“Whether it’s climate change, inequity or racial justice… none of these are issues that anyone will independently solve. We’re going to have to figure out how companies and governments work together in new structures in order to make some headway.”
Vanessa Colella is Citi Group’s chief innovation officer, accelerating and discovering new sources of value by championing innovation so Citi can compete more effectively in a world of technological, behavioral and societal change.
Within Citi Group, Citi Ventures is dedicated to promoting innovation and entrepreneurialism. This involves venture and equity investing in entrepreneurs and start-ups around the world designed address some of the most pressing challenges. D10X acts as an internal Citi Group incubator to promote entrepreneurialism and innovation from its over 200 thousand employees while adhering to regulations and protecting clients from any risks. “This is built around the idea that entrepreneurs want to change the world and we’ve got over 200k employees globally at Citi and they want be a part of force for positive change also.”
Citi Ventures invests in solutions around some of the biggest problems like income inequality, racial justice and climate change. While the economy is set to rebound in many areas, investment and innovation related to vulnerable populations most affected by the pandemic should get the most focus. “We’re going to have to be vigilante about the things that don’t change.”
LISTEN AND SUBSCRIBE
SPEAKER
Vanessa Colella
Chief Innovation Officer
Citi; Citi Ventures
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darsie: (00:07)
Hello everyone. And welcome back to salt talks. My name is John Darcie. I'm the managing director of salt, which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy. Salt talks are a digital interview series with leading investors, creators, and thinkers. And our goal on these salt talks is the same as our goal at our salt conference series, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And our guest today has a long history of investing in a lot of these big ideas, a lot of very profitable investments in these big ideas as well. Uh, her name is Vanessa Colella and she comes to us from Citi group. Uh, Vanessa is city's chief innovation officer and leads the city ventures and city productivity teams.
John Darsie : (00:57)
Uh, Vanessa's goal is to accelerate and discover new sources of value by championing innovation. So the city can compete more effectively in a world of technological behavioral and societal change. The city ventures team drives innovation by exploring incubating and investing in new ideas and partnering with category, defining startups to help people, businesses and communities thrive. Uh, before joining Citi as chief innovation officer, she led their venture investing and D 10 X group, uh, at Citi ventures and ran marketing for cities north American consumer bank. As she joined Citibank in 2010 from us venture partners where she was an entrepreneur in residence, uh, prior Vanessa was the head of north America marketing and SVP of insights at Yahoo, uh, where she was responsible for developing and executing their consumer data strategy. She was previously a partner at McKinsey and company as well. Uh, she received her master's degree from Columbia university here in New York and MIT as well as a PhD from MIT media lab.
John Darsie : (01:58)
And as Vanessa may or may not know, Citi group, uh, also has ties here into SkyBridge, uh, Anthony, who is hosting today's talk, uh, was able to acquire city group's alternative investments unit after the global financial crisis in 2010. So we have city groupers among us here at SkyBridge. So it's great to have you on, and obviously we're great friends with the team at city group. As I mentioned, the host for today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge capital, which is a global alternative investment firm. Anthony is also the chairman of salts and with no further ado, I'm going to turn it over to Anthony for the interview. He says that now, Vanessa, that I'm the host of the interview, but he's going to try to outshine me for the next 45 minutes, just so you know how this works okay.
Vanessa Colella: (02:42)
To keep score, not really,
Anthony Scaramucci: (02:44)
You know, you're, you're a fellow boomer like me. Okay. We're competing against these millennials. It's two on one. I'm pretty confident that you and I can take him, but by the end of the show, you won't be needing to keep score. Let's just, let's leave it at that. He'll be running up the score on me. You see that it's, it's a protal, it's brutal Vanessa, but first of all, congratulations on everything you've done. Uh, and Darcy just for the record, we've established who the smartest person is on this salt talk. Okay. We can take your IQ and my IQ multiply by four and we're not reaching Vanessa. So Vanessa, I want I'm, I'm more interested in your family of origin, if you don't mind and your career, or where, where did you get all this drive and ambition? And when did you start to think that your career was going to unfold with this trajectory?
Vanessa Colella: (03:34)
Um, so I grew up, uh, in a very small town in Wisconsin and, um, I guess like many people in the Midwest was raised to believe that you work hard and then learned over the course of my life. It's work hard. And, and I feel like I've been very fortunate and very lucky. So I, um, as some people know, I started my career as part of the charter Corps of teach for America, uh, and have done as, as was mentioned earlier by John, I've been able to do a bunch of other things since then, but, uh, but I think, you know, have been really fortunate to be involved in lots of major scale transformation, which is what I enjoy.
