Brad Garlinghouse, Ripple CEO, on Swell, r3 and fixing payments in the US

Laura Watkins Executive Producer

1st November 2017 • 5min read

Sam Maule interviewed Brad Garlinghouse, the CEO of Ripple at Ripple’s own event, Swell, in Toronto, for Blockchain Insider.

Welcome to another edition of Blockchain Insider Interviews. I’m Sam Maule, we’re in Toronto, and we’re with Brad Garlinghouse, the CEO of Ripple at your own conference called Swell.

Most importantly, the name [Swell] came from..?

Swell, there’s a lot of water metaphors in what we do, our core product is called X current. The next product we launched is called X rapid. So, Swell is, kind of, building on the, water theme of what Ripple is doing, and kind of spreading the Ripples around everything, really.

Ripple’s really focused on how do we enable an internet of value? How do we make value move the way information moves today? And that’s our big multi-year, ten-year view of how the world will evolve, and how do we dial that back in, to make it tactical and real, today and tomorrow? If you enable an internet of value, you’ve got to connect the repositories of value. And the repositories of value, as big as the Bitcoin value proposition is today, the banks own trillions and trillions and trillions of dollars of assets, so if we want to enable an internet of value, we’ve got to connect the banks and payment service providers and MSBs, and we’re excited to make a bunch of progress on that. I think one of the things that has served Ripple incredibly well is, I think, in contrast to some in the community that are kind of taking a very horizontal view, we’re talking about literally over 100 use cases. We’ve been very specific about one. Payments.

Particularly cross-border payments. I think that that focus and really understanding that segment and that customer, and the ability to go deep in really solving that problem, has served us incredibly well, and we’ll remain focused on payments, it’s obviously a massive industry.

We’ll remain focused on payments, it’s obviously a massive industry

And eventually, maybe, Ripple will address some others, but today, I view it as the earliest days of Amazon, where Amazon said, “Hey, we’re a bookseller.” I mean, the first name of Amazon was not Amazon, it was Amazon Books, and they built a platform to serve a need to sell books, and then they did another vertical, and another vertical, and another vertical, and another vertical, and then obviously productised the platform. I think the best way to build platform technology isn’t by trying to be that horizontal, because by the time you build a platform, the needs have changed and evolved. If you build it really successfully for one vertical, in this case a really big one, you can put yourself in a really good position to build it up for others, as well.

You’ve been CEO since January if you look back over the past year, from January to now, how would you, kind of, summarise your stamp on the company, in your tenure as CEO?

I think, for me, it’s been the mark over maybe two and a half years, of really driving that focus, and really understanding that customer. I think we’ve gotten increasingly focused, and gone deep, around this segment, and again, I think that’s served us really well. I like to be aggressive, and what you’re seeing here with Swell is: Ripple’s an incredibly good place, and we’ve been incredible fortunate, part of that’s skill, part of that’s luck, but it was to press our advantage and I think we want to continue to be aggressive in the ecosystem, continue to invest in the ecosystem.

We have some things teed up for Q4 that I’m really excited about, to continue to invest in the overall ecosystem. When I say that, by the way, I’m not even just talking about the XRP ecosystem. I’ll also be a little longwinded here, just to say, I think all boats will rise in the blockchain world. I want the whole ecosystem to do well, and I think that will serve Ripple well. When I see things in the ecosystem that I think are bad for the ecosystem, I think that’s bad for Ripple, I’m going to speak out against that. ICOs are one of those examples.

You know, the programming we’re doing here is a little bit different, and it is a little bit more of the fusion between finance and technology, and I think that has served us well, we had a lot of interest in participating and being here.

When I see things in the ecosystem that I think are bad for the ecosystem, [and] bad for Ripple, I’m going to speak out against that. ICOs are one of those examples.

What I like about Swell, the conference that you’re having, it’s very narrowly focused. The un-conference approach, right?

We definitely wanted to keep it small, I don’t mind sharing with you, we had a couple of thousand people that wanted to be at Swell, that we turned away, and that isn’t because we don’t want more people engaged with Ripple, it’s because we wanted to make sure we had the highest quality audience on stage, and in the audience. People that really are influencers and customers, and can affect the vision we have around the internet of value.

