Watch out for startups with autonomy

Markets around the world are dominated by large incumbents with a ton of market power – whether it is media, logistics, e-commerce or finance. For a startup to succeed at a busy market they need to out-execute all the incumbents by an enormous margin.

Why is it that only 1 in 100 startups ever succeed after raising $5m in series A? They always have a good idea that could work. Where startups fail after Series A is execution, specifically the speed of execution.

Read More

Why does TransferWise have fees?

Money is information. Using, storing, moving money should be as cheap and instant as exchanging information. As cheap as sending an email. And certainly it shouldn’t be more expensive or slower if the information crosses country borders.

That’s not the reality. World Bank calculates that people lose 7% on average on cross border, others triangulate the total fees banks charge be $200bn. With TransferWise we’ve brought the fees down to 0.3% on some routes, but we believe it can and should be much cheaper. We have made 27 price drops in the last 9 months and plan many many more. Here’s how we do it.

Read More

Your free debit card is not free

I’m between rental flats in London and chose to rent a cottage in Essex for two weeks. I found it on Airbnb and paid the landlord ca £1000 for that. Crazy prices around London.

The landlord got most of it, Airbnb got a good margin, but I was fascinated to pay £2 to my bank as a hidden fee on my debit card. It doesn’t show up anywhere on my card statement, but this is what Airbnb had to pay to the bank that issued my card in what is known as an interchange fee. Read More

Euro 2.0 weekends

Can money exist without a banking system? “Sure,” say the bitcoin enthusiasts. But can we have the same kind of money that we’re used to – euros, dollars, yenis? The invention of smart contracts makes it a practical opportunity.

We are half-way through building a proof of concept for a tech savvy country to run a bankless monetary system in parallel with the traditional one. A few friends put together the infrastructure using Estonian ID system over a weekend, we’re now planning for a second iteration and you’re welcome to join if you believe you can help.

Read More

The future of money may be in the ether

Two years ago I got very excited by the idea that it will be possible to decentralise the handling of money in my small country Estonia. I’m not talking about geeky bitcoins, but the real Euros. I wrote this blogpost, chatted with bitcoin people this and the other side of the Atlantic. At the time it certainly felt do-able, but needed quite a bit of technical and cryptographic wizardry.

Now we have the Ethereum programmable blockchain. It took me a couple of hours on a Saturday morning to successfully implement a central mint and a monetary system using a public recipe, together with necessary enforcement controls to tackle money laundering and other bad things.

Read More