taavet hinrikus

Taavet Hinrikus

Co-Founder CEO, TransferWise

THIS CHAT HAPPENED ON January 12, 2016

Discussion

taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
Hi - I’m Taavet Hinrikus, co-founder and CEO of TransferWise. We’re revolutionising the way people send money abroad. Before TransferWise I was Skype’s director of strategy until 2008, starting as its first employee. I’m also a digital advisor for the Prime Minister of Estonia and an angel investor. My investments include Tweetdeck, Mendeley, OMGPOP, Betaworks, Sunrise and Mapillary among others. I’m looking forward to answering your questions on all things start-ups, tech and FinTech. UPDATE: Thanks everyone, this was awesome fun! Thanks for all the questions. If anything is left unanswered then I'll check in tomorrow and will get back to you.
Andreas Klinger
Andreas Klinger@andreasklinger · Tech at Product Hunt 💃
Hey @taavet You guys are famous for how you structure your company. If i understood it right you define company wide goals and then create teams around them, those teams then get segmented into smaller goals and smaller cross functional units. To me it seems to be the most logical structure for knowledge worker teams. But it feels still uncommon in our industry, where we usually have layers of managers, product managers, engineering managers and engineers. You are doing this quite some time by now: - What are your biggest lessons learned so far? - How cross functional are your teams? - What good and what bad/funny moments can come out of this "decentral" structure? - What would you different if you would start again at (let's say… random number *cough* product hunt) 20-30 people?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@andreasklinger Hey Andreas hope you are well - long time no see! - biggest lessons learned so far One of the things I’m proud of building is our culture, it’s definitely been a part of how we’ve been able to grow (and move fast) - More here: https://t.co/LnD99nb6lO Biggest lessons learned about this? Full autonomy is chaos. Leadership still has an important role to play in giving the team context. And you need to empower your teams. - How cross functional are your teams? Very. When teams aren’t independent they fail. Hence when launching new markets or products/features making sure teams have everything they need to succeed within the team is critical. - What good and what bad/funny moments can come out of this "decentral" structure? No one ever has a view of EVERYTHING going on, which is quite fun as CEO. I sometimes find out precisely what our buzz team want me to do when I turn up ..
Corley
Corley@corleyh · COO @ Product Hunt
@taavet thanks for joining us today. I am an active user of TransferWise - it's how we pay people outside of the US. A few questions for you. 1. What was your initial inspiration for TransferWise? What made this your next big problem you wanted to solve? 2. How are you thinking about fraud, money laundering and the complexity that comes with transferring money? 3. How do you think about exchange rates, risk and float? Yep, you guessed it - finance / math / tech geek. I realize these are all big questions, so feel free to keep your answers brief and directional. I just wanted to get a sense for these things.
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@corleyh hey and thanks for the first questions! 1 - we really built TransferWise to solve our own needs at first. Me and my co-founder Kristo were both expats and needing to xfer money... And having some experience building Skype we realised that this money xfer thing can be done much better than the banks. Long story short here we are now. Here's the story in more verbose format so that I can answer more here :) http://www.bbc.co.uk/news/busine... 2 - all these are super important areas that we need to be great at - we have dedicated teams for working on most of these, the key is to simplify it for yourself and break the problem apart to bite sized chunks! 3 - the whole point of TW is that exchange rates dont matter. if we could predict the way the exchange rate moves we'd be doing that instead :p you're much better off finding a provider that charges least in fees versus trying to guess the exchange rate. the reason for building TW was that banks were charging 5-10% in their fees (hidden and non hidden).