You have one of my favourite lines. “Blockchain tourists”. What do you mean by “blockchain tourists”?

I was quoted saying that, I did say it, and I’ll say it again, but it’s not intended to be as derogatory, maybe, as it came across. I think people should experiment around blockchain. The demarcation I’m really trying to make is, Ripple has had the good fortune of having real customers touching production systems, moving real value, not sandboxes, experiments. To me, blockchain tourists are people who’re really interested in the space, they’re learning about the space, they’re kicking the tyres.

The good news for Ripple is we have a lot of demand that aren’t blockchain tourists.

The good news for Ripple is we have a lot of demand that aren’t blockchain tourists. They are, seasoned travel veterans that know what they’re trying to solve, and they’re trying to solve a real problem, and we want to spend our time with that segment, because although we’ve grown our headcount a lot this year, we continue to have more demand than really we can handle quickly.

Right. That’s a good problem, by the way.

It’s a good problem, but it’s still a problem.

I want to touch on that a little bit, because your background, to me, was very interesting, You came from Hightail, you were the CEO at Hightail. But Hightail’s not exactly a blockchain.

It’s funny, the kind of serendipity of how I ended up here. I would have described myself as a crypto enthusiast. I owned some bitcoin, by virtue of being connected with some good friends who had been, patient zeros, if you will. A guy, Wences Casares, a gentleman, Dave Goldberg, who unfortunately passed away, and a guy, Micky Malka, are people I’ve all known from being around Silicon Valley for a long time, and had one way or another advocated, and so I’d purchased some Bitcoin, which I’m glad that they were advocating.

When I joined Ripple, I felt it was early and premature, and so Ripple was a little bit of a contrarian, or a lot of a contrarian, in kind of saying, “Look, we don’t think governments are going away, we don’t think banks are going away, we don’t think fiat currency’s going away. But we still think there’s a role for digital assets to play in reducing friction, and accelerating the speed, and reducing cost associated with payments.” So, when I started to talk to Chris Larsen, they were recruiting to hire somebody as COO, being a Bitcoin enthusiast, or a crypto enthusiast, married with, I thought, a very pragmatic vision of how you actually bring this forward, and revolutions rarely happen by going to the end point first.

Look, we don’t think governments are going away, we don’t think banks are going away, we don’t think fiat currency’s going away. But we still think there’s a role for digital assets to play in reducing friction, and accelerating the speed, and reducing cost associated with payments.

You’ve got to crawl before you walk, before you run. And I think the progress Ripple’s making, for the industry, is, you know, I think moving the whole revolution forward.

Well, one thing I like about Ripple, too, is the ability to retain talent, which, in tech as a whole, is incredibly difficult

I think the culture of an organisation is really important, and I think Silicon Valley, and various examples, have kind of lost sight of that, at times, and I think we’ve been fortunate that Ripple’s had a great culture, that continues to challenge people like Stefan, who I do think is a genius, and he humbles me easily. I think the people at Ripple are engaged because they believe in the mission. They believe in the big vision that we’re trying to achieve. There’s no question that if you are building an organisation where it’s all about, “Hey, I want to make a bunch of money,” then yeah, you’re going to see people exit. We have been very focused on a big picture of what we want to achieve over a ten-year period, and our leadership team’s been strong and stable, and I think people are excited by the progress we’re making.

We have been very focused on a big picture of what we want to achieve over a ten-year period, and our leadership team’s been strong and stable

So let’s talk about culture and mission a little bit.

I will admit, I’m a capitalist, and I want to build a business. But it’s awesome to be at a company where I feel like we can put our dent in the universe. As Ripple achieves success, you can start to see tangibly how that could have, Ripple effects...

(SM: Well done)

...[and] how that can impact society in grander ways. We’ve actually been working with the Gates Foundation a long time now, I think around two years, maybe a little bit longer, and so to finally have some of that work announced publicly is really gratifying, and I think very much on mission for what Ripple’s trying to do, and we couldn’t be happier about it.

