The Journey of Athena.

Michael Starkey and Nathan Walsh, Co-founders of Athena Home Loans share their remarkable journey!

In this episode of Fintech Chatter Dexter Cousins chats to Nathan Walsh and Michael Starkey, Co-Founders of Athena Home Loans.

Making their long awaited return to the show, Nathan and Michael discuss their journey over the past four years,and the insane challenges they’ve had to navigate as interest rates rose rapidly and funding markets dried up. 

According to Wikipedia Athena was the patron goddess of heroic endeavor; she was believed to have aided the heroes Perseus, Heracles, Bellerophon, and Jason. She may have also aided Michael and Nathan over this last few years!

We ask Nathan and Michael the tough questions like how do you compete with banks, balancing technology with regulatory requirements, navigating the rapid interest rate rises since 2022, and the importance of partnerships. 

Nathan and Michael also share their secrets to building a resilient team and maintaining a strong company culture as they aim for the next stage of growth and innovation in the home loan sector.

“This is now an execution story.”

Nathan Walsh – CEO, Athena Home Loans

Chapters

00:00 Introduction to Athena Home Loans
03:38 Founding Story and Vision
05:48 Tech Fin vs Fin Tech: Athena’s Position
07:32 Navigating Regulation and Compliance
11:48 Challenges of Distribution in a Fragmented Market
13:34 Impact of Interest Rate Rises
19:45 Lessons from Big Banks
23:23 Partnerships and Growth Opportunities
29:29 Cultural Alignment in Partnerships
31:41 Frameworks for Evaluating Partnerships
33:47 The Journey of Co-Founders
37:59 Attracting and Retaining Talent
40:51 Navigating Growth and Change
45:09 Reflections on Past Experiences
48:40 Future Aspirations and Growth

Links from this episode.

• Athena Home Loans
• REA Group — took a 20% stake in Athena in October 2024
• Loan Market Group — one of Athena’s broker distribution partners

Nathan and Michael on Fintech Chatter.

• Athena’s co-founders on disrupting Australia’s mortgage market (2021) — recorded before the rate cycle turned
• All Fintech Chatter episodes

Full transcript.

Lightly edited for readability — filler words removed, wording otherwise unchanged.

Dexter Cousins
You’re a fintech founder staring into the abyss. You’re about to lose everything you’ve built. You’ve no way of getting funding, and every sale is losing you money. What do you do next? And how do you turn around a business that has only months to survive? I’ll cover that in today’s Fintech Chatter.

I’m Dexter Cousins, your host and the founder of Tier One People, the executive search and recruitment firm dedicated to helping fintech companies hire exceptional talent.

Today’s guests are Nathan Walsh and Michael Starkey, the co-founders of Athena Home Loans. We last featured Nathan and Michael back in 2021. Athena were flying high. A year later, rapid interest rate rises and a capital markets crisis had a sudden and immediate impact on their business. If they didn’t act fast, they’d be out of business in a few months. I chat to Michael and Nathan about their journey over the past four years, how they’ve navigated rocky waters, and how they’re now scaling the business and getting even greater growth.

Nathan, Michael, welcome back. Four years since we got together and had this conversation. If startup years are like dog years, that’s about 28 years since we last spoke. I’m sure there’s a lot for us to talk about. But before we do, maybe you could tell our listeners who didn’t tune into that first show who Athena Home Loans are, and the big problem you solve.

Nathan Walsh
Great to be here, and hard to believe it was four years. It does feel closer to 28.

Dexter Cousins
There’s a lot more grey hairs. Or no hairs.

Nathan Walsh
I wish I had grey hair.

So, Athena Home Loans — we’re a specialist Australian home lender. Mortgages, helping people buy their home. We founded with a mission to help Aussies pay down their home loan faster. Really with that idea to say, this is a massive $2.4 trillion market and it just wasn’t meeting the needs of consumers.

What’s interesting is that Mike and I have been at this now for coming up eight years, so when we last spoke was roughly halfway through the journey. Your views of the opportunity, and of what the problem is you’re solving, evolve. A market at this scale where net promoter scores for consumers are typically mildly negative — more detractors than advocates. So a real opportunity for us to go out there and understand how we change the game for good. What does it actually look like to be better?

Absolutely, for those in that position, pay down your home loan faster. But there are so many broader opportunities to work through together. And the other thing is we’re a B Corp, so we really are about bringing profit and purpose together. We’re trying to put some real muscle behind the idea of what can be done to make life better for people with a home loan.