Anthony Scaramucci: (04:15)
And so let's talk about Citi ventures for a second. Um, what was the small town by the way? [inaudible] awesome. Okay. So
Vanessa Colella: (04:23)
You're old enough Anthony to remember the advertisements on 60 minutes, uh, how to spell Wausau. If you can't find it, I'll find a clip for you.
Anthony Scaramucci: (04:32)
I am old enough and see John is smiling right now because that was a shot to my kneecaps. Okay. Referencing my age. That's fine. I can take it though. I'm a, you know, a little sensitive, but I'll be, I'll be able to get over. So you've eaten a lot of cheese curves though, in your life though. Yes, absolutely. Yeah. My first partner, when we left Goldman Sachs, his name was Andy Bozart. His father worked for Alice traumas, which was a farm equipment company up in Wisconsin and they lived in, in Greendale. So I've been in my share of Milwaukee brewer games, uh, and I own one share of the green bay Packers. See that that's as close as I can get to Wisconsin. And I've been, I've been eating cheese curves, which is sort of obvious. So let's go to city ventures for a second because you've done some phenomenal things in your career and you've done some phenomenal things at city ventures. So tell us a little bit about Citi ventures. Tell us what you're looking for. And then this is sort of that Simon cowl question about the X factor. You've been very successful in identifying that in companies. So tell us a little bit about city ventures and then tell us how you find that X factor.
Vanessa Colella: (05:43)
Sure. Thank you. So Citi ventures, we really do a couple of things. Um, each of which have come together to think about how do we accelerate innovation, accelerate growth, uh, both for the company and for our clients. Um, first of all, we do our venture venture capital or equity investing, um, almost all of it for the company. Um, and in that, as you just referenced, you know, we're looking for, so looking for entrepreneurs who are really trying to change the world, who are trying to think about what it is that could, could make the world better in the financial services sector, whether that's safety and soundness, whether that's, you know, fraud prevention and data or more customer facing types of technologies. Uh, and you know, as you might imagine, we, we end up working with a lot of those entrepreneurs at Citi where we're collaborating with them to bring their plans and services to market.
Vanessa Colella: (06:36)
Um, we also, as part of Citi ventures run an internal incubator called D 10 X, um, to the X-Factor point, this is built around the idea, yeah, entrepreneurs want to change the world. We've got over 200,000 employees globally at Citi and they want to be part of a force for positive change also. Uh, but of course we are a highly regulated bank, so we can't have everyone just coming in every day and experimenting. Um, we've had to create a setting whereby employees can bring their ideas forward and we can test out those ideas in a way that doesn't introduce any incremental risk to our clients. It's our company. Um, and lastly, we run a group called the studio, which is really mostly thinking about how would you redefine banking? What if you opened the aperture a little bit and thought more broadly about financial services?
Vanessa Colella: (07:27)
So I'll give you just two quick examples there. Then we can talk about the X factor. Um, two things we've done in studio. We started a group a couple of years ago called Cupid, which stands for city university partnerships and innovation and discovery, and really was all focused on how do we bring diversity into the financial services sector? And we focus on many different types of diversity, racial diversity, ethnic diversity, gender diversity, also different kinds of backgrounds, right? I don't have a banking background as you've heard. I never worked in a bank before I came to city. And what we find is that people who are passionate about computer science or data science or design, they don't necessarily know. I know that there are lots of different places that they could use those skills, for instance, financial services. So we bring a wide variety of people into the bank, um, with the idea that we can give them a window on what a career might look like.
Vanessa Colella: (08:23)
And we can talk about some of the other data-driven platforms that we've have you launched as well. And in terms of X-Factor yeah, I have an amazing group of investors on my team. Um, they, they come from investing and so, you know, a lot of, I think people think your venture capital is very sexy. So, so isn't it neat. It's, it's a lot of block and tackle work, right? It's building networks. It's, it's trying to make sure that you're finding entrepreneurs who, you know, maybe are being by other venture capitalists and expanding beyond. So the obvious places. Um, so it's a lot of, I mean, it used to be a lot of coffees. Now it's a lot of zoom chats, uh, and it's really being an expert in your field, having a thesis about where the world is going and then kind of rolling up your sleeves and proving that as you know, Anthony proven that it's not just about the money, right? The money is important, but also how can we help these entrepreneurs create jobs, grow their companies, um, have the impact that they want.
Anthony Scaramucci: (09:29)
Well, we, we totally agree on that, but you're, you're doing something that is cutting edge and unique. If you don't mind me saying it. So because you're, you're sitting in what you just described as a highly regulated company that has structure layers of bureaucracy to protect its employees, to protect its customers, and obviously do adhere to the governmental strictures on the company. And yet you're sitting at the forefront of identifying trends and cutting entrepreneurs that are literally at the cutting edge of different things. So how are you managing that Vanessa? Like how do you get to get that feel for where the next trend is or where things are going as it relates to FinTech and, and the future, uh, from a venture perspective?
