a lot of responsibility very early. Israel is considered a startup nation partially because of that. Because you can be 18 or 19 years old and you can basically be a commander of a unit and go and make life, death decisions that affect not just you, but also other people. It’s like adding carbon to steel to make steel. The more you add, the better. Coming to the United States and I already showed up with a lot of great skills that really helped me be successful in the rest of my career.

Tanya:  Yeah, I’m sure. What were some of the things in looking back at your time with the military which I’m sure you had some pretty hairy experiences, what were some of the things that you took away from that experience that you learned?

Alex Mashinsky:  One of the critical moments was I was in Lebanon doing the war over there. That was ’84 through ’87, 1984 through 1987. I wasn’t there the entire period of time, but that’s my time in the military. They stationed me in Lebanon to be in the communications core.

Basically, they didn’t have enough people. They couldn’t train me. I was sitting on top of a mountain with all this communication gear making sure that everybody could communicate. Just imagine if you have a group of soldiers that’s fighting somewhere and they can’t communicate with command. They forgot to train me on the equipment. 

Of course, it always happens to me, the head commander of the entire – I don’t know what the English expression but is like a very senior guy in the military. Obviously, wanted to get in touch with someone and I had no clue how to do that. All of us face these types of moments where you are tested. Some of us buckle under pressure and some of us thrive and become the best we can be. I don’t know why; I can’t explain what makes me be that way, but I realized that when I’m under – the higher the pressure, the more I actually perform, better I perform.

If I have to come up with an idea or solve a problem, I usually create an artificial barrier or put myself in the room with people where I have to answer these things right away, and the answer just shows up from somewhere. On that peak of that mountain, even though I wasn’t trained on the equipment or anything else, instead of just running away, or sweating, or getting all nervous or whatever, I started playing with equipment and figured it out. I still got in trouble because I wasn’t supposed to be there in the first place, but at least everybody got to connect and talk to each other even if it was five minutes later. 

Through that experience and others like it, you get to trust yourself. You discover yourself. You open up the origami further and dig deeper and understand who you are because the entire journey of life is just self-exploration. The more we get to know ourselves, the more we can find the things that we can do better than anyone else. That’s how we become successful. If we do the things we’re not the best at, then our chances of being the best in the world at it are pretty low.     

Tanya:  No, absolutely. At what age did you begin to realize that you had a knack for building things?   

Alex Mashinsky:  I’ve been tinkering with things from my early teens. I would skip school and run to the junkyards and buy all kinds of old equipment or military equipment. I had a room full of gear that I was just tinkering with. My mom would pop her head in the morning and ask me if I’m going to school. I would usually say no. She was like fine. She gave me the freedom to experiment. For me, it worked out, but I’m sure – I’m not sure if I would allow that to my own kids. My parents were extremely supportive.

I remember my dad – I think I was 14 and my dad pulled me to a sit down conversation and said, listen, I don’t know what you’re doing with all this stuff, but I don’t want you to come back to me 10 years from now and tell me how I did not force you to go to school and all that stuff. You take responsibility for the rest of your life, fine; you can do whatever you want. That was a pivotal moment where I had to really think about this and go and say gosh, do I really know what I’m doing or I’m going to be sorry and end up working cleaning streets or something?

I accumulated a lot of technical skills which a lot of kids do these days just by programming and playing with computers. Back then, having your own computer was $10 or $20,000. That was not an option. Salaries in Israel are – you make that in a year. I think I was lucky enough to again learn a lot of these skills using equipment that I bought really cheap from junkyards and then converting that skillset to innovating in different things related to hardware electronics, or software, or system architecture and things like that. 

Tanya:  As you’re sharing this story, I’m so – I’m still stuck with at 14, you realized the impact that your father’s comment could potentially have 10 years later. I don’t think that I would have that level of awareness if my parents had that conversation with me at 14. That’s impressive.

Alex Mashinsky:  I definitely lacked in other skills, so it’s not like I had perfect social skills or other skills. I think all of us – I look at my kids, each one of them has a different set of skills where they’re good at one thing and not so good at others. As parents, normally we work really hard to make sure that they are rounded out and they’re good at everything.