Dexter Cousins
Nathan just mentioned it’s closer to eight years than six. How did you both get together and decide you were going to tackle this problem?

Michael Starkey
We both worked at NAB for a good amount of time — I think you were more than ten years, I was near on nine or ten — and we were part of the same leadership team. It felt unlucky at the time but lucky in retrospect that NAB was going through a funny phase, where people like Nathan and I probably felt we’d reached the limit of what we could do within that organisation with the leadership at the time.

We got together over breakfast once. It was February 2017. Nathan had this vision, sketched out the way funds flowed in the market, which I still think is super relevant to where we’re going and what we can achieve with Athena. Interestingly enough, that was a vision around the flow of debt and funds in the market, as opposed to technology and what it could do on the borrower side — which, as Nathan said, turned out to be a good opportunity as well.

We got excited about that in February, and by April or May we’d resigned. A lot of people thought we’d been cooking that idea for a long time, because we’d known each other a long time in the bank, but we really got excited about it quite quickly. We firmed up some sources of equity capital during that period, worked out we could raise the money and get started, and within two or three months we’d resigned to start this business.

Dexter Cousins
One of the questions I tend to ask everybody on the podcast is whether they’re more of a techfin or a fintech — as in, getting creative around financial instruments and innovating on that side. You’re eight years in from that diagram Nathan mapped out. How would you describe Athena in that context?

Nathan Walsh
I’d say we’re a fintech if the emphasis is on the financial services side. But I think we’re really way more tech as a source of advantage than maybe Mike and I would have appreciated. What the engineering teams and the product design can do is quite incredible.

So there’s a real balance, but we’re not doing original research deep into the core of technology. What we really have is an opportunity in a vertical that’s well behind where the world is — how do we bring really modern design, the agility and opportunity that presents, and deploy it in a way that benefits the two sides of our business, borrowers and brokers, and then the funding side as well?

It’s incredible what is therefore possible. We are up against banks, major players who are always going to have a massive scale advantage in this space. So for us it’s about how we can move at speed, deploy insights, deliver better solutions. That really is bringing together how you run financial services, how you work within a regulated category, how you create a platform that can move billions of dollars — but do so in a way where you’re bringing some extraordinary talent on the tech side as well.

Dexter Cousins
There’s a mantra in the startup world — move fast and break things — which isn’t really applicable to fintech, because if you do break things there could be a jail sentence at the end of it. How have you balanced that requirement to move fast with working inside the bounds of regulation, compliance and capital restrictions?

Michael Starkey
We hired a very experienced team right from the get-go. If you look at the people running our product function, treasury, risk, they’ve all got years of experience, sometimes in major organisations dealing with highly regulated markets and reputationally sensitive issues. When someone takes a home loan out and gets into trouble, how do you deal with those customers? We’ve got a lot of experience in our team in that, and a very strong risk function.

We’re relying on funding partners to lend us billions and billions of dollars of their money, so they put a lot of scrutiny on us. We’re forced to take these issues extremely seriously and put all the frameworks in place.

But the advantage you have, as Nathan was saying, when you’re starting with a blank sheet of paper, is a cleaner platform with end-to-end data that flows all the way through from acquisition, originations and servicing to the back office and treasury functions. You have a fair amount of advantage in satisfying those requirements, because you’ve got clean files.

When our funding partners come in and examine our operations and look at the files we’ve written, invariably they find we’re in a very clean position. We’re able to demonstrate not only the performance of the loans — we’ve written $9 billion of loans and we haven’t lost a cent, and our arrears rates have typically been an order of magnitude lower than the majors’ — but also justify why we’ve written every file, because of how systematic it is and how clean the data is.

So it’s a space we have to take very seriously, but we think we’ve got an advantage in doing so. Would you add to that, Nate?

Nathan Walsh
What you just framed is actually the most important question for someone to think through if they’re looking to play in fintech. You’re not just thinking, almost naively, about what’s desirable without understanding all the constraints. There are reasons why finance works in certain ways.

Think of it almost as a double-loop design, where you need to think about what the requirements are to really do things better for a consumer or a broker or your channel partners — but equally, what is both the letter and the spirit of the regulation you need to operate in, and how do you make those things consistent?

That’s the difference between a really great insight that can be scaled and deliver impact in a great business, versus something where the world doesn’t quite work the way you’d like and you haven’t really thought through that you need fuel for the car.