Vanessa Colella: (10:14)
Yeah, it's a really important question. I think, you know, sometimes people assume, oh, you're an innovation. Like you must stay on top of everything. And what I would say to all of your listeners is no one can stay on top of everything, but it's, it's just a mental impossibility at this point. There's too much information. So we tried, I try and think about with the team, what themes do we think are going to be important? And the nice thing is because I have the privilege of running a number of different things as part of Citi ventures, I get signals about those themes from different places, right? It could be from startups or venture capitalists that we work with, but could also be from client work that we do with our banking clients who are facing the same kind of challenges that we're facing. And out of all that every year we, we try and distill a handful of themes.
Vanessa Colella: (11:07)
Um, things like, you know, purpose goes mainstream is one that we've been thinking about for a number of years, right? This idea that it used to be only a very small number of companies that embedded purpose into their business, right? You could buy Bombas socks or Toms shoes or shop at Patagonia. And you knew that those were brands that had a purpose that was interwoven into their very business. And then a lot of other brands thought about what they did and then what they did to do good as related, but somewhat separate things. And we've been watching for years now, this idea that purpose was going to get fully integrated into business. And where that comes from is, is trying to tease out. When do you start hearing signals that resonate around a theme from different areas in your life? Like when did your parents bring up something that you also heard about at work? When do you hear from, you know, another investor that your kids were also asking you about? Um, and we try and do that same thing within Citi ventures, which is where, when these singles come together from very different places, it's a pretty good indication that there's some accelerating irreversible trend to pay attention to,
Anthony Scaramucci: (12:25)
And, and certainly COVID has affected all of that. And you're, you're intersecting now this purpose driven movement with the trends of what's going on in the pandemic. So how has that changed for thought process if at all?
Vanessa Colella: (12:39)
So certainly one thing that's changed is in my job, I used to have to spend a lot of time convincing people that disruption was a real thing. Uh, I now have to spend zero minutes doing that. We've all lived through really three and a half different crises over the past year, right? From the pandemic to sort of massive economic dislocation, to crisis around racial equity, by the way, all of these things already existed just 2020 sort of rip the bandaid off and said, made it impossible for anyone to not see what was happening. How has it affected us? I think, you know, one, it's made me proud of the work that we've done at city, whether around racial equity, uh, or just around the work that we've done on, on wealth, inequity and income inequity. We we've been working on a platform for a couple years that we launched in April of last year called the worthy.
Vanessa Colella: (13:37)
That was all about how could we help people earn more money. So as an example, you hear all the time about up-skilling and re-skilling, but people are trying to up-skill right. And the U S we've gotten $1.6 trillion worth of unpaid student debt. We shouldn't need any more information than that, to know that people are trying to up-skill, but they haven't been able to connect what skills they need to the ability to put more money in their bank accounts. Uh, and so we said, well, we could use a lot of publicly available data to launch a platform that allows you to go on and say, Hey, my name's Vanessa, I have 30 years of experience. I'm a school teacher in San Francisco. What can I do to improve my skillset? What can I do to increase my paycheck? Well, it turns out if you're a school teacher here in San Francisco, the answer is learn Mandarin because in this location, dual language, Chinese education is really sought after.
Vanessa Colella: (14:39)
Uh, but I started my career as a school teacher in Brooklyn. And if I were still sitting there, the answer is Spanish. So when you think about sort of, how do we, how do we help address some of these massive, whether it's climate change or inequity or racial justice? You know, we think it's a combination of providing people with tools to make effective decisions, um, and then working differently, creating different kinds of partnerships, because none of these are issues that any one of us is going to independently solve. We're going to have to figure out how companies governments work together in new structures in order to make some headway
Anthony Scaramucci: (15:19)
That, um, it, it, it makes total sense, uh, at the same time that you're doing all that. And you're trying to figure out what is going to change again, as we start to reopen the economy and create some level of normalization. So, so what are your thoughts there, Vanessa, in terms of things have changed and we accept that there's been a massive acceleration of certain things. Um, but then some things will go back or maybe no things will go back. What, where do you think we will be six or 12 months from now in terms of trends? Assessment.