Life is not necessarily that. I think life is all about becoming the best in the world at something. All of us have that possibility. Each one of us is a unique cocktail of genes that has never been created before and will never exist again. The opportunity is really to find what is that one thing that you can do better than anyone else.

It’s there, but it’s really hard to find because the – and you have to do it through experimentation. You have to constantly test things, experiment with things, and find the things that you’re good at, and find the things you are not good at. Put all your efforts on the few things that you think you can do better than anyone else. Unfortunately, our educational system and our society is not designed for that. They’re designed to make sure that we’re good or average at many things.   

Tanya:  Yes, that’s true. What is the one thing that you discovered that you were really good at?

Alex Mashinsky:  I can see around corners. I don’t know how it works, but for me, it’s obvious from a technological standpoint what the future looks like. I don’t understand why everybody else doesn’t live in the future already. I’m usually 5 or 10 years ahead of where things are. What I did my entire life – I did eight companies. Celsius is my eighth company. Every one of my companies I started was trying to convince others that this is what the future looks like and disrupting this or that industry because time has come and the future is here.   

Tanya:  Yes, and actually, you’ve had to step in on a few ventures and self-fund because you had issues raising capital at the time. You really had to put your own capital on the line.

Alex Mashinsky:  Yeah, every venture I had to put my own capital. I can tell you that when I say okay, I raised over a billion dollars from venture and private equity and so on and had three billion in exit, people think, oh, he can raise money like just a clicking. He twists his fingers and the money just shows up. I had to pitch almost every company at least 200 times, so 200 people said no to me. Having the conviction of saying – understanding that they’re wrong and you’re right and keep going in it – and not all of them obviously were huge successes, but the point is that almost all of them I was right on the vision even though I might not have executed better than my competitors. 

One great example is I started a company called GroundLink. That was in 2003. I basically told everybody look, in the future, everybody is going to have a phone with a GPS. You’ll be able to order transportation on demand. Everybody could become a driver. I built that company. We just forgot to subsidize every ride, lose money on every ride. I actually built a profitable company and Uber came and just ate our lunch.

When Uber was just in San Francisco, we were serving 5,000 airports around the world. The company had whatever, $70 million in revenues and was profitable. We were right on the strategy. We were right on the technology. We were right on hiring the right team. We were right on raising the money, but we were wrong on the business model. We tried to build a profitable company where our competitors went to – for the land grab and raised whatever $14 billion dollars and lost $12 billion in the process subsidizing rides. 

It was a very visceral experience for me because this was my I think sixth company, so I already had the whatever billions in exits. I meet with exactly the same investors that the Uber founders meet with. Travis Kalanick was a – who at the time, was the CEO of Uber, lost all of the money for all of his investors 10 times in a row before Uber.

When I sat with Bill Gurley and it was basically a decision for them to invest either in – Bill Gurley from Benchmark. They were about to decide are they investing in GroundLink or are they investing in Uber. I couldn’t even imagine a scenario where somehow Travis would get the funding and I won’t because I was a successful serial entrepreneur. I’ve made 100x for my investors on Arbinet and other companies that I founded and here was a guy that lost all the money in all of his startups. Bill obviously did not select GroundLink.

I went close to a clinical depression after that just by basically completely – it’s like Ali versus what’s his name where he gets knocked out on the 10th round of something and he was supposed to be the winner by a long shot. It takes a while to rebuild yourself, and rebuild the self-confidence, and go and swing at the next opportunity because this is all – this game that I’m in is all or nothing. There’s no room for a second or third winner.    

Tanya:  If you look at, well, Lift was a second winner in the ride-sharing space at least. Then several others came: Via, Juno. Why do you think Bill choose Uber or Travis? 

Alex Mashinsky:  For me, a winner is somebody who has a sustainable business. I don’t think Lift or Juno have sustainable businesses. Lift had close to a billion in losses on two billion in revenues. We are in a unique environment that’s in a time window where that is acceptable, but I can assure you that is not a sustainable business model. 