There is an opportunity for a startup to solve both those problems better than an incumbent, because at its heart many of the core regulatory problems are ultimately just data access and management. When you get really careful and tight about the information you need — in our scenario as a lender, what do anti-money-laundering obligations mean, what do ratings agency obligations mean — you start to go through and that’s the information that’s needed. Then how do you develop systems that can capture, manage and analyse those things effectively?

So there is a real double-loop design problem, where you can say: yes, let’s develop something that’s a better answer, but equally something that’s meeting obligations in letter and spirit better as well.

Dexter Cousins
One of the key challenges in what you’ve just mentioned is that you’re at the forefront of innovation, so from a regulatory perspective a lot of what you’re trying to do might not have been done before. It’s uncharted waters. The challenge I’ve found for a lot of people, particularly in compliance and risk, is they tend to see the world in black and white, and you’re operating in all the shades of grey — where there are things that are simply unknown, and if anything you’ve got to be the trailblazers for changing some of those regulations, or even creating ones that don’t exist.

Nathan Walsh
I’d say we’re probably a little different from some others, in that we are really at the heartland of meeting responsible lending obligations and writing good quality credit. We’re absolutely operating in the black on all of those dimensions, not pushing boundaries.

What we’re really innovating on is how you do those things. Think about the compromise of making sure this is the right loan, but also giving a great, fast, easy experience. How do you bust the compromise between speed and quality?

That idea that if you move fast you have to break things — well, how do you move fast and not break things is the much more interesting question. It’s self-indulgent to say let’s move fast, and it’s not just in regulated finance. You look at some major players who’ve taken that philosophy way too far up the scale curve, and we’re all bearing a bit of that.

Dexter Cousins
The analogy I use is the reckless driver who drives off into safety but leaves the pilot behind.

Nathan Walsh
You want to be able to move large amounts of money around safely. Consumers are making some of the biggest financial decisions many will ever make in their lives. You want to step through all of those points and end up with things that deliver better experiences.

There’s an awful lot of really fascinating challenges, and part of the reason fintech is such a fascinating vertical is that inherently it’s a more complicated problem set, because you need to be thinking about multiple perspectives.

Dexter Cousins
The other challenge is distribution, and you’re working in a space that’s probably the most fragmented of any sector in Australia. Is it more than 70% of home loans that come through a broker? And how many brokers are there in Australia?

Michael Starkey
There are a lot of brokers, but they’re organised under partnership and aggregator groups. As we’ve evolved from being purely a digital and direct player into dealing with those partnerships, we’ve now got Mortgage Choice as a major partner, which is part of the realestate.com.au group, and Loan Market Group. Both of those originate tens of billions of dollars of loans every year.

What we’re able to do is work with those groups, and with the brokers that are part of them, to speak to the benefits of our proposition, give really great service to those brokers, and get their support in distributing our products. So yes, there are thousands and thousands of brokers, but they’re all organised into partnership groups we can have really deep relationships with. That’s been a huge feature of the last couple of years of Athena — embedding ourselves into those big groups.

Dexter Cousins
The other major challenge, and one none of us foresaw, was 2022. We started a period of interest rate rises — ten or eleven consecutive ones. Being a business that relies on a loan book and capital management, what did that present in terms of challenges, and how did you navigate it? I imagine it looked pretty rocky while you were going through it.

Nathan Walsh
Think of Game of Thrones, as the White Walkers climb the wall.

For us it’s probably less about rates going up or down, because variable rate loans move. It’s that at the same time that was happening, there was an inflation spike right around the world. Equity markets were feeling that. There was real concern around debt markets. So there was a disruption of everything happening all at the same time. That absolutely was a challenging moment.

The real reason for that was that those of us funded by debt markets saw those costs flow through straight away. But the big banks have the benefit of deposits, which they were slow to pass the benefits through on, so their costs went up much more slowly. And they also had what has to be an all-time great deal, where there was $188 billion of nearly free money the RBA was giving them. Literally tens of billions of dollars to the larger players.

So at the point where our costs were going up by well over 4%, we were competing against players who had a sweet deal, paying almost nothing for big chunks of funding.

What’s interesting — and this comes back to the 28-dog-year view since we last spoke — is how you really do need to be thinking that the seasons can change. In our market, that was a bit of a winter.

What it did, though, was give us an opportunity to think quite differently and retool a whole bunch of aspects of what we did. We broadened out the product set. Mike was referencing the big partnerships we’ve got in place. We’ve evolved our business system to something where, frankly, the markets are as competitive as they’ve ever been and we’re growing at rates we’ve never seen before.

