Pulak Sinha is a man with a mission: to modernize the Asset Management / Advisory business to be on the cloud, increase transparency and ultimately increase yeild.
We caught up with him to talk about his journey.
Recorded Transcript of this episode: Pulak Sinha | OnPepper
Alright, welcome to another episode of broadcast today. Today I’m joined with politics enough from on pepper, and of course, my co host Robbie Mahajan bullock, take it away. Tell us a little bit of on pepper, how much money you make, how many people you imply, how are you crushing it.
04:53 Oh, it’s so it’s at an early stage yet so it is on paper is a platform that we are we have built for the asset management industry.
05:06 And this is a massive, massive space and there are way too many things going on in this industry. And one of the big areas that’s going is the alternative assets.
05:18 And so we focused on that. It’s a, it’s a complex space. It’s all enterprise enterprise deck, but we have built a platform that will have this section of the industry so good.
05:33 Pull it from what I know. I mean, you know, there’s like almost $40 trillion under management in the US and
05:40 They’re looking at different asset classes, different types of investments, how do they currently keep all of that data wrangled and then and then what are you doing to help them make better investment choices.
05:53 Sure, sure. And that is the key. That’s the crux of this entire product. How do you keep all of this data. I mean today.
06:02 It’s a gaggle of systems that have come from different spaces in the word in their past. They were probably an equity system which has been repurposed to do some of this work, the system stone really don’t
06:18 Don’t cut it and a lot of it is Excel Excel is is the go to System everywhere.
06:26 And in this space. It is like the Bible but and it needs to change. I mean, as you as you just mentioned it’s 40 billion, but it’s growing and it’s growing faster.
06:38 As as time goes by so so that all of that data needs to go on real high quality platforms that can provide everything from security to accessibility to speed to consistency. There’s so many aspects of data we we end up providing all of that.
06:56 So if I’m invested as a, as a person, a high net worth individual or whatever invest with an asset manager. How does the fact that they have on pepper helped me get a better return
07:09 Oh, we say, I mean as as an asset manager, if I can add two basis or 200 basis points just to their returns all of that flows directly to you as the investor in back manager in that asset manager. So it’s a it’s a big deal for the investors that they understand how their data is being kept
07:34 And it adds the transparency, I mean it’s adds a lot of transparency about what the data is. And can I really trust this manager. I’m the biggest issue and the biggest challenge in this space has been the
07:48 Lack of transparency, I mean investors and very large investors. Sometimes when they invest in our in an asset manager who’s in this specific class sometimes don’t know what’s underlying this portfolio. What are they doing. Yeah, listen, add that layer of transparency to the industry. Okay.
08:07 Awesome and go ahead, Vivek.
08:09 I have a question. So how many. What is the size of this market like to. So are you looking going after guys like like really big guys like Wells Fargo and fidelity or like their affiliates, or is that independence smaller like you know i know i
08:24 Know there’s a company called called stream out of Seattle that manages my money, and they’re like 2530 people I think 20 people and they have their own brand, they’re not part of fidelity or something else. What is the size of this market. I’m just curious.
08:38 So Melinda.
08:42 Romy mentioned the size. There are different ways that you’ll start measuring sizes.
08:47 So one is the overall 40 trillion, which is being managed different people ordering pension funds habit pension funds have groups that invest in managers like this.
08:58 Similarly endowments family offices, so they are a distinct set of LPS
09:04 That are that are part of this. The other side of it, or the managers themselves. So we are looking at managers anywhere between
09:11 100 million in assets under management. Do something like 10 billion in assets under management. That’s the spot for us.
09:19 And you will find over 12,000 managers in the space shuttle and these are, these are all over the place. And a lot of them don’t even are not known.
09:32 They could just be doing a few real estate deals, but the complexity of this space need for them. It is very important that they address the complexity with technology. So
09:45 You know, pull. Do you think of yourself as a fintech in that fintech space is that, broadly, what you would say
09:53 Oh, we just scholars. It is a subcategory of fintech so fintech itself has broken. If we look at it fintech, there is bank deck, which is very specific to what investment banks need
10:08 Then there is a whole category which is reg deck, which is regulatory technology. So these are all sub categories of fintech, so we we come under, and I would almost coined this term asset deck where how do asset managers.