Vanessa Colella: (15:51)
Yeah. So I think, you know, as you, as you see all the stimulus, not just here in the U S um, but in many countries around the world and particularly here, um, I think there's, there's pretty good consensus that, you know, we, there will be a lot of sectors that do come back. Uh, I tend to be more focused because I think I'm interested in pointing innovation at, at the places of greatest need. Um, I think in my group, we tend to be focused on, okay, it's great if, if some sectors come roaring back, but what about all those small businesses that weren't able to make it? What about all those people who, you know, had, you know, eviction, moratoriums, but, uh, but nonetheless our are well behind in, in rent and trying to think about how to get back on their feet. So I think, you know, we, we've had a miraculous year from a, um, a medical perspective in terms of the vaccines, obviously devastating you're in terms of the, the, the health effects and, and mortality around the world.
Vanessa Colella: (16:57)
But by the vaccines are nothing like, I think we ever would have expected if you and I had been having this conversation a year ago. Um, and, and so I think we will see improvement and I just think we're, we're actually going to have to remain vigilant around the things that don't change, uh, as opposed to getting kind of back on the wagon of, you know, now there's 5g, now there's six G now, you know, that those things will all happen, but we've got some real stars from what we've all been through around the world that I think we're going to have to retain focus on.
Anthony Scaramucci: (17:33)
So, eh, w w we're in agreement that companies are moving for more social purpose for more positive change. Um, could you share some examples of what Citibank is doing in that space in terms of what you are thinking about?
Vanessa Colella: (17:50)
Uh, sure. Just a couple of quick, but I think important ones. I mean, we've talked a little bit about income inequities city was the first, um, first company, first major bank that came out with an unadjusted gender and racial pay gap numbers, right. With the idea that if we're not willing to talk about the fact that there are discrepancies between pay for four different people, then it's going to be really hard to ever solve that problem. And so, you know, I think that's an important one. We obviously launched a number of initiatives totally over a billion dollars in 2020 to address racial equity and racial equality. Right. How do we think about me? One that my team is involved in is how do we think about using our impact fund at city to support black entrepreneurs, who we all understand get a minuscule fraction of venture capital funding, um, all the way to, you know, leveraging some of our municipal relationships around the world to help cities rebuild. Right. We talked earlier about how small businesses have really been impacted over the past year. So how do we help those cities attract investment? How do we get those businesses are back up and running? Uh, so a wide variety of activities, but again, I think importantly tied to the, our business, um, being separate of that, that was something really important to us. Uh, particularly when we launched the racial equity work was how do we do that in a way that is that's fully tied into the core of cities business?
Anthony Scaramucci: (19:31)
I think it's very well said, but you also have the dilemma of balancing risk, risk management, the regulatory scrutiny that you guys are under with all of the concepts of innovation. So how do you make that balance work fast?
Vanessa Colella: (19:46)
Yeah, I mean, I, I sometimes give the analogy I said earlier, you know, we can't have 200,000 people coming to work at city every day and decided that they want to experiment. It's a little bit like going into surgery and lying on the Cod with that little tiny blanket on top of you and having your surgeon walk by and say, Anthony, I thought this afternoon, I try something new. And you think that was
Anthony Scaramucci: (20:10)
My brain surgeon, by the way. So that's probably some of the problems that I've had in my life. That was my brain surgeon that did that
Vanessa Colella: (20:17)
To me. Yeah. Well, if that happened, you said, man, I don't want you to try something new. I just want you to do the thing that you do. That's predictable, that's repeatable. I don't want volatility in this situation. So yeah, we've, we've thought about this a lot at Citi and we've worked over the last, uh, certainly decade and I can speak for my group at the company and making sure that we have systems to be able to experiment without introducing risks. So let me give you one example of, we talked about [inaudible] earlier, which is our internal incubator. Um, we've developed a process whereby we can test ideas before we actually move a dollar, uh, put anything into market. And while that sounds incredibly obvious, you'd probably be surprised at the number of large companies that when someone has an idea, they pitched that idea and a senior person says, okay, I like that idea.
Vanessa Colella: (21:16)
And they go and build it and they do it. Um, we do just the opposite. Someone has an idea, and then we say, okay, let's first validate the idea before we go into building it and putting it into production. So just that simple switch of sort of the order of operations, lets us create an environment that is safe and doesn't introduce incremental risk for people to experiment. And I think that's been really important to our ability to explore new innovations at city because, you know, we, we work in an industry that does not, it's not the right place for like fail fast and break things. Right. That is not how, how we think about things as you know, in financial services.
Anthony Scaramucci: (22:02)
Yeah. But, you know, listen, I, I guess I have a, uh, a bias towards city because of my experience, uh, you know, Mike Corbat and I became personal friends after the transaction where we bought a business from you guys, Jane Frazier. And I have also, uh, developed a relationship because of that. And it does seem like you, you guys have a culture that is a little bit more entrepreneurial, um, than most. And so, so why is that Vanessa? Cause you like working there of course. And the, and uh, you're an innovator. So what is it about Citi's culture that makes it work?