Willie Tran
Willie Tran@willietran_ · Product, Testlio
Hey @taavet! Thanks for doing this. My question is regarding the Estonian startup scene. I've spent some time in Estonia (I work at an Estonian startup), and I was wondering what do you think it is that causes so many startups to appear there despite having such a small population? Did you feel that being from Estonia had any problems (or benefits) while building and growing Transferwise?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@willietran_ I think Estonia has a lot to thank Skype for. When we built Skype in 2002/2003 startups were virtually unheard of in Estonia. But by building a global success story we did three things: * we proved that entrepreneurship is legit - people should not automatically gravitate towards telcos/banks/etc, there's a better way to have impact * there are 1000+ people now who either work or worked in Skype in Estonia - all these people know what it takes to build a global business and many have gone on to build their own businesses or join others * it also brought some money to the scene - lots of people were paid well and could save something to bootstrap first year of their startup and people made money with skype options as well (in addition to the engineering founders who later on went on to launch the venture capital company Ambient Sound Investments)
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@taavet @willietran_ forgot to add there - the importance of Skype is about having a local success story. these usually move the ecosystem forward in a major way
Ryan Hoover@rrhoover · Founder, Product Hunt
BIG TransferWise fans at Product Hunt. Curious to hear your thoughts on bitcoin and cryptocurrency, Taavet. Any plans to support these new payment methods?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@rrhoover If only there was demand from consumers for that... at times it really does seem to me that bitcoin has evolved into a system for greed, much like the banking system. Too little user benefits so far... and not sure we'll even see them (what has happened in the bitcoin world in the past 12 months?)
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
Thanks everyone, this was awesome fun! Thanks for all the questions. If anything is left unanswered then I'll check in tomorrow and will get back to you.
Harry Stebbings
Harry Stebbings@harrystebbings · Podcast Host @ The Twenty Minute VC
@taavet thanks so much for joining us today. I actually spoke to Ben Horowitz about your amazing journey when he was last in London! Big fan of yours, my question is; what has been the single biggest determinant of TransferWise's success? Also, how did the investment with a16z come about? P.S Would be such an honour to have you on @twentyminutevc and share your story!
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@harrystebbings Thanks, Harry! The main thing is that we’re focused on our mission. And we have an awesome team making it happen. Re a16z investment - we actually met the team at a16z at the end of our Series A round but they wanted us to move to California...that didn’t interest us because we were getting this thing going in the UK. Then when we went back two years later and we told them how we were getting on, they got involved.
Junius
Junius@juniusfree
Hey @taavet My question is related to product development. How will you spend your time if you've got one hour to solve a user problem/need? Thanks!
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@juniusfree the best way to spend an hour probably is by talking to customer(s) to understand the problem really well - what you see from your gutfeel is often wrong so understanding that the thing is about is first and most important
Billy ZHOU
Billy ZHOU@billyflh · Billy. International traveler
@taavet @juniusfree your gut felling is often wrong. Indeed! Thanks.
Gloria Lombardi
Gloria Lombardi@lombardi_gloria · Founder and Publisher of MARGINALIA
Hello @taavet and lovely to meet you. My question is about leadership and management. As a CEO, how do you approach team communications? Many thanks.
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@lombardi_gloria When a company’s scaling fast, it’s definitely one of the challenges. I spend a lot of time chatting to people in the office, on email, slack, team calls…
Gloria Lombardi
Gloria Lombardi@lombardi_gloria · Founder and Publisher of MARGINALIA
@taavet @lombardi_gloria Thank you very much for your answer. I also appreciated the answers you gave others participants on the criticality of the internal culture. Wishing you and TranswerWise all the very best.
Apoorv Khatreja
Apoorv Khatreja@ap00rv · iOS/Android Developer, Splitwise
@taavet As a relatively new user of TransferWise, I find it to be so much better than anything else that's out there! My question is that what are the biggest challenges that TransferWise is facing right now? What comes next at TransferWise? Are you simply working on expanding to more countries/currencies/payment methods, or is there anything in the pipeline to improve the user experience or product itself for existing users with popular exchanges (for eg USD to INR)?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@ap00rv thanks for using TW. Do you have any feedback to share? Its really about continuing what we're doing - we have 5% market share in UK now, next up is doubling/tripling this. And then doing the same in other markets. The challenges are mostly about the team - we're 450+ now, the way we worked 2 years ago does not quite work any more. Also we're in 5 offices today and adding more. Making sure the team is empowered to move at lightning speed, but still has enough context.