10:25 Like that. I think you just create a new category, man. That’s awesome, right on the show.
10:30 The first Category creator on
10:33 There we go, we got that going on and and helped me understand where are you in the journey to do, you know, do you have customers do you do pilot customers are they paying or what were you in the journey in terms of company.
10:48 Absolutely. So we have we have crossed the first step of putting in a pilot customer we have full paying customers now in a space and some of our customers have done very well.
11:03 Recently, one of our customers just cross the billion dollar mark. They came on the platform as at and when they were just starting off. So these are growing customers and each growth for them is growth for us.
11:18 And I’m assuming your pricing is kind of like to is some function of the total asset that they are managing and monitoring pricing based on some as a value more effectively. Absolutely.
11:28 That’s how we manage it’s totally based on the total
11:33 How do you get customers. What’s your biggest challenge. How do you get customers on. I mean, this seems like a very niche super nice thing, like, man, you know, the total addressable market is 12,000 people, how do you, how do you get in front of these guys, especially during call it
11:46 So that is the challenge that we are trying to bring through now till now as
11:51 Before this before covert it was people we knew and people who knew who knew people. So, that is, but we need to go create a different way of marketing to these people and reaching out to them. So some of this would include include being on podcasts with you and this
12:11 Would also think there are a ton of asset managers listening to our podcast bunch of bankers. I will tell you where there are a bunch of bikers right in my network and my my band the bankers that we talked to. Yeah. They are they are they are in the mailing list up I have you do, you know, have a media company called merger attack by any chance
12:28 No activity.
12:29 So they, they, it’s interesting that your, you should talk to them like they can
12:33 They don’t serve is can I asset managers, but this server service people around the m&a industry like lawyers gonna mail I banker. So, so they’re closer to this, then, you know, I think the closest that I can think of. I’m sure there’s a trade publication for just straight up. money managers.
12:52 Question, but makes me laugh because he knows I’m the least technical person on the planet, but
12:56 You know, one thing that I’ve, you know, I didn’t read about your company and been looking at some of the great stuff on LinkedIn and so on and
13:03 You think of yourself. It looks like you guys are very cloud native right your cloud native you. You didn’t have to
13:09 Build something 20 years ago in port it now its native tell me why that makes a difference here because I’d love to hear a bit about us both the technology, but I think you’re an IIT graduate
13:19 But you’re also a MBA from Columbia and so and so, talk, talk about a little bit about how cloud native city or native Miss has affected your ability to execute
13:32 Envy should take a step back on that specific question because it’s a very important question for the entire industry and it’s it’s not just technology industry, but it’s
13:44 It’s it’s technology industry serving all these other industries which is going to be the tea and cloud is going to be that that differentiator. So
13:56 What that does what cloud does is it allows. Number one, it allows entrepreneurs like us to create systems like record.
14:06 Many years back, if we had to build the infrastructure, just to build a system, we wouldn’t have been able to that would have cost us
14:14 Millions of dollars, but that’s that’s one side of the story, the second side of the story for the for the user.
14:21 What we are able to do is we are able to provide multiple functionalities on this on a on a cloud at a, at a cost that is very easy to accept. So as a typical startup one sometimes can spend 150,000 which was
14:40 Which is like the benchmark for getting a system into my price. Right. That is totally taken away you the whole SAS model.
14:50 Is allows that. But the bigger thing is the complexity in the system. You’re getting data from
14:57 Many different sources sources and to be able to integrate that kind of data on any platform will require
15:08 A technology infrastructure which a non cloud system will not be able to provide and that is where I think the distinction will come and these distinctions start becoming valuable as as you scale up as it becomes
15:25 As the systems become more complex as the business becomes more complex. Yeah, not made even a to us is absolutely key to the growth of the whole industry. I mean, the other side of it. I would almost say that before cloud and often cloud. Kind of, yeah.
15:43 So that’s that’s BC and AD. Right.
15:47 Or whatever. I love to
15:50 Do things now from you on the show.
