In the heart of Haymarket in Sydney's CBD, a growing consortium of 110 engineers and bankers meet from Monday to Friday to build a new company that simplifies how banks operate.
At the helm of this operation, which is called Constantinople after the Roman Empire, is a formidable woman called Di Challenor.
Never being the one to tell herself no, Di and her co-founder Mac Duncan hold a unique title in Australian business history as the duo to raise the largest ever seed round for Constantinople - $32 million.
So what went into the making of this founder?
Di had a unique upbringing as the daughter of a mining executive, regularly moving schools meant always being the “new girl”, feeling lonely, and she found the constant change difficult. But this also instilled in her a strong sense of being able to tolerate discomfort.
This momentum has carried through in a philosophy she took to her pre-founder career journey, which was to always quit a job on a high. As an adult, she's been the one to call the shots, not the needs of Dad's work. From cutting her teeth in tech sales, Di then embarked on a long career in banking with various roles at Citibank, J.P. Morgan, and Westpac.
Not one for the textbook-and-theory approach to business offered at university, Di first entered the tech world at 19 as a sales administration assistant at a software company. At the time, software came in shrink-wrapped physical packages (80s and 90s kids - IYKYK). Di started out making tea, fetching lunch, and doing the photocopying for her male colleagues (“and they were all men”).
And then, she spotted an opportunity. The company had 50,000 units of a software called “Jump”. Di begged her boss to let her have a crack at selling it - and sell she did. Not only did she move 50,000 units, she moved 500,000, outperforming the main software product at the company. Her memory of this time was it was less her gender that raised eyebrows from prospective clients, but her age.
Now, along with her growing team, she's building a software company of her own.
MP readers, here's Di Challenor.
Natasha Gillezeau: Di, thank you for making the time to join me. Your name came to us via Jethro Cohen at Square Peg, and we were like yes, Di sounds great, we’d love to chat to her. So thank you for helping to make it happen.
Di Channelor: Pleasure.
One of Missing Perspectives’ contributors Cara Davies - who built and sold a Gen Z fitness app called Steppen - recommended a book called The Unfair Advantage. In it, the authors argue that all entrepreneurs have some kind of unfair advantages - and knowing how to leverage these is key. So my question to you Di … what’s your unfair advantage as a founder?
I’d probably broaden it to my unfair advantage as a human. About 15 years ago, I saw this YouTube video of Will Smith where he was on one of those late night American talk shows. And he was talking about how he wasn’t the smartest, and he wasn’t the sexiest, but he had this thing called “grit”. And if you were to be running next to him on a treadmill - he was going to outrun you. He would die on that treadmill, and you would be off by then. He was saying: “I never give up”. And for me, I look for alternative ways to do things, I’m always testing the system. I’m always saying you can do better than that, you can do much better than that. If there's a bump in the road - then actually - I’m going to go around it. So, my unfair advantage is I have a huge capacity for work, and a significant amount of grit in that I don’t give up.
I’m curious about how you found working in quite male-dominated fields. You’ve said it didn’t bother you when you worked in tech sales, and then you worked at Citibank, JP Morgan and Westpac. Do you have any thoughts on what needs to evolve when it comes to gender?
I’ll give you two perspectives to that question. So, I’m 5 foot. And I can tell you I feel like I’m the tallest person in the world. Every so often - my co-founder is quite tall - and I look up and go, oh I am quite short. I think the same applies to my gender - of course I’m a woman - but I couldn’t care. I just want to be a successful person, who helps other people be successful. And that has meant that in the most successful industries in the world - they are male dominated - but it has never bothered me. I’m actually grateful for the men that I’ve worked with, because they’ve helped me to be better.
Do you have any mentors in particular that you’d want to shout out?
I’ve just had bosses who back me. I’d run into fires, and they’d say there’s the fire, go fix it. I’ve got a number of children. And every time I’d had children, not one time did anyone say, "oh you’ve got three kids, or five kids, and therefore can you actually manage all this?" Not one time. The men that I worked with, or for, never looked at my gender either. They just looked at me as one of the team, and a talented individual that they could really help to reach my potential.
My observation is that women do not help other women naturally. I think women need to do a better job of supporting other women, and it’s really simple things. Every opportunity I get to say to a female or a woman I’ve just met, I’ll say - when you’re in a presentation at work and it’s a female presenting - are you the first person to congratulate her? Or are you the first person to criticise her? And most women will say to me - I’m the first person to criticise. And I say, well what I’d like you to do is observe your male colleagues in those situations. Most men are the first to compliment. Men have this rising tide mentality, as in, if we rise the tide, then we all win.
Like a better natural understanding of positive sum games, infinite games?
Yes. Men are also more likely to believe that there are stacks of incompetent people in the world, but incompetence will play itself out. Whereas women tend to say you’re incompetent, and I’m going to point it out now.
I definitely agree with the saying praise in public, criticise in private. I think that’s respectful, regardless of gender. Is that something that you noticed in banking?
Definitely in banking. And this is a harder conversation - but there is no such thing as balance. And all these books and movies that tell women they can have it all - it’s actually not true. You have to make sacrifices. You want to be an Olympian? You make sacrifices. You want to be the best business person? You make sacrifices.
