Zevvle as a sustainable business

This question is poorly and vaguely worded, so apologies. I really don’t know enough to be able to ask a better question unfortunetly. :sweat_smile:

That said, what does a sustainable Zevvle look like? Or maybe, what’s the goal state of the business?

In particular, how many users does a network have to have in order to be viable?

Would the two boiz from Birmingham be happy running a network that does modestly well instead of growing to the point of enslaving the Earth? (I’ve seen Monzo’s secret world domination plans.)

Is it even possible to run a smaller network in the long run?

I’ve been wondering this as I watch another disruptive tech business I liked offer up its once nubile body on the alter of limitless growth, forgetting the good intentions it had when it began, as its form decays into a splintering husk under the blind stare of a greedy god.

Sounds like it’s just aimed at Nick and Tim, but curious what everyone thinks. :slight_smile:


offer up its once nubile body on the alter of limitless growth, forgetting the good intentions it had when it began, as its form decays into a splintering husk under the blind stare of a greedy god.

Christ, I need to get outside.


I think from a few tens of thousands of users it can be profitable and sustainable as long as they don’t piss away all that profit into marketing or similar crap.


We’ve moved the goalposts over time, so things may change again, but…

I had the idea for Zevvle around the time of Monzo’s disruptive prime and felt compelled to build an equally-unstoppable juggernaut that transformed the industry with millions of users.

Over time that ambition has faded, partly because of watching tech companies get sacrificed at the growth altar (hearing Monzo’s CEO talk about the times he’s come out of a meeting with an investor feeling shit about lack of progress is a complete turn-off) and partly answering the questions “What kind of business do we want to create, and what kind of life do we want to lead?”

In other words, I’ve come to value our independence. Not answering to growth, but to our customers, our future employees, our environment and ourselves. We still need to grow, but that’ll be considered and not some world-conquering trite. Also, I don’t want to deal with the guilty conscience of shovelling money offshore to reduce taxes for shareholders.

As for size, :man_shrugging:… as big as we feel like. Going to work so we can hit a growth target sounds horrible :face_vomiting:. My main motivation for size is the projects we can take on; the bigger Zevvle is, the bigger things we can do, telecoms-related or not. (I love side-projects…)

Yes :smiley: Monopolies are bad, and it’d be sad to watch the next startup take on a complacent industry in 20 years dominated by the incumbent Zevvle…

We’re going to do the best work we can, and however many people that attracts is fine by us. We’ll try not to turn customers away (:joy:).

There’re a lot of variables, but you only need a few thousand to be sustainable if you keep it lean!



What business is that out of interest?

Monzo Bank Limited

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I’m a investor but I wouldn’t use it as my main bank account for multiple reasons which I won’t go into here.

Thank you for your fantastic response, Nick :smiley:

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From experience, one of the critical things is ensuring that processes keep up with growth.

You can answer every support chat personally when you’re a couple of hundred users total, but you can’t sustain that ratio of support people to customers at scale. If you scale the userbase, things break unless you pour money into patching it while you fix it but on the other side, if you spend forever building something perfect and great, you’ll probably run out of your startup money very quickly.

From reading through the entire community forum here, there’s a big barrier of “when we get connected directly to a network” for Zevvle, which to get there, will take a serious investment. To fund it, you can either take on some form of investment or slowly build up capital, which requires that each user brings in positive revenue and that you then have enough users to make the company overall profitable.

Investment means investors, who want a return on their investment. Their bet in giving you money now is that you have big user numbers now and can make each of them proifitable at some point, making their investment more valuable that they can sell for a return.

In any case, growth and for per-user revenue are both required, but you can do them in either order. Big investment allows you to do the growth before per-user profitability, whatever your opinion on that is. :sweat_smile:

Zevvle being a service customers pay for from day one makes outside investment much less required once it hits a point of overall profitability.


What is the barrier to connecting directly to the network? Cash? Having enough users to be worth bothering with?

I should probably remind everyone now that I currently work at Monzo and have done for the past three years, so take everything here with that in mind. :sweat_smile:

From what I understand, Zevvle right now operates much like Monzo Prepaid did, and working there over the transition from Prepaid to Current Account I can give a pretty good idea of what things were like behind the scenes.

