The Inaugural Fintech Forecast

Outward VC and Callsign launched the inaugural Fintech Forecast, an annual event bringing together leading figures in Fintech to discuss the state of the market. This year Outward’s Devin Kohli and Callsign’s Amir Nooriala were joined by Eileen Burbidge (Passion Capital), Shachar Bialick (Curve) and Isabel Woodford (Sifted) as moderator. The themes centred on leadership in crises and the power of founder CEOs vs. executive CEOs, rounding off the conversation with a discussion on the latest leadership change at Monzo.

To replay the panel follow the link.

Defining Fintech winners, have the goal posts shifted since Covid-19?

Who will come out as the winners and losers has been front of mind since we learnt of the pandemic reaching Europe, Woodford poses the question of what winning means and whether the goal posts have now changed?

Eileen Burbidge – partner at Passion Capital and non-executive director of a number of Fintechs including Tide and Monzo – kicks off the discussion, arguing the definition of success will remain centred on providing genuine value and utility, concluding “I don’t think [Covid] shifts [this] and I don’t think it alters what Fintech companies set out to achieve or deliver for customers…it will just take longer.” As business slows and the time frame for success is stretched, companies need to ensure they have the runway to come through it.

Devin Kohli, co-head of Outward VC – the early backers of Monese and Curve –  on the other hand argues that to some extent the goalposts of winning have changed, explaining that “in the short term it’s all about survival… if you manage to survive where so many others have failed, it’s arguably a win.”

Amir Nooriala, CCO Callsign and former COO of neo-bank OakNorth, is optimistic about the opportunities crises can create. Drawing from his experience during the dotcom bust and the GFC, Nooriala comments “you get more long term gains during this kind of period than you would during a boom. Companies will drop off. Competitors will drop off. There will be opportunities to hire top talent and make acquisitions you previously couldn’t.” Well-funded Fintechs should focus on putting plans in place to set themselves up for an acceleration when the cycle changes.

 

Keeping founders motivated in a time of crisis

Woodford shifts the conversation towards the psychology of founders and how to keep them motivated during trying times. Kohli notes that whilst there are financial mechanisms such as option and performance schemes that VCs can look to re-calibrate to the challenging macro environment, it doesn’t always come down to money as “successful founders are motivated by what they are building”.

Shachar Bialick, founder of Curve, notes that there is a big different between owning 5% vs. 30% and talks of the importance of aligning the interests of shareholders and management. Bialick however points to a deeper motivational driver which he explains by comparing founders to Rock Stars, who are driven by the desire “to be known” and to make a dent in the world.

The conversation shifts focus from incentivising founders to unraveling the traits of successful founders. Nooriala, reflects on his experience working for an executive CEO vs. a founder CEO noting “you can massively notice a difference in terms of the pace, in terms of the unwillingness to settle… it doesn’t matter how difficult it is, the founder will generally want to solve it while an executive is more concerned about their career and the next promotion.”

 

Monzo’s recent leadership change

Woodford directs the conversation towards Monzo, whose CEO Tom Bloomfield stepped out of his position to become President of the company. Burbidge notes that “in hindsight we should have done this a year ago” the reason being that 90% of Bloomfield’s time has been largely taken up by the regulators rather than focusing on product and vision. Burbidge continues, “I don’t see any diminishing of Tom’s leadership role in the company – quite the opposite. I think this is going to reignite and reamplify [his] role as cultural leader and the vision for the business.”

Shachar countered by warning, “there is a huge price of replacing a foundered CEO with a salaried CEO in terms of the impact on the vision and strategic goals of the company,” echoing Nooriala’s earlier point that “an executive CEO is concerned with the next 2-3 years vs. a founder who is in it for the long run.”

Nooriala, wrapped up the discussion by concluding leadership change is natural, especially as a company grows from seed stage all the way to one day becoming an incumbent, stating “hopefully that change is always an upgrade and an evolution as opposed to departures.”

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