Every year around the same time, i.e. our anniversary, on the 22nd of August, I pause and ponder…I also do that at the start of the year looking back and forward, how much ground we have covered, how slow we have been, how close to dying we have been…again…
We started three years ago, three stooges and a whiteboard. Marcel, uber capital markets architect, Florian proper PhD and uber switched-on consultant (he knows that he is the only one for whom I use that term “consultant” as a compliment) and me ops monkey, end to end cash EQ and Prime brokerage guru. A Dutch, an Austrian, a French…A lot of strong views, a lot of ego (in a good way because we cared and we still do).
On that note, if you stop caring, stop whatever you are doing now…pretending is hurtful to you, your relatives, colleagues….Life may be a gamble but it is not a game.
That whiteboard saw a lot of drawing, a lot of ideas, a lot of possibilities but we didn’t know where to start other than try to make some dough with consulting work for us whilst we were figuring out our USP. And then, we acquired Investlab IP. It is part of our lore…Marcel was their CTO, we thought it was an amazing opportunities, I called three, four people I respected who had any idea how to structure an investment. I was thinking a 7 figure investment into the defunct IP would work and they broadly all said “don’t saddle yourself with that much debt or financing angst to start with. People will come to you as a team first and then because of the tech. You guys are great, don’t do it.”
That was my first failure to secure funding…not the last.
I told Flo and Marcel…let’s bid as if we don’t want it…will leave it at that and your imagination but we won the sealed bid without using too many kidneys as collateral.
Big bidders were just big talkers.
We then embarked upon a journey of taking that IP to the next level of its doomed journey. I travelled across Asia to sell BrokerFabrik, we met a lot of institutions in HK too and everyone loved the idea, the app, the customer experience but no-one bit…
Equities retail brokerage was and still is so commoditised with horrible UX based on forgotten programming languages that only a dying and shrinking population still speaks. Price points were too low for us to make a living or even just cover our cost base. The product was great but there was no market fit.
I also painfully learned the lesson about co-creation…humans like the idea to get involved with the building process of a great solution that their clients will use except if they are C level and can’t put a probability of failure onto their impeccable CV.
Loss aversion is a bitch, I experienced first-hand. Another learning curve hitting me in the face. To all decision-makers reading this (if you got that far…) tell guys like us “NO, it won’t happen”, “your product sucks”, “you suck”, whatever but don’t sugar-coat it, reject me, am your age or even older…I can take it. I never got any rejection maybe because they thought am a nice guy and couldn’t take rejection kindly...try me next time and I will show my resilience. It will hurt but it will give us certainty on both sides.
After a year of surviving, we heard the call from the market “you guys do equities but what about cryptos?” and repurposed our platform. No, it’s not a pivot…It’s about adding another asset class, at least that was the idea.
After a few months of repurposing our platform and finding how different the crypto world was (fix messaging anyone?), we stopped peddling with securities in general and equities in particular because whilst we saw the post-trade workflows converging at some point, that future nirvana was nowhere near actualising itself fast enough.
2018 and the crypto winter came. With hindsight, it is easy to spot that BTC and its copycats were getting hammered but when you are in the tumble dryer your vision can only be a tunnel one.
We asked our clients to get on and put some trades through but their own clients were not ready yet…we were live but had no data to show for the hardwork that the team has gone through.
As a parenthesis, we have an amazing team of individuals that pulled together more than once and never lost hope that we would make it through. That trust and loyalty is the main reason as to why I am so emotionally attached to the FinFabrik brand: so much hope, sweat and brawn have been put into what makes us today that I will do anything to takes us to the next level. I will write one day about 意, the intent, I learned through my years of martial arts practice as it is a tool for cutting through the start-up rollercoaster.
In May 2018, we had a week before payroll and no money in the bank, we asked all our colleagues to come up with an acceptable sacrifice they would be willing to make in order to give all of us some breathing space. Thinking about that period makes me emotional because some asked us to cut their salary to a level that was making no sense. They pulled through, working harder, never complaining. We even laughed more than once at the situation. I don’t forget and forgive good and bad…I don’t keep either at the top of my mind but when it is needed I can be either very generous or ruthless. I can’t wait to be thanking all of them once we are past the valley of death. Today, you are my witness.
Going back to the cryptofolks – we stopped pushing for what was now called CryptoFabrik (a different UX from BrokerFabrik), we told our phantom clients that when they would be ready we would be glad to reinitiate our partnership but then we had to stop wasting time and energy (and money) on both sides. We never burn bridges and one of the most important thing for me is not to be seen as an asshole. Inconsequential idiot? No probs…crazy? Tell me something that I don’t know. Asshole? Substantiate it fast because am coming at cha.
Then in August 18, we finally started our push into blockchain which was weird on one level. I fell in love with it early 2015, set up a consultancy in mid-15 pre FinFabrik era, was invited all over the region to talk about it and what it meant for many aspects of finserv (trading, corporate actions, fund admin, custody etc.) but we didn’t do anything blockchainy until late 2018.
Now, that CrossPool has come to life since that fateful decision in 2018: we have issued two private loans on it last month, one secured, one unsecured and a private investment into a movie, selected to the Oscars. We have finally found our market fit. (More details here)
Everyone I speak to agrees to the direction of where investing goes i.e. within 5-10 years for you to invest 1 dollar into anything. Investors and partners (existing and potential) love our tech and our decision to go for permissioned DLT as a starting point. Some even say we are onto something big.
Well, judging from my long intro to give you some background as to where we come from, I have some reasons so as to not jump up and down with excitement, at least no higher than usual. Got a MCL and popliteus tear last month at the Fintech Basketball League on the same knee that got beaten up 10 years playing volleyball in India…Maybe I should stop playing with balls or in a team…don’t know yet! Am that stupid, I will try to find out again soon!
We are stronger than ever (team-wise, product-wise, solutions offering-wise, experience-wise) but I can only celebrate the miracles and the journey that took us here. The future only interests me as an opportunity to focus my mind on a big challenge.
We are still a lean cockroach start-up but I think we are getting close to graduating to another league.
Thank you for having being part of our journey with a special thank you to the doubters and the ones who beat me up…It made my resolve stronger, helped me learn about the market and more importantly about myself: it improved my story, it uncovered flaws in my reasoning, it gave a six-pack to my resilience. I am still rubbish but a little less than yesterday.
Thank you to everyone who has crossed my path in the last three years and gave me something that helped me move forward. I am forever grateful.
Let’s continue the journey together because this time we have a greater chance to reinvent capital markets and we can’t do it alone!