Vanessa Colella: (22:41)
Yeah, that's a really great and insightful question. I don't, I don't get that question a lot. Um, but I've thought about a lot. So I think in a city is, um, it's a very multifaceted institution. Obviously we operate in, you know, more than a hundred countries around the globe in many different businesses. And therefore I would say, well, well, lots of companies are large city is multi-faceted. And so it, it tends to attract people who are problem solvers. So when we look at the kinds of traits that entrepreneurs have, you know, they're, they're curious, they're, they're brave, they're tenacious, they're they they're empathetic. They try and put together teams of people who are diverse and think about things in different ways. We find a lot of those same traits in employees at Citi and, and my own hypothesis is that because of the multifaceted nature of the company, it actually people self-select for some of those traits.
Vanessa Colella: (23:43)
Uh, and therefore, you know, I, I believe that a lot of the innovation that we've been able to drive at Citi, we have been more successful because of our employee base, because we have a group of people who, um, who thrive in an environment that has, there are many different things going on and your career can be, you know, one year in the consumer bank and the next year and treasury services, right. There are lots of different kinds of, of challenges to tackle. And so I really do believe that it comes down to kind of the, the character and sort of the, the passions of our employees and have really been the fuel for us to be successful.
Anthony Scaramucci: (24:25)
Before I turn it over to our resident, millennial, who will ask the real spiffy questions about the new economy, give me some predictions that you have about our near term and our intermediate term future.
Vanessa Colella: (24:41)
Um, well near term future, I think, you know, it, it's so funny, human nature is so fine, right? None of us, none of us love change. Um, and, and, you know, none of us love having to be super adaptable and, and we're also generally very bad with any sort of information that has latency or probability attached to it. And so we've been living for more than a year now around the globe in many situations that none of us thought we would ever be in, in fact, if we were doing this in another era, we would have met in person rather than over zoom. Um, and, and yet people are, you're wearing a lot of makeup
Anthony Scaramucci: (25:23)
By the way, but if we're meeting in person, I'm just letting you know my hair and makeup would've looked terrific on that debt, but keep going. I'm sorry. I didn't mean to interrupt. Likewise. See that Darcy's hair and makeup. He doesn't need it unfortunately, but you know, you and I would have looked great. So go ahead and tell me,
Vanessa Colella: (25:40)
Yeah, so, so I think, you know, right now people are in this mode of like, it's so hard to see when sort of the, the fog might lift right in the same way that a year ago, it was so hard for any of us to see how radically our lives were going to change. Uh, and so I actually believe that, that, you know, given we talk about vaccines earlier, um, I am optimistic that that things will start improving faster than people expect right now because our expectations are, we're sort of in this like, oh my gosh, what if it's like this for years? Um, and so I think we will start to see, um, we will start to see things reopen as more of the world gets vaccinated. Obviously that's predicated on as a globe, us making sure that, um, that countries all have access to vaccinations.
Vanessa Colella: (26:36)
So, uh, and as we do just as in the pandemic, you saw certain sectors, boom, and other sectors suffer. Um, we'll see the same thing, you know, coming out of that. Um, what's been interesting from, from my vantage point, is that, you know, that at the beginning of the pandemic, we weren't sure if from a startup perspective, you know, we were going to see sort of a real slowdown in activity. Um, and actually we, we didn't, um, we we've seen whether you look at the FinTech sector or venture capital overall. Um, we've seen really robust activity all the way through 2020 with maybe the exception of March of last year. Um, and so I think that will, that will continue. We've seen entrepreneurs pivot their businesses, figure out how they can, can continue to grow. So I think we'll see sort of more developed sectors emerge just as you'd expect, as, as people are able to do things like travel again. Uh, and, and you'll see in, in my world, um, you, we have not seen so much of a slowdown in the startup world, so I don't expect that that will change.
Anthony Scaramucci: (27:45)
So my colleague, John Dorsey has questions for you. Um, but this has been a fascinating conversation and, uh, uh, congratulations on everything
Vanessa Colella: (27:55)
That you're doing. Thank you. I appreciate that.
Anthony Scaramucci: (27:58)
Yeah. Finally get my opportunity here. It's actually mandated in my contract, as I say, on some of these talks that I get at least one third of the air time. So thank you Anthony, for fulfilling that contract, but I want to talk about purpose goes mainstream and citizenship, which is sort of the name for city groups, uh, ESG type of efforts. So w we also did a recent talk, uh, with a couple investors, prominent investors that focus on ESG. Uh, and, and I think there's two categories of people that are involved in the ESG space. There's people that are paying lip service to tick a box so that they can, uh, go out and say that they're implementing ESG initiatives. And there's people that genuinely dive deep into these metrics and, and, uh, meaningfully enact change through initiatives going on at their company and, uh, companies they invest in. What do you think are the primary drivers behind sort of the demand for these ESG oriented strategies and impact investing and what is Citi group doing? Maybe that's different and deeper than others that, that do it more, uh, going through the motions.
