U.S. Markets close in 2 hrs 33 mins

Influencers Transcript: Max Levchin, September 5, 2019

ANDY SERWER: The work of an influencer never stops. Max Levchin hit it rich at age 27, then he went right back to the office. In 1999, Levchin co-founded PayPal, which was sold to eBay three years later for $1.5 billion. Levchin gained a $100 million fortune from the deal.

Soon after, he launched Slide, a social networking business that he sold to Google for hundreds of millions. He now runs yet another company-- the digital loan business, Affirm-- and other endeavors as well. Levchin is here to talk about how to find and build successful tech startups over and over again.

Hello, everyone. Welcome to "Influencers." I'm Andy Serwer. And welcome to our guest, Max Levchin, CEO of Affirm, co-founder of PayPal-- part of the PayPal Mafia, and a million other endeavors-- maybe just a polymath. We can call you that. We'll get into all the things you've done.

MAX LEVCHIN: I like that. I like that.

ANDY SERWER: Anyway, welcome. Good to see you.

MAX LEVCHIN: Good to see you.

ANDY SERWER: So, Max, how would you describe what you do to, say, an 8-year-old nephew? What do you do for a living? What's your work?

MAX LEVCHIN: So I normally tell people I start and run companies-- that's kind of a one-- one-liner introduction. But, when pressed, I revert back to, I just write code. That's kind of how I think of myself.

ANDY SERWER: A coder.

MAX LEVCHIN: A coder, a hacker, a builder, a company starter. That's-- I haven't thought of this one--

ANDY SERWER: OK.

MAX LEVCHIN: --too carefully.

ANDY SERWER: All right. Well, maybe we can loop back to it. Why don't you tell me about Affirm, your latest company right now.

MAX LEVCHIN: It's been latest company for over seven years, so it's a bit of a-- bit of a long-in-the-tooth startup, but still very much a startup. The-- it's a bit of a throwback to my PayPal days. So PayPal was all about innovating above the credit card rails, where we took credit cards-- which, 20 years ago, were really hard to use online-- and built the user interface-- which turned out to be much more than a user interface-- to make it easy to use in a browser. And online commerce was never the same.

20 years later, it took me a long time to realize that, the underlying infrastructure-- the-- what's below the rails, below the ground-- isn't especially well-made. It's not transparent. It's not especially consumer-friendly. It has its own user interface problems-- makes money on people's mistakes, kind of, at a very fundamental level.

And so I wanted to go back in there and see if it can be remade better. So seven and a little bit years ago, we started a company with initially just a very narrow view of, let's do a better job scoring credit. So-- so the venerable credit score that everybody uses today is pretty opaque. It's not really clear.

There's plenty of information online, where this fraction is how much credit you have used, and this fraction is how much money you made. But there's not a whole lot more to it that's been well understood. And, as a result-- and, from personal experience, I came to the US as a teenager, had to have my PayPal co-founder sign for my first car loan, my first cell phone.

You know, this is after PayPal IPO, so your credit history is-- is not exactly well-utilized as your credit is being assessed. And so Affirm, initially, was this idea, let's build a better score-- let's build something that's transparent, that's inclusive, that brings people in where they're being excluded.

And then it expanded from there, where, at this point, we are embedded at the point of sale as a lender of records. So when someone wants to buy a thing, we will underwrite you-- tell you, hey, here's how much credit we can offer you. We'll actually pay the merchants, and we'll take the risk on you and finance your purchase. And then we'll bill you over time.

The cool thing about Affirm, sort of through this commitment to transparency, we price everything in dollars, as well as rates. So you know exactly how much you will pay all in. So your principal, your interest, we stop at that number. So once you've paid us the amount we promise that you will, you cannot pay us more, which means we don't compound interest into the principal, but, more importantly, we don't charge fees of any kind, including no late fees.

And so, as a result, it's probably the most honest or transparent financial product out in the market. And that was-- we did that five years ago, and have been growing very, very quickly since, serving millions of users and billions of dollars lent. Keep expanding-- keep on adding new financial products.

ANDY SERWER: So how do you measure success? I mean, and how many users do you have? Do you have to get accepted by various legacy systems? Like payment systems, like Merchants, et cetera.

