From Cab Driver To Crypto Visionary: Cory Johnson’s Ripple Story

Our second episode features Cory Johnson, founding editor of The Street, former Bloomberg TV correspondent, former jazz guitarist and current chief market strategist of cryptocurrency upstart Ripple.

Johnson will speak on the impact Ripple is having on the speed of global payments at the Benzinga Fintech Summit in San Francisco November 14.

Spencer White:        00:02        Welcome to Benzinga’s Fintech Focus podcast, your weekly dive into the world of Fintech featuring conversations with leaders on the front lines of the financial revolution.

Spencer White:        00:17        Hello Fintechnicians and welcome to season one, episode two of the Fintech Focus podcast. This is Benzinga Fintech editor, Spencer White, here with Benzinga producer and co-host, Spencer Israel.

Spencer Israel:        00:31        How’s it going?

Spencer White:        00:32        Good, good.

Spencer Israel:        00:33        So, Spencer White, we have a very special guest on this episode. Tell us who we’re talking to.

Spencer White:        00:41        Yeah, we are speaking with Cory Johnson, Chief Market Strategist of Ripple. Ripple, as our listeners may know, creates banking infrastructure that hopes to standardize the use of blockchain technology in payments. Ripple has signed deals with banks around the world and also created its own cryptocurrency, XRP.

Spencer Israel:        01:01        And I believe he’ll be at our event, right?

Spencer White:        01:04        Yes. Cory will be speaking on Ripple’s behalf at the Benzinga Fintech Summit in San Francisco, November 14th. He will be describing the company’s role in the instant money transfer ecosystem of the future. We are really excited to present our interview with Cory after this quick message.

Spencer White:        01:26        The Fintech Focus podcast is all about telling the stories of the people who are making the Fintech revolution happen. And if you wanna meet those people in person, you can’t afford to miss out on the Benzinga Fintech Summit in San Francisco, November 14th. There you’ll meet leaders from the brokerage and payment space, and do more business development in one day than you could in a year just sitting at your desk. Check out bzsummit.com for more information and to grab your tickets before they’re all gone. When checking out, enter the promo code, FINTECHFOCUSVIP, all one word, all caps, for a discount.

Spencer Israel:        02:05        And then before we get to the interview, we just wanna thank WeWork for letting us use their beautiful and new podcast studio and equipment here in downtown Detroit. Thank you very much for that, we appreciate it. And with that said, here is our chat with Cory Johnson.

Spencer White:        02:27        Alright everyone, welcome back to the Fintech Focus podcast. We are joined today by Cory Johnson, Chief Market Strategist at Ripple, founding editor of thestreet.com and former long time correspondent for Bloomberg. Welcome Cory.

Cory Johnson:        02:40        Yeah, thanks for having me.

Spencer White:        02:43        Oh totally, we’re glad to have you. So Cory, let’s start at the beginning. What is Ripple and what’s the Chief Market Strategist do?

Cory Johnson:        02:53        These are the questions I’ve asked myself. So Ripple is fundamentally an enterprise software company. We make software and sell it to financial institutions, basically banks and remittance companies. And some of our products use a cryptocurrency as digital assets that is called XRP. And so, to me it’s not a very complicated story. If you wanna get into the weeds and understand how the technology works and understand which of our technologies deploy XRP and how XRP works. That may sound a little more complicated, but fundamentally, we’re just an enterprise software company. We’re trying to solve this really big problem which is moving money across borders.

Cory Johnson:        03:38        It is insane in this era of technology when I can send a text message to a friend in Rome with emojis and a GIF attached to it, or I can send an email to a friend in Cape Town, South Africa in three seconds with an Excel spreadsheet attached with all kinds of information. But I can’t send anything of value. I can’t send value or money when anything less than five or 600 basis points of costs and will take me three to five days. That’s crazy, and that doesn’t reflect the best of technology. So we have a handful of software products that, I think, do reflect the best of technology, that move value and money across borders in seconds, not days, and for less than a 100 basis points instead of hundreds of basis points.

Cory Johnson:        04:30        It’s software that’s deployed by banks, financial institutions, so that the know your customer rules, the anti-money laundering rules, are all obeyed by the banks as they are now, but they use our software to move money more quickly and more cheaply.

