Startup Grind Washington DC has the extreme honor of hosting Nigel Morris, one of the founders of Capital One at the 1776 campus. Nigel, beyond creating one of the most known financial banking solutions in the world, has also invested in such companies like Webs.com, AddThis, and Braintree. Nigel provided the crowd with plenty of insight, and a lot of cheeky humor for good measure.
Nigel touched upon his life growing up in Britain as a rugger, eventually moving to Philadelphia and beginning his life working in the financial realm. When he met Rich Fairbank, his future co-founder, in Philadelphia, they went on to form the banking function at their company, SPA. While all the “superstars” were focusing on the bigger fish in the financial realm, namely real estate, Nigel decided to focus on the credit card industry when there was only one choice of credit options. At this time, more than half of the United States was without the option of credit with bad credit scores or high APRs acting as barriers, so Nigel and Rich decided to move into that space and disrupt it.
With the idea of challenging the norms of APRs and credit lines, Nigel and Rich decided to leave the cushy world of strategy consulting and joined Signet Bank to run their credit card function. They did not end up running the credit function overnight, but rather it was a laborious process that demanded much experimentation and managing aspects they had no prior experience in. Nigel had to even work closely with hundreds of customer services employees, trying different ways to motivate and encourage them to perform at their best while navigating the role himself.
While Signet Bank was focused on the real estate market, Nigel found the opportunity to focus more on their credit market. By offering lower interest rates and “cherry picking” the right consumers, Nigel managed to get carefully picked customers to move their bank accounts from other banks into Signet through balance transfers of zero percent. Nigel believed that “having plastic was necessary for many people to run their lives,” so he continually worked hard to find ways to “offer people credit who [weren't] credit-worthy” in the eyes of bigger credit card companies.
Solving the issues of the consumer weren’t Nigel’s only issues he had to deal with. As he attempted to expand his function, he was met with resistance from his superiors. Even when he wanted to expand into the Canadian market, he was told that the bank “[didn't] invest in foreign countries.” Nigel knew that it was time to create something of his own.
Thus, Nigel and Rich went off to form the company we know today as Capital One (it was going to be called either Capital One or Global One, but since it was based out of Washington DC, the Capital city, Capital One won out). The early days of Capital One were very bootstrapped, and they were forced “to raise [capital] in the market.” Lucky for them, they had all the data they needed to reach the appropriate markets, and they “could see money being made before [their] eyes.” According to Nigel, “it was like cheating, [for they] knew the answer before spending the money … [They] were a data-driven company. Big data is just a bigger version of what we were [already] doing … [Nowadays] it’s all about big data, but not about what to do with it…”
As Nigel went into his departure from Capital One into his creation of QED Investments, he touched upon some insights about being an entrepreneur. He said to always “be involved with things with the wind on your back,” things you truly believe in. Company culture also plays a big role for Nigel, for he mentioned he would “rather be an average manager at a great company than a great manager at an average company.”
He closed by saying that Washington DC has “a thriving entrepreneurial class,” and that the “best people [want] to live in DC.” He remarked that it was a great location to begin a business, for the “competition for talent that [they] wanted wasn’t in DC” as it would be in New York or even San Francisco.
Although Nigel admitted to never having a Capital One card, he does have one of those Viking helmets from the commercials.
Written by Cedric Craig, Community Manager