Vanessa Colella: (28:57)
Yeah, so, so great question, John. I think, I think the primary drivers are a number of things. First of all, I think, you know, we've already talked in this conversation about the fact that, that a lot of these issues that ESG has been trying to address by the way ESG is, as we all know, not a new thing, but it's sort of a newly embraced thing of these issues have existed for a long time, but they have, they have risen to the point of being unable to be ignored. Um, so I think that's one driver. I also think, I mean, Anthony was joking earlier about generational differences, but I do think that the push from both millennials and gen Z to take some of these societal issues much more seriously, uh, has, has been a really good push. Um, you see all sorts of surveys about how, you know, how those generations feel that these are not nice to have this.
Vanessa Colella: (29:47)
Isn't like the thing that you do after work. This, this has to be, this has to be something that is part of what you do at work. So I think the drivers are both, um, are both kind of, you know, the reality of these challenges becoming bigger and bigger around the globe and generations of people saying enough, like stop ignoring this stuff. Um, you know, we have to, we have to pay attention. I do think to your point, there still are, you know, there's some places that sort of talk the talk and some places that walk the walk, uh, and you know, I've, as I mentioned before, I'm really proud to be at city because I think, you know, we, we haven't necessarily rushed into things. I think, you know, when you rush into things, you got to build the right infrastructure to really be able to do things like issue green bonds and, and make these things part of the natural course of business.
Vanessa Colella: (30:43)
Right? Why is that the case? Well, it turns out, you know, to issue green bonds, you've gotta be able to tag your assets as to whether they're green or not. And many companies haven't done that yet. So how do you, how do you help do that? So I think we have been very sort of both forward-leaning and methodical about building the, the structures necessary to make ESG a core part of what we do. Uh, and, uh, and I think that's that, that is an accelerating an irreversible trend. And, and you'll see, you know, many companies move in that direction. I don't think that's going away anytime soon.
Anthony Scaramucci: (31:22)
And so what's the next iteration of this. You talked about how we went from, you know, ESG existed, but maybe there wasn't the same level of investment or application of ESG, uh, the ESG mentality in businesses and investment institutions, where are we potentially in 10 years, if this framework continues to take hold, what are concrete steps, uh, you know, that companies can take to drive these positive social changes and what can be the output from that?
Vanessa Colella: (31:48)
So let me first maybe comment John, from the perspective of, of venture capital. Um, since I spent a while in my, my day in that space, um, you know, venture capitalists are obviously looking for companies that they think they can scale. And part of that scale is to be able to exit in a, in a way that returns capital to, uh, to all the LPs and, you know, part of having confidence about investing in a startup is having confidence that there's that pathway to that startup having an exit at some point. Um, yeah, there was a lot of green investing when I first came Silicon valley 20 years ago. Um, but it wasn't as widespread because there weren't any really good examples, like scaled examples that you could point to entrepreneurs being. Um, the good thing about venture capital is it is a virtuous cycle.
Vanessa Colella: (32:43)
Uh, and once people start to see companies that are able to exit successfully, then that will cause more capital to flow into those types of companies. So, you know, through our impact fund that city, we've got, you know, $200 million impact fund focused on ESG and black owned businesses. And we see many more companies today, many more entrepreneurs successfully raising capital, whether it's for things like, um, sustainable energy or workforce development, things that that would have been niche a decade ago are now sort of part of the, the general sort of flow of capital. And, and part of the reason for that is, is that virtuous cycle of you've seen some success and that will be, get more success. So if you asked me about 10 years from now, you will see many more companies that one might have thought about. You know, when I was at MIT, we did a lot of, you know, we were young, like you are now.
Vanessa Colella: (33:44)
And, and, you know, we did a lot of dreaming about like, what if this technology could be used for this good. Right? And then, then you sort of grew up in thought, well, no, one's gonna, no, one's gonna fund me to use that technology for this that will now people will. And so you will see many more companies, uh, we just, uh, are investing one right now because I can't disclose yet because it's not public, but really interesting way of thinking about how do you, how do you modify energy usage to reduce the, the pressure on the grid? Obviously super timely, given what happened in Texas, um, and 10 years from now that those will all be mainstream companies. And, and hopefully it will be really proud investors in many of them.