MAX LEVCHIN: We measure success by number of users we have. That-- that is the most important metric.

ANDY SERWER: And what is that?

MAX LEVCHIN: Try not to talk in precise numbers, but it's in the single-digit millions at this point. So I'll-- I'll keep it at that. The better measure, I think, is that number in juxtaposition with user satisfaction. So you can have a lot of users, but if they hate you, you're not going to get very far-- kind of, you know, places like the DMV come to mind.

But our user satisfaction scores have been extraordinary. The Net Promoter Score for the company, basically from inception and through today, has been north of 80.

ANDY SERWER: Yeah.

MAX LEVCHIN: So it's-- last week was 83, I think. And so that-- that's a pretty good sign that most of our users would gladly recommend Affirm to their friends.

ANDY SERWER: And when would I use it though, Max. In other words, how would I-- when would I want to use this and-- and try it?

MAX LEVCHIN: If you're buying a Peloton bike, or a Casper mattress-- both great companies right here in New York City-- you would find us offered at the point of sale, and the choice there is yours. You can say, hey, I'm just going to buy it with my debit card, because I have the cash and I don't need any help. Or you might use your credit card, especially if you're sort of hunting for points, and you want to double down on those.

But if you're younger, or an immigrant, or don't like credit cards-- whatever sort of a stripe of society that you come from-- there are plenty of people, it turns out, that say, I just want a payment plan that tells me exactly--

ANDY SERWER: Right.

MAX LEVCHIN: --how much money I'm going to owe and when I'm going to be done. And I don't want a card or an account or anything to chase me down later and make me spend more money, or charge me fees I didn't expect. So that's what Affirm will do for you.

About a third of our transactions, and more than a third of our merchants, offer what's called a 0% loan. So one of the things that you can-- you can take this one to the bank, as they say in our industry-- if somebody's offering you a 0% rate, it is not a 0% rate.

ANDY SERWER: Yeah, right. What's the catch? In other words.

MAX LEVCHIN: Yeah, the catch is always there. It's always in the fine print. There's always the pay your loan down during the promotional period. And if you don't--

ANDY SERWER: Yeah.

MAX LEVCHIN: --there's 29.99 rates. But the trick typically is it compounds from time of purchase, all the way back. It's called deferred interest with full recapture. It's the nastiest thing in the world-- should've been banned. It's been attempted to get banned, but--

ANDY SERWER: Right.

MAX LEVCHIN: --somehow the industry manages to weasel its way back into allowing it in some form. And so one of the things that we set out to do, from very beginning, was let's build a true 0%.

ANDY SERWER: But then, what's your catch?

MAX LEVCHIN: We don't have one. So the 0% that you would see at Affirm is the only true 0%. That means that, for example, if you buy a Peloton bike, people see a 0% loan--

ANDY SERWER: And how do you make money, then?

MAX LEVCHIN: We have the merchant pay down the interest. So what's really going on is the merchant is transferring some of their margin to the consumer.

ANDY SERWER: Oh, OK.

MAX LEVCHIN: So it's a-- it's an entirely honest transaction. What it does do, though, it allows the merchant to preserve their pricing integrity. They're not discounting. They're helping you pay for your bike, or your mattress, or your-- whatever it is you're buying-- over time, without ever having to say the price is not really the true price. But there is no catch. There's no late fee.

ANDY SERWER: Right.

MAX LEVCHIN: There's no flip to the different rates.

ANDY SERWER: No.

MAX LEVCHIN: And, God forbid, there's no different interest.

ANDY SERWER: Are you wearing an Affirm T-shirt, by the way?

MAX LEVCHIN: I always wear an Affirm T-shirt.

ANDY SERWER: Wow. OK. That's looking pretty good-- San Francisco.

MAX LEVCHIN: Yeah. We now have offices in New York and Pittsburgh, as well as San Francisco. So I rotate through my logo and locale.

ANDY SERWER: Nicely done. OK. And you mentioned that you came to this country as an immigrant from the Ukraine.

MAX LEVCHIN: Right.

