Over the past few months, a couple of people have asked me what it's like starting a bank or a fintech. I am not sure I am any kind of expert, but as it’s Christmas and this week marks an anniversary of sorts for me, I thought I would try and make sense of our journey so far.
Three years ago this month I quit my well paid job at a big four bank.
I walked out on money, share options, some good people, some not so good people and above all the wonderful security of knowing I was going to be paid next month.
Two and a bit years of earning nothing have taught me some pretty sharp lessons.
Start-ups ain’t glamorous…
The first thing I learnt is that being an entrepreneur and starting a bank is nothing like I thought it would be. In the debit column it’s not glamorous. Raising capital is horrible. You face constant rejection. The hours are brutal, and you live with the constant nagging fear of failure. Not some random concept of failure but a very acute fear of what that would mean for you, and all the amazing people that have trusted you with their money or their careers. Plus you have to look your family in the eye as they make sacrifices for your dream….and that’s when you are successful as we look back on raising over A$8m of capital in 2017!!!
Being yourself, transparent and honest works really really well
On the credit side being successful as an entrepreneur isn’t about being some Alpha, aggressive, show off bullshit sales guy. Being yourself, transparent and honest works really really well. You don’t have to know everything, in fact you shouldn’t. Align yourself with great people who know more than you.
Best of all you get to do something that actually makes a difference. To get up everyday and do a job that you care about, that your team cares about, and that people you have never met before care about, is a really really fun thing to do.
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Venture Capital in Australia is ridiculously scarce
Show me the money! Where is it?!
Next up I learnt that Venture Capital in Australia is ridiculously scarce. Professional investors in this country have made it clear to me over and over again, that they won’t invest in businesses before they have customers and revenue...or product/market fit as they like to call it. Of course by that point the risk is much lower and it’s much easier to get capital.
This isn’t a criticism of VC’s - everyone works within their models - however it’s much much harder here to get an idea up than for example in the UK or the US.
If it wasn’t for the vision and foresight of a number of family offices and High Net Wealth individuals, Xinja would never, ever have happened.
Make sure your bank never preys on the vulnerable
It’s time for a change in banking
My third big learning, was just how unhappy Australians are with the existing banks.
Having worked in one, it really caught me by surprise.
I knew people wanted a better alternative, I knew the banks had been caught up in scandal after scandal, but the fact that random strangers (now happy Xinjas!) would give up hours of their time for free, to help us build them a new bank, absolutely blew me away.
People, who I have never met, from all around Australia send me emails encouraging us, and telling us to make sure we “stick it to the banks”. They tell us stories, telling how our prepaid card would have helped them. One sticks in my mind especially. A lady from rural NSW who had faced financial ruin but picked herself up, got a heavy goods vehicle license and was now fighting her way back as a trucker. She asked me to: “make sure your bank never preys on the vulnerable and stays true to your promise of putting money back in the pockets of Australians”. No bullshit, I teared up reading it.
To be honest, sometimes these emails make me feel ashamed to have worked in banking. I hope Xinja is a good step towards making amends.
On that note, we have to acknowledge the haters and the trolls. If you are thinking about starting a business, doing something different, or even just breaking away from the crowd a little, there are going to be people that will try and tear you down. Fortunately we are lucky, it's only happened once to us, we had a couple of people go feral on us on social media and say we were criminals! I know it's someone who has never met us, and probably does this habitually, …..but wow it hurts knowing someone hates you that much, even if you have never met them or touched their life. The truth is, you need a thick skin to do something different, as people can be cruel and unkind.
Millennials will also take action. They will move their money to ethical investments. They will support companies they think are doing good
Millennials will drive the new ethics
On a much brighter note, the best gift that starting Xinja has given me, is a level of hope for our future. Millennials get a lot of grief for being lazy or not willing to put up with tough times. However I have found our millennial customers and staff to be deeply compassionate and committed. They seem to care more about issues that my generation (I am 45) and my parent’s generation didn’t care about and should have. Millennials will also take action. They will move their money to ethical investments. They will support companies they think are doing good, and they will happily pay a fair value to companies that truly help them. I think this compassion, willingness to act and be corporate activists with their money bodes very well for the future. (Actually I've just realised that's 4 lessons 😉 )
With that I wish you all a restful and happy holiday season. It's going to be full on here at Xinja headquarters running our crowdfunding and getting ready for our February and March product releases.
Thank you all for your support this year. We all look forward to repaying your trust in us.