That’s the resilient story. People show those pictures of the sawtooth you’re going to be on as a startup founder, and we’ve definitely experienced that journey. But equally there’s that need to constantly look back at your business model and ask some foundational questions — and frankly that leads to opportunities. We need to think differently about what we’re delivering to consumers and how we’re funding that. So it was a challenging time, but some of it we’re benefiting from enormously now, because of the great work teams did during those periods.

Dexter Cousins
That casts back to the GFC. I distinctly remember the big four banks really pushing hard on deposits, because of the challenges they had funding their lending books. What experiences did you get working within a big four bank that gave you some reassurance to get through that period? It was pretty unexpected, and for people who haven’t experienced it before it would probably look like game over — like there’s no way out.

Michael Starkey
There are probably two things. One is that things are cyclical. We’ve seen a few cycles already just in the short time Athena’s been around. At the moment capital markets are fantastic — we’re about to do a huge term deal, there’ll be lots of demand, and our funding position is as strong as it’s ever been. But we went through that period Nathan described where our funding costs versus the banks really widened. So things are cyclical, and you do have to play a medium to long-term game, and you need funding partners willing to back you through that journey knowing it’s cyclical.

The other thing is, I’m not sure working in the big four banks is massively good preparation for what we’re trying to do — in the sense that when you’re inside those organisations you don’t realise just how powerful the implicit subsidies are.

In the case Nathan talked about, there was an explicit subsidy. Literally billions of dollars of free money, not even indexed to the cash rate. That would have been billions to the bottom line, and they just flipped that into mortgage competition. But even the implicit subsidies — the fact that AA-rated organisations are able to raise money more cheaply than we can sell AAA-rated paper. That’s a result of the implicit government guarantee of the big banks.

When you’re in those organisations, I’m not sure you’re as aware of how much an extension of the government they are through various parts of the cycle. I think we were a little bit shocked, being outside the system, at how when a crisis comes like Covid, all of the government subsidies get channelled through the banking sector in Australia in a way they don’t in other markets overseas. It’s an opportunity for the regulator to step back and ask some questions about the impact on competition when they distort the market to that extent.

Nathan Walsh
I might come back to the question a different way, which is what’s the value of that on the resume.

Every entrepreneur has their own journey. I was quite late in working out just how awesome it is to be in this mode, and if I were giving advice to someone in their twenties I wouldn’t say go and work in a big bank for a decade like I did. I’d say go and get started.

But every background will have its own strengths and weaknesses, and you’ve got to play to your strengths. The strength that comes from a large organisation is that you do learn excellence in certain functions. Those big organisations have very smart people working with very good intent and working hard. But because of the complexity of the business system they’re in, it’s often like the efforts of the collective 30,000 people aren’t quite what you’d want them to be.

Our insight coming out of that is that many of the people on the finance part of fintech come from those organisations, and their experience is incredibly valuable. But we’ve got to say: how do we get the business system not to have their complexity? How do we get one plus one plus one to equal a lot more than the 0.3 a large organisation manages? A lot of that isn’t just excellence in each function, it’s how things work together. How do you get to the point where product and sales and risk and finance all mesh together incredibly well? Because what a customer ultimately wants is the sum of all of that coming together.

So my biggest learning from working in a big bank is not to be afraid of competing with big banks. But it’s about being quite specific about where simplicity and focus and agility give you advantage, versus the spaces where — for the reasons Michael was referencing — there are big advantages in a market like Australia, where there are oligopolies in way too many industries and big players have scale and implicit regulatory support.

That’s the balancing act you get from those backgrounds. But if I got a do-over, I’d probably take the ladder and jump straight into getting started on the entrepreneurial path.

Dexter Cousins
We talked pre-show about productivity, and some pretty sobering numbers coming out of Europe and Australia about where we rank globally. Two of the things we talked about were oligopolies and competition, and then the challenges facing startup companies here in Australia — that there just isn’t the support to get them through the tough periods where they can then become the global player. We’ve seen some incredible stories, yourselves included, Zip — almost Rocky-style storylines of resilience, getting hit and knocked down and getting back up on the nine count. It’s been incredible to watch the absolute grit of people in the industry here in Oz.

As you mentioned, Michael, there are seasons, and you’ve come out of the winter into spring. There was a big announcement last year about some investment. Do you want to tell our listeners about that?

Michael Starkey
REA — this made the newspapers back in October when we closed the deal. They bought 20% of the business, and involved in that transaction was a bunch of primary investment into the business as well.

