Five Burning Questions With New England-Based Innovators: Sandbox Banking’s Skye Isard
Boston’s reputation as a hub for financial services is well deserved, with giants from Fidelity to State Street and John Hancock calling the city home, along with a growing number of startups that are changing the way we all live our financial lives. Sandbox Banking plays an important role in this ecosystem by helping customers including banks and credit unions connect fintech products to their existing systems.
And the 2017 graduate of the Y Combinator program is on a roll, as it announced in February this year a $4.3 million seed round led by Horizon Ventures, which brings its total funding to $6 million.
I caught up with Sandbox Banking Co-Founder and Chief Technology Officer Skye Isard to discuss his company’s trajectory and plans for the future, as well as his outlook on the Boston startup world.
Considering you went to college in Boston and co-founded your company in the city, how would you characterize the startup scene here?
Boston is fertile ground to build a company for multiple reasons. For starters, you have so many colleges and STEM graduates, and there's a ton of research that's always going on in our backyard.
We also have really vibrant tech industries, including healthcare and financial services tech, with major financial providers like Fidelity, Wellington and State Street here. That makes a big difference, with those organizations serving as a training ground for a lot of the talent.
I would consider myself an example of all this because I went to Tufts and worked for MIT's AI Lab and the Harvard Management Company. I cut my teeth building software that was used at scale to solve real business problems, while the engineers, portfolio managers and analysts at those organizations helped train me.
Another thing about Boston is that you have a lot of tech startups that have gone from infancy to IPO and beyond, which is important. There is just so much excitement around startups in Boston, and startups beget more startups.
I could go on and on about Boston. It has an amazing kind of ecosystem of providers for startups, with organizations like Startup Boston that build community. That's important because being a founder can be very isolating. And organizations like FinTech Sandbox and the DCU FinTech Innovation Center gave us a lot of support along the way.
And I was wondering if you could tell me a little bit about your origin story and how you and your partner Ravi Balasubramanian came up with the idea for Sandbox Banking?
The most concise way to put it is that we encountered the problem as we were trying to solve another one. There came a point where we were trying to sell a piece of financial advisory software to banks and credit unions, and started to figure out that integrating that software with the internal systems and data sources of credit unions was going to be a major hurdle.
We were talking to a lot of innovation leaders as well as CIOs, CTOs and even CEOs at traditional financial services organizations who weren’t able to innovate the way they wanted to because the integration hurdle was just so high. So they were really reluctant to work with new vendors or new fintechs. While part of it is just literally the difficulty of getting the work done successfully in a timely manner, another part is the data security and compliance aspect to it all. So we saw a clear industry need that lent itself to our personalities, since we're obsessive about using software to drive innovation.
But even after we started working on the problem, the first version of our software wasn't right. It took probably another year or so after we had our first customer before we were building the product that we have today, which is called Glyue, a low code integration builder for banking. We thought at first that we should build an API to encompass all of banking – a kind of universal API – and that wasn’t exactly right. If you try to make a one-size-fits-all API, it doesn't make anyone happy, at least if they need deep integrations. The low code builder allows them to be customized to meet integration needs.
Given all the changes in the industry in recent years – especially during the pandemic – how did Sandbox Banking adapt and stay relevant to customers?
It's interesting, because in our case, we didn't have to really pivot how we do business day to day because we were already a fully distributed team.
What I would say is that the pandemic and the move to work from home accelerated the digital innovation journey for our customers. They sped up the pace at which they wanted to do innovation projects, which raised demand for us and increased the level of customer urgency.
There were of course unique moments, and a few sprints that we had to perform to ensure that our customers could originate all the PPP loans that their own customers needed. Those cases were fun and challenging, but didn’t require us to change the shape of the business.
The pandemic was horrible in so many ways, but it wasn’t bad for our business in terms of the technologies that our customers needed or in terms of our ability to help them.
And tell me more about how you embraced a remote workforce, and how you continue to create a sense of teamwork and cohesion with folks spread out all over the United States.
We didn’t necessarily embrace remote work from the start, because Ravi and I actually lived in the same house when we started the company. But by the time we came out of Y Combinator in 2017, we were in different places and we grew the business with a distributed team. There was a time when we had a central office in Boston, but that only lasted for a year or so.
Maintaining a cohesive team isn’t trivial and takes an extra amount of work, both in terms of being deliberate about activities and managing people. We have all-hands meetings multiple times a year in one location and hold strategic meetings, but also have a ton of fun.
We have some meetings where we'll take certain parts of the organization and gather people in one spot, which takes less coordination and overhead, but is really valuable. We also have more brainstorm and whiteboard meetings than you might otherwise, so people can communicate and have the kind of interaction that simulates watercooler talk.
We have to be more meticulous about employee onboarding than other businesses that have everyone in the same place. We try to have a really detailed plan and a primary mentor for everyone who comes on.
But there are a lot of benefits of a remote workforce. You can hire talent from anywhere, and there can be a huge cost of living benefit for our employees, since we don't change our pay grades based on where people live. Remote work certainly helps create diversity in multiple senses. And I like having people from all the different geographies in the U.S. Plus, there’s no commute – everyone loves that!
And finally, congratulations on your seed funding. Can you describe what that means for you as a company, and what your plans are for the future?
Our mission is to accelerate banking innovation, and we fulfill that mission by helping our customers build integrations between banking systems. So fundamentally, we're going to use this capital to eliminate the bottlenecks that prevent our customers from building those integrations, and those bottlenecks can vary. Sometimes they exist because we don't have marketing collateral to tell them that a certain capability exists. Sometimes the bottleneck is the product, where there have been missing features or opportunities to accelerate the lifecycle of an integration with the software itself. And there have been many times where we've had too much work and too few people, so hiring is definitely a significant component of what we plan to do with the money.
If you talk to anyone in our leadership team, you'll find that we don’t just throw people at growth bottlenecks and are highly invested in trying to solve bottlenecks intelligently. So at the end of the day, I don't think any of this represents a radical shift in strategy from our perspective. There are certain types of integration, certain novel initiatives that will be brand new, that I’m very excited about. We're entering into the space where our software is being used to build integrations, not just within a bank or between a bank and its vendors and partners, but between institutions themselves. That requires some additional investment, but it's still using our low code integration builder.
I look at it as a natural extension to what we're doing today that will greatly benefit our customers. And just because we're not really changing our strategy in a fundamental way doesn’t mean that we're not going to look very different as an organization in a year or two from now. I'm excited to see what the future holds for us.
About the author: Randall Woods is a former editor at Bloomberg News and currently is a Senior Vice President at SBS, a communications agency for technology companies and startups.