Anthony Scaramucci: (34:31)
So I want to go back to an earlier comment. You made it wasn't in your official bio, but you mentioned that you were part of the founding group founding core for teach for America, which is a fantastic organization. I had a lot of friends from college that went into teach for America before going on to their maybe full-time career, whether it be as a lawyer or a technology investor or a founder. Um, uh, it's a multi-part question about, you know, why do you think teachers am I, my mom was an educator. Um, she worked for an organization, uh, in addition to teaching in a classroom called newspapers and education, where she took, uh, content that was in local newspapers, went to low-income school districts and taught teachers how to leverage, uh, current events, things that were happening in the real world to teach their students about various concepts.
Anthony Scaramucci: (35:13)
So, uh, what is your outlook for education? Why do you think teachers are well-suited like you were, you know, you went from a teaching background into a successful career in venture capital. Why, why do you think teachers are well suited, uh, to be potentially technology investors and, and forecast trends and understand human behavior? And what are your, uh, what's your outlook for education given, you know, COVID has sort of accelerated our move a digital world and giving people an idea of how we can scale quality education. So I know there's a lot in there about your background as a teacher, uh, but I just find it fascinating that you came from teach for America. And, and I think teachers are well-suited to, to follow the path you have, but try to unpack all of that, that I just throw.
Vanessa Colella: (35:54)
All right. I'll do my best in a few minutes. So you get all of your airtime. Um, so why are teachers well, well-suited, I talked before about a couple of traits that, um, that we think are really important for driving change, um, uh, you know, curiosity being empathetic, bringing in diverse points of view, being brave or tenacious. Um, I think, you know, teachers, teachers really embody a lot of those traits and, you know, I can certainly speak for, you know, many, many of us around the world who have realized in 2020, um, with our children at home and unable to go to school, just how important those teachers are and, and how, you know, how important having, having kids get access to people who think in those ways, how important that is. So, you know, why do I think teachers are, first of all, I think, you know, many people are well-suited to do lots of things.
Vanessa Colella: (36:52)
And so you have many, many people will have very diverse careers in the future. Um, but I do think teachers, teachers ultimately are very good listeners, um, because you have to be to maintain control of a classroom. Um, I, I remember when I first moved into corporate America and someone asked me, you know, how did I manage that meeting that people were so difficult? I said, I used to teach 42 eighth graders at once. Like that's difficult, you know, adults are I actually generally reasonably well behaved. Um, so I think teachers have a lot of passion, a lot of, a lot of grit, a lot of, you know, intellectual preparation and, and those are all things that the economy is sorely in need of both in the education sector and then other sectors, um, where do I think education will go? I think, you know, some sectors were already very disrupted well before 2020, right?
Vanessa Colella: (37:51)
If you think about, um, news and media, I think about, um, retail and lots of things had gone on, you know, there are a handful of sectors like healthcare, financial services, education that had not been through that same level of disruption. Uh, and I think, you know, many people thought, even though, you know, some of us are passionate about education reform, we felt like the old school, like way schools work didn't have to stay the same for a hundred years, or it could have moved forward. But, but, and there were, by the way, there are lots of educational reform that's already going on. As you mentioned, you know, the work that your mother is doing, uh, but none of it ever really got scale. And 2020 was the year that education changed at scale. Now, the other thing that happened in 2020 that everyone's aware of is that education changed at scale in ways that like double down on the inequity of education.
Vanessa Colella: (38:48)
So, you know, a massive body of work that needs to be done for everything from, you know, folks in New York working to make broadband accessible, um, in a much more equitable way, because it turns out you can't be in zoom school if you can't get on zoom. Um, and, and so, so 2020 both accelerated the idea that you could teach in lots of different ways. And, and I think sort of mandated us all to get much more serious about making sure that that is broadly accessible. So just like we were talking before about, you know, venture capital and, and the fact that success begets success in these sectors, um, years ago, ed tech was like a small thing. Ad tech was the thing that you did. If you were a double bottom line investor, or you were interested in social, but you didn't care quite so much about what your returns look like. Ad tech will be a big place that people put money into, right?
Anthony Scaramucci: (39:45)
And you're seeing the, you to me IPO, they've been doing a lot of advertising as well. It's just a Testament to how the sector has grown. I want to dive deeper into FinTech and thank you by the way, for unpacking that complex and meandering question that I pose to you, you did a fantastic job, uh, but FinTech, this sort of goes back to the theme that Anthony was talking about. You're working in this sprawling organization that does a lot of different things. And in the FinTech space, I would say to some extent, there's this intermediation that's happening as a result of technology and FinTech. Uh, so when you're working in an organization like Citi group, that has a lot of, you know, I'm going to call them legacy, uh, financial operations and business lines, and then you have FinTech, uh, that's, that's potentially disintermediating some of those businesses.