That came after a relatively long-standing partnership we already had in place, a very successful partnership, because together we were writing a lot of loans with REA through the Mortgage Choice broker network.

We’d been in conversation with REA for a long time. We love the capabilities that organisation has — the tens of millions of people who go to their website every month, involved in the whole property ownership journey, and the fact that they’re interested in financial services. So we’d long wanted to partner with them. We’d pitched a few times and been in conversation for a number of years.

We did it in parts. We started with an arrangement where we were jointly building products together and selling them through their network. When that worked really well, they decided they wanted to take an interest and get closer to us.

They’ve been an exceptionally good partner for us, and I think we’ve been a great partner for them as well, because we bring a capability that takes a lot to build — a mortgage origination and servicing platform and treasury capability. The benefit REA get is being able to access that. The benefit we get is being close to a business with millions of customers and thousands of brokers.

Dexter Cousins
Were you ever on the other side of a partnership like that when you worked in a big four bank?

Michael Starkey
Peripherally. At some stage we were partnered with NAB — that’s common knowledge — and other organisations at various times. But back to what Nathan was saying, it is very difficult for an organisation the size of NAB to align itself properly around a partnership like that, just because of the number of people who need to be invested and bought into it.

I don’t want to speak on behalf of REA, but I think the appeal of dealing with someone like Athena was that they were in the room with Nathan and me. The decision makers were right across the table. You’re not going away and trying to negotiate with ten other conflicting stakeholders in your business. That probably makes it easier for a business our size to put in place a relatively involved partnership and get it done at speed.

Nathan Walsh
Coming back to your point about oligopolies, it’s a fascinating one for a startup to think about: when does a partnership make sense, and how do you unlock that value? Where it goes well, you can combine the innovation, the agility, the technical capabilities, with real scale. But clearly there are lots of stories where those things don’t work.

What’s been so extraordinary is that it really does take an organisation, but it’s also an individual piece — the individuals working together. We had the benefit of some really exceptional executives sponsoring and delivering on the REA and Mortgage Choice side, and we assembled our very best team members focused on this as well.

Cultural alignment matters. Actually having that same belief that we can go and do things very differently and deliver for consumers. Something that looks good on a PowerPoint slide — to make that real, there’s an awful lot of thinking and understanding and commitment and having the right joint motivations. The payoff is exceptional.

This has ended up being a really important evolution in our own business story. In their case, a thousand brokers, absolute experts in the market, with real insights coming through, and we’ve gone through a process of being able to co-design with them — thinking about them as an exceptional group of people, so not a channel, a real partnership. And then equally there are opportunities to scale on the digital ecosystem as well.

It’s one of those things which for a founder is such an intriguing idea, but needs some real investigation and thinking about what it’s going to take to make it a success — given there can also be real frustration. Some of the war stories you hear: tried some great ideas, but it just never quite lands.

Dexter Cousins
You talked about cultural match, and you rightly point out it’s not words on the wall. One of the greatest litmus tests of whether there’s cultural alignment is the negotiation phase, because then you really see whether this is a partnership or whether you’re just getting squeezed.

Nathan Walsh
I agree with that. It comes down to there being real implicit information in whether the easy things are easy, and then whether the hard things can be worked through constructively. If you get to the point where what should be easy ends up being hard, there’s possibly a signal in that.

That’s again where we’ve been really lucky and very blessed, having partners who really are seeing some of the core things that were most important to us. We’re all about fiercely fair value, and those are things that were valued and embraced by our partner. And equally the time that the brokers have been willing to give to say: this is what will make it a better solution, here are the gaps I have to serve my customers better.

Those real opportunities to come with some understanding have been quite foundational as we’ve gone on our own product journey and roadmap. So I’m with you completely. It’s not about what the coffee mug says, it’s what people do. And then how do you get the learnings early and think about what’s going to set things up for success.

Michael Starkey
We’ve had a great set of partners across our business. It’s not just REA — that’s obviously a really important one — and other distribution partnerships like Loan Market Group, absolutely fantastic. But equally on our funding side we’ve got exceptional partners. We’ve written $9 billion, and we’ve had billions of dollars of funding come in the door from dozens of different funders. I’d say we’ve had exceptional partnerships there as well. And then on the technology side there are different components we work with. You’re never going to be the one delivering every single step of the value chain, so you do need to work with people.

Dexter Cousins
Do you have a framework for deciding whether a partner is going to be the right fit?

Nathan Walsh
In some ways the simplest one is being clear on what’s important to you, and then being consistent and executing on your own commitments. Many of these are not fast food. They’re things where the kettle’s on the back of the stove boiling away, and people are seeing: okay, I like the story, but let’s see the delivery.