Spencer White:        04:46        Great. To drill into that a little bit, this point is belabored a little bit in the crypto discourse, but really lay it out and make a claim for us, what the difference is between Ripple and XRP. What’s the core relationship? And talk about how someone can use XRP, the currency, but never interact with a Ripple company product.

Cory Johnson:        05:11        Yeah, so the difference between Ripple and XRP is like the difference between Exxon and oil. They’re completely different things, and occasionally related. Ripple is a software company. We’ve got tons of engineers and people developing software and selling software and helping the market get software. And some of that software deploys and uses XRP, just as ExxonMobil does lots of things, and some of their work is discovering and exploiting the use of oil. XRP exists completely separate of Ripple. XRP was created, all the work to create XRP started before Ripple was a twinkle in anyone’s eye.

Cory Johnson:        06:03        And if Ripple were to go away, the Johnson family would be quite sad, but XRP would continue to exist, and many other companies, many start-up base, many beyond that, are using XRP as a core technology, again, to try to find new businesses. And really, the technology for XRP is like Bitcoin two dot oh. It’s Bitcoin, but it’s faster. It’s Bitcoin, but it doesn’t use tons of power. It’s Bitcoin, but it’s not controlled by Chinese miners. But fundamentally, it is a blockchain digital asset that is used principally for the movement of value.

Spencer White:        06:45        Great, well thanks for the explainer. So now that we’ve got the groundwork here from you, let’s talk about you. Spencer and I, we have Bloomberg on in the newsroom. We’re used to seeing your face reporting the news. What made you wanna go from a successful media career to working in cryptocurrencies? Have you always been bullish on crypto? Was there a moment in your career when you realized the potential of this and that got you really excited about this opportunity when it came along?

Cory Johnson:        07:17        Yeah, well I’ve done a lot of different things. You know me from my work probably in television and radio and seeing me in Bloomberg but I’ve done lots of stuff. I was a magazine editor, I was a sports writer, I was a hedge fund manager for a while. I was a jazz guitar player, I’ve done everything. I was a taxi dr … Two blocks from Ripple’s office in New York, as I look out the window right now, I can see the garage where I used to drive a New York City taxi cab. So I’ve done lots of stuff.

Cory Johnson:        07:45        And when I started to look into … I spent a lot of time reading about what’s going on in the world of crypto, what blockchain is, and what it isn’t, and so on. That’s a function of my reporting and just my curiosity. But when I started really digging into Ripple and the business problem that Ripple’s trying to solve using technology, and I see so many smart technologists coalescing around blockchain, I started to take it maybe with a little more interest. And digging and digging and digging, I personally found that there was a lot of value in the company Ripple, and potential value on XRP as well. And it kind of materialized out of the blue.

Cory Johnson:        08:34        And I’ll tell you, I have been around so many high growth start-ups in Silicon Valley. When Google was a couple of guys in a garage in Palo Alto, I knew these guys. Even in the early days of Yahoo I was there. I’ve seen SalesForce come out of nowhere to become one of the dominant software companies in the world. I’ve seen these companies, and all the headaches that are there, that are associated with that. So blockchain as an industry looks a lot like the early days of the internet, the early days of cloud computing, and the technological excitement around it reminds me very much of TCP/IP and cloud computing. And these are the things that I’ve seen from technology, and I think blockchain is a big part of that. I think Ripple has the potential to be the dominant company in the space, and indeed one could argue we are the biggest company in mesh to steal the blockchain right now.

Spencer White:        09:37        Got it.

Spencer Israel:        09:37        So did you approach Ripple about working together, or did you climb the mountain and Chris Larsen was at the top meditating and you asked him if you could work for him? What’s the superhero origin story?

Cory Johnson:        09:49        You don’t wanna interrupt the guy at the top of the mountain meditating. No, Chris and I have been friends for a long time. I was covering him through many different stages of his career, and he proposed this idea that I work for him and I thought it was just crazy. I shot down all the reasons why.