Monzo’s Prepaid card was operated entirely by a series of 3rd parties and the Monzo infrastructure was built on top of their APIs. This meant that Monzo could get a card into the hands of customers very quickly and start working on unique features such as the app.

That works great for a while and is very useful, but you get to a point though where you hit the limitations of the 3rd party platform and you grow enough that the per-unit cost of oursourcing becomes a big chunk of your costs.

What you can do then is bring what that 3rd party gives you in-house and get a lot more control over how it works because you’re building it yourself.

The reason these 3rd parties exist is because it might be prohibitively expensive to do something on your own, particularly at small scale. Monzo could not exist today without those 3rd parties.

But you make a trade-off when you bring something in-house, instead of a per-unit cost, you now have to pay for the salaries of and generally manage in-house engineers, which brings complexity for the benefit of flexibility. Building something like a banking ledger, Mastercard processor, or a Faster Payments gateway from the ground up is expensive and takes time, so you often want to do both by using a 3rd party to get something started and then make decisions about what you bring in-house based on what capabilities you need to execute your business vision.

There are examples of this kind of thing all over engineering at various companies. It’s why Amazon Web Services can be great if you want Amazon to manage your servers but also might kill you if you become too dependent on it and can’t move away from it when you need to.

The barrier here is cost, both in money and people to do it (which does actually equal money but shush!). You have to reach a point where the benefits of doing that are higher than the cost. For Monzo, the many card payment outages was part of the decision to bring it in-house. Do you see Monzo having widespread 24+ hour card payment outages since the Current Account launched with the in-house processor? Nope! Same with Faster Payments much more recently.

I think in terms of Zevvle, their current oursourcing to their host network means that they haven’t had to go out and build call routing, number management, make contracts with companies for SIM card personalisation, and so on. It means that two people can build a functioning mobile provider fairly quickly with the baseline of what people would expect.

Connecting directly to the network means reimplementing all of those things in-house, and is really expensive. Connecting is the easy part though, and it’s replacing functionality that’s both hard and super interesting to me!

Given the vision, I imagine that one day there will be a point where Zevvle has to go through a similar migration to Monzo’s Prepaid to Current Account, and it might result in some features being dropped temporarily due to technical trade-offs (remember how the Monzo Current Account didn’t support Monzo(.)me for a while?) or a bit of a weird migration (remember how Monzo had two apps for a while?), but if you want to have features that nobody else in the market does or do things better than the market average, it’s the long term right move to bring key technologies in-house.

If Zevvle wants to do account-level data sharing properly and their 3rd party doesn’t offer that feature, that probably means building billing in-house. If Zevvle wants to do eSIM properly, that probably means bringing SIM provisioning in-house. To do one of these, you almost always have to bring all the core technologies in-house too.


Rika has summarized it perfectly, but yes it’s cash and infrastructure (which also equals cash).

Most carriers won’t even talk to you unless you pay them an insane amount of money to begin with and some will still ask you to have a certain number of end-users (which is weird because you’d think that they just provide infrastructure and don’t care about how you use it, but at least some carriers - at least in certain countries - mandate that you must have a certain number of end customers and grow by at least a certain rate).

Infrastructure is another issue. I believe this is actually even worse than with payments - I’m not familiar with the payments side of things but I’ve been trying to get through it on the telco side and you have to basically implement everything from scratch and while the majority of it is documented and freely accessible, the protocols themselves are complex and IMO very over-engineered. I guess this is why most major carriers just buy what I call a “magic box” from Ericsson and call it a day. It seems (to me as an outsider) that payments is actually easier from seeing Monzo (and now others) being able to do it in-house.

Regulation is one more problem. Payments is actually easier because it’s a level playing field, if you abide by the regulations and pass the audits you will be let in. In telecoms, the radio spectrum (which is what you need if you need to run your own towers) is auctioned off every couple years and the highest bidder wins, so for a startup there’s absolutely no chance to win against the incumbents who can afford to bid and take a loss on that for a decade if it means they get to keep their incumbent position and are pretty much guaranteed to make that loss back + more. So this means for the foreseeable future you are stuck at being an MVNO and have to abide by the wishes of your upstream carriers, and they will never give you a good enough deal to be able to profitably compete with them, and using the venture capital model of operating at a loss for years to capture the market (like Uber) wouldn’t work either because they still own the upstream network and can kick you out (by making the terms of the deal unsustainable for you) at any time.