Anthony Scaramucci: (40:30)
There's obviously exciting things happening, but you have to be sensitive to, um, you know, things that are happening with your organization and things, trends that are happening in the FinTech space. How do you communicate internally about, okay, this is a, an unstoppable train that's moving, and this is how we need to sort of, uh, position ourselves to, to not be left behind by it. But at the same time, not fully disrupt what we think are, are good models for, for running our business. But again, uh, somewhat of a meandering question, but, but within the framework of our Lord large organization, how do you look at FinTech and identify which trends, uh, you try to sort of help accelerate and which ones you, you know, uh, maybe decide that, that the old way of doing things has merits and, and there's reasons to stick with
Vanessa Colella: (41:13)
Them. Yeah. So, so a couple of things I'll take you're inside the organization first, and then sort of what has merits, um, inside the organization. I mean, it's a real dialogue. Like we're privileged to have great working relationships with our business leaders and business operators across the company. And, you know, city is not the arbiter of, of what trends are going to move or not move, right? We have to be responsive to what's happening in the environment, what our clients need, how you bring those opportunities to our clients. And so, you know, I think we try and not only bring companies to bear and help entrepreneurs, entrepreneurs be successful, but we spend a lot of time on thought leadership. We talked at the beginning of this discussion about, you know, themes, et cetera, right. We, we try and contextualize a lot of the change so that it's easier for people who have a 24 by seven day job running a large business, but who aren't afforded the opportunity to meet thousands of entrepreneurs every year, right.
Vanessa Colella: (42:20)
We try and distill what we're learning from the outside and bring that in so that our operators can make decisions that they need to make about their businesses. Um, the other thing I would say is that, that, you know, very rarely, not never, but very rarely in life does change happen instantaneously. Um, that that's both a bad thing because actually humans are really good at recognizing instantaneous change and really bad at recognizing change over time, which is why everybody knows the story, the story of the frog in the boiling pot of water. Um, but it's really good because it does give us time to adapt. And, and I think that that dialogue that we have with our businesses, the exchange of ideas, they, you know, the pushback that we get from them sometimes about, you know, you're busy talking about this trend, but we see it differently over here. Nope, that's a two way conversation. And I think the robustness of that conversation is probably the thing that makes me most heartened about, you know, where, where we end up as change continues to happen in how we serve our clients, because this isn't about, you know, tomorrow morning, we're going to wake up and everything's going to be different, but also not. Everything's going to be exactly the same and, and helping each other, see that continued evolution of change, I think is, is a big part of what we do.
Anthony Scaramucci: (43:48)
And again, going back to Anthony's prior comments about Citi, I think it's a credit to the organization that they're willing to, to have those conversations and to have people now tell them where things are moving and how they need to change, as opposed to just sort of building walls and trying to defend the old way of doing things. But Vanessa, thank you so much for joining us today. Anthony, do you have any final words for Vanessa before we let her go? No, listen, I think it's a, it's a phenomenal conversation and I think you've left. No doubt that people inside a very large scale corporations, uh, can see innovation, invest in innovation, uh, make bold decisions. And in some ways you're getting the benefits of both of those things. You're the benefits of the scale and infrastructure of Citibank with the nimbleness of your astute leadership and entrepreneurship. So congratulations, Vanessa. Uh, don't let these millennials beat you down. Mola. I'm counting on you. Okay. I'm doing my part. I'm doing my part over here on the salt talks, Vanessa. I'm expecting you to do the same.
Vanessa Colella: (44:54)
Excellent. Listen. Thank you, Anthony. Thank you, John. And real pleasure to, uh, to be with both of you today. I appreciate the invitation,
Anthony Scaramucci: (45:01)
Vanessa. Thanks again, everybody for tuning into today's salt talk. We love educating people on a variety of different topics. And it's great to get the perspective that I think is a unique perspective that Vanessa brings just a reminder, if you missed any part of this salt talk or any of our previous talks, so you can access them all for free on our website and on our YouTube channel, our websites, salt.org, backslash talks to access all these salt talks. And our YouTube channel is called salt tube. We post all of our episodes on demand there as well. We're on social media. We're most active on Twitter at salt conference, which we hope to have Vanessa in person at one of our future salt conferences have a we're also on LinkedIn, Instagram, and Facebook, and looking to grow our audiences there. And please spread the word about these salt talks. We love again, educating people. Uh, we would like to be a resource on a variety of different topics covering finance tech and policy. So please spread the word. And on behalf of Anthony and the entire salt team, this is John Darcie signing off from salt talks for today. We hope to see you back here. So.