Alloy’s Unconventional Path to $1.5B with Tommy Nicholas, Co-founder and CEO

The Peel with Turner Novak

Turner Novak

Technology

4.6 • 11 Ratings

🗓️ 14 March 2025

⏱️ 90 minutes

🔗️ Recording | iTunes | RSS

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Summary

Tommy Nicholas is the Co-founder and CEO of Alloy, the identity and fraud prevention platform trusted by over 700 financial service companies.

Our conversation explores the early days of fintech, why more consumer financial protections actually lead to more fraud, and gets into the weeds of various tactics he’s learned building a technical platform company like Alloy.

We talk about embracing that the hard parts of company building are actually the best parts, why you’re most likely to give up when things first start getting better, using hands-on sales implementations in the early days to gave Alloy product market fit on steroids, how hiring changes as you scale, getting 100’s of no’s over 20 months raising their Seed round, and why TAM doesn’t matter.

Thanks to Charley Ma for his help brainstorming topics for Tommy!

Thanks to Numeral for supporting this episode, the end-to-end platform for sales tax and compliance. Try them here: https://bit.ly/NumeralThePeel

Timestamps:

(3:56) The platform to manage fraud

(5:48) What fintech risk was like in the early 2010’s

(14:34) Why company building never gets easier

(19:30) Reasons the hard stuff is actually the good stuff

(24:00) You’re most likely to give up when things start getting better

(33:47) Doing hands-on sales implementation to get PMF on steroids

(42:26) Deciding when PLG or hands-on sales will work best

(52:33) Why more consumer financial protections leads to more fraud

(58:14) 20 months to raise $2m vs $200m from a spreadsheet

(1:06:32) “Make yourself look like a good investment”

(1:10:14) Why TAM doesn’t matter

(1:14:35) How to hire collaborative problem solvers

(1:24:38) Why Alloy didn’t do much marketing early on

Referenced

Try Alloy: https://www.alloy.com/

Charley Ma’s Pod Episode: https://youtu.be/5cxgB1_q2lw

Try Artie: https://www.artie.com/

Follow Tommy

Twitter: https://x.com/tommyrva

LinkedIn: https://www.linkedin.com/in/tommynicholas

Follow Turner

Twitter: https://twitter.com/TurnerNovak

LinkedIn: https://www.linkedin.com/in/turnernovak

Subscribe to my newsletter to get every episode + the transcript in your inbox every week: https://www.thespl.it/

Transcript

Click on a timestamp to play from that location

0:00.0	It never gets easier by definition because if you are doing your job right, all you're doing all the time is earning your way into new really hard problems to solve.
0:10.0	If you have some point of view that you're just going to elegantly engineer the solution to one problem so well that it will scale forever and then you will be done, guess what?
0:19.0	Like, that's not how it is. The way it actually is,
0:23.2	is you go get product market fit for a use case with a segment. Well, now you've got to figure
0:27.7	out how to dominate that use case in that segment. Okay, well, now you also got to figure out
0:31.6	how to earn your way into the second use case with that segment. Guess what? That's just as hard
0:35.5	as it was to do it the first time,
0:37.6	except also you're scaling the first use case. So now you have to do two things. You have to do this magic really hard thing that almost nobody can do in the first place while you're scaling this other thing. And then you have to earn your way into the third use case. And then you have to get into a new segment that you don't even know. At every stage, you earn your way into these new opportunities and problems and you either
0:56.0	succeed or fail at capturing them.
0:59.6	And so every 18 months, it's a question as to whether you're going to be one of the companies
1:06.0	again.
1:07.0	I definitely thought when we really got product market fit on steroids, which took a long time,
1:11.4	but when we got it, I had the sort of, you found our perception of like, this is going to be
1:16.0	really hard, but we're going to grind our way through this growth period, and then like
1:19.5	magical executive will show up and solve all my management problems or whatever.
1:25.3	And it turns out to be completely the opposite. Welcome to the Peel. I'm your host, Turner Novak, founder of Banana Capital. Today's guest is
1:32.0	Tommy Nicholas, co-founder and CEO of Allo, the identity and fraud prevention platform trusted by
1:36.9	over 700 financial service companies. Our conversation explores the early days of fintech,
1:42.0	when more consumer financial protections actually lead to more fraud,
1:45.7	and we get into the wheeze of building a technical platform company like alloy.
1:49.4	Sometimes the secret is like that actually is how you do it. Actually, you should wire that
1:53.3	straight into the DNA of every hire you ever make. We talk about embracing that the hard parts
	...

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