I’d put them on similar levels from what I’ve seen, though Payments have far more propriatary and secret layers to it than the open standards of telecommuncations. :sweat_smile:

Think of it this way, there are more mobile network providers in the UK than debit card payment schemes (effectively just Visa and Mastercard).

I don’t think that is a bad thing, I think there’s a difference between being an MVNO connecting to a host network and outsourding your entire network and systems to the host network. Virgin Mobile seem to do a pretty good job at being an MVNO while remaining very much their own thing and being competitive in certain areas (I am aware they’re trying to merge with O2 to own the network but at that point you’re operating on a very different level). You can compete with your host network by doing something better than they do, and it’s not all just about price, coverage, or speed (as much as they would like you to believe).

That’s why we have industry regulators, and why you keep good relations with suppliers. :wink:


there are more mobile network providers in the UK

But those are either “thin” MVNOs like Zevvle that don’t get involved in the technical side at all (aside from the customer-facing parts), or those that just buy Ericsson/Huawei/Nokia equipment. As far as I know there are no major carriers that build and operate custom equipment and why you don’t see much innovation in the industry because everyone is pretty much limited to the capabilities of the third-party equipment they’ve bought. To make an analogy with payments, it’s kind of why every legacy bank has their own custom app (some even with a flipping chicken) but at the end of the day none of them could pull off instant transaction notifications, a decent API with webhooks, etc because it’s just a frontend for legacy rust.

Virgin Mobile seem to do a pretty good job at being an MVNO

I am honestly not sure they’re doing a good job. They’re presumably profitable (although I’m not sure whether it’s the cable broadband that is bankrolling the mobile side) but from an innovation and customer service point of view it’s definitely not there just by looking at their “community” (which is horrendous, none of this shiny Discourse stuff) and all the complaints on it. You’ve no doubt I sometimes trash talk on Monzo regarding the current situation with CS which in my opinion is much worse than it used to be but Virgin Mobile (as well as other telcos - they’re not the only one) is orders of magnitude worse which is why I wouldn’t consider it a good business and if I was high up at the company I would be ashamed (which maybe explains why I’m not there? :joy:)

If we assume they’re profitable it’s going to be a very thin profit margin (frankly inline with the rest of the industry), but IMO it’s not a good business opportunity; they have the advantage because of their brand and huge capital they already have thanks to their cable broadband business (I refuse to call it “fibre” because it isn’t), but for a new entrant like Zevvle (or anyone else that tries to break into this market), “just” being a traditional MVNO with the typical profit margins of the industry isn’t going to cut it in my opinion.

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Yup, it’s exactly like the payments industry. You either don’t get involved and pay someone else to do it, or buy and run an existing product from some vendor.

The thing that made Monzo special was looking at this and choosing a third option, building something like the Mastercard Processor, 3D Secure Processor, and more in-house. Monzo remains one of the only banks worldwide who does this and benefits greatly from it. Again, it is hugely expensive but that’s what you have to do if you want to do something truly transformative in a space like this.

Fair enough, I was using them as an example of a non-network owning provider who manages to be big and compete on the same stage as all the network-owning providers.

I fully agree here. If Zevvle want to truly be Monzo for phone service, it’s going to take that serious technology investment at some point to build what others would buy.


In my opinion the telecoms regulation isn’t the best (not just in the UK though), it’s for example why broadband providers are allowed to mislead the public with false advertising regarding “fibre”, and why the payments and banking scene is much more healthy than the telecoms one. The fact that spectrum itself (which I guess is equivalent to a banking license) is handed out by auctions instead of “airtime” on that spectrum being billed is a problem as it prevents any new entity from entering the market.

As far as the relations with suppliers go, I’m not sure it can go that far considering the goal would be to out-compete them. You can be nice all you want but at the end of the day it wouldn’t make sense for them to offer you a deal that will allow you to out-compete them and become the best network ever. It’s similar to why telecoms try hard not to become a “dumb pipe” (despite that it’s what they should be) and will try all kinds of (often bullshit) marketing strategies to make their “value add” appear worthwhile to the customer while screwing them behind the scenes.

