Episode 543: Killing It: The Story Behind the Synapse Story

In This Episode It's another engaging episode from Breaking Banks' new series, Killing It. Host Jason Henrichs shares a candid conversation with Sankaet Pathak, Synapse CEO and Co-Founder, about Synapse's just completed, very public bankruptcy and acquisition that came with highly opinionated social media commentary. Listen as Sankaet shares his personal story as well as a behind the scenes narrative of Synapse's journey, the challenges faced, and what ultimately brought him to the decision to kill Synapse as a stand-alone entity. Sequencing is important. Read the entire transcript here. Podcast Content: Chapter 1: 00:00 - Introduction and Synapse’s Chapter 11 Journey The hosts introduce the episode, diving into Synapse’s public bankruptcy and acquisition by TabaPay. Sankat Pathak, Synapse’s founder and CEO, joins to share insights on the process and misconceptions surrounding the events. Chapter 2: 05:15 - The Misunderstood Narrative Pathak clarifies the misconceptions about Synapse's journey, emphasizing the deliberate decision for Chapter 11 to enable a strategic asset acquisition. Chapter 3: 12:30 - Missed Opportunities and Strategic Shifts Discussion on the $100 million term sheet veto and the strategic move to acquire a bank charter, highlighting the internal disagreements that sealed Synapse’s fate. Chapter 4: 20:45 - Lessons in Building and Scaling Pathak reflects on Synapse's growth journey, the challenges of creating a middleware-focused company, and lessons learned about culture, market selection, and business scaling. Chapter 5: 28:40 - Banking as a Service: Challenges and Future Directions In-depth exploration of the complexities of banking-as-a-service models, the role of FBO accounts, and predictions for the evolution of the BaaS ecosystem in the next five years. Chapter 6: 38:10 - Regulation, Culture, and Market Dynamics Discussion on the role of regulation in shaping financial services, differences between tech and bank cultures, and how these elements influence business success. Chapter 7: 47:20 - The Future of Banking and Fintech Models Speculation on the future interplay between banks and fintechs, including trends toward fintechs acquiring bank charters and banks adapting to technological DNA. Chapter 8: 55:00 - Closing Reflections and What’s Next for Pathak Pathak shares his personal takeaways, his future plans, and how the lessons from Synapse’s journey will shape his next endeavors. Related Content: Episode 474: Ringing Out 2022: What did we get right? What did we miss? Tech’s Role in the Shut In Episode 55: Jim Marous Episode 547: The BaaS Bombs Drop + Synapse Bankruptcy Episode 140: Let's Talk Culture https://youtu.be/tkIwAiaI2dA Full Show Transcription [00:00:00] Welcome to Breaking Banks. The number one. Killing it. Killing it. There's often a story behind this story. The explosion of social media, private Slack and WhatsApp groups, newsletters, make it difficult not only to decipher fact, but even put together a cohesive story. Synapse is just completing a very public bankruptcy and acquisition with highly opinionated social media commentary. Sankat Pathak, Synapse's founder and CEO, joins me on this episode to share his side of the story and the journey that brought him to the decision to kill Synapse as a standalone entity. Well, thanks for agreeing to have a difficult if not painful conversation about the last chapters of Synapse's journey as a standalone entity. [00:01:00] Building in public is hard and, you know, finding a soft landing is admirable and difficult enough without public commentary. I guess I should be thankful Twitter didn't have the reach and vitriol in 2014 when we like tried to crash land, you know, Perk Street, same maneuver. I sometimes tell people it's like, we landed the plane. People were definitely on fire. But no one died, right? Um, I'm going to start with,