Dimitri Dadiomov — CEO & Co-Founder of Modern Treasury — On building payment operations
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“A hill I’ll die on: to calculate a TAM is to insult your product team.
Amazon’s TAM was never book sales. Sony’s TAM was never rice-cookers. Starbucks’s TAM was never whole beans.
“TAM” presumes zero future creativity — if you believe that, definitely don’t invest in that team!”
In today’s episode, Andrew Janssens sits down with Dimitri Dadiomov Co-Founder and CEO of Modern Treasury, a San-Francisco based company that builds payment operations systems.
Dimitri founded Modern Treasury in 2018 alongside his co-founders, Matt Marcus and Sam Aarons. Prior to Modern Treasury Dimitri was a Principal PM at LendingHome (formerly Kiavi) responsible for building payment operations.
Modern Treasury was part of Y Combinator’s S2018 class, and offers tools that automate the full cycle of money movement — from payment initiation, through approvals, to reconciliation — and are accessible through web application or API. They completed the second close of their Series C in March 2022, raising $135M at over a $2B post-valuation.
In this episode we cover:
- What Modern Treasury does in Dimitri’s words:
“Modern Treasury helps companies move money. That’s the short elevator pitch. Now, what does that actually mean? If you think about what’s happening in the world of technology, every payment is going to start and end in software, and that interface between websites and software application and mobile apps, and the banking system writ large.
There’s a lot of opportunity there. But there’s also some challenges in that interface and how that all works very well. So Modern Treasury, we build software for the companies that are stepping into that. And we build technology to initiate payments to reconcile to monitor and account for what happened on a product or website that moved money. And we help companies build ledger that will help companies do KYC and compliance. … all of this is to make it the best platform for somebody to move money.”
- The origination of the name Modern Treasury:
“Turnkey Treasury was the name under which we applied to Y Combinator originally. We hadn’t started the company yet, officially or legally. And so we had a couple of weeks to kind of think about the name before incorporation.
One of the things that we realized at some point was that a lot of times company founders get referred to as the name of the company … so when you get into YC, like a lot of times people will say these are Stripes, this is the Airbnbs. And we didn’t want to be the Turnkeys. Because nobody would hear the N. We sound like the Turkeys. Nobody understood what that was.
And so we ended up coming up with a A Modern Treasury that domain was available for $10. So, you know, I think that I think it’s a great name, I think that, first of all, it’s hard to argue for anybody to have a non-modern treasury. So I think a lot of sales conversations, oftentimes, it’s sort of, well, “this is like the right option”. So I think that’s, you know, in a way that makes for a good name.
Now, I think it’s also memorable, I think there’s a little bit of a tension between Treasury, which just sounds like this old Victorian word for something that is relatively untouched by technology. And making it Modern is almost there’s an inherent tension in the name. So I think I think it works.”
- Dimitri’s advice for Fintech founders getting started or joining an accelerator
“I think one particular challenge for FinTech founders is that FinTech founders tend to be maybe a little bit less, maybe a little bit more worldly. And they’re following the macro. Something that I’ve been noticing recently is talking to early stage founders who are really obsessed about what’s happening in the venture landscape, or what’s happening in the macro world and how it is. And of course, all that matters. But then at the end of the day it doesn’t matter nearly as much as whether you have customers who will use your product and the product works and they’re happy. And you have to be able to point to the and everything good that happens to a company happens as a follow up to that.
- What are payment operations?
Payment operations wasn’t really a category when we started. So it’s been really fun to see that emerge as a category and having companies in a lot of different geographies. Now try to build payment operations solutions for those geographies.
We did a survey just recently, of a lot of finance leaders at companies that are 500,000 person size and one of the most fascinating learnings for us that came out of it was if you asked finance leaders, how many different software systems they use in managing their own kind of finance and payment operation issues, the answer is 9.5.
That’s 9.5 things that they’re logging in and out of, and this can be Excel, Google Sheets, a bank portal, accounting systems and ERPs, and billing systems and so on. And so I think that that has been really interesting. I think that few people thought of that as really a software product waiting to be built. And I think what has emerged as an understanding that you’ve seen a certain set of automation, common change the, say, marketing landscape, and there’s always more tech companies. And we know that there’s,read rates on emails, and you can kind of feed that data into Salesforce.
And that doesn’t really exist as much in the finance realm. So I think there’s some very obvious automation opportunities and kind of connection. But really, a lot of it comes from having 9.5 systems, on average, people are moving data from and logging in and uploading a CSV, handling some sort of integration.”
- Dimitri will happily die on the hill that “calculating a TAM is an insult to your product team”
“I’m happy to defend that statement. Till the end of time. So I think, here’s what it kind of comes down to when you think about the most successful companies in the history of tech, let’s say, Apple, right? I mean, it’s pretty hard to argue that Apple has not been insanely successful in a lot of different sectors. And if you went back to 1975, when they were founded, and you said, what’s the microcomputer market? Whatever number you would have come up with, it would just been completely irrelevant.
And by the way, Apple sells that number of dollars an hour? If not, probably not that, in 10 minutes today. And then if you said, “Oh, well, actually, like, they also do some software. So they’re gonna sell some, you know, education software. So I’m gonna add that to it. And then I’m going to add, you know, graphics and design software.” And all these things that the product team basically comes up with over and over again, start expanding the team.
So whatever TAM you came up with: two things are true, Either the team that you’re about to go fund will never come up with a new idea. And you should absolutely never fund them…. Or, you don’t believe that, in which case, you can’t possibly have a TAM that that is an argument that makes sense. Think about Amazon, right? “Oh, look, it’s the largest bookstore on Earth”
… So I think those arguments around TAM have always kind of been funny to me, because it comes from, I think, an investment mindset of, I’m trying to understand opportunity for specific products. And a product can have a TAM. But the idea of a TAM for a company or it’s just kind of funny to me.”
- Dimitri’s vision for Modern Treasury
“We’re trying to build a big public company that is the default software for a set of payment operations related activities. There’s going to be factors of our journey around how international is it how enterprise it is,… it’s hard to predict what it will be in be in five years.
But at the end of the day, we’re trying to solve a problem that’s not going to go away. Companies will always have the issues around how do they move money, how they track it, how do they manage your business, how do they know about what’s happening their business how do they keep a ledger of what’s going on and their business and so you know, since the times of you know the Medicis or before, this has been a factor of of how businesses are run.”
- Why founders should focus on building culture sooner rather than later
- Dimitri and Modern Treasury’s reverse interview of the host of the Acquired podcast
- and a whole lot more!
Check out the Episode on the platform of your choice here → Spotify | Soundcloud | Apple Podcasts
About Dimitri
Dimitri founded Modern Treasury in 2018 alongside his co-founders, Matt Marcus and Sam Arons. Prior to Modern Treasury Dimitri was a Principal PM at LendingHome (formerly Kiavi) responsible for building payment operations.
Dimitri grew up in Redmond, Washington before attending Stanford University for his undergraduate, and Harvard Business School.
About Modern Treasury
Modern Treasury is a payments operations platform that offers tools that automate the full cycle of money movement and are accessible through web application or API. They are headquartered in San Francisco, with roles in NY and remote. Check out their job openings here.
About the Author
Andrew Janssens is a second-year MBA Candidate at The Wharton School, where he is part of the Wharton FinTech Podcast team. He has a passion for the nerdy corners of financial services, venture capital, and all things FinTech. Don’t hesitate to reach out with questions, comments, feedback, and opportunities at ajanss@wharton.upenn.edu.
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