One of the main problems is that data pricing is inherently flawed, the excuse is that RF spectrum is scarce so data should be limited but that doesn’t pass muster in practice because data is billed regardless of the actual network load and congestion of the RF spectrum in a certain area, and in fact sometimes wastes spectrum (why can’t I have unlimited data in a village at 3am on a Sunday when everyone is asleep, and the tower is just there burning energy and rent regardless of whether anyone is using it? it is literally cheaper for them to give out free data in this case than to prevent someone from using more than what their plan allows to than to let the tower be unused while still burning energy). Not to mention how “data” can magically disappear forever if you don’t use it all in the current billing period.

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I have some stories here best not shared in a public forum, but understanding the motivations of your suppliers can make them extremely easy to work with. If what you are saying is 100% the case, there would be zero reason for them to offer MVNO services at all.

Ultimately, they are a business looking to make money, so it must make some form of financial sense to them.

The question I find myself asking is “what do they get out of it?”. I don’t know the answer here but I would love to find out.


I guess if your are in a different league than them (broadband vs mobile) it makes sense for them to offer you MVNO services, it’s an extra bit of money (maybe not as much as what they’d get out of a retail customer, but still better than nothing if the customer were to go to a competing network instead) with low risk of you out-competing them on the mobile market because you’re focused on a different offering like broadband, which is why services like Sky or Virgin Mobile exist, but from a pure MVNO perspective that starts out as an MVNO (because there’s no other way) but that aims to be the “best” network I am not sure.

I guess one reason could be market research, they let generic MVNOs come in and see how they do, and if they do very well their either buy them out (I assume mostly for their brand, like Giffgaff) or just replicate the perks in-house and in the long term the MVNO will either pivot or die). Otherwise I don’t really know, it doesn’t make sense from a business perspective to let a competitor take over your market if you have the power to stop them (which is the case with a typical MVNO arrangement). I guess the timeframes we’re talking about could be a handful of years, so MVNOs could still make a profit and a decent chunk of cash for the founders, but in the end they will still be out-competed by the host. Maybe someone else with better insight into the industry can shed some light on this.

There are niche companies that offer different services (catered for M2M, etc) and are successful at being MVNOs but I think this is because they are indeed niche and reasonably will never compete with the host carrier’s main offering, so it’s win-win because the MVNO makes some money, the host carrier makes money with no risk of either one eating the other. But if suddenly the MVNO starts significantly eating into the other’s market share I expect the other to respond accordingly with either a more competitive offer (where they have the advantage) or reworking the terms of the deal to make that particular offering unsustainable for the MVNO.

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So you need something that they cannot replicate, or be unwilling to do.

Monzo’s once-unique technical features have been widely copied on paper, but other banks have long legacies and processes that make experimentation expensive. You just can’t clone culture either.

There are openings, though yes, you can’t really grow larger than your host network without either buying them (see BT+EE or Virgin Mobile+O2) or deploying your own infrastructure (like Three maybe?).


So you need something that they cannot replicate, or be unwilling to do.

Indeed, but anything can be replicated given the right amount of money, and even lack of skills/mindset can be replicated by just putting enough money on the line and maybe several failed attempts. Sometimes this might be a bit extra money for things like setting up a separate company like Natwest is trying to do with Mettle (although they are very late to the game, and IMO they have no chance against either Starling’s or Monzo’s business offering).

So the problem becomes “development cost of replicating the tech + management/admin cost to deal/bypass a legacy mindset or culture mismatch”. The latter can buy you some time (and you can make some good money as a founder or early employee), but ultimately the host will still end up eating you/buying you in my opinion. I’d love to hear opposing opinions (as it will give me some hope in my own attempt at this :joy:).

deploying your own infrastructure (like Three maybe?)

My understanding is that Three was bankrolled by the parent company (which happens to have a lot of cash from unrelated services) and I am not sure whether it’s actually ever been profitable when considering the initial investment to bid on and win the spectrum licenses + build the infrastructure. Looking at their history they also arrived at a time when carriers had a lot more power and could offer new services like 3G and value-add services (like video calling, etc) so it could’ve helped, where as now carriers are dumb pipes (which is good from a consumer point of view) and 4G is already more than good enough for the majority of people.

PS: I’m logging off for tonight, but thanks for the insightful debate and I’d be happy to continue this tomorrow!