1. Scale-Up Marketing & Communications with OakNorth's Valentina Kristensen

PLEASE NOTE: This transcript has been created using fireflies.ai – a transcription service. It has not been edited by a human and therefore may contain mistakes.

[00:00:02] DOM HAWES: Unicorns. They're supposed to be rare, but they seem to be everywhere. Now, like you, I suspect I devour business and marketing books, but if you've noticed more and more of them use the same reference material and they retrofit the strategies and tactics they're espousing to unicorns. Well, you know what? I'm bored of reading about unicorns. 

So what if Amazon thinks back to front? Why is it relevant to me that Steve Jobs started with why? Google, Facebook, Netflix, those guys, you know it's not where I live professionally and it doesn't inform my future. So, I thought, why don't I do something about it? Why not create a body of reference material that ordinary marketers like me can contribute to and learn from? That is Unicorny. 

[00:00:55] DOM HAWES: Hey, peoples. Welcome to the very first episode of the very first season of Unicorny. This is a podcast by marketers for marketers. You get the gist, you probably listened to the intro, and if you didn't just rewind back and play it again. Now, God, have we got a treat for you today. I'm joined in the studio today by my co-host, Dafina Grapci-Penney. She is from Greentarget and you can find them at greentarget.co.uk.  

Now, I had to bring Dafina in today, because I needed specialist financial expertise and there is no finer financial expertise than resides in Greentarget, because today's guest is Valentina Kristensen, who is Director, Growth and Communications at OakNorth. I'm not going to tell you who OakNorth is. I'm going to let Valentina do that herself, because she tells the story really, really well. But if you're in communications or marketing or if you're leading a company that is scaling quickly, or if you want to understand how to build and exploit reputation, don't go anywhere. This is pure gold.  

[00:01:55] DOM HAWES: Hi, Valentina. 

[00:01:56] VALENTINA KRISTENSEN: Thanks. Thanks for having me. 

[00:01:58] DOM HAWES: Why don't we start? OakNorth has been an amazing story, but bizarrely, not everybody knows about it. So, why don't you start, please, by telling us the story of OakNorth? 

[00:02:09] VALENTINA KRISTENSEN: OakNorth was founded by two entrepreneurs, Rishi Khosla and Joel Perlman. The idea was really born out of the experience they'd had with their first business Copal. They started that business in 2002, and by 2005, it was profitable. It had very good cashflow, great list of clients. They were looking for a loan to help them grow, and they kept getting the same computer says, No Response from all of the high street banks here in the UK. Then fortunately over the next 12 months, they managed to get a dividend recap from these special situations desk of one of their U.S. clients. They were able to grow on to scale that business to 3000 people across 13 markets and they sold it to Moody's Corporation in 2014. 

It was really that experience which, I guess, planted the seed of the idea for OakNorth. Once they'd exited that business, Copal, they said, “Right, this is the problem we want to solve, that funding gap.” We call that funding gap the Missing Middle. These are businesses which are distinct from startups, they’re more scale ups, businesses with a proven productive profitable business model that are looking for debt finance to take them to the next level. 

The challenge you have in the market at the moment and really what's been a challenge for the last 30 years or so is that a lot of the investment in technology has been at the much smaller end of the scale. Either loans for you and me to going apply for a credit card online in a matter of minutes or very small business loans, so tens of thousands of pounds, maybe up to a quarter of £1,000,000 a max. 

Once you get into the half-million, up to even 100 million, that's where it becomes uneconomical for the large banks to do the underwriting of the loan and to actually take the time to understand the business in detail. The reality is the amount of time you have to do in terms of credit underwriting for a loan of 1 million is the same as you'd have to do for a loan of 100 million. So it's not that you can't get a loan, it's just that you're not going to be the priority. If you're a growing business, a fast growing business, the opportunity cost of having to wait several months to get an answer, especially if it ends up being a no, can be pretty high.  

This is really the problem that Rishi and Joel were trying to solve. They figured the answer probably in technology and being able to accumulate all of that data and be able to analyse the data very, very quickly, but having a human involved in the process where needed. So it's not a fairly automated process and certainly at this size of loan, the correct balance between the human man or woman and machine is very important. That was really the premise of it. They develop technology, we call it the ON Credit Intelligence Suite, and we use that to lend our own balance sheet here in the UK. OakNorth Bank launched in September 2015. Got its provisional license in March 2015. I started working with Rishi and Joel in June 2015, and then we managed it to launch fully in that autumn. 