PART 1 OF 3 ENDS [00:10:04]

Cory Johnson:        10:00        Yeah but I work [inaudible 00:10:01] so it’s just crazy. Shot down all the reasons why I thought I was a bad idea and couldn’t really come up with a great thing. And it was kind of the right time for me to do something different. I wanted a new challenge. I’m really a start up guy. Yes, I worked for Bloomberg I did not start Bloomberg, but I started on the less of TV shows and I did a keynote of my work as the [inaudible 00:10:21] manager. I started the Silicon Valley Bureau for CNBC. I started Slam Magazine in New York City. I started the Vibe Magazine with Quincy Jones. I started discrete.com with Jim Kramer.

Cory Johnson:        10:34        I really see myself as … I started some of the market’s radio show with [Joe Nauser 00:10:38], at Bloomberg. So, I got to a stage at Bloomberg where I wasn’t in startups anymore and I wanted something new to start up. Ripple is certainly … It’s a big start up. And it’s a fast startup. A startup that’s got a lot more traction than some startups, but it definitely is a startup, and it just seemed to really do the right thing for me right.

Spencer White:        11:00        Interesting. Are there parallels to working in startups in media to fintech startups? What’s the same, what’s different?

Cory Johnson:        11:11        I mean, personally, it’s sort of a round the clock effort. It’s something that’s seen where there’s a lot of change, and a lot of … Your first plan might not be your last plan. You need to be able to turn on a dime. It’s a place where there’s a lack of bureaucracy, and the main goal is to get something done. How you get it done isn’t as important. No one’s punching the clock and checking to make sure that you’re following corporate policies, and we of course are ethical and we found the right rules and respect towards each other, but the main job at a startup is get the damn thing done. And really pursue your goals relentlessly. And that appeals to me. And I like the way that things change and you have to adopt these situations and you say, “Oh wow, we’ve never ever seen something like this before, let’s come up with a solution.”

Cory Johnson:        12:11        That’s so exciting to do, and that’s true in me, that’s true in fintech. I think it’s true in any startup. It’s also true that financially, I certainly took a big pay cut to come work here, hoping it works out over the long term but it takes a commitment on many front to do something like this.

Spencer White:        12:35        Hey everybody, Spencer White here with a quick message. So if you are listening to the Fintech Focus podcast, you are definitely interested in the connections that can be made between Fintech startup CEO’s and institutional executives. If you’re a startup founder who wants to get in on the action yourself, or you’re an executive at a financial institution who needs to see the newest startups, you got to be at the upcoming Benzinga Fintech summit in San Francisco, November 14th.

Spencer Israel:        13:03        And if you’re in the brokerage or payment space, you cannot miss the chance to network with the heads of trading and all the major brokerages. Barry Metzger at Charles Shwabb, Matt Wesche at E trade and others will be speaking with the brokerage expert herself, Theresa Carey in a can’t miss panel.

Spencer White:        13:21        And you startup founders, the ones who are looking to make a big exit, you can’t miss the keynote presentation by Andrew Cortina, founder of Venmo and founder of AI Assistant startup, Fin, on his path from an exit to Braintree and PayPal to the future of work.

Spencer Israel:        13:36        For more info, head to Bzsummit.com.

Spencer White:        13:45        How does a chief market strategist fit into the role of a chief market strategist fit into that hockey stick growth of a startup. How do you guide messaging or are you working with a company on attacking certain segments? What’s the role?

Cory Johnson:        14:03        Internally and externally there’s a lot of value in having a clear understanding and explanation of what you’re doing, and talking in … Adding this complication and confusion around the world of cryptocurrency add to it the people who don’t really understand, XRP and reminder to send the other technologies have been around longer than that, and of course got a lot of money associated with that. Got a lot of investment, and I think we wonder what Ripple is doing because Ripple’s a big player in the world of XRP. Now you’ve got people wondering what Ripple means for banks and financial institutions. If we were to lower the cost of certain competitors in the financial service industry, everyone else in the financial services industry is going to want to understand that. And so we have a role to try to explain that and explain what we’re doing and try to make sure people know what Ripple is and what we’re trying to do as a company. So I think that that would [inaudible 00:15:05] idea.