Jaan Pärtna
Jaan Pärtna@jaan_partna
@taavet @ap00rv Taavet, you mentioned the way TW worked 2 years ago does not quite work anymore as the team has grown significantly. Can you elaborate on how you would expect it to impact the TW culture and is it likely to change the current flat to structure to more standard hierarchical? Is there something specific in the work environment that you wound definitely not change to avoid becoming like most of the other corporations? Thanks again.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
@taavet what have you learnt about investing since you first started? Are there any lessons you've learned from experience that have had an effect on your investment strategy that you can share?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@ems_hodge surprisingly (not) its all about the team. will they stick it in for the long term? how well can they hire? the idea often times will change, but having determined founders who can build a team around is important. and if you plan on being value add then you also want to see proof of the person listening/learning to you as noone likes talking to a wall, right?
Chryssi Chorafa
Chryssi Chorafa@chryssi_c · Senior Consultant
Hi @taavet, Thanks for making yourself present in this chat forum, this is such a great concept! There are many FX companies out in the market such as WorldRemit, HiFX and others. How do you differentiate yourself from your competitors? What is your long term vision? In what type of markets are you interested to expand? Many thanks in advance!
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@chryssi_c I know - it’s fun at this end too. It’s great that consumers are starting to get real choice - for so long, the banks had a monopoly - that’s why they were able to charge so much. We don’t tend to think about our competitors - we focus on how to make our service better and better for our users. Our long-term vision… to bring fair and better international money transfer to everyone in the world who needs it. It’s also about changing the whole world of finance. I think in five years time, it’ll look completely different.
Billy ZHOU
Billy ZHOU@billyflh · Billy. International traveler
@taavet @chryssi_c Chryssi, I want to add some my personal thought, and the reason why I love what Taavet's team do. When you log in to your bank’s website, you see a balance printed on the screen. Let’s say it’s $100,000. Don’t think for a second that there are one hundred thousand pieces of paper sitting in your bank’s vault. In fact most banks have very little cash on hand. Your balance is nothing more than an accounting entry on your bank’s balance sheet, which is likely maintained in a computer database somewhere in a building with no windows. There’s no physical ‘money’ backing up this bank balance. It’s an annotation in a computer. Every bank customer’s savings is part of this complex system of accounting entries. When you transfer money to your kids, the bank doesn’t send them a FedEx full of cash. They merely make an entry in the ledger reducing your balance and increasing your kids’. The same thing happens when you swipe your Mastercard to pay for something; banks exchange accounting entries that credit the vendor’s account and debit your own. Nothing physical ever changes hands, it all takes place in digital ledgers. Given that this type of money exceeds physical cash by a factor of 10:1, you could argue that most modern currencies are digital. In this case, think about taking 2-3 days wiring money with a bank-deciding rate does not make any sense. What TransferWise does is to break this no-sense situation. Just personal thought.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
@taavet what has been the best advice your've ever been given? Flip side what's the worst?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@ems_hodge the worst piece of advice i’ve ever been given… i forgot it pretty quick :) the best piece of advice - find a job that you’d do for free: that way you know you love it
Dmitry Kaigorodov
Dmitry Kaigorodov@kuolldev · ceo/founder, www.kuoll.com
@taavet What were the most difficult things you needed to solve about being a company from Europe? Good luck guys! You inspire us all.
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@kuolldev Starting a money transfer business in Europe meant we were a global business on day 1. Starting from Europe has been an advantage rather than a hindrance for example finding the language skills to build a global business was relatively easy. We knew we wouldn’t be able to build a US business remotely and one of the harder steps was opening our US office; figuring out how to build a great US product and growing it to its first $1bn in 8 months.
neeharika sinha
neeharika sinha@neeeharika · Google, Threadchannel
Hello @taavet Great to meet you here. I was curious to know what are few differences in startup scene in Europe vs Sillicon Valley? Thanks
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@neeeharika well, Silicon Valley had a bit of a headstart on us in Europe… the main difference is that when you start up in Europe, you have to think internationally from day 1 as the domestic market isn’t that big
Billy ZHOU
Billy ZHOU@billyflh · Billy. International traveler
@taavet @neeeharika " Need to think internationally from the day 1" This also happens to countries such as Chile, Peru, Malaysia, since the market is very small. This mind set really value a lot.