Since then, OatNorth Bank has gone on to lend several billion pounds. It's highly profitable. It's been profitable since year one. Lent to hundreds of businesses across the UK who have directly gone on to create tens of thousands of new homes and jobs. Then the technology, we're now licensing that to other banks around the world. Public clients include SMBC, ABN-AMRO, Capital One, Fifth Third, PNC, that's just a few of the names there. 

[00:05:19] DAFINA GRAPCI-PENNEY:  That's a fascinating story, especially given the context. Obviously the last few years have seen the emergence of neo banks, digital banks. You've also seen some of the more traditional banks of that game in terms of digitisation, but also investment in technology. I'm just curious to know, especially in this competitive environment, how have you managed to build a differentiating identity and what have been some of the major challenges that you've encountered along the way? 

[00:05:46] VALENTINA KRISTENSEN: To answer the first question in terms of building a distinct identity. I think the fact that OakNorth Bank is very focused on a specific market niche, right? We're not trying to be all things to all people. We're not trying to fix the current account problem. This is a challenge that, as I say, Rishi and Joel, our founders personally experienced. So they knew there was a gap in the market. That's obviously been proven through the success that OakNorth Bank has had to date and the demand for lending that it's had or that it's seen. I think that's part of it. The fact that we're not trying to you mentioned, I mean, Monzo, Starling, Revolut, doesn't have a banking license, but one of those new entrants and they’ve come to market with a very broad proposition in terms of products. 

I think we said actually we'll go really, really deep in this particular area and make sure that whatever we're offering is ten X better than what you can get elsewhere versus trying to spread ourselves much more widely and then potentially offer products and services that are incrementally better. So that was really the focus and, as I say, it's yielded good results so far. I think in terms of the growth of the business very much at the beginning, it was focused on getting that foundation in place in terms of the brand. The narrative, the messaging, what are the core messages and at OakNorth Bank? Its speed, flexibility, transparency, and an entrepreneurial approach. Those are the key things that really differentiate us versus getting a loan somewhere else. 

It's also that if you're going to say it, you’ve got to make sure that you live up to the promise. It can't just be marketing for the sake of it. Otherwise you potentially spend lots of money and time and resource going out, getting people to come to you, only for them to realise t hat, actually, what you're offering isn't quite what they were promised. a big part of it is making sure that you deliver on that promise. As a result, we spend very little on marketing. Up until last year and really the second half of last year, everything in terms of brand building was driven primarily by PR and communications in terms of above the line spend, probably about £60,000 per year. That's incredibly low for a business of OakNorth’s size and, certainly, that's very different to some of those new players that have come to market. 

[00:07:52] DAFINA GRAPCI-PENNEY: Exactly. I think another aspect that makes OakNorth unique from what I can tell, is that the business is also profitable, unlike many of the other new entrants who are spending a lot in their marketing and attracting a lot of funding, but they’re still to turn a profit. I'm interested, how do you navigate that from a comms perspective? 

[00:08:11] VALENTINA KRISTENSEN: Yeah. I think profits are very unsexy and it's that Silicon Valley mantra, right, of growth at all costs and that if you are profitable, then you must be sacrificing growth. I think our philosophy is that the two aren't mutually exclusive. OakNorth has seen across every metric that you could possibly measure double or triple digit growth every year, and that includes in our profits, right? So, last year, post-tax profit of 77.6 million, that's pretty good for a business that's been trading at the time for about five years. I think in terms of the narrative, I mean, you can be as much a FinTech darling by being profitable versus if you're not, the media will probably criticise you for not growing fast enough if you're only profitable, but they could equally criticise you if you haven't yet got a proven business model. 

I think from our perspective, our customers don't really care if a profitable or not. They care about the service that we're giving to them. That's always the focus for us. We don't get hung up on things valuation. It's about the value that you're delivering, whether you're making a difference to those customers. Unfortunately, that doesn't make the headlines all the time, but talking about the brand. No, everyone's not heard of OakNorth Bank, but that's also because we don't want everyone to hear about it, because not everyone is our potential customer.  

There'd be no point in us doing expensive tube advert, because I'm not trying to target the average consumer, I'm not trying to target small businesses. There's a very specific niche of business, right? The Missing Middle, so that requires a much more detailed focus and finding the places where these individuals and these businesses are meeting and then going and making sure that they're getting the right messages, rather than a broader approach. 