Cory Johnson:        15:06        If we’ve got so much interest in this company, if it’s growing so fast as, as if we’re signing deals at record pace right now. The call on him to sort of be the representative of the company does get to be a little too much, so I’m sort of stepping in there trying to lighten that load a little bit and explain what Ripple is and what we’re doing to lots of different constituencies. Investors, regulators, people on Wall Street who invest on cryptocurrencies on Wall Street, as well as some media and prep. A lot of conferences and people sort of develop this need for the industry watching, and I’m involved in all that.

Spencer White:        15:45        And so let’s talk about what it is that you’re explaining. Let’s talk about test cases. What specifically is Ripple signing these deals to execute on and disrupt?

Cory Johnson:        15:54        So right now it’s really expensive and really hard to move money across borders. There’s lots of ways to think about it. I think we all tend to think about ourselves as people and friends to the people we know. It’s hard to think of businesses and see what they do [inaudible 00:16:11] involved in those businesses. But if you were an import on something and you’re hoping to make a 10% profit on the things you buy in one country and sell in another, but you’re paying 600 basis points to move the money to pay for things, you suddenly reduce that 10% profit to 4%. Furthermore, if it takes days and days to pay a supplier, some suppliers just aren’t going to want to be involved with that. So it’s harder for small business to get involved and get work in cross borders and it’s because the big businesses are just part cash waiting to be put to use.

Cory Johnson:        16:49        Our Chief Financial Officer at Ripple, Ron Will, he was treasurer of Yahoo. He had over 150 bank accounts in over 100 countries with cash just sitting there waiting for the day that he might have payroll to make or a supplier to pay for something. And Yahoo had a great advantage as a pain for them, he had hundreds of millions of dollars lying all over the world waiting for the potential to make a payment, but for them it was an advantage smaller businesses didn’t have. So that’s crazy to me, so the banks that are our customers recognize that their customers want to move money fast. They have been … They want to pay less, the banks recognize that they can lower their costs, they can lower their costs to customers in the market share, so that’s when they’re buying this stuff. They also really like the accuracy that Ripple software allows right now.

Cory Johnson:        17:42        Right now our biggest competitor to next current plan is an International banking contortion called Swift, and Swift has an arrow rate that senses up to 600 basis points. Imagine you send money from one country to another. You don’t know if it got there, you don’t know where along the way the information got lost, and they never send you any information back in the moment that you send it. You’ve got to kind of wait days and days to receive back or even acknowledgement of a problem. That was the State of the Art until Ripple entered the market place. So our customers are getting this kind of sure thing of what’s happening with their money transfers, and getting instantaneously these Ripple software products in ways they haven’t seen before. Things like that.

Spencer White:        18:30        And as this technology gets out into the wild and is used by large institutions and customers, what are you learning about your assumptions that you had building this technology that … How are you implement feedback?

Cory Johnson:        18:46        Well I think that what’s really interesting about this is … It’s early days, so we’ve got over 100 customers who are signing deals will move a billion dollars across the [inaudible 00:18:59] I can see email and get one today. Whenever we’re getting a customer and this email goes up from head of sale, and it’s pretty cool, but they’re coming fast and furious. [inaudible 00:19:10] the six months that I’ve been here, I’ve seen these customer announcements picking up speed. A year ago Ripple was signing a new customer every six weeks. Now we’re signing one every six days. It’s a really dramatic difference in terms of what’s happening, but I think it’s still so early because we’re still selling it.

Cory Johnson:        19:28        I think there will be a day when the banks who are using our software are so happy that they’re getting the accuracy they want, they’re getting this incredible speed, and then [inaudible 00:19:37] five days and it takes less than a minute to do. And that’s just a game changer. That’s going from Pony express to email.

New Speaker:        19:47        And yet what we’re going to see in the future, giving the greater numbers is a network effect, or a bank in Thailand that has 100 banking partners and has 10 of them using Ripple software-

PART 2 OF 3 ENDS [00:20:04]

Cory Johnson:        20:00        Using Ripple with it, Ripple Software. And Ripple Software is allowing them to suddenly cut costs of those 10 customers. They’re going to turn around to their other 90 corespondent bankers and say, “Wait a minute, you guys got to sign up and get on the Ripple Network, because you guys are going to lower your cost, and we want to do more business with you, and you’ll want to do more business with us.” And it’s that network effect, of our customers selling us to other customers. I think that that’s very early today. That’s what we’re going to see in the future.