Tanya:  Oh, yes; I so agree with you. People are going to get spanked and then lose their money. It’s happened, but it’s somehow still acceptable. I agree. It’s going to –

Alex Mashinsky:  I think society in general is not necessarily winning here because the fact that I live in New York City, the fact that there’s 150,000 extra vehicles circling in Manhattan, and the average speed in Manhattan has dropped drastically. The city publishes a speed at which traffic moves around the city. For the last 10 years since these guys basically loaded up the city with cars, it slowed down by 50%. We’re not creating any efficiency. All we have is a lot of spoiled brats sitting in their own vehicle sitting in traffic. Less people use public transportation, getting there takes longer. We haven’t solved the problem; we just created a different problem.

If you look at all of my startups, I’m always targeting a win-win scenario. Arbinet built voice over IP; three and a half million people use it every day. They used to pay $3.00 a minute and now they pay nothing. We’re using voice over IP right now as we speak. These are win-win scenarios. 

Or putting wireless on the subway. Eight million people every day could not contact anyone in case of an emergency or check their phones or anything; now the service is free. These are win-win scenarios where we’re creating value out of nothing and it makes the world a better place. Celsius is the same way. It’s enabling everybody in the planet to earn interest where the banks basically don’t pay anything. 

I think going back to your question about Bill Gurley, Bill – I think in general, the San Francisco community is a very tight-knit community. Most investors invest in companies that are 5 to 20 minutes away. We were New York-based. Beyond that, Uber was definitely pushing the envelope being a pure play. They were just a mobile app. There was no customer service. There was no call. There’s was nothing. 

There wasn’t anybody you could talk to if you wanted to – if you had a problem. We thought that was pushing it too hard. You could call us. You could email us. You can send us an SMS and make a reservation. It was a full-stop service solution that was targeting a broader set of the population and not necessarily Millennials who need to get home from a bar or whatever. 

I think the pure play had a big part in it. The reason Uber had a very high adoption rate is because when Lift showed up in San Francisco, they cut their rates. They realized that the supply and demand curve was so aggressive. It moved up so quickly that – very quickly that just Uber was bigger than the entire taxi industry in San Francisco.

 There was a pent-up demand that no one realized was there. We realized that we just did not – we didn’t think that subsidizing rates – because our slogan was happy drivers equals happy customers. Meaning if we create more income for drivers, the quality and everything will be better. As we all know, anyone who works for Uber and taxi and everybody else is making less today than they did 10 years ago because it’s a race to the bottom. 

Tanya:  Yes, so competitive.

Alex Mashinsky:  As far as pricing.

Tanya:  You mentioned that after this whole thing went down and the capital from Benchmark went to Uber, you went through a really dark period. How did you rebuild yourself? What was that process?

Alex Mashinsky:  I married an amazing woman.

Tanya:  That’s a great start.

Alex Mashinsky:  Who basically looked at me and said what the heck are you talking about? She always has complements for me. I’m not going to repeat them. She was basically like I know your skillset. I know what you can do. It doesn’t matter what happened yesterday. You pick yourself, and you get up, and you go in and do something even bigger. That’s how you get back.

It took me a few months. She had to say it many times because depression is basically just this – just like a dark cloud that just hangs over your head. It doesn’t go away. You can move to the left, to the right; it just follows you everywhere. You have to really shake it off. The only way you do that is by rebuilding yourself and rebuilding your trust in yourself and so on.

Because Uber copied everything we did. They copied the business model. We never owned a single vehicle. All of our drivers were independent contractors. We had the first app in the App Store, the first app on Android store. These guys really copied us but got there faster, better, cheaper. It was a really –  

Tanya:  A kick in the balls.

Alex Mashinsky:  Uber is the fastest valued creation in history. It’s a company that got to $100 billion faster than any other company in history. I was there whatever, five years I had Uber. I started in 2003; Uber started in 2008, 2009. We had an ample head start and we still managed to not win the market. 

Tanya:  The race. You’ve won many other races. I’m going to have to side on your wife’s side on this one. You have a pretty good batting average.

Alex Mashinsky:  Yeah, it’s a good – it’s a great batting average; I agree. I consider myself like a – I compare myself to a champion. When you’re a champion, you’re competing on the 100-meter race. It doesn’t matter if you came second, or third, or seventh.

