I remember reading the Cold Star problem when we were getting this going together and thinking, you know, trying to solve the Colesar problem in a network affects business, with financial institutions has to be the worst idea of all the time.

But now that we're on the other side, it's worth it.

Once you get the flywheel going, it's hard to get the going.

Exactly. The first 20, that's the thing for it.

Two and a half years ago, Silicon Valley Bank collapsed in 48 hours. Not because of bad loans or fraud, because customers could move money faster than regulators could react.

The internet had turned a manageable problem into a systemic crisis.

Here's what almost no one noticed.

SVB was already a member of the deposit networks that could have prevented the run.

They just weren't using them.

94% of their deposits sat uninsured while the solution gathered dust.

That failure revealed something bigger.

America has nearly 10,000 banks and credit unions,

in order of magnitude more than any other country.

This fragmented system is either our greatest economic advantage or a ticking time bomb, depending on who you ask.

Community banks fund the small businesses and startups that make America different, but without the right infrastructure, they can't compete.

In today's discussion, A16Z general partner, David Haber, sits down with

Gene Ludwig, former U.S. Comptroller of the Currency, and Paolo Burtalotti, founder and CEO of

Modern 5, a company that could become one of the most systematically important financial

institution utilities in the United States. Not by replacing banks, but by getting hundreds of

them to work together.

We're talking about the cold start problem in financial services, why the biggest opportunity

in fintech might be the least sexy, and what happens when you turn former competitors into

...