Cory Johnson:        20:28        Basically, not to get religious about it, but people spreading the good news of the Ripple gospel.

Spencer White:        20:35        Got it. So, if there is that network effect, that positive feedback loop, are you still coming in contact, or do you come into contact at all, with crypto skeptics, or bears? There were a lot in the early days of this technology. And if you do-

Cory Johnson:        20:50        I don’t know if it’s because of where I sit, but it seems like I see a lot less skepticism than I saw even six months ago. What do you guys think? Do you see that? I just feel like I don’t hear the same, “This whole thing’s a fraud, it doesn’t do anything.” [inaudible 00:21:05].

Spencer White:        21:07        I only see a few commentators calling total BS these days. And, so, I was interested to see your thoughts on how that’s evolved. You don’t really need to make the case for Blockchain technology in general anymore. Even Jamie Dimon’s sold on it. But what do you say to people who are more skeptical?

Cory Johnson:        21:25        And that wasn’t the case a year ago, right? A year ago, you had Jamie Dimon, [Lauren Blank 00:21:28], and others, casting aspersions on this thing. It was all a joke. Even on Warren Buffett, Charlie Munger at the last annual meeting of Berkshire Hathaway only a few months ago.

Cory Johnson:        21:38        But I think that what they’re really talking about, is the speculation around coins, if you will, but they haven’t really done the work to understand what this blockchain technology is, and what that could do.

Cory Johnson:        21:53        I agree with Bloomberg, the speculation around coins, the notion that investing something in the store value … I personally don’t believe in investing in gold. I don’t believe in investing in things just because you think someone else is going to pay more for it later.

Cory Johnson:        22:09        I think [inaudible 00:22:10] to me [inaudible 00:22:11] Cory Johnson investments, not Ripple the company. But I sleep better at night when I know there’s an intrinsic value in the things that I’m invested in. I would much rather have investments in Facebook, or Berkshire Hathaway, which is throwing off billions of dollars of free cash flow at the end of the day, then a fly by night hope, like a Tesla, or some Dog Coin, or something, that only has value because you think someone else is going to pay more for it later.

Cory Johnson:        22:42        [crosstalk 00:22:42] Even a collectible comic book has greater value, because at least you can sit down and look at the thing and read it, which is not the case when it comes to these quote unquote store value investments. I could never get comfortable with owning gold instead of owning corn or oil.

Spencer White:        23:02        I think that makes total sense, and thanks for the complete candor there. We’re running up on time, here Cory, we want to just throw one last question at you. There’s so much positivity enthusiasm in this sector, tons of fun thing, you’ve got people like Michael [Miltongrass 00:23:17] throwing tons of money in cryptocurrencies, and Blockchain technology, but what worries you? What are the challenges that you know need to be solved in the future? Maybe you could call this the ‘what keeps you up at night’ question.

Cory Johnson:        23:32        There’s a whole lot. Execution, of course, is the toughest thing in any business, and we need to continue to keep our nose to the grindstone and execute the best ways possible, and keep our people inspired to do so.

Cory Johnson:        23:43        I think that there’s a very closely related series of problems. I think that the crooks who have come to this thing to steal money from windows, and orphans, and unsuspecting people, like they do in every new technology, like they did in oil, like they did in the dotcom days. I think there’s a really big risk there that they give the industry a black eye, and keep banks and serious businesses hesitation to want to get involved in the space. There’s a risk, but the regulators screw it up, because of the bad actors who are certainly in the space.

Cory Johnson:        24:21        I think it’s really incumbent on the regulators, particularly in the US, to get this right. They’re doing the work. They’re taking the time to figure out. The problem is they’re taking their time, and other countries are not.

Cory Johnson:        24:34        Countries in Singapore, Switzerland, Thailand, and others, are really working hard to understand Blockchain, and cryptocurrency, and digital assets, and create some clear rules for business to form and, build and, thrive.