15:51 That’s awesome. I’m morbidly curious guy, give me the backstory on paper on paper, like, what, what is the name itself. Give me, give me the back. I’m sure there’s a story. Oh, here. Give me that.
16:02 Oh, that’s a, that’s a little that’s a little divergence, but I’ll give you a little quick view of why we named it pepper. So
16:13 We based on what’s freedom. I lived down the road. So I would cross Trinity Church every day. And it’s obviously one of the oldest churches in the city.
16:26 It was raining. One day went inside and there was an A in my curious thing which reads everything that’s written anywhere.
16:36 So I saw this very interesting story about the Trinity Church. Many was founded in 1690s And around that time the monarchy in in Britain had given away a whole bunch of land to the to the church and the gift that land for one peppercorn a year.
17:02 Yes, in that land is still being leased out actually Trinity Church just did a deal or Mark just but a few years back, the whole Hudson Yards is being used at $6 billion. So, but that was done at one pepper, because that was the consideration. So that’s a great name for any product.
17:25 That does integrations.
17:27 You know, now I understand, because when I used to work for vacation you would give me one peppercorn a year.
17:32 For all I know, we’re like, man.
17:35 I like making 6 million and paying one peppercorn that would be a pretty good deal. Right.
17:43 Gotta get that story on your website because because I will say that tell that speaks volumes as to your view of, you know what, what it is to make a good investment ROI and and really to shepherd in the industry that
17:56 I think still remains obscure to people, even though, even though they put money in there, you know, and I was reading this MIT article about data silos recently and
18:05 It’s just amazing.
18:06 To think about the different asset classes and the different regulatory frameworks and that all coming together in a fund.
18:14 That you’re supposed to move on a dime right and not to optimize your consumers investment. But how do you move on a dime without
18:20 Knowing a frankly, what the heck’s going on right and you need that you can data integration for that. And so, you know, I know from a marketer. It sounds like a cliche, but really powerful story really, really powerful story.
18:32 I went to the question. So what’s next for you. Are you planning on kind of mean I’m growing the company organically. Are you guys raising money are you, what’s the, what’s the RD, are you chasing after the next big customer, are you chasing after somebody like Lori large like fidelity or anybody else like some big money manager that can pump a lot of volume.
18:51 What’s gonna, what’s your, what’s going on next gonna like the next not story. Yes, or next milestone rather
18:58 So, so as a company builder. The first thing is always trying to go up to the next big client. So we are always in touch with lines.
19:08 And that will that will keep on going. But even to get clients. What we do need is the capital to back down to be able to support some of these larger clients so that capital for us is key to that growth.
19:24 And so we will be VR in the market, we will be raising capital or for seed round. Now, after having done all of this to to enhance the growth and frankly give
19:37 Give our clients the comfort that okay, these guys are going to be there for the next 10 years and and my planning horizon. So 10 years 15 years and Awesome thanks to you.
19:49 Got it, got it, got it. And how is that fundraising process going given given everything that’s going on right now. I’m just curious.
19:55 But it’s it’s early days for us we have we have built out the deck, we have built out our, our piece of how we want to go out in the market, and what other thing.
20:08 You start reaching out to investors in the next few weeks.
20:13 Would you be open if pull up. Would you be open to, you know, if we get any feedback on this podcast directly to us about people interested in investing. Would you be open to having those conversations
20:24 We would definitely be open. Yes.
20:27 Yeah, when we send out the email. We do get a lot of kind of folks that are in the mailing list, who are who are investors who are
20:35 You know themselves, quite frankly, and they have introduced to AJ, who was from leads are acts like a couple of folks asked me to get introductions to them. So we’ll just follow the emails after you. It’s pretty straightforward actually
20:46 Tell us a little bit about the company itself for you, your bit you personally are based in New York, but I fully distributed everybody’s in New York Region all over the world. Give me, give me. Give us a sense of where how things are so
20:58 The one thing that I realized that you get the bet you get the talent, where it is we are everywhere and my CTO is in Dallas. He has done all of this work for six years, or
21:13 End up from Dallas, we met in this period, we met, about three times all together. We work every single day. So my backend team is in India. I have another team which works of Poland.