I agree with you that it can be a really unhelpful message that you can have it all, and it’s not commensurate with reality. It’s a bit of a cliche, but to some extent, you have to put a certain level of energy into something to start getting something back from it, and if you spread yourself too thin, you know, nothing is really going to happen. When it comes to being in business, there is a level of commitment and energy input to start to see the returns.
I think you’ve summed that up perfectly. And I don’t really feel that people understand that – that there is a tradeoff. You just can’t have it all. It is unfortunate that there are some career paths that you don’t get a choice because of what you’re doing like doctors, nurses, that’s a small microcosm. How do you get people to recognise that if you want something so great it actually requires you to do a lot? And also this long term debate with people around when, as a woman, when is the right time to have children? Do you have maternity leave? Do you not have maternity leave? Do you have children later once you have your career in order? I think this is a complex subject.
Let’s talk about Constantinople. Why the name Constantinople - I have intuitions - but I would love to hear how you see it and how you and your co-founder Mac came up with it.
It took us about six months to come up with the name, maybe a little bit longer, because we were ruminating on the business idea for a while before we then left the employer that we were with, and started the business. We really wanted a name that people would remember - that would connect with what our mission was - and what our vision is for the business.
If you’re familiar with Constantine, who was the emperor of Rome, and at that time when Constantine was the emperor, Rome was under attack, quite severe attack from all these gangs and goths, and he was very concerned about how could he manage to protect his citizens, how could he create a vibrant city that would enable his city to prosper and grow, and so he took a really bold move and he moved Rome to the Bosporus, and he created Constantinople, and he moved it there because he had the protection of the sea on one side, but also one of the greatest trade corridors in the world, east meets west, and then he could protect the other side, the land side, with a huge significant set of moats. And then he had the great ability to be able to protect his citizens, and create a vibrant society because you had merchants coming in and selling their goods, and that would then provide a source of income to his citizens. Now, Constantinople lasted for 4,000 years. And it really demonstrated a few themes that we’ve taken into the company - that you do need to make a choice at some point about how you’re going to create a future-proofed business. Is your foundation solid? Are you open to do business differently? And are you creating longevity for your company, like he did with his citizens?
So with Constantinople what we’re doing and what we’re enabling is we’re enabling the viability of a long tail of banks to continue to be able to support their customers. So we’re providing them with a new foundation. We’re not just a banking technology platform, we’re not just an operations platform, we’re not just a compliance platform, we are an entire banking platform. We bring together technology and operations and compliance and use software to provide a modern state banking capability so that this long tail of banks can continue to be viable to serve their communities, to serve their customers in all parts of the world. And so if you link that back to Constantinople where Constantine was providing a foundation for his citizens, Constantinople is the company today providing the foundation for banks to prosper and grow for hopefully a thousand years.
With that metaphor, was there a moment that you had to make in a similar way to be like - the way this is going is not working or defensible for - and we need to not start from scratch, but starting a new city and starting a new company in a way is starting from scratch. Are there similarities there?
Definitely. The banking industry is incredibly challenged. If you look at our market, we have five really strong banks - CBA, NAB, ANZ, Westpac, and Macquarie. They’re fabulous institutions, the lifeblood of the country. But we have a long tail of banks within the market of probably 40 or 50 community banks. And those community banks have purpose - those community banks were started by a group of teachers who had a single mother who was a teacher but couldn’t get a mortgage from a major bank but needed support. So the community came together and started a bank. They are owned by their members. That’s a very, very different ethos to providing banking services. But banking has become incredibly difficult over the last 15, 20 years.
For the operators of these banks?
Yes, for the banks themselves. So, you’ve got a market structure where you’ve now got a situation where regulation is so hard to obtain if you don’t have the best technology. You’ve got cost-to-income ratios in banks that have just exploded because the cost of running a bank is so significant. You’ve got operational risk challenges, because again, you’re relying on technology and people. And these banks really just need a viable alternative to be able to serve their communities. The role of cooperatives and mutuals to deliver benefit, we can’t all be focused on profit-making returns to shareholders, our world needs to be balanced with large successful publicly listed companies, but we also need companies that are thinking about the community and have those relationships with the community. Our world is moving so fast with the use of technology, we’re forgetting about people.
If you think about how fast technology moves and who has access to that technology, that can exacerbate differences in capabilities. Would you say what you’re building at Constantinople is almost like an attempt to democratise access to technology on one side, and mutuals and community banks on the other?
Totally. And we want to level the playing field.
So it’s kind of like Shopify.
Exactly. Shopify has enabled the long tail of merchants to survive and prosper in the world of online ecommerce. I can be a candlemaker in New Zealand, and I can send my candles to the world, but I have no idea how to manage accounting, no idea how to do a website, no idea how to handle payments, no idea how to run inventory. I’m really good at making candles. So what’s Shopify done? They’ve enabled those merchants.
