This article is part of Fintech Leaders, a newsletter with almost 65,000 builders, entrepreneurs, investors, regulators, and students of financial services. I invite you to share and sign up! Also, if you enjoy this conversation, please consider leaving a review on Apple Podcasts, Spotify, or wherever you get your shows so more people can learn from it.
I sat down with Eric Poirier, CEO of Addepar, a global tech and data company with over $5 trillion in client assets managed on the platform and clients in 45+ countries. Founded in 2009 by Joe Lonsdale and Jason Mirra, Addepar has raised half a billion dollars from a long list of great investors.
Eric has been CEO of Addepar since 2013 and prior to that he was amongst the first 20 employees at Palantir.
In this episode, we discuss:
Lessons for entrepreneurs on the importance of making bold technology bets early on, despite its risks
“If you don't make those bold bets, maybe it feels like you're mitigating some risks short term… but it basically means you're on your way to obsolescence quite quickly.”
Something that stands out in this conversation is the importance of embracing risk through increasingly seeking larger and larger strategic partnerships and clients. Back in 2017, Addepar was confronted with the decision to onboard a client that was 20 times larger than Addepar's entire client base at the time. Moving forward was not just a gamble; it was a calculated risk underpinned by mutual diligence and a shared vision for the future. But they would not have been able to get the job done without the right partners who were not only willing to take a leap of faith but also possessed the patience and commitment to see it through. For entrepreneurs, this means looking beyond the immediate risks and focusing on the potential transformative impact such partnerships can have on their business.
The onboarding with this particular client was not without its challenges, but staying transparent on the facts and having the support of the client was key to navigating this step. Eric Poirier emphasizes the importance of maintaining open lines of communication, setting realistic expectations, and committing to work through difficulties together. This level of alignment and dedication is crucial (and not always common), especially when venturing into uncharted territory. Fostering a culture of transparency, both within their organization and with their partners, was certainly a decisive factor.
How AI and machine learning are helping solve problems in the investment management world
One of the most significant contributions of AI and ML in investment management is the ability to automate tasks that are traditionally manual and operational. A palpable example is the processing of capital account statements and other documents related to investments in alternative assets like private equity or venture funds. These documents, often delivered in unstructured formats such as PDFs, represent a substantial operational burden. The use of LLMs and ML has allowed Addepar to automate the extraction and processing of this data, significantly reducing the manual effort involved.
That said, most integrations of this technology start (and usually continue to be) with some degree of human-in-the-loop. In most cases, human oversight for quality control is still essential, especially in cases where the AI's confidence level falls below a certain threshold. This synergy between human expertise and AI's efficiency is pivotal in managing the complex and delicate nature of investment data.
Transitioning from software engineer to CEO
“One of the inherent competencies of software engineering is you take big complex problems, and you break them down into pieces. And then you order and sequence those pieces, you solve them one by one... I find that building businesses is remarkably similar.”
Poirier's background in software engineering taught him the art of deconstructing complex problems into manageable pieces, a skill that has direct applications in his role as CEO. The approach of analyzing, sequencing, and solving challenges piece by piece is as applicable to building companies as it is to software development. This methodology allows for tackling the many aspects of running a company, from product development to market expansion, with precision and effectiveness. For Poirier, there’s no doubt that engineering principles can guide strategic business decisions.
Addepar's go-to-market strategy, lessons learned from working with Peter Thiel and Joe Lonsdale… and a lot more!
Working with Peter Thiel: Eric first crossed paths with Peter Thiel back when Eric was in college at Columbia University. Although they haven’t worked together in over a decade, Eric admires Peter’s independent thinking and his profound depth of knowledge. Thiel's approach, characterized by intellectual curiosity and a deep understanding of complex domains, has allowed him to challenge conventional wisdom and remain deeply innovative across many fields.
Working with Joe Lonsdale: Eric Poirier has worked very closely with Joe since his early days at Palantir. It was also Joe Londsdale the one who convinced him to join Addepar in 2013. Lonsdale's ability to spot and nurture driven, passionate individuals has been fundamental to Addepar's culture of excellence. He understands the crucial importance of placing the right people in roles where they can significantly contribute. Additionally, Joe’s effectiveness as a connector, creating ecosystems where diverse talents and ideas converge, is a very powerful tool for company building.
Want more podcast episodes? Join me and follow Fintech Leaders today on Apple, Spotify, or your favorite podcast app for weekly conversations with today’s global leaders that will dominate the 21st century in fintech, business, and beyond.
Eric Poirier, CEO of Addepar – Powering $5 Trillion of Assets, Modernizing Investment Management, From Engineer to CEO & The Power of Bold Bets