ANDY SERWER: And-- and it shaped your thinking, obviously, when it comes to this company, because you were talking about trying to get credit and that being difficult.

MAX LEVCHIN: Yep.

ANDY SERWER: How else did it affect your thinking? You went to the University of Illinois--

MAX LEVCHIN: Yep.

ANDY SERWER: --being a kid from another country?

MAX LEVCHIN: You know, it's the sort of thing that's really hard to self-examine, so any form of, well, here's what it did to-- to little Max is probably a little facetious or exaggerated, but I think-- I mean, I'm fairly well-known for my outspokenness in favor of certainly certain types of immigration, because I think what it does to you as an immigrant is the sense of unlimited opportunity that just hits you in the face.

And you go from, hey, I just escaped something that was constraining my ability to be the best I can be, to complete lack of limits. And so I had an extremely inspiring teenage years and early 20s. I was surrounded by people that built the modern internet. So I was at UI, as you mentioned, on campus in '93 when Mosaic launched, and so--

ANDY SERWER: So you-- do you overlap with Marc Andreessen then?

MAX LEVCHIN: Yeah, we're a-- we're a couple of years overlapping. All of us, kind of in the computer science department, worked, at some time or another, at the National Center for Supercomputing Applications where Mosaic was developed, and the web server was developed. So all the kind of-- the things that we take for granted today weren't around 25 years ago. And they were built by the hands of people that were in my school.

Kind of-- I had a front row seat to how the future would look like. And so I entered school thinking PG in in computer science, teach-- be a professor. I come from a long line of advanced degrees, and certainly my family expected me to do just that. And, by the time I was wrapping up junior year, I was like, one, I'm going to-- hopefully, I'm going to graduate, because I know my-- my parents are going to murder me if I don't.

But the second I'm done with that, I'm going to just start companies and try things. And so, in that sense, I think having an immigrant background gives you a little bit of a leg up because you're not afraid of anything. We came to the US with $600 to-- for the family of five. And the expectation was, go figure it out.

ANDY SERWER: What do you think about President Trump's policies on immigration then?

MAX LEVCHIN: I think that policies on skilled immigration and treatment of foreign students-- I don't know if the policy has actually been enacted, they've been talked about a lot. But I have a very strong view on what I think is right. I think we should staple some form of work permit and maybe a permanent visa to every advanced degree that we give here, because what is the point of educating people in fantastic schools from faraway places if they're going to go back to their faraway place and better their country, as opposed to the one that gave them the education?

So I think that's a-- a very, very clear place where I have a strong point of view. I don't doubt that immigration is an extraordinarily complex issue, and would, certainly from my faraway vantage point, it looks like people like to bundle skilled immigration and various forms of refugee and crises at the border of various kinds. And I get it that I will never get it-- that's why I'm not in politics.

ANDY SERWER: Right, right. But in terms of putting up impediments for skilled students, I mean, half of them are going to go back anyway, because they want to. But to actually force people to go back doesn't seem to make sense.

MAX LEVCHIN: Yeah. I think that-- that's just extremely, extremely short-termist.

ANDY SERWER: Right. Let's talk about PayPal, because it really was kind of a moment in time in the history of Silicon Valley, such as it is, and it's become sort of legendary. As I mentioned, there's this PayPal Mafia. And I want to know, you know, what is it about that time and that story that resonates to this day?

MAX LEVCHIN: You know, again, if you're in the soup, it's hard to tell how the cooking is being done. But I think it was just an extraordinary time-- extraordinary group of people. I was very lucky to be-- to be at the-- at the founding of that. The-- I don't remember the exact date, but shortly after we incorporated, Yahoo's stock price apropos-- the chair in which we sit now-- went down something like by 90%.

So they had the crash-- of the-- the early internet crash. The world was writing internet businesses off. We were sort of looking at ourselves in a mirror going, like, did we pick the worst time in history to start a company having to do with the internet? And so it was a lot of-- we're coming in from an extreme low-- before we shipped the product, before we did anything.

So that was kind of an interesting background noise that shaped us. We were all super young, and so was everyone around us. But in terms of people who are starting companies in Silicon Valley at that time-- and always, really, it's sort of the domain of people who have nothing to lose-- young or old-- but just people that are willing to go headfirst into a pool with no water.

