Founder Stories with Taavet Hinrikus (Transferwise) | Summary and Q&A

Summary

In this interview, Taavet Hinrikus, the founder of TransferWise and former employee of Skype, discusses the founding story of TransferWise and its disruptive role in the fintech industry. He also touches on the reaction from traditional banks, the growth of the company, and its future plans.

Questions & Answers

Q: What were the early days of Skype like?

In 2003, we were building Skype in the back alleys of Tallinn, Estonia. The concept of a startup was still new, and it was amazing to realize that we could build a company that would change the world from such a location.

Q: How did you come up with the idea for TransferWise?

During my time at Skype, I had to deal with the frustration and high costs of transferring money between different currencies. When I met my co-founder, Christo, we realized that there was a need for a better solution in the foreign exchange space, and TransferWise was born.

Q: What has been the reaction from traditional banks towards your model?

Initially, there was skepticism and dismissal of our model. However, as more and more fintech companies disrupt various areas of banking, banks are starting to take notice. They understand that the traditional banking model is being challenged, and they need to innovate to stay competitive.

Q: How are you using the internet to disrupt the fintech and foreign exchange space?

TransferWise leverages the internet to provide a faster and cheaper way for people to transfer money across borders. By using peer-to-peer transfers and mid-market exchange rates, we eliminate the need for traditional banks to facilitate these transactions.

Q: Is London still the leader in fintech compared to other cities?

Yes, London still has the edge in terms of fintech ecosystems. Other cities, like Sydney, are a few years behind in terms of developing their fintech industries. London has seen incredible growth in the past decade and continues to be a global leader in this space.

Q: Are you planning to expand into other countries?

Yes, TransferWise is looking to become a truly global player. We have already launched in the US and Australia, and we have plans to expand into New Zealand, Hong Kong, Singapore, Japan, and China. Our goal is to provide fair financial services to consumers worldwide.

Q: Do people take TransferWise seriously as a brand?

Yes, we believe people take us seriously. While we may push the boundaries with our advertising campaigns, it is important for us to stand for something and make a point. We balance transparency and fairness with the need to grab people's attention.

Q: Is your business defensible against competitors?

TransferWise is highly defensible. Building a brand and trust in the online space is challenging, and our technology and network allow us to move money quickly and securely. We continue to invest in our business to maintain our competitive edge.

Q: Do you think there is still a lot of growth left in the market?

Absolutely. While we have achieved a 5% market share in the UK, globally, there is still significant room for growth. The market for consumer and small to medium business money transfers across borders is estimated to be between 5 and 10 trillion dollars annually.

Q: Have there been any obstacles or bumps in the road for TransferWise?

There have been some bumps along the way. We had to make changes to our advertising campaigns based on concerns raised by the Advertising Standards Authority. We are committed to being transparent and ensuring that everything we say is factual.

Takeaways

TransferWise, founded by Taavet Hinrikus, has disrupted the financial technology space by providing a cheaper and faster alternative for transferring money across borders. The company has faced initial skepticism from traditional banks, but as fintech continues to disrupt the banking industry, banks are starting to pay attention. TransferWise has successfully expanded its services to different countries, and there is still ample room for growth in the market. The company aims to maintain its innovative edge by investing in technology and building a strong brand. While they have faced some obstacles, TransferWise remains committed to providing fair financial services to consumers worldwide.