We ultimately have opportunities — it’s a $2.4 trillion market — on both distribution and funding, and we want to balance both sides of that. You don’t want to be strong on one end and not the other. So the idea isn’t how do we go and do a hundred small things with different partners, but how do we pick some really exceptional people where there’s real alignment in what we can deliver and what they bring.

And when you’re at a point where there are some fundamental economic truths and fundamental consumer value that’s going to get unlocked, then it becomes a really interesting execution problem.

Michael Starkey
Personal relationships have played a big role in our story as well, to be honest. We talked before about whether we could have done this ten years earlier. Personally, I don’t think I could have — the importance of the relationships from working at NAB. It was fantastic in terms of the number of people we met from every corner of the industry, and a lot of the people you know from your past life end up, in some capacity, on the distribution side or the funding side or the technology side. That’s been critical in our journey. It’s often less about a hard framework and more about the trust you have in a relationship you had from a past life. That’s a huge part of our story.

Dexter Cousins
This isn’t scripted, but that’s exactly what I wanted to talk about next — the journey you’ve both been on together, and what you’ve learned about each other over these last eight years. What are the changes you’ve noticed in each other? Michael, if you go first.

Michael Starkey
That’s a good question. We worked in quite separate parts of the business. We happened to be on the same leadership team, so we knew each other in that respect, but we didn’t observe each other that closely before this business.

Nathan has huge integrity, and a brilliance, which you get exposed to much more when you’re working closely together than when you’re a colleague in a different division.

How has he changed? I think you’re pretty much the same bloke you were when we started seven or eight years ago. I think we’ve both grown into the role, because there’s no safety net when you’re doing what we’re doing, whereas at the bank there are plenty of safety nets.

When you’ve been in the trenches — if it’s all beer and skittles, you probably don’t really test one another’s mettle. The way Nathan led the business through what was a pretty challenging year and a half, when the earth was moving beneath our feet. Now we’re going great again, and it’s easier to be a good leader when everything’s great. So it’s been a really great journey for both of us.

Nathan Walsh
Mike’s been very generous there. For me, I did feel I knew Michael really well before we started, in the sense that when we sat down and had that initial conversation and he said, yeah, I think this is interesting — that was a massive deal for me. I would not have jumped in and done this without him. One of the smartest people I know, someone with integrity, someone who’s calm under pressure, someone who, if they say they want to do something, they’re going to do it.

The idea of having a co-founder was a big part of the journey. Clearly there are people who make a big success of being a solo founder, but I think that takes some doing. For me there’s just so much value in having someone I incredibly trust in that journey.

What I’ve been absolutely fascinated by is that we do see the world quite differently on certain things, but it’s fascinating, when you get a lot of decisions you need to work through together as equal co-founders, just how often we actually make the same call. Very quickly. A team member can ask a question of Mike or myself, and I’m very confident it’ll be a quick answer, and I wouldn’t be second-guessing the calls he’s making, and vice versa.

And then the ones where that’s not the case — they are really the hard problems. We need some real thinking through. Which comes back to the point that the biggest thing in a startup is don’t make the easy things hard, then be very thoughtful about the hard things, and know the difference. You do need to move at real speed.

Having Mike as a co-founder has been an absolute blessing, and I’d call out a number of the team we’ve been working with from before day one who’ve equally been exceptionally great partners. Getting a team you trust, getting a team that you really feel can go and take on the world together — that’s true on a good day and a bad day. There’s so much resilience that comes from the right group of people around you. We’ve been really fortunate with the set of Athenians we’ve had, so many of whom are six, seven, some approaching eight years with us.

Dexter Cousins
What’s been the secret to attracting great talent?

Nathan Walsh
There are a few things we’d call out, but we’d also say there’s definitely some good fortune in there.

We started with people we really respected, and we went out quite specifically before this started and said, we’d love to work with you. There were a couple of phone calls of, come and have a lot more fun than the job you’re in at the moment. That brought in some truly exceptional people. Even when we were six people, we were gathering the team we wanted to have when this was a ten-billion-dollar business, not where we started.

The second one is that there’s real value in making some explicit choices about the culture and behaviours and what company you want to be. That’s a little less important when there are just six of you, because that’s what you’re doing day to day. But it’s surprising how quickly you get to the point where you do need to make those calls, because you’ll be thirty people before you know it and all of a sudden culture is something emerging.