But we-- we were surrounded by people telling us, this will never work. I remember going to see someone about understanding risk in credit card space, and this woman asked me something along the lines of, you know, do you have this in place? And, you know what's your-- your customer procedures? And I-- I sort of-- I generally held the line, even though I was faking it to the nth degree.

Then, at the end, she says something-- you know, so what's your chargeback management process? And something in my face betrayed the fact that-- I was going, like, what are you talking about? And she said, oh my god, you don't know what a chargeback is. Oh, honey. You're done. I walked out of there going, I must be.

So-- so I think that the fact that we were so unprepared, and the early success has just emboldened us to-- sort of, you know, we couldn't do wrong. We-- we had to keep on trying. And there were plenty of ups-- plenty of things that we-- we are absolutely doing very bad things. We almost went out of business numerous times. But the people that sort of came together were ultimately really good.

ANDY SERWER: And who were some of those people? Who is the PayPal Mafia then?

MAX LEVCHIN: At-- you know, at this point, I think, by mutual agreement, there's about 125 co-founders.

ANDY SERWER: OK.

MAX LEVCHIN: But-- so, obviously, Peter and I started the company.

ANDY SERWER: Peter Thiel.

MAX LEVCHIN: Peter Thiel. Very early on, Reid Hoffman was our first board member, and then, eventually, an executive vice president. So he sort of did all the really kind of a super advanced BD-type role and strategy. People you've heard of another contexts, people like Steve Chen, and Chad Hurley, and Jawed Karim-- so eventually co-founders of YouTube, of course-- Russell Simmons-- not the rapper--

ANDY SERWER: Right.

MAX LEVCHIN: --but a slightly less-known co-founder of Yelp, and Jeremy Stoppelman, a better known co-founder of Yelp, were both in my organization on the technology side at PayPal-- started Yelp together a few years later. Ken Howery, Luke Nosek--

ANDY SERWER: Right.

MAX LEVCHIN: --all these guys eventually will end up in Founders Fund. Elon Musk-- obviously, the merger between PayPal and X.com gave birth what PayPal really became. It's a long list, and--

ANDY SERWER: It's an amazing group, and one of my favorite things in my last job, Max, was commissioning that photograph.

MAX LEVCHIN: I was going to say, I think you had a little bit to do with the--

ANDY SERWER: Of that.

MAX LEVCHIN: --with the coinage of the mafia.

ANDY SERWER: Exactly. Where we got all of you guys to dress up á la "The Sopranos"--

MAX LEVCHIN: Yep.

ANDY SERWER: --and took that picture of you guys. And you guys were so awesome to cooperate. And the photograph is just, to my mind, epic.

MAX LEVCHIN: It is an epic photo. Although, a number of times, it reappears in the press, at this point, as sort of borderline embarrassing.

ANDY SERWER: Right.

MAX LEVCHIN: But it was actually a great day. We were holed up in a real-life Italian eatery in North Beach, which is a historically Italian neighborhood in San Francisco, and it was not air conditioned. And so the giant globules of sweat on all of our faces are real.

ANDY SERWER: Right. Yeah.

MAX LEVCHIN: It was just really, really warm.

ANDY SERWER: Well, that adds to it. I don't know if that was intentional at the time.

MAX LEVCHIN: Reid looked like he was not enjoying himself.

ANDY SERWER: Reid-- Reid looked dying. Yeah, that was pretty classic. So as PayPal went forward, you know, it became part of eBay, and then it came out. And now it's attached with Venmo. And so how has that evolution of payments proceeded? Does it make sense to you? And is there still room-- I mean, you're actually-- you're-- of course, you're part of that world again today. Where does that all stand?

MAX LEVCHIN: So I think the thing that is worth knowing, or keeping in mind about payments, credit lending, banking, it's either the largest or the second largest market in the world. There's energy-- without which, we're all kind of, you know, not going to have cameras to film us. But, other than that, payments is gargantuan.