[00:09:44] DOM HAWES: That's really interesting, Valentina. I've come across the OakNorth brand personally, I think probably in two or three different corporate finance advisory firms that we've been working with. You've obviously spent some time talking to channel effectively or at least working out some distribution. In terms of your own strategy, your growth strategy, how do you think you're differentiating from some of the other players out there? Are you consciously targeting channel as a deliberate ploy to grow? 

[00:10:10] VALENTINA KRISTENSEN: I think it depends. I mean, a lot of it's been quite organic. You have a meeting with an accountant or corporate advisor, a lawyer, and then they send a business your way and that just happens, as I say, completely organically. Then, maybe that turns out to be a really good deal and you end up lending to that customer. Then the lawyer or the accountant or the corporate advisor sends you another one and you start to see, okay, these are the individuals and these are the firms whose client lists seem to be very well aligned with us. But we don't take an exclusive approach of these are the only individuals that we'll work with or to get advice from. 

I think then it's you've got to make sure that you're nurturing those relationships and we do, again, using those channels, a lot of events throughout the year where we get to build the relationships with them, develop them, allow them to meet some of our clients, and hear from them firsthand, hear about their experience. So that they, again, know that when it's not marketing for the sake of it, but that we're really delivering on that promise. 

So many businesses, they spend so much money on marketing and then people come in and the product or the service doesn't meet expectations. I would much rather that we spend very little on marketing, but that the product and services speak for itself. Two thirds of our qualified pipeline comes from customer referrals. Almost two thirds of our existing customers are repeat customers, and that's quite surprising considering that average time of a loan is about three years, right? Those customers who borrow from us in the very early days coming back three or four years later to borrow again, because the experience is just so much better than anything they can get from that clearing bank.  

Also the fact that, again, going back to the focus, we don't have a caveat, if you're going to borrow from us, then in six months’ time you have to switch to us and make us your current account provider or your cashflow has to come through us from a FD or a CFO's perspective, that's a headache that you're saving them, right? That they don't have to have that caveat as part of their loan. 

[00:12:08] DOM HAWES: I mean, I guess as well from a CFO point of view, when particularly you're talking about high street lenders, there's availability, which there isn't on the high street, because most high street banks have completely withdrawn from supporting the missing middle, as you call it.  

[00:12:20] VALENTINA KRISTENSEN: Yeah. I think actually it's really interesting, because you think about OakNorth Banks journey to date. We launched in September 2015, then nine months later the UK made an unprecedented decision to leave the EU. Then, obviously in March 2020, an unprecedented event occurred. Well, it had reached UK shores, I should say, by that point. A very short history experience, not one but two unprecedented events and have continued to grow and to lend through those. In some ways that's actually been an opportunity for us to potentially gain more market share than we otherwise would have. I mean certainly in the six months following the referendum vote, we saw a huge peak in demand and this is less than a year after launching, right? 

Our brand wasn't where it is today and we saw our loan book, triple in size, which is just not something that we would have expected, especially on that period, but it's because, as you mentioned the other banks were retrenching. That was, again, what we saw in the immediate months following the COVID lockdowns; retrenchment from the market, which again, gave us an opportunity to really step up to the plate and support those customers. 

[00:13:26] DAFINA GRAPCI-PENNEY: Let's dig deeper into customer acquisition, which as we know is very costly in finance. You've done an impressive job in terms of growing that organically through the referral network and so forth. I was wondering how do you see this trend continuing for OakNorth? How do you plan to continue to grow and build scale beyond the referral network? I suppose what role do you see PR and marketing playing in that? 

[00:13:49] VALENTINA KRISTENSEN: Yeah. So, I think you really hit the nail on the head there, because it's not scalable, right? I think if you're a startup and you have limited marketing budget or resource, then my advice would be to get the PR comes to make that where you invest, because that gives you the opportunity to experiment to get that messaging really, really clear to get the narrative really clear, to get third party endorsement, which can help drive lead generation. Then, once you're at a point when you know, right, this is exactly our customer and we know that these are the messages that resonate then you can start to put the marketing dollars behind it. 

Big part of our strategy now that we’ve – I mean, we're coming into the sixth year here is investing in marketing. So we hired a fantastic marketing director last year, a guy called, Hugo Sousa. You may have read that, in December, we acquired Fluidly, pending regulatory approval. That's about 50 people and a good chunk of the team are focused on marketing. We'll now have a much bigger in-house team who can help with our content marketing, social media, events, and in a way that is you've got, I suppose, teams of people who can do this rather than a jack of all trades, more ad hoc approach, which I think is definitely very fun and can scale in those first few years. But then once you reach a certain point in your journey, you do need to actually put some proper money behind it and resource in terms of the team. 

