An Open Post to Monzo's Senior Management

Dear Monzo Senior Management,

I’m Monzo User #585 and have been in huge admiration of everything you have done and accomplished. You haven’t always got it right, but when you haven’t you went back to drawing board listened to opinions and came back stronger.

I have seen all the news reports about furloughing and latterly the redundancies that are hanging over your team and I haven’t quite been able to come to terms with them. Seeing your staff’s tweets on twitter is really heart braking. I understand that I am not privy to all the information that you have to arrive at the decision you have arrived at, but I refuse to believe that there is not another way out of this.

In my opinion the three cornerstones that helped make ‘Monzo Monzo’ were the community, your staff and your dedication to transparency. More recently (last 6-12 months) I have felt you have moved away from the community and you have ditched your attempt to be as radically transparent as you once were. Making staff redundant, for me, I’m afraid is the final straw. I will keep my Monzo account open in hope that you return back to your core values, but until then I will be switching to another bank account as my primary.

There are many alternatives that I believe you could have at least attempted before you made redundant the incredible staff that contributed to making Monzo the best bank in the UK (and probably Europe).

I appreciate that what I say next is comparing Apple to Orange’s, but I’d like to draw your attention to this Tweet.

I know a publication is a million miles away from a bank but look at the response when you do the right thing.

I perosnally would pay for a Monzo Plus subscription during these times, even if Monzo Plus was only 1/10th finished. I’d do that just to do my bit to give you revenue so that you could carry on the journey to hopefully reach the vision that @tom pitched to the room when I had to pick up my pre-paid Mondo card way back in 2016.

Another thing that you could do is level with your community - ‘All - things are pretty tough for us right now, we’d love to get your help by you referring as many people as you can to join Monzo’. I think you’d be pretty amazed at the response.

When the going gets tough is not the time to lay off the incredible people who have helped Monzo so far, it’s the time to turn to these incredible people and their incredible minds and seek alternative ways to overcome this adversity that Covid-19 is causing. Clearly intercharge fees have plummeted as less people are using their card due to lockdown but that can’t be the only way for a progressive bank like Monzo to make revenue.

For all the above reasons I will be using another bank account for my Direct Debits, Standing Orders, Salary and regular spend. This will only negatively impact your revnue ever so slightly as I am only one person. But this is one of the only ways I can show my displeasure at the recent ongoings at Monzo, by doing my talking with my feet.

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hmmmm , I get your sentiment , your actions would, if followed by lots of people would make the other 1000+ redundant , every person that you asked to join and didnt put their salary in would cost Monzo more money and cause more redundancies …all businesses are facing their toughest ever challenges at this point in time making redundancies across the board in their hundreds if not thousands and your solution is to withdraw your funds to stop Monzo from any income from your account …hmmm

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You’re incorrect on your second point. We already know that Monzo is profitable with every new account opened but they are more profitable if people pay their salary in. Can’t be bothered to scroll through the community to find the exact Monzo stat’s that prove this but they are there if you have the inclination to try and fact check it.

so if that is correct they should be in clover then with every new customer that chucks 20 quid on their spending card , the £10 or £12million a month running costs should be a mere drop in the ocean and they dont need any more funding rounds

from the annual report -
Per-user contribution margin (revenue minus variable costs including expected credit losses) is a key metric that we’ve worked to improve over the last couple of years. It tells you whether each active customer using Monzo generates more incremental revenue than they create in cost. Annual per-customer contribution margin is now +£4 as at May 2019, up from -£15 a year ago, and -£65 in 2017. The longer customers are with us, the more profitable they become, and salaried users contribute +£30 – mainly driven by the money we make when people use their Monzo cards.

the +£4 contribution margin is averaged over all customers, subsidised by “salaried” customers - some 30% of users who contribute £30 to the +£4 profit / customer , so you getting all your friends to join up and put their 20 quid on a card would knock this back to a loss which could in effect cause more redundancies as I said

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On a unit economics basis every new account is profitable for Monzo but they have invested huge amounts to scale. Hence by growing your customer base you should be able to cover more of the fixed overheads.

I think you might be slightly missing the point of my first comment. I was dissapointed that Monzo turned to redundancies before trying other solutions to keep them on sound footing.

You type all that about how much you care, how Monzo should do more and then contradict everything you say by moving your money elsewhere?

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This is the most hopelessly naive post I’ve read. I don’t know where to start.

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Things are happening that are very shit at the moment. Some very good people will lose their jobs. But I’m not going to use a different bank to ensure that even more good people will be in the same position

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When they are using their cards!

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The exact opposite of what Monzo needs it’s customers to do (per @iansilversides).

Your frustration is clear, but I think you’re over playing the role the forum has in the planning for the future. The community was a big player initially, in promoting the product. That was then.

Regrettably passion isn’t enough. Monzo needs to convert many (most?) customers into so-called Full Monzo for it to fully realise its potential as a bank. In the meantime I guess it’s feeling it’s way forward.

Jumping ship won’t help one bit.

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I get you sentiment James , I would have thought , I may be wrong , but Monzo from both yours and my experiences over the past 5 years would have tried everything and everything possible to keep the fantastic staff on before having to make the toughest decisions to let them go, just as all industries are having to cope with these difficult decisions …may I say for the greater good … survival for the rest of the staff employed

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Hence I said there are many other solutions that they could have explored to drive revenue. I wasn’t stating that my two options were the correct route, merely that by turning to their staff and their community to look for alternative solutions they may have been able to avoid these layoffs.

I don’t buy the ‘everyone else’ will get made redundant argument. If Monzo saw enough people upset with their decions who took similar action I am sure they would pivot and seek an alternative path pretty quickly

You may not agree with me and that is your prerogative.

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I would also like to think this, but I also mentioned how I believe they have deviated from their radical transparency. If they were open with the community, like they were in the past, and said they had tried absolutely everything to avoid this, then I would have taken them at their word. But that part was missing.

I mean you’re just spouting complete rubbish.

Do you think nobody at Monzo has considered trying to increase revenue?

What? I’m sure there isn’t a party going on with Monzo staff right now that are at risk of losing their jobs. Nobody wants to be letting people go. Not Monzo. Not the staff. Not the managers. It’s a horrible situation and a lot of people will be upset. But sometimes you have to make big decisions. People being ‘upset’ is not a reason to lose millions of pounds.

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Simple economics doesn’t agree with you.

Monzo are unfortunate in that they are the biggest (by active customers) and arguably best fintech, but they had the least cash on hand when this all kicked off. They need to save money so that they can survive, simple as that.

I’m not sure what options you can think of that would garner revenue for them in meaningful numbers. I can guarantee you that the majority of their customers wouldn’t pay for a premium service “just to help Monzo” when they’re probably struggling themselves.

It’s obvious that Monzo don’t want to do this, and you claiming that there are avenues they could have taken before getting here is just naive and unhelpful.

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True I agree the transparency of late has been missing , I think probably because the staff have more on their plates at the moment , hopefully this will return

Why would the staff have more on their plate?

Purely by definition they’d be working off of sprints/kanbans and pick up items when they have capacity.

Less capacity means less work being done in the dev world.

yep maybe they are all sat with their feet up getting deliveroo pizzas :man_shrugging:

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To your point here which I completely take on board - could the community not reach out to their friends and encourage them to make Monzo their Primary Bank Account?

Again - I’m not saying I have all the answers just that I’d have turned over every stone at least twice before I resulted to this.

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Wouldn’t that spread concern and people would assume they’d be about to go bust?