The, you know, US credit card outstanding balances right now are about trillion dollars. Just to give you a sense for it. Like, that's just US. It's not even in the world. So-- and then, you know, volumes of payments going through the world, and now with the internet, are in many trillions.

So there's always room in every niche-- every little thing you find in payments, where you kind of go, oh, wow, that little thing's broken, and it could really use some fixing, is inevitably measured in hundreds of millions of dollars. Like, the little stuff is hundreds of millions. The bigger opportunities-- the bigger sort of ideas to revolutionize things are always-- you know, they-- they quickly become trillions.

And so I'm personally always very bullish on any payments-- financial services idea-- because the market is so massive, because the infrastructure is so old. One of the interesting things that's actually kind of a neat observation, which I don't hear a lot about, but it's absolutely true, the first industry to really embrace computing after-- so the war machine was financed.

So if you look at people like AmEx and people like, you know, Citibank-- like, these really giants of the financial industry-- even in the '70s, there were stocking up on IBM System/360s and AS/400s. And, you know, all these sort of classic big iron-- biggish iron computing. And that's where they still have. They haven't really upgraded.

And so, in many ways, what was the early adopter advantage now became the shackles that hold some of the largest infrastructure players that we have down, because they really don't have the ability to say, you know, away with it all. Let's build it from scratch with modern technology with better systems. And so that's why disruption has been so plentiful in-- in the space.

And so, yeah, I think the development of P2P payments-- Venmo-- is actually exactly how PayPal started, 20 years ago now. And there's plenty of other entrants, and they're all growing at some ridiculous pace. You know, it's not like--

ANDY SERWER: Square, Stripe.

MAX LEVCHIN: Yeah. They're all these players that-- you know, when Stripe launched, it was basically like PayPal minus the business model, because PayPal arbitraged card payments against bank payments. Stripes said, no, card payments is enough. And everybody, myself included, said, how are you going to make any money? Like, the margin is this thin and, you know--

ANDY SERWER: It's so good.

MAX LEVCHIN: 10 years later, it's a-- I don't know, whatever it is now-- a $30 billion company, $25 billion company.

ANDY SERWER: So all these companies can succeed because the marketplace is-- no-- no guarantees, but there's room for a lot of them.

MAX LEVCHIN: It's just-- there's a lot of things that can be done better. The opportunities are plentiful. The market is enormous. Financial services is generally a market that naturally goes to multiple winners. There are very, very few national monopolies, because the markets are-- internationally speaking, for sure-- markets are large and very diverse. What's very successful here could not work somewhere else. So you have to be willing to reinvent yourself, or let someone else take the market.

I think the most interesting ideas also emerge when generational divides take place. So '08 was this watershed moment where a whole generation watched their parents get cleaned, or fleeced, or whatever you think they did. And so a whole bunch of young people said, whatever it is that my parents did, I'm not doing that. Mortgages-- that sounds terrifying.

I'm not going to use credit cards. That's a bad idea. I'm going to borrow no money and use debit cards. That's really great until you need to buy your first car, or you need to put a deposit in an apartment--

ANDY SERWER: Right.

MAX LEVCHIN: --and borrowing had to be reinvented.

ANDY SERWER: Right.

MAX LEVCHIN: The origin of Affirm is as much in this idea of, let's go clean up borrowing, as it is in answering the question, how will young people borrow money if they are so actively saying, I don't want a credit card?

ANDY SERWER: Right. right.

MAX LEVCHIN: So that-- that's where-- but these opportunities are everywhere.

ANDY SERWER: I want to ask you about another group of tech companies. One of the other companies that you founded was Slide, which was sold to Google, and then you ended up working at Google for a while. I want to ask you about those big platform companies, like Google, like Facebook. And there are a lot of issues these companies are facing right now-- sort of for myriad facets and myriad sides. And I'm wondering if you've given thought to how they can rectify their problems. Should they be regulated? Should they be broken up? What is your thinking on that?

MAX LEVCHIN: Those are hard questions to answer. I think the-- in general--

ANDY SERWER: Are they too powerful?

MAX LEVCHIN: The relative measures of too powerful, not powerful enough, are always very hard to-- maybe. They're certainly extremely powerful in the absolute sense. Like, yes, Facebook probably knows far more about me than I think I know about me-- and that I think anybody should know about me, really-- because they're an amalgamation of all my friends' knowledge of-- of me.