That’s what we’re doing - a mutual bank or a community bank wants to serve their members. But for banks to continue, they must meet minimum standards. But the technology divide and the regulatory challenges is just too hard. So we’re creating this banking platform that brings a level playing field that enables those banks to serve their communities and their members.
I can understand the desire or the need - but in terms of the opportunity, you guys have investors. Square Peg, Airtree and Prosus Ventures, they’re now on this journey. They have to see, to some extent, what you’re seeing to come on board - so what are they seeing in terms of the opportunity?
In the US, there are 4,500 community banks. There are probably 10 in New Zealand, 40 in this market, Europe and the UK are full of mutual and community owned banks. However, there’s no reason why we can’t then one day be serving the larger banks. So banking is the biggest industry in the world.
What do most banks have challenges with? Technology, compliance, and the way that most banks manage it is through people. If you look at most banks' PNLs in the world, they spend about 10 per cent on technology, 70 per cent on people, and the rest is regulatory capital and so on.
So if you think about the ability to use software to transform banking, you can actually have a massive impact on the productivity of an entire industry that happens to be the biggest industry in the world.
Let’s talk about the team and the setup that you’ve got to actually do this. We’re in the Constantinople office at the moment in the Sydney CBD. It’s sort of got a scaleup office vibe - it’s open plan, lots of people working very hard - who have we got out there?
We started with Mac and I, we’re now 110 people.
Wow. How long was it just the two of you?
It was Mac and I for probably two months. We had to hire, so we moved very fast to hire. The best part of the job is assembling the team - I mean, I love my job, I get to help our clients, and help them do what they want to do, and then we get to build a company where we employ 110 people.
Mac and I have created 110 jobs. We are an engineering company - we’re deeply grounded in engineering-first principles - and the bulk of our company are software engineers. Because we’re running a bank, we’ve then peppered that nicely with a number of people who come from a banking background.
We work hard at Constantinople - like, you do not get a bank to market in the time period of roughly around 15-18 months that we took to get a bank, not just part of a bank, to market. But we’re not a sharp elbow culture. We care about each other. But we care about each other in a different way - care here is I want to work really well and really hard and I want to deliver because I don’t want to let my colleagues down.
It’s like being counted on.
I want to look at that colleague on my Teams call or Zoom call and know that they’re going to get me what I need when I need it. Because they care - they’re accountable to one another. They don’t want to let each other down. They really believe that we can do something great as a company .
I think that’s healthy. Having people you’re accountable to, and having people count on you is what takes you out of yourself and into another, and has an energising dynamic in my experience.
I completely agree.
I wanted to end on - you obviously have experience raising capital. One of the headlines Constantinople has generated is you raised the largest seed round to date in Australia - $32 million in a round led by Square Peg, with participation from Airtree Ventures and Great Southern Bank. Congratulations. I know that sometimes news media headlines can take away from what that actually means. And really, that is about pulling in financial resources to be able to go and build a team and take bets on creating what you have in mind.
Of course.
But it’s still a significant achievement. I’d love to know for other entrepreneurs - male or female - three tips on capital raising. How did you actually do that?
Yeah, so my first comment is it’s not super easy. And I’m glad it’s not, actually, because you’re asking a venture capital fund or a venture capitalist to believe in you and to impart their precious capital to your business and trust you. It was definitely an experience that tested me. And coming out of a banking environment, where capital was pretty easy to get, and then coming into a world where capital is not freely given, was a real test of myself and again, I put myself in quite an uncomfortable position. Firstly you’ve just got to back yourself and realise that those people evaluating you have very little information.
So, you must know your business and how that model works and how you’re going to execute better than anyone. You must not leave any stone unturned. We spent hours preparing for every investment committee that we went to for every Series C and Series A, and we were meticulous. We know our business. We also knew where our risks were. You can’t go in and say look, I’m going to start this and it’s all going to be rosy, and I think I could be a unicorn in five years. I’m not saying people do that, what I’m trying to articulate is there’s that story, and then there’s the other story, and be really clear as a founder and anyone who is going to go on this journey, I think an investor wants to know how you’re going to deal with challenges. Have you thought about the risks? What’s around the corner? The “what if” scenarios?
That's a hard thing to marry, because to start a company, you need to be able to see something that’s not there yet. It strikes me as an interesting dichotomy of being in a situation where you're really positive on the one hand, but really realistic on the other.
You need to be very multi-disciplined in how you run a business. Because no matter how good your business model is, no matter how good your people are, there will be challenges. And being able to articulate how you’ve thought about those I feel will give an investor a view that actually, I really back this person, their idea is brilliant, they’ve got customers, they understand their market, I think they can get product-market fit. But actually, what I also really respect about this team is they know where the issues are going to lie. What could be - might not be - could be a whole different set of issues that arise - but they’ve thought about how they’re going to execute. Because most investors in my opinion are thinking - do I want to back this team? But actually, can they execute? You can have the best idea in the world - but can you execute? Execution means managing risks. It means understanding what could happen, and plan for it. I think back yourself, and never ever give up.
Great message. Anything else you’d like to add?
For anyone thinking about becoming a founder - just go for it. It’s the best thing I’ve ever done.
Thanks Di!