That's really the focus going forward is we've managed to achieve so much with so little. So, now let's see what we can achieve when we actually put some money and resource behind it. 

[00:15:18] DAFINA GRAPCI-PENNEY: We talked about the banking business, but you also mentioned that there's a tech side to the business, which is a credit intelligence offering. I just wonder how do you reconcile competing with banks, especially over here in the UK, versus acting as a tech provider to banks? 

[00:15:35] VALENTINA KRISTENSEN: I think it's the fact that we have our own bank in the UK is a huge competitive advantage. If you think about every other software as a service provider that will be selling to banks, they don't speak the same language. They may have people on that team who used to work at a bank, but we do it every single day. 

I mean, when you think about going through COVID and having to identify where that risk is in your commercial loan book and prioritising in the right order. We can say all of that, we can explain our process and we can build that into the product and we can do it with the exact same real life experience that all of our bank customers are going through. 

On the point of competition, I think the fact is that, here in the UK we don't sell the product to UK banks, so the product is being sold outside of the UK. Here, we're not eating our own lunch, as it were. I think as I say, I mean speaking the same language is something that a number of those bank customers have said is completely different than the SAAS providers who come to them. I think, looking ahead, the next big unprecedented event that we're all experiencing is climate change, right? For banks to understand where the risk is in their book, both in terms of physical and transmission risk. 

We're having to do that, talk about disclosure's, talk about scope one, two, three emissions within our own bank in the UK. Then, I'm having those conversations and building that into the product, the credit intelligence suite for those conversations with bank partners around the world. 

[00:16:54] DAFINA GRAPCI-PENNEY: That's a very good point, because you have your own bank, you have the incentive to innovate the product. Unlike a vendor who will sell you an off-the-shelf product and you're actually investing your own product and improving it continuously. So, presumably your white label partners benefit from all of that innovation as well? 

[00:17:12] VALENTINA KRISTENSEN: Completely. I think software is never is never finished, right? You're always developing, you're always iterating and we we're very, very fortunate to work with some incredibly forward-thinking banks, right? I mean, Capital One, Fifth Third, Old National, Customers Bank. I mean, these are banks that are willing to be fast movers and are willing to give us very honest feedback about the product. What needs to be changed, what needs to be improved. I think that's, again, where the business model is quite unique, because we're not just a bank across the group. We've obviously got the enterprise software, which is where, eventually, the majority of the scale will come from, because you're talking about banks around the world. Whereas, at least for the time being, OakNorth Bank is very much a UK-focused bank. 

[00:17:54] DOM HAWES: Presumably, because you've got that dual focus. I would imagine you've got a pretty big data set around commercial lending globally? 

[00:18:01] VALENTINA KRISTENSEN: Yes. So OakNorth across the group now we have about 365 billion of commercial and industrial data, so that's more than JP Morgan have. We obviously have ambition to increase that number exponentially over the years. That's really from some of the banks that we're working with, right? We've got a huge amount of data that's not only incredibly helpful for what we do within OakNorth Bank, understanding how different businesses will react to different events. I think you take an example of COVID. So many banks take the approach of lumping businesses into one of, let's say, a dozen categories, right?  

Restaurants, hotels, they'll fall under hospitality and leisure. The reality is that you have to go many, many levels deeper. I mean, if you split that up, you're going to have hotels and, under that, there's going to be boutique hotels and airport hotels and hotels that are in conference centres. If you talk about leisure, you're going to have to split that out into all the different types of activities that you might do. Then, let's take an example of golf versus indoor climbing, right? I think about indoor climbing and then you go to Vauxhall.  

if you think during the pandemic you wouldn't have been able to go and do that, right? Because it's not exactly great for social distancing, it's indoors. Everyone is touching the same things. You likely would have had a very different experience to a golf club which is outdoors, which definitely lends itself to social distancing where you're bringing your own clubs. So, would have had a very different experience, but they're still classified as leisure businesses. 

The fact is that you have to look at each business on its individual merits in order to build a proper credit profile, a proper credit picture, and take a forward look view. Forget about where a business has been or where it is today, because the fact is you're not getting your money back in the past. You only get your money back in the future, so you need to be taking a forward look view. That's something that we build into the product so that we can do it within our own bank, but also help other banks around the world to do it. 