And even more so true of Google, who-- Facebook, at least, there's some amount of sharing that I do proactively. Google I-- I met-- during my time at Google, I met an executive who likened Google search box to an ear, where it's the world's giantest ear. And billions of people come in and whisper into its ear, you know, amazing things, like where do I buy an engagement ring? And, also, do I have cancer? And will I die?

And it's a massive responsibility to hang on to that data and mine it for signal and figure out how to give the right answers. And the responsibility that's implicit in, what do you show someone that say, do I have cancer? Like, you may push them to a decision that if you knew what they were going to do next, you would regret.

And so, in that sense, I think the responsibility in these companies is enormous. And I'm not sure there's one thing they can do, or anybody outside of them can do, to say, well, here's how you fix the problem, right? There's a little-- at that scale, of any company, of any industry, you're playing with a human condition more than you're playing with the balance sheet.

So my guess is the first thing they need to do is probably recognize internally, and sort of take very, very seriously, that what they're playing with is a lot more than their profit and loss and features. And I think that's a-- that's a weighty, weighty set of responsibilities.

My guess is they're going to end up facing a lot of regulatory scrutiny, because our lawmakers-- and others-- are pretty good at dealing with the human condition and thinking in terms of the human condition, while 10 companies are actually much better at thinking in terms of growth and features, and kind of detaching themselves a little bit from what people really-- really experience when they use their product.

Actually, not to shift to Affirm suddenly, but one of things that I did very early on influenced by this experience of being inside the belly of one of the largest companies that Silicon Valley ever produced, I try to write down our core values, which I'd never done before. So this whole notion of core values, and, you know, what do we stand for?

You know, at PayPal, if I'd said that, I probably would have been sort of chuckled at, because we're all super young, and we just wanted to grow. We just wanted to build a great company. And the morality of it all was something that we cared about, but as a side effects to--

ANDY SERWER: Right.

MAX LEVCHIN: --like, let's go build a great business. With Affirm, it was kind of backwards-- or the other way around-- where I said, I'm going to write down our core values. And I'm not going to write a line of code until I know what it's for. And we sort of played with this and that, and with my co-founders and a bunch of early people, and ultimately wrote down five things. But the first one of these is people come first.

And I think you have to decide that you feel that before you start writing code. And that's probably what was going to have to happen to a lot of these large platforms that have not necessarily been living the people-come-first value, or their version of the same idea. But I don't know. We live in extremely interesting times. I think the fact that these companies wield an extraordinary amount of power is-- is starting to really reveal itself in big ways.

ANDY SERWER: You mentioned lawmakers. You were on the board of the CFPB, and Mick Mulvaney disbanded that. What was your take on--

MAX LEVCHIN: I've never been fired until--

ANDY SERWER: Yeah.

MAX LEVCHIN: --until that time.

ANDY SERWER: What was your take?

MAX LEVCHIN: I really enjoyed that process. It was--

ANDY SERWER: The firing part?

MAX LEVCHIN: No. The firing part was uneventful.

ANDY SERWER: Right.

MAX LEVCHIN: I called into a-- a conference line, and they said, hey, the board's been disbanded. Thank you for your service. And so, huh. Now-- what I know, it feels like, where's my box? You know, I need my-- but it was an unpaid position, so there's no--

ANDY SERWER: Right.

MAX LEVCHIN: --no box for service. But the process of hearing from stakeholders from everywhere-- like, really, really everywhere-- was amazing. So-- and I live in my own little insular Silicon Valley world. There are people that I think are doing a really great job sticking to their moral principles and doing the right thing, and people I think are probably walking the gray line, and people I think really should not be building products that they're building.

And, I-- you know, I don't make many secrets of who they are, since I was willing to put my opinion out there in the public, but it's very different when you sit down around a table with people that represent, or advocate, for people from sort of truly impoverished communities-- people that are unable to make their mortgage payments and are facing repossession of whatever property that they have, people that are fighting with some local agency that was supposed to stand behind the mortgage, and is now bankrupt, and all the sort of-- like, the reality of life in places that are not like Silicon Valley, where we all get paid six-digit salaries or higher.