Tanya:  It wasn’t first.

Alex Mashinsky:  It’s all about being the first. Again, we were so ahead of our time that we had everything; we had all the tools in our hands to win this. We just missed that.

Because I went back to my investors in 2011 and told them, look, we need to start subsidizing. Uber didn’t get out of San Francisco until the end of 2010. I said, “Look, if they come to New York, we’re going to lose this race.” They’re like, “No, you’re profitable.  They can’t subsidize it forever.” That’s where I should have just put my foot down and just really pushed that agenda and forcing the investors or go and do something else because I ended up leaving anyway in 2011 because I thought it was a losing proposition. It was a very painful and dark period, yes.

Tanya:  Usually, those periods come with tremendous lessons. It sounds like you’ve highsight been able to pull out some really good nuggets there. In terms of your – well, first of all, of the eight businesses that you’ve created, how many people have you employed approximately? 

Alex Mashinsky:  Thousands; I ran Novatel Wireless. It’s a public company, so that had 1,400 employees. Arbinet had probably like 350 people. GroundLink had also about 300 people, still has about 300 people.

I don’t like it when it’s already hundreds or thousands of people. You can’t move as fast. I like the early stage, the 0 to 200 people. I would say that’s what I enjoy the most: building, solving problems, moving as fast as possible, trailblazing. Those are the things that I think are where I excel.

I usually hand off the company to a different CEO and go and do the next thing. Everybody excels in a different – if you’re a good CEO of a public company, your job is just to squeeze as much as possible out of the existing infrastructure. There’s people that grow the cow and there are people who milk the cow. It’s not the same set of people.   

Tanya:  No, it isn’t. It’s a totally different skill set, which is very common.

Alex Mashinsky:  Then there are people who come and kill the cow.

Tanya:  There’s also a lot of vegetarians out there. Okay, so you’ve employed literally thousands of people which takes something from a leadership perspective. When you’re leading a company, one of the hardest things to do is manage and lead people. How have you evolved over these eight companies in your leadership style? What have you learned?

Alex Mashinsky:  Yeah, that’s a great question. I don’t think they really teach you this in school, or in college, or management.

Tanya:  No, I’m sure they don’t.

Alex Mashinsky:  It also has so much to do with who you are, your skillset. Again, the better you understand what you’re good at and what you’re bad at, the more you will bring in people to cover your weak points. For me personally, I’m not a detail-oriented guy. I’m not the finance guy. I’m not even the marketing guy.

I know what I do well, and I grab those things, and I do them myself, but I surround myself in most cases with people – and I learned this over time obviously. I didn’t learn that overnight. I surround myself with people who are much me stronger than me, much better than me in those areas. Somebody has to be three times better than me. If you hire somebody who is just a little bit better than you, then you didn’t really solve any of your weaknesses. 

The problem usually is that when you have a young company or just an idea, it’s very difficult to bring great people to come and drop their job or whatever else they’re doing and come and join you and go and change the world. Many times, you have to go through two or three cycles where you effectively upgrade the team and you move the people who – it’s not that you get rid of these people who came early, but you move them to other roles as your bringing and adding more skills to the company. Now, that I’ve done it whatever, seven or eight times, I almost do it my sleep. The first few times, it was just a nightmare because I did think that I was better than anyone at any and everything. Obviously, that was just a recipe for disaster.

Sometimes you need to be lucky. Going back to Uber, doing it right after the recession, 2009 through 2019, they have an exceptional 10 years where everybody just threw as much money at them as possible. If they’d done that just a few years earlier, I guarantee you they would have been a complete failure because being seen in a limo in 2008 was not a good scene. If you lived through that period, especially in New York, people frowned at you for driving in limousines. All Uber did is took a limo and priced it in the same price of the taxi.

I think timing has a lot to do with it. Sometimes when you’re right on timing, it covers for a lot of other problems as we’ve seen they had internally. With Celsius Network, we’re really taking on the banks. We’re basically looking at this whole idea that banks take your money. They pay you nothing for it. They lend it to your neighbor – they lend your money to your neighbor and charge them 25% on their credit card to make it 95% of the value that you made – that they made on your money. That’s just a ridiculous idea.