[00:19:57] DOM HAWES: Okay. I'm keen to go back in time again, because this is ostensibly a show about marketing and communications, but I'm so fascinated by the story and where you are and how you as a business are thinking. You've got this data set, you've got the ability to do things others can’t, because you've got the data, because your technology is in the cloud, you've got no legacy systems whatsoever. That obviously is going to drive your own lending business in the UK. Is OakNorth going to lend overseas or is software very much the focus for you overseas in the future? 

[00:20:28] VALENTINA KRISTENSEN: I think – and this I guess goes back to your question about competition versus collaboration. The fact is that a lot of the banks that we work with have stood the test of time. They've been around for hundreds of years and there's probably a reason why. I don't think that's because they've never had any competition or that nothing better has come to market. I think it's actually because they're incredibly good at adapting and evolving. When they see that someone is coming to steal their lunch, they throw the kitchen sink of it to try and make sure that that doesn't happen. 

The reality is that a lot of these banks have accepted really good relationships with customers. It's just that, as you say, with the legacy technology, there's definitely a desire to service these customers better. It's just very difficult to do that. It is much more slow moving. Arming them with the tools to do that effectively. In our view is, is a much better approach than trying to go to every single market around the world, trying to get a banking license in every single market, trying to build a team and a marketing function and a board and deal with the regulators. 

Getting one banking license was a big enough challenge. Trying to do that in multiple markets, I mean, you've seen this, right, with a number of the neo banks that you referred to, and that's not just in the UK. These are other near banks in other European markets who have gone in to market and then pulled out several months later, because they realise actually it's incredibly difficult to do.  

Now, for the moment, that’s not impacting valuations, because hopefully they can find the growth elsewhere and they can diversify their product offerings. Again, our focus is very much on the UK. We really want to be the go to bank. If you're a Missing Middle business looking for a loan, we really want to be the main choice that you go for and that's not by being the cheapest, it's just by really being the best, and then, outside of the UK, helping other banks to address that funding gap in their own markets, using technology to do much more efficiently and much more profitably. 

[00:22:20] DOM HAWES: Okay. As this is a marketing show, we've talked a lot about product, which is really fascinating. We've talked about positioning, we've talked about placement, we've just mentioned price. I'm just going to come back to it very quickly before we go back in time. How price sensitive is the Missing Middle? 

[00:22:35] VALENTINA KRISTENSEN: Surprisingly, not that price sensitive at all. I mean, again, I think it's about valuing the time and as I mentioned earlier the opportunity cost of having to wait several months for an on-site is potentially much more expensive than one or two percentage points more in terms of rate. So I think we figured trying to be the cheapest in the market. Someone can always come in and undercut you. That shouldn't be how you differentiate yourself. You should differentiate yourself with a product that's much better. I don’t think there's a brand out there that's proven that's more than Apple, right? 

I mean, every Apple product is several multiples more expensive than the similar product of another provider, but customers still, even with iterative improvements to the product, go out and buy the next iPhone or the next Apple watch or whatever it might be. 

I guess it's the difference between being willing to pay to stay in a five star hotel and have a five star experience versus staying in a two star motel and having a two star hotel experience. The choice is absolutely yours. Then, you’re just very realistic and aware of what experience you going to get as a result. 

[00:23:36] DOM HAWES: It's great value compared to anything that involves equity anyway. You’ve taken on – 

[00:23:40] VALENTINA KRISTENSEN: 100 percent, exactly. 

[00:23:41] DOM HAWES: As a business, as a business venture credit or a line of credit is a lot more attractive than BEE, if you can get it – 

[00:23:48] VALENTINA KRISTENSEN: Agreed.  

[00:23:49] DOM HAWES: Right. Let's go back in time. I'm fascinated by this. Dafina, pitch in, because I think this is going to be really interesting so I just want to go back to 2015. There are 40 people.  

[00:24:00] VALENTINA KRISTENSEN: Yeah.  

[00:24:00] DOM HAWES: You just got the banking license, is that right? 

[00:24:03] VALENTINA KRISTENSEN: We got the banking license March, 2015. 

[00:24:06] DOM HAWES: Okay. You joined in June? 

[00:24:08] VALENTINA KRISTENSEN: I should clarify. So, I started working with Rishi and Joel in June 2015. I was seconded later that year. 