21:27 Rest of the folks are in and around New Jersey. I have somebody in Cleveland, so it’s talent, where you can get it in the best part is the team has been working together and it has been executing on all of this. Well, being the system.
21:41 Is a spree covert right this break over it, obviously you guys have been doing this for six years. This is easy for you. You’re like, no. Ha ha. I’ve been doing this for way longer than are you idiots.
21:50 And we can give lots of good ideas to people about how to do these
21:54 W one good idea number one good idea that you guys do that. You say, for what for anywhere for for for our listeners.
22:00 I think the biggest thing is being able to talk to every single person, every single day, not just not just your internal people but talk to your clients every week that is
22:13 Eating some so do you make a point of like talking to, like, at least one client a week or I can do all fine to
22:18 Me every week.
22:21 You do every week. I talked to my client. Yeah, so
22:25 Yeah. Otherwise, I mean that they are the ones will give me all the feedback in terms of what’s coming next, what are they seeing how are they seeing the product go. I mean, that’s the best feedback.
22:37 I mean, frankly. Bullock. Isn’t that what we used to call co creation. Right. You’re co creating your product with their customer, right.
22:43 In some ways, in some ways, you’re not taking a risk you’re risking because you’re talking to the buyer about the thing you’re building right in some ways, you’re not just being theoretical about it. Right.
22:56 That’s a huge takeaway. That’s a huge takeaway, you know, for for for me.
23:00 Yeah, say, and being short article is good and I i personally come from that background, but once I do that I take it to the client and get our life feedback rest to be doing. So, it is it is for creation almost always we
23:18 Our pipeline is totally built on what our clients have asked us to or what they need, what
23:25 That’s a good way of kind of early as we talked to Sean
23:29 Couple of days ago around kind of market development is a great kind of de risking of the market development process where
23:35 You’re literally like talking to your customers every week consistently and you you make. I like the idea that
23:40 You make a consistent point saying that no we talk to our customers every week. It’s almost a forcing function and sort of like it’s easy to kind of say I will talk to them and then we’ll go back, do something come back in a month or quarter or something like that and then
23:52 And then the energies last I got another point.
23:55 Bullet. Do you do you envision like kind of starting kind of doing some media kind of with your customers because that has worked really well for us in the past where you say, like, hey, I will run a webinar with our customers. So, those, those kind of kind of those kind of
24:09 Events are are generally very, very helpful. People love to see how other folks have used your product, literally, that can. It’s kind of a glorified case study.
24:18 I love that.
24:19 We would love to do that.
24:22 So our first client and he has been around since I mean he started his business of Asset Management since 90 1993 and then
24:35 He hates to be in front of even knew he would rather
24:40 Have me on a call for about three minutes and say, Okay, if everything is all right. Or this is not working or whatever it is. So we would like to get some of them and he has been
24:52 A lot of these guys don’t want to be in front of the camera, they, they are they are shy of
24:59 The nature of the industry, it’s it’s dated. They don’t go out there.
25:03 But you gotta break through. Man, you got to break through.
25:08 Open offer from mean vague.
25:09 You want to come on boot cast
25:11 Bring a customer.
25:12 Will do this together.
25:14 We will. Yeah.
25:16 Yeah, we bring in. That’s a great idea actually pull up, pull up. Sorry. That’s a great idea, you should, if you have a customer, we should actually
25:22 Romy we should actually try to get not only not only CEOs, but also one of their customers. Also on it and we love like a more kind of like a different viewpoint on a lot of things also into the discussion. Well,
25:37 I do know that, you know, I did a call with you some time ago and that you’re going to be doing an awesome fintech panel at interrupt coming up in October. So we know we’ll see you
25:49 On camera more but you know once again 15 minutes of fame. You’re awesome. And we look for, you know, Vic has enough assets to to put on pepper.
26:02 New as a customer.
26:04 Come up. Yeah.
26:06 XL he uses a notebook.
26:08 Exactly. I don’t take money from other people manage other people’s money that’s a, that’s a separate issue, but
26:15 Good stuff. Guys, thank you so much for for joining us with that will wrap up the show. Thank you.
26:20 Guys, thank you so much. Amazing seeing
26:24 Bye bye.