Ashton Squires
Ashton Squires@ashton_squires · Founder of Asquire Events
Hi @taavet, Thanks for your time. What do you want the transferwise brand to represent and have you found that brand has had to change for different regions and different customer segments? From a university student that uses transferwise regularly! Cheers
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@ashton_squires we stand for transparency and fairness - that translates everywhere and to everyone. That’s more than the brand - it’s the mission of the company.
Billy ZHOU
Billy ZHOU@billyflh · Billy. International traveler
@taavet this is Billy. We help Chinese young entrepreneurs to explore across border business opportunities. Does your team have any plan to put RMB on your list?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@billyflh watch this space ;)
Billy ZHOU
Billy ZHOU@billyflh · Billy. International traveler
@taavet @billyflh Cool, I am keep a close eye on your product. You may want to start from off-shore RMB, where most of your customers have no culture barrier. The Chinese government will open six cities to allow Chinese send money oversea in 2016. There will be around 600 billion RMB (around 100billion dollars) once this is open. Your team need to watch this closely.
Manuel Solorzano
Manuel Solorzano@eevmanu · Engineering @ uTu.ai
Hi @taavet, thank for joining us today. Do you see any opportunity outside remittance area in fintech, like exchange rate startups with a better rate above local banks?? (not neccesarily sending money cross-borders). Thank you for product, is awesome, I hope I could use soon in American countries. Love what you're doing in fintech area, pretty hard work, disrupting some game rules of 'dinosaurs' banks.
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@eevmanu Hey Manuel - Not sure if I understand your question - could you elaborate? But overall - I believe there is a huge opportunity to help consumers with better finance products. TransferWise and the rest of the FinTech community are less than 1% of the way on the journey. Look at other finance verticals - from lending to asset management to saving to mortgages all being disrupted by fast tech companies.
Billy ZHOU
Billy ZHOU@billyflh · Billy. International traveler
@taavet @eevmanu Yep! The old banking system really sucks. They still represent themselves as the roll way: once you pass a gate, you pay for some fee. Transferwise and other finteck companies are in the stage of ...... post-banking age.
Manuel Solorzano
Manuel Solorzano@eevmanu · Engineering @ uTu.ai
@taavet @eevmanu yeah, thanks for replying I'll do my best re-elaborating my question. What I mean is having a digital money exchanger dealer in your country, that would exchange your money to other currency with an above market rate (if not highest) and move to your personal account in the last currency, hope you could understand me because, as a remote worker, I receive my money in USD but I need to exchange to my local currency but banks exchange rate are so low so what I do is withdraw money, exchange and deposit it, but this involves time. Considering that I prefer to exchange my money here because remittance services give you a good exchange rate (better than local banks) but charged a exchange rate fee (between 2 o 3% of the amount) or maybe is a exchange fee far below that highest in local market. Thanks again and wish the best for you and #TransferWise
Jordan Gonen
Jordan Gonen@jrdngonen · trying my best.
What has been your biggest failure ?
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@jordan_gonen not having a sauna in the office since the start. just kidding :) http://uk.businessinsider.com/tr...
Diana H
Diana H@diana_h4 · dd
Hi Taavet and thanks for being here today!! ...I have a question regarding the policies and regulations that apply to fintech industry in the UK...what do you think is the future for this industry? Thanks
taavet hinrikus
taavet hinrikus@taavet · Co-Founder CEO, TransferWise
@diana_h4 The future’s definitely bright… the regulators in the UK have been keen to work with tech start-ups and other countries have followed their lead. There’s still much more to be done to modernise things like AML… More exciting, it’s clear that consumers are starting to embrace alternatives to banks… that’s cool.