[00:24:13] DOM HAWES: Okay. When you turn up, you got a banking license 40 employees, but no book. Where the hell do you start? 

[00:24:21] VALENTINA KRISTENSEN: Well, I should probably go even further back in time than that, which is that I'm the daughter of an entrepreneur. My mum is an entrepreneur, raised four kids. I saw firsthand the experience that she had in trying to build a business and how her experience with the banks, it was not always very positive. So, for me, the mission really resonated, right? The mission to empower the Missing Middle globally. When I first met Rishi and Joel, I was like, I can't believe that these two men have managed to build such successful business and exit that business. When you Google them, you can't find anything. It was quite remarkable. So, a lot of the focus initially was actually trying to build that story. 

How are these two people, who have never worked in banking and aren't bankers, how are they going to build the bank? How do they know what to offer customers? So really telling that story and that personal experience, but also showcasing some of the fantastic talent that we have within the business and our chair was Lord Adair Turner. He was the former chair of the FSA before it became the FCA. Cyrus Ardalan, who later became our chair and he was formerly at Barclays for, I think, 15 years or so. Again, bringing out the big guns when needed and building that foundation, getting those messages really honed in. What does everyone want to be known for? What makes us different, genuinely? How can we make sure that if we're going out and telling this that the promise we live up to that promise and then building those relationships with journalists, right? 

Finding out, okay, in this case, it was the banking reporters, the banking editors, those running by enterprise or business, really trying to build those relationships that when the time came that we did have some deals to talk about or some customers who are willing to be case studies or do PR, the journalist wasn't hearing from you for the first time that they actually already understood the business. They knew what you offer. They know what makes you different. Then you could just go ahead and say, right. Someone's actually come to us and borrow some money and here’s an example. 

I remember very, very distinctly my first PR story in terms of a deal, which was a £500,000 loan to Adventure Bar, which is a bar chain here in London and the Telegraph ran it, which today if I went into the Telegraph and said, I've got a £500,000 loan for a London business, they'd be like, “Wow.” You might want to add another zero to that story and bring me a national brand and then maybe we can talk. I think the story has to evolve over time as well. Obviously you're not always going to get big pieces in the Telegraph, but I think, when you're in those early stages, it's very much about the people, the founder story, the mission.  

Then, over time, what we’ve found is that's great for corporate profile. It's great for securing investment. OakNorth is one of the most well-funded FinTechs in Europe and having secured over billion dollars, but it's that what really drives deal flow are the customer stories. Are you going to lend to a business like mine? A lot of our time and energy goes into publicising those stories, making sure that those are in, a lot of cases, trade publications, which most people will never have heard of, but that's the publication that everyone in that sector reads. If the newsletter comes in their inbox, they're going to go through it in detail. 

[00:27:30] DOM HAWES: To start with, it was their own personalities. You wanted to build the profile of your founders, and also obviously you had a couple of giants on the board that you could use to establish instant credibility and trust. So, the starting point was people, was it? 

[00:27:43] VALENTINA KRISTENSEN: Yeah. I think in the people and again, the mission, right? At the time we were the third bank in 150 years to secure a banking license, a UK banking license. It was still quite novel. Obviously, today, there's been a couple dozen I think that have been granted banking licenses. But again, it's what problem you're trying to solve. Why is this a problem? Making sure that the market understands there is a genuine funding gap here, there's a genuine problem and you hear, SMEs are 99.9 percent of all businesses and they're underserved and overlooked, but you have to actually bring that to life. 

I think Rishi and Joel's personal story, the fact that they are entrepreneurs not bankers, was something that really resonates and meant that – going back to speaking the same language – we speak the same language as the businesses and the borrowers who come to us. 

[00:28:30] DAFINA GRAPCI-PENNEY: If we look at your investor base, how much of a game changer was actually getting the likes of SoftBank on board in terms of your media profile? 

[00:28:38] VALENTINA KRISTENSEN: Yeah. So I think the halo effect, we definitely felt that. I think it did put us on a different level of publicity wise. Again, we are quite different to a lot of the SoftBank portfolio businesses, right? I mean, we're profitable. I think at the time we were the first UK FinTech investment, but they've been incredibly supportive, as have all of our investors, not just financially, obviously, but actually in terms of the advice and the expertise that they bring to the table, especially through periods like the last two years that we've gone through.  