We flipped it on its head and committed to pay our depositors 80% of what we make instead of the bank keeping 80% of what they make. In nine months, we accumulated $135 million dollars in deposits and did over a billion in loans. It’s growing phenomenally well. Here again, I’m assembling a team that can scale the company and move equity and brings a great skill set. We just hired a CFO this week, for example, who came from a different company and brings an amazing set of skills. Much better than my definitely; three times better than me.

As long as you do – you fill the holes with this type of management, and everybody really believes the vision, and they’re there working hard not because you’re demanding it but because they’re passionate, and they adopt the idea and the passion about making the world the better place, then work is fun. I don’t feel like I work any day. I haven’t had a day – I think maybe the GroundLink days, but not since GroundLink where I woke up and I was like – I felt miserable going to work. Life is short and you should enjoy every day. This is my way of enjoying going through the journey

Tanya:  This is your self-expression. To have started eight companies, it’s who you are. Actually, I think I read somewhere that you tried retirement, but that didn’t bode so well?

Alex Mashinsky:  That was horrible. 

Tanya:  What happened there? Couldn’t relax?

Alex Mashinsky:  Both me and my wife, we don’t have an off switch. My wife, Krissy Mashinsky, she’s the President of Urban Outfitters, Anthropologie, and Free People. She runs all the wholesale for this. It’s a public company with 17,000 employees. She doesn’t have an off switch either. We tried to take some time off and whatever and we were both miserable. It was like what were we thinking. 

Tanya:  Yeah, no, I totally get it. After the birth of my twins, I took some time off because my twins had some pretty severe medical issues; now, they’re fine. I could not wait to come back to work. I get you. It’s almost like you need work to relax and enjoy life.

Alex Mashinsky:  The brain is like a muscle; if you don’t work it, it just withers away. Too much vacation or too much off-time is definitely not good for you just like too much work is not good for you. I was joking with you before we started this recording that I don’t have any vices. I don’t have time for vices. When you’re running around, you’re – and you’re trying to do or be the best you can be, that does not leave you anymore – any time for – 

Tanya:  To mess around, yeah. What’s your framework to keep pushing yourself to grow?

Alex Mashinsky:  You have to start with a big opportunity right. A lot of times what happens is that some people stumble on it by chance. Again, going back to the Uber idea or the GroundLink idea, our vision was not let’s make taxis more comfortable; our vision was that Millennials and Gen-Xs are just not going to own a car. Everybody is just going to share these vehicles instead of owning vehicles. Now, they say everybody is talking about self-driving vehicles and all that stuff.

Once in a while, the world goes through a transition, a transformation. If you’re there at the right time and you understand what it’s going to look like, then you can build the future now. You can build the future that’s going to be here 10 years from now. You can start it now because it takes a long time to build these things.

For example, with Celsius Network, we think that the future is a financial institution that acts in our best interest. Now, that sounds ridiculous, but we see banks, and brokerages, and insurance companies do not act in our best interest. When you think about this giant wave, that tsunami of decentralization that we’re about to be washed by, and blockchain, and all this innovation related to cryptocurrencies and so on, then you can see very easily how in the future, the power is going to be taken away from the banks and be given back to the people.

The reason why I’m so confident about it is because I did that with voice over IP. We’re going to go in from voice over IP to money over IP. With voice over IP, I came and I said, hey, voice is going to be free. It’s going to run on the internet. It’s going to be pier to pier.

The entire internet ran on the phone networks. It was ridiculous to think to yourself that how can you put voice on the internet if the internet runs on the voice network. It was a dial-up internet back in ’94 and ’95 when I wrote the patents and built the first gateways. You have to leap into the future. You have to understand that the internet is going to be a thousand times bigger than the voice network. The entire voice network just becomes an application on the internet. 

We’re going through the same transition today. We’re going through the process in which the entire financial infrastructure that we use every day is going to be replaced by a blockchain based pier to pier system. All the toll collectors and the guys who basically control our lives are going to be replaced with people who act in our best interest.