I love the focus of financial inclusion, right? Obviously you want to build a company, for the long haul, but being able to, (I think the term “give back” is overused, but you know what I mean)? You can take these technology-type solutions, and introduce them into environments like India, right?

For sure. Mobile is the best example of this, we saw it in a lot of South East Asian countries, certainly Africa, where you just skip the landline entirely, which is far more efficient, and so I think in some markets, you may find that the legacy infrastructure, what Ben Bernanke called yesterday “the horse and buggy”, we skip right past that. It’s going to be fun to watch some of those markets, and certainly, again, the Gates Foundation is so influential, and so effective in being focused on how we have an impact, and they have been just amazing champions, and I’m excited by how that could play out.

Also, the news that you had about the accelerator, is it an accelerator for banks?

RippleNet Accelerator Programme. We’re super excited about it. I think this is an example of how we can take advantage of the unique position Ripple is in, to invest in the ecosystem really tangibly, and accelerate the work we’re doing. The headline you probably have seen is we’re committing $300 million of XRP to accelerate the network effects that we’re already starting to see, but if we can have that happen more quickly, more customers, we’re quickly getting the production, that’s all the better. You know, in the earliest days of Visa, they had various incentive programmes, to drive that adoption. I view this very similarly.

We can take advantage of the unique position Ripple is in, to invest in the ecosystem really tangibly, and accelerate the work we’re doing.

We had the recent news, as far as the legal action with R3. Can you discuss where we’re at?

Absolutely. So, R3 sued Ripple, Ripple sued R3. To some degree it’s a contract dispute. We entered into a partnership, there was compensation for delivering on that partnership. I think R3 is trying to paint it simply about the option agreement. It’s a broader partnership. Our suit, I think, speaks for itself, in that we don’t think R3 has lived up to the commitments they have made. The first step in that litigation was a suit that R3 brought against Ripple in Delaware. That case was dismissed last week, and the case overall will continue, now, the case that we brought against R3 will continue, in California. So, it’s not over, but we think it’s nice to see that Delaware took our view that that wasn’t the right venue to even consider the case.

Our suit, I think, speaks for itself, in that we don’t think R3 has lived up to the commitments they have made.

This whole concept of consortiums, and making them successful: you’re not new to the game, you’ve led multiple companies. Without getting too simplistic here, what makes it so hard? And would you agree we need some sort of a standardisation of approach when it comes to payments?

Yes. Well, so first of all, I want to double-click on the word “consortium” just for a moment. I think that word has been a little bit bastardised. Historically, a consortium was a group of people coming together with equity participation. And now you have things that are called consortium, but when I think about the consortiums, some of them are just open source software initiatives, right? People say, “We have 100 members in our consortium.” No, you have 100 participants in an open source software platform.

I think for Ripple, it has been about how we bring real volume into production, and people contributing to open source technology does not make one a member of a consortium.

So let’s talk about payments, then, and let’s focus on North America, since my focus is, for my company, North America. When can you please fix payments? Because this is absolutely a nightmare.

I marvel at it. I admit, because I didn’t come from the banking or payments industry, you know, as I was learning about Ripple, and what they were trying to do, it’s just unbelievable to me that, truly the most efficient way for me to get money to London today would be to go buy a ticket at the airport here in Toronto, and fly it there.

That’s a crazy thing. I mean, I can stream video from the space station, yet I can’t move my own money from Point A to Point B efficiently. These are infinitely fixable things, and I’m super excited by the progress we’re seeing. The momentum is building. It took us a long time to sign our first bank, and then it was a little faster to our next bank, and our next bank. I am very excited about the pipeline for Q4, and feel like, particularly with this RippleNet Accelerator Programme, where we’re investing to incentive, to accelerate things more, I’m super excited about where we sit.

It’s just unbelievable to me that, truly the most efficient way for me to get money to London today would be to go buy a ticket at the airport here in Toronto, and fly it there...I can stream video from the space station, yet I can’t move my own money from Point A to Point B efficiently.