They do a lot of events where they're, I mean, actually I've been to a couple where they bring the marketing or the comms people together. You can hear the experiences of others and once they were at the stage where OakNorth is now versus maybe a 30-billion valuation or they've gone from 800 people to 8,000 people, and then that comes with a whole range of internal comms challenges, right? And your whole approach in going from a private company to a public company. All the learning that has to happen internally, because people have to suddenly understand what does insider trading mean. You know, your whole dynamic and relationship with the media changes, right? Because the days of exclusives become very difficult when you're when you're a public company. 

Certain promises that you could make previously no longer apply. I think that's something that is great to hear the experience from other businesses. I don't know if we will go public, if that will be the route that OakNorth takes, but certainly learning from other teams and individuals who've been through the journey is really exciting. 

[00:30:09] DOM HAWES: I think that's another really interesting question, particularly do you stay private or do you go public? From my own experience having worked in a public company, I can see the mentality where you want as many reasons as possible not to go public, because that level of disclosure can be a nightmare. Also, there are so many things that you just not allowed to do. 

[00:30:28] VALENTINA KRISTENSEN: I think, as well to that point, no matter where you list, you have the quiet period, but you're not allowed to do any marketing. That's where PR and comms becomes so incredibly important, because it's about the relationships that you've built up with those journalists that will really come to life there, right. I mean, it's the journalists are going to be writing about you in that period, once you've marked your intention to list. You're not allowed to proactively go out with anything.  

You're at the mercy of what the press will write about you. If you've not spent any time for them, getting to know you, all they have is the prospectus to rely on, or worse, if you've disregarded journalists or you've not been transparent or collaborative in the past, then you're probably going to be in for a pretty tough time, as we've seen with a number of businesses. I think that's something that every business and, as I say, going back to the very beginning, making sure you have a very solid PR and communications foundation is absolutely key. 

[00:31:19] DAFINA GRAPCI-PENNEY: I think the worlds of private and public are actually converging as well, because there is an expectation of private companies, even if it's not a requirement as such, to be more transparent. Again, you've led the way by being transparent in terms of your numbers where you haven't necessarily been required to. 

[00:31:36] VALENTINA KRISTENSEN: Well, I think that's also where, being a UK company, it's very interesting because obviously, in the US, you don't have to do that as a private business. Transparency is built in and because you have to do so much reporting as a bank to the regulators, you have a lot of that great, very strong corporate governance in place, which I think if you want to get public, which serve you very well best as a company that's been fairly private and hasn't necessarily had to be as transparent. So, yes, definitely a good thing I would say and a blessing for any UK business that wants to list here. 

[00:32:08] DOM HAWES: What I'm hearing and what I find fascinating, if I'm going to think about takeaways that listeners can take in apply to their businesses, you guys have a really interesting approach, because I don't think I've come across a more modern business. You've blazed a trail wherever you've gone with the use of AWS for core-banking systems launching a bank when you're not bankers. It’s über modern in many ways, yet your approach to growth and marketing and communications is old fashioned, reassuringly old fashioned. 

It's get the product right, get the reputation right, build trust, and encourage word of mouth. I think many other business would have had extraordinarily hard working and super expensive performance marketing programs and loads of wonks trying to optimise performance and all that kind of stuff and you guys have done the basics really well. 

[00:32:59] VALENTINA KRISTENSEN: Yeah, and I would say another thing is focus on the value rather than the valuation right? As I say, our offering is incredibly focused and that doesn't mean you can't be diversified in terms of products and services, but it's that the problem that you're trying to solve, not trying to be all things to all people. That has served us very, very well. 

Yeah. I think going and again, if you think about the basics of PR and comms. It's all about relationships, right? I mean, that's probably one of the reasons why it's been so challenging the last the last couple of years with COVID, because especially I think back to when I first started out, it was so important for me to meet journalists face-to-face and build those relationships. It must have been incredibly hard for those people who are starting out in their careers, who haven't had the opportunity to do that. But yeah, relationships, being transparent, being honest, and making sure that the product lives up to the promise. Absolutely, it's the fundamentals. 

[00:33:51] DOM HAWES: Dafina, are we allowed to mention the M word? 

[00:33:53] DAFINA GRAPCI-PENNEY:  Well, yes, I'm always curious. Valentina, how do you measure the impact that PR is having on the business? 