Cory Johnson:        24:55        The US has not done that as well as other countries have, yet. I’m very hopeful that they will. The conversations that I’ve had with the regulators, and our team has had with regulators, I think we all come back with really positive about it, but we would like them to work fast and establish some real, clear lanes, so that the companies dealing with Blockchain companies, like Ripple, can recognize, that we are serious, professional, honest, fair, and legal, and not lump us in with those crooks.

Spencer White:        25:29        Great. All right, let’s end on a pithy line here. Where do you see Ripple in a year?

New Speaker:        25:37        Bigger, better, faster.

Spencer White:        25:38        Love it. Thanks so much, Cory. Really appreciate your patience and thanks for bearing with us [crosstalk 00:25:43].

Spencer Israel:        25:47        All right, so that was our chat with Cory Johnson. Lot of fun. Spencer White, what did we learn?

Spencer White:        25:53        A couple of things stuck out to me there, Spencer. Two most interesting things to me were, one, the libertarian wet dream of potentially paying people in traffic ahead of you to pull over and let you go. When you think of Blockchain and potential applications, probably in the last five uses I could think of, but to each their own. It seems like a slippery slope to me.

Spencer Israel:        26:22        Is that your term?

Spencer White:        26:22        It’s a technical term.

Spencer Israel:        26:24        Technical term, there. Okay.

Spencer White:        26:28        But the other thing to me that was really cool was, Cory’s own unique, personal journey. You don’t see a lot of the founder slash entrepreneurial types in the fintech media landscape. Honestly, the only other person I can think of really, is Benzinga’s own CEO Jason Raznick.

Spencer White:        26:45        I thought it was cool to learn how Cory brought new ideas to the table at a mammoth company like Bloomberg, building out Bloomberg TV, founding TheStreet With Jim Cramer, all those endeavors he found himself in. Honestly, even just the arch of someone’s career, going from a hedge fund manager to a crypto bowl, that’s unique enough. But he’s done everything else in the media space, so I thought that was a really cool story, and it’s interesting to see him taking this leadership role at Ripple.

Spencer Israel:        27:16        I’m always interested when people leave the media for other jobs and other careers, where do they go? Because, there’s no defined path for that. A lot of times the media is the end of the line for people who are maybe retired, and to see him launch off of that into a whole new thing, I think, is interesting. I’m going to be watching that, because I think I’m curious about what happens now.

Spencer White:        27:42        100%. And especially to be taking a, maybe partisan is not the right word, but in an issue as divisive as cryptocurrency, it seems applicable for a media personality to definitively end on one side of that debate.

Spencer Israel:        27:58        Exactly. All right, on that note, that’s going to do it for episode two of season one of The Benzinga Fintech Focus Podcast. If you liked this interview, you should definitely subscribe, leave a review, iTunes, Suncloud, Stitcher, tune in, and Spencer White, tell the good people where they can find the Fintech Focus Newsletter.

Spencer White:        28:20        If you are interested in following this gospel, you got to go to benzinga.com. You will likely be greeted with a pop up, telling you to subscribe to one of our bevy of newsletters, or you can go to the newsletter tab on benzinga.com, there you will find the Fintech Focus Newsletter, with your weekly dose of funding news in the fintech space, and tidbits that I find interesting.

Spencer White:        28:42        You also can’t miss Cory Johnson’s live appearance at the Benzinga Fintech Summit in San Francisco, November 14th. He will be telling the Ripple story to an audience of payments and brokerage executives. And that’s it for me.

Spencer Israel:        28:56        I was going to say, they can also tweet incessantly at you until you either block them, or put them on the list.

Spencer White:        29:03        Twitter for me is a one way street. I just read. I’m not brave enough to delve into interacting with people there.

Spencer Israel:        29:10        Okay. On that note, that’ll do it for us. Again, thank you to WeWork for letting us use their beautiful new podcast space here in downtown Detroit, we really appreciate that. We’ll be back with more on episode three of the Benzinga Fintech Focus Podcast with, who?

Spencer White:        29:27        We will be speaking with Aaron Klein, CEO of Riskalyze, and a longtime friend of Benzinga’s. Until next time, fintechnicians.

PART 3 OF 3 ENDS [00:29:35]