And these problems just don't really come up in day-to-day conversation, was a-- sort of an amazing window into how this country really works. And so if you didn't have this sense of, you know, people come first, you walked out of there every time feeling like, wow-- like, the world is a complicated place, and not everybody lives in San Francisco or New York City.

ANDY SERWER: What do you think about people like Alexandria Ocasio-Cortez who are looking to address wealth and income inequality by, for instance, raising taxes on rich people?

MAX LEVCHIN: I think, in general, what has struck me as amusing-- and to some extent, tragic-- is that there's not a whole lot of people that are pounding the table for some form of socialism that lived in a socialist setting. Having grown up, or spent my first 16 years in a socialist country, from personal experience, redistribution does not work, because people doing the redistribution somehow always get a lot more.

And, you know, that's almost too trite of a characterization, but I'm not a fan of significant march into significant redistribution, because I've seen how it fails. And it works for a while, because you're excited, or the-- you know, the people were excited right after the Soviet Revolution in the teens of last century.

But fast forward to the '50s, and the place was going downhill fast. And, by the '90s, there were tanks on the streets, because we couldn't-- couldn't contain the populace from tearing the country apart. So I'm not a-- I'm not a fan. I'm not a fan of-- of the blunt--

ANDY SERWER: Right.

MAX LEVCHIN: --let's just give the government all the power, and all the money, and then everything is going to be OK. Having said that, I think, you know, a lot of the folks in social democratic movement, and various forms of sort of very progressive parties that-- or movements-- that we have in the US, are kind of speaking to the same thing that I observed at this APB board-- the income inequality, the desperate nature of life in a lot of these communities, is very real.

ANDY SERWER: Right.

MAX LEVCHIN: So I don't think it's a-- my point isn't to ignore, or to push it away, just think the conversation could be more civilized and a little bit less flippant. And I remain a big believer in conscious capitalism, or more thoughtful capitalism, as a way of figuring out how to contribute to elevation of the people who have been left behind, or who are being left behind. I'm not--

ANDY SERWER: Does that mean not having short-term goals? I mean, just having broader goals than this quarter's P&L, for instance.

MAX LEVCHIN: For companies, for sure.

ANDY SERWER: Yeah.

MAX LEVCHIN: I think-- so, as an engineer-- and, you know, to go back full circle-- I write code. Writing code is all about testing and iterating. And I think one of the things that we do a lot of is debate, and not enough of is experiment. The most exciting news I've ever heard, whether I believe in it or not, on the-- addressing poverty, is the fact that there are a bunch of places in the US now trying universal basic income.

ANDY SERWER: Right.

MAX LEVCHIN: I have no idea if UBI is a solution or not-- in fact, there have been some reasons to believe that it's not. But we won't know if it works here or not until we try it.

ANDY SERWER: Right.

MAX LEVCHIN: And so just having-- you know, let's ship a bunch of features that try to make the world a better place for folks that have been left behind. Observe it for whatever number of years, months, quarters that it takes, and then iterate on it. And I think, to me, the two big areas are figuring out how to train people to prepare them for the next iteration of what the workforce will require.

I'm a big believer that jobs are not disappearing, but they're being replaced. And I think that's something very important. And for younger version of our future workforce, just investing very heavily into education, especially education of people that without some form of help, will end up on the disadvantaged side of society. I think that's really, really important.

And my-- my hope is that, instead of spending too many cycles debating what is a perfect solution and creating what looks like partisan gridlocks, just iterating on good ideas that-- you know, there's no shortage of papers, and academics, and sociologists, and economists that all have a really, really strong view-- usually backed up by good data-- that we then don't even bother testing. We just sort of go right into the debate of why it couldn't work. So try more, talk less.

ANDY SERWER: OK. On that note, we're going to wrap things up. Max Levchin, CEO of Affirm. Thanks so much for joining us today.

MAX LEVCHIN: Thank you.

ANDY SERWER: I'm Andy Serwer. You've been watching "Influencers." We'll see you next time.