[00:34:01] VALENTINA KRISTENSEN: Yeah. I think you always have to approach at us. I'm not going to be able to track every single lead, because the reality is that let's say you hosted an event for and this is more broad marketing rather than PR problems, but you host an event for a number of corporate advisers, accountants, lawyers, and then maybe not immediately, but maybe six months down the line. One of those accountants or lawyers or corporate advisors message to someone your sales team and says, “I've got a great business.” Is that individual going to remember that they first met that person at that dinner, which was arranged by the marketing or PR and comms team? Maybe, but very likely that they might not.  

If the deal ends up going ahead, often that will that would be logged as self-generated or it's coming from an intermediary referral. I think part of it is you have to work incredibly closely with your sales team. Again, that's where the trust in the relationship is really, really key. That's something that from day one, I mean one of OakNorth’s values is one team and it's definitely not just decoration on a corporate profile page. It's actually, genuinely what we live within the business. A big part of that is having those very honest conversations.  

If it's not clear from the data where the lead is coming from, then making sure that you actually spend the time to find out. Then, obviously there are a number of leads that you can absolutely track with 100 percent certainty that came from that particular article or that particular PR or comms effort, whether that's because there was a backlink in the article and you can follow that journey through your website and you can see what happened or when they were filling out the form of the website. When you ask them, what did you first hear about us? They say, “The Sunday Times.” And maybe they didn't even specify, Sunday Times, maybe they just say a news article, but you can do, you can see which news came out around that time and you can figure it out.  

I think a lot of it is measurable and obviously I wouldn't be able to get in front of the CEO every year and be able to say this is what impact we've had unless I had some tangible numbers to show for it. This is what I can absolutely say with certainty has been delivered by the team and the team's efforts. Then, this is where, as you can see, it's a bit more of a grey area. We've absolutely played our part in that. So, yeah, I think it's going into it with making sure that whether it's on the forums, whether it's on HubSpot, whether it's on Salesforce, whatever marketing technology you might be using to track leads, make sure that you have that in place, having very honest conversations with your sales team and making sure you're working very closely with them. Otherwise you'll always be seen as a cost centre and then having the caveat that there's always going to be a portion of leads that unfortunately you just can't track it that may slip through the cracks. 

But then what you get is anecdotal feedback, where someone on the sales team or the debt finance team, they close a deal, and the first call they make is to you to say, “I want to PR this deal.” Then you know that they didn't want to spend time doing that if it hadn't yielded results in the past. 

[00:36:54] DOM HAWES: Wow, Valentina. Thank you so much. That's just an amazing interview. I think I speak for both Dafina and me when I say that really was enjoyable to listen to. 

[00:37:03] DAFINA GRAPCI-PENNEY: Absolutely. A great growth story. 

[00:37:06] DOM HAWES: Do you know what I find fascinating? Is when we devised this the concept for this podcast, I thought we were going to be talking about marketing. Yet, the very first guest we come in is talking about Comms and the whole strategy, the whole growth strategy started with communications, not marketing. 

[00:37:21] DAFINA GRAPCI-PENNEY: That's what we'd say to our clients. 

[00:37:22] DOM HAWES: Is that what you’re saying? If you don’t know, Dafina is Managing Director of Greentarget, which is one of the city of London's finest communications consultancy. If Dafina says it's true, it is. Now, on that note, Dafina, we heard a lot today from Valentina. If you are going to draw three things out that you would give as advice to other companies that want to be leaders, what would those be? 

[00:37:49] DAFINA GRAPCI-PENNEY: Well, I think there were some three really useful takeaways from this conversation, which can be applied to many of these emerging businesses in the financial services or FinTech space. One would be to get your product right early on and stay focused, because I think the temptation with so much opportunity out there is to try and expand your product and your services early on. So, get your product right and get your messaging right from the beginning.  

Think about the board and the advisors quite early on, and I think about the credibility that they're lending to the business, because I think that's as OakNorth has demonstrated us has been very important to them. Finally, I think in the financial industry, as we know, banking money is all about trust. If you can be transparent and if you can be transparent, both in terms of your communications, but also in terms of how you build relationships early on, then that will certainly serve you in the long term. 

[00:38:47] DOM HAWES: Thank you for listening. That is the end of today’s show. If you would to subscribe to us, please do go to your favourite podcast outlet and you will find us there. If you want to be on the show, my name is Dom Hawes. Look me up on LinkedIn, connect, and I would love to talk to you. This show is put together by Selbey Anderson; we find and unlock hidden value, and the show is recorded at Terminal Studios which you can find @terminalstudios.co.uk. See you next time.