We came with a fairly simple model: what do we want to be for customers, and then how do we be like that for each other? If you want a reputation for being straight up with customers, you need to be straight up with each other. If you want to be at the point where you’re disrupting things out there, you need to be brave with each other. So the marketing proposition, the product proposition and the employee proposition — it’s so much easier if those things are all alike.

To be clear, that wasn’t Mike and me sitting down with a Persian cat in our lap planning out the world. It was very much an open conversation with team members, stuff we organically had discussions about — what are the real choices we want to make. So they’re not motherhood-and-apple-pie statements, but things people feel free to say: hey, let’s be braver about this.

And then the last one is trying to get accountability and knowledge lined up well. People come because they’re making an impact on the world that’s quite different. These are people who could go and get great jobs anywhere. They’re here because they choose to be. So there’s a lot about what the purpose is, how you tell that story, and actually allowing people to go and do some extraordinary things.

Dexter Cousins
Two things you mentioned there. The first is that thing about getting to thirty people and then all of a sudden. The data I’ve collected over the last nine years focused on fintech here in Oz shows that businesses that hired an HR person in the first thirty people have 50% less turnover of staff as they scale. I used to put that down to the fact there was an HR person there, but there have been businesses that bucked that trend where they didn’t — and what they did was focus on the culture piece and get really clear about their values. They didn’t just copy what Atlassian had done. It was a clear set of principles of: these are the behaviours we don’t tolerate. If you see them in me or you see them in anybody, it’s called out and addressed straight away.

The second thing is the growing pains that happen in the business. They’re now happening to businesses that were remote-first and were flying. They’re hitting that fifty-person mark and starting to have exactly the same problems in staff turnover and scaling that happened when you had everybody in the office. So there’s a fundamental bedrock that needs to be in place regardless of your operating model. If you don’t have a clear set of values everybody has to adhere to and knows exactly what they are, you’re going to be in trouble.

Michael Starkey
And there’s a certain amount of turnover that’s inevitable, and actually desirable. We’ve got 140 people. Our leadership team has been extremely stable. As Nathan said, we’ve got an exceptional head of people who does much more than just HR, and people who joined before we even incorporated the business. But because they’re so good and stable, and there are only 140 of us, inevitably as people grow they are going to hit that point.

Dexter Cousins
This is the challenge. This isn’t a corporate where you’ve got five-year careers. Your business has been maybe five different businesses in these last seven or eight years, requiring different people with different skills to get you to the next stage.

Nathan Walsh
And if it means your journey is twelve months but you make an impact, that’s actually a great thing.

This is one of the topics where my own growth has been the biggest — Mike, you might be sitting in the same place. We came from a big corporate where we had really nice, smart people in HR, but not empowered to do very much. We came away and started this business almost with the point of view that you don’t need one. We were very much in the category of: we’re going to work it through, we’re going to own the people problem as managers.

There was one of our investors at one stage who said, you know what, I think the problem is you’ve probably never seen a really good one. They made an introduction to someone, purely to go and understand that particular executive’s perspective of the world and what she does. We came away thinking, okay — we’d seen the lawnmower version, and that’s the Ferrari version of what it can look like.

Interestingly enough, we then got an exceptional head of people, but not from a traditional HR background. Just with exceptional skills around change and people and community. She’s built a very tight team to do these pieces. Absolutely fundamental.

Dexter Cousins
I’m going to transport you back to the last time we did this, four years ago. If you were going to talk to those versions of yourselves, what would be the words of guidance you’d give?

Nathan Walsh
I’d probably arrive with a very good quality bottle of scotch for a start, because what I’m about to share with you is going to be odd.

Early 2021, if that’s when we spoke — at that stage we were really motoring along pretty fast and feeling pretty pleased, because there had been clearly some major moments. We were at the height. So we were saying, we survived Covid, here’s what we’ve done. There were some moments in early 2020 that were pretty hairy. We were probably not really appreciating that that was only the first round.

Dexter Cousins
The warm-up.

Nathan Walsh
Not so much Covid, but actually the implications of unwinding all the rest — that was when the much bigger components came through. I’m not sure we’d do much other than batten down the hatches that little bit faster. We got some great advice from investors and we did move fairly quickly to get much more focus as a business, and I’m really pleased about that.

So it’s probably just realising the world was going to change, and getting ready for that. But probably just saying: this too shall pass. That’s literally all we would have needed to say, and then hand over a nice Talisker for the right moment. I don’t know, Michael?