We just building that today. There’s enough people who are willing to jump in and say yes this is – I believe that this is in my best interest. I’m willing to take my money from the bank and deposit it with Celsius. We’re actually shocked at how many people are willing to do that. We beat our own projections every month, so it’s an amazing growth story.   

Tanya:  It makes sense. You are aligning incentives with your customers which eventually people will clue into. How can it not jive?

Alex Mashinsky:  I know, but the banking is 700 years old. No one has ever turned around and said I’m going to give my depositors 80% of what we make with our money. The idea is very simple, but it’s shocking that no one has done that. Yes, there are technological limitations, and there are regulatory limitations, but no one has tried to build that.

Many times, the simpler the idea, the more powerful it is. Here, the abuse that we all go through – and in Europe right now, there is $10 trillion worth of negative rates. Meaning, people took their money, $10 trillion with a T, deposited in banks, and they paid the banks to take their money. That’s just ludicrous. 

Tanya:  Yeah, that is ludicrous.

Alex Mashinsky:  How can we get to that point? That’s like plucking the chicken one feather at a time. 

Tanya:  It’s torture.

Alex Mashinsky:  It took 100 years. I came to this country 30 years ago and I used to get 7% by just depositing money with Citibank. Over time, banks just paid us less and less and less and no one is screaming. No one is mad as hell and is not going to take this anymore. I’m carrying Satoshi Nakamoto’s flag here taking advantage of this blockchain revolution and applying it to something that we all know is a problem, but we have not really done anything about it.

Tanya:  Yeah, well, the blockchain technology has a lot of evolution and reiterations to go through. I think you’re right in Gen-X, Gen-Y, especially really don’t have a lot of trust in banks for all the reasons that you mentioned. People have a short memory as well. Maybe one of the reasons that we don’t question why things are the way that they are is because they’ve been like that for so long, but that doesn’t make them right.

Alex Mashinsky:  That’s correct, yes.

Tanya:  Okay, last question: if you could rewind 10 years and give yourself one piece of advice, what would that be?

Alex Mashinsky:  Ten years, so that takes us to 2009.

Tanya:  Yes, right in the midst of the – actually or before the Uber.

Alex Mashinsky:  It was in the midst of it already, yes. Wow, that’s a hard question. I have to really think hard about it. In 2009, there was still definitely time to win this. It’s funny because my wife – when Uber came to New York and my kids starting using Uber instead of GroundLink and I realized that was the end when your own kids don’t use dad’s app.

Tanya:  That’s a stinger.

Alex Mashinsky:  She just looked at me and she said, go get a job at Uber. It sounds obvious now, but back then, it was almost like go work with the devil.

Tanya: Yeah, no, forget it.

Alex Mashinsky:  Of course, my wife was probably right. I should have gone and teamed up with – leave my own creation and gone and teamed with the enemy. I probably would have done very well in there, but that was not a conceivable idea or a possibility when you put your heart, and tears, and sweat into this thing for whatever, six or seven years, and suddenly, to turn around and to go to side with the other side. That’s probably a big mistake.

I probably should have been more aggressive rising money and convincing my board and my investors that we had to be more aggressive in this space. These are life lessons that are – I’m not sure I would have – if this happened to me right now with Celsius Network, I’m not sure if I’ve learned that lesson. As a founder, it’s extremely painful, extremely difficult for you to just jump the fence and go and do something else.

My wife is more of an executive in the launch company. Somehow, they do that extremely well. They can jump from one company to another and just go – keep running the next day and not have any feelings or any pain leaving one organization and joining the other. In my DNA, in my core, it’s definitely something that’s going to be – it’s a very hard lesson for me to learn. 

Tanya:  That’s a really great lesson. Every business is like a child. You’ve had on top of your six human children, you’ve had eight businesses which is – and you put your heart and soul, so I could totally get that. Okay, amazing. If people want to check in with you and reach out, how do they get in touch with you?

Alex Mashinsky:  I’m still old-school email, alex@mashinsky.com, my last name. Also, you can reach out to me on Linked In or check out celsius.network. There’s ways to contact me through their website. Go and make the world a better place.  

Tanya:  Amazing; well, thank you so much, Alex. It’s been so amazing to have you on this show.

Alex Mashinsky:  Thanks for having me.