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Shamir Karkal happens to be on the other side of the world. He works for McKinsey & Company, a global management consulting firm, and banks are his clients. So it's clear why Reich emailed the question to him. But actually start a bank? Well, it certainly wasn't impossible, but it was a big question. He'd have to think about this one.

Karkal met Reich during their first year at Tepper. They became good friends despite divergent backgrounds. While Reich was growing up on the beaches of Melbourne, Karkal was in the burgeoning city of Bangalore, India. Karkal also loved science, technology, and physics. Both his parents were bankers, but he had no interest in the family trade. Ironic, because he found out that a grandfather who died before he was born had been the chair of what would become the largest bank in India. He even has clear memories of going to work with his mother and "walking around these stacks and stacks of cash in the bank vaults."

Karkal opted to study computer science in India but "graduated into the worst job market for software engineers in Indian history." He'd always loved the idea of a start-up. In fact, before graduation he had signed on with one, which went "completely bust" by the time he got out. Instead, he took an "interim" position with a small technology firm and, after a few years, moved on to a better opportunity at an IT services company. He was quickly shipped off to Washington, D.C., to work on a project for the World Bank. Apparently, his banking roots were conspiring with his fate.

After a year, looking to round out his more technical education, Karkal enrolled at Tepper. He met Reich early on, and though he can't pinpoint the exact moment, he's sure it was in the school's first-floor, windowed lobby where they always hung out. Still dreaming of start-ups, he became active in the venture capital club. Karkal impressively placed tops in his class each year and became a business-game team leader. And, even though Reich was living in New York their second year, Karkal made sure to pick his friend as his first team member.

After graduation, Reich stayed on in New York, while Karkal postponed his entrepreneurial dreams to take the "offer you don't turn down" from McKinsey. His clients were none other than banks. Small, large, and around the world. He and Reich stayed in touch through emails and drinks squeezed in anytime Karkal was in the States. He was vacationing in India, when Reich's email Let's start a retail bank appears in his inbox. He reads it and, not surprisingly, has "a bunch of questions." But he also takes it seriously, because he knows Reich and has tremendous respect for the intellect and business acumen that he witnessed firsthand during their days together at Tepper.

A second email arrives almost immediately. This one is from the Jerry in To: Shamir and Jerry.

Jerry Neumann is an angel investor and was co-founder of Root Markets, the mortgage business where Reich had spent 18 months. He's also the man who once said, "Josh, if you ever want to start a company, I'll fund it." In fact, Neumann recalls the conversation, sitting with Reich in a coffee shop during Reich's stint with the equity research group, trying to convince him to use his talents to build "something more interesting," a company "with more impact."

His email comment this time is equally pointed. Oy. Regulation. Starting a bank is really hard. I like it.

Two weeks later, when Karkal is in the States on business, he makes certain to stop in New York. The Tepper grads adjourn to Reich's backyard garden, making themselves comfortable at the table and chairs Reich has set up in the 100-square-foot space, spacious by Brooklyn standards. It's in that setting that Karkal decides he's going to go with "a once-in-a-lifetime opportunity. I guess I just hadn't gotten the start-up idea out of my system," he says with a smile.

As fate would have it, within a few weeks, Reich encounters an issue that cements his certainty in their new project. His bank, Chase, the largest in the world, puts through Reich's online bill payments twice. The ensuing "nightmare" weeks are filled with calls, dead ends, and frustration. He's endlessly transferred from group to group, with nothing accomplished. It takes three weeks to solve the problem, concluding with Reich $11 in the hole. He jots it all down in a little book, vowing to make sure his bank will solve these problems.

(Continued …)

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