Michael Starkey
I was going to say exactly that. We probably didn’t appreciate the size, the seismic impact — not so much of Covid itself, people didn’t stop borrowing through Covid, but the shift in the market, and how deep and long that impact was. We’re still dealing with the fallout in some ways. We’ve reoriented the business to be very strong now and growing really strongly, and it’s fantastic in the moment. But that original model would still be sputtering along if we hadn’t done all of the work over the last few years.

So yes, understanding the seismic nature of that shift in the market would be the main thing. But again, what could you really have done differently? I think we did move pretty quickly to face into the reality.

Nathan Walsh
It is interesting over that time period. We clearly went through a process, and we talked to some amazing founders in the ecosystem going through every scenario. What’s common is that idea of really zero-basing the business. Really start from the ground up and ask: what’s the resilience you need in terms of having a compelling proposition, not just for today but thinking two or three chess moves ahead? What’s the range of uncertainty? What could happen, and how do we make sure we’re set up for that? And then what are the building blocks of the business system you really focus your investment on — the things that are most important?

There were a lot of things that were actually really great ideas, and we started trying to do them all in parallel, as opposed to saying no, let’s really focus on our superpowers. Get that done, then this, then this. The productivity of that focused business system is so much greater.

Dexter Cousins
I hope we don’t leave it this long, but if we were doing another podcast four years from now, what would you love to see happen in the next four years, and where would you like to be?

Michael Starkey
I actually think we’ve got the building blocks in place now to be on a really strong trajectory. Even if you look at the kinds of propositions we’ve got, or will have in the next year, and the distribution arrangements, I think we’ve got the building blocks to really have a super scale business.

We will be profitable this year, which is a couple of years after we thought we would be, just with the disruption, but it’s still a great milestone. And in four years’ time we’ll have a sizeable business, where we should be pushing the size of one of the regionals in terms of book size. That’s where we’d want to be. And we’ll still have a super tight culture and a super tight business, but at significant scale. We’re not satisfied with playing in a very small part of the market. We want to be a big player.

Dexter Cousins
And for you, Nathan?

Nathan Walsh
I agree with Mike. In some ways this is now an execution story. We’ve got an exceptional team, a really clear view of what we want to do, and this is now about how we go and change home loans at real scale. The partners we’ve got represent a very significant share of the entire mortgage market opportunity, and on the funding side similarly we’ve got great support.

In some ways it’s nice — you think about building a house, and there’s a lot of time that isn’t always visible, getting the foundations and the slab and all of those components, and then things can really move from there.

Dexter Cousins
If you think about it, these eight years you’ve been laying the foundations.

Nathan Walsh
Where we’ve got to over the last two or three years of broadening out, adding distribution partners, adding product spread — we’re talking about some really foundational pieces. We’re moving from simple loans at a price to some really sophisticated things. Splits, offset accounts, self-employed, lite doc, companies, trusts. We’re starting to talk about quite a broad part of the market where we really believe we can deliver exceptional value, and some of the best brokers in the country are recommending us as one of the really big parts of their menu.

From here there are lots of opportunities to say where we go next, and I think we’ve got a clear line of sight on product, distribution and funding. We’re only a couple of months away from passing through our $10 billion of loan settlements. That’s a pretty big milestone, and we’re looking to be well through double that.

What’s exciting is that you look at other markets around the world and non-banks are over half the US market, roughly a third in other parts. In Australia it’s only about 5%. So there’s a real opportunity to give Aussie borrowers and Aussie brokers more choice, to have technology that can deliver better solutions, and to bring those insights to say: how do we make a day in the life of someone owning a home who needs finance that much better?

That’s where we’re really excited. These foundations, where we’ve established ourselves as a funder through some market events — the loans we write perform exceptionally, therefore we’re rewarded by great funding costs, and therefore we’re able to provide a great deal.

Dexter Cousins
It’s been really generous of you to share all these insights and the journey you’ve been on. Before we wrap up, we do have some amazing talent listening to this podcast. If anybody’s interested in careers at Athena, where’s the best place for them to go?

Michael Starkey
Email either of us, or get hold of us on LinkedIn and we’ll get your details through.

Dexter Cousins
I’d hope they’ve got the critical thinking skills to find the right contact details.

As always, folks, thanks for joining me. If you’re new to the show, make sure you follow us wherever you listen to podcasts, or on Fintech Chatter TV on YouTube. If you’re coming back, thanks so much for your support. It really means a lot to me, and it really helps me in getting great guests like Michael and Nathan onto the show. Until the next episode, keep well.