Ch-Ch-Changes
All I ever wanted was to create video games. Though I may have not been the greatest programmer while in school, I felt it was my calling. After college, I did the natural thing and applied for a job at the 2 or 3 German video game companies that existed (this was the late 90’s). Not surprisingly, they completely ignored me. I did then what every decent German wanna-be programmer did at the time — I applied for a job at SAP. Randomly, I ended up developing Finance and Payment solutions at SAP in the beautiful village of Walldorf. And while I was still excited about gaming (Hello “Ultima Online” and “World of Warcraft”!), I started getting really passionate about enterprise software, and in particular Fintech, although the term didn’t exist back then. This continues to this day. In addition, I can’t stand when things don’t make sense, or, even worse, if they are unfair. Why hasn’t there been a real change in payment terms in hundreds of years, conceptually? Why do we still pay small business after 30, 60 days, or even later?
And why, and now we get to the point, does an employee get their salary at the end of a month, providing credit to her employer, although she earned and therefore deserves this money at the time she performed the work? And even worse, why are there predatory lenders out there, taking advantage of this salary gap, and charging workers horrendous fees and interest if they run into trouble at the end of a month, before their actual payday? This is the reason why I was listening carefully when I got a phone call from a FinTech and TradFi entrepreneur a few months back.
Look, the idea is not new. We talked about “ending payday loans through employer Dynamic Discounting” at Taulia, my previous Fintech company. But quite frankly, ideas are like assholes, everybody has one. What truly matters is conviction, commitment, and execution to bring an idea to reality. And this is what my new role promised to have.
When the opportunity came up, I was just transitioning out of Centrifuge, the company I co-founded with Martin, Philip, and Lucas in Berlin. Our mission is to connect businesses worldwide through a decentralized, blockchain-based protocol, to enable tokenization and subsequent lending to every company on the planet. For me, Centrifuge was (and still is) the natural extension of what we did in our previous startups, most recently Taulia: bringing access to liquidity not only to a few million suppliers but also creating an open and unstoppable network to provide financial services to literally every company in the world. A big, audacious goal? Fuck yeah. I truly believe we can get there, but it will take time. So why did I decide to make a change, and transition into a board role at Centrifuge and join Greensill? The truth is, it was likely one of the hardest decisions of my life, but one that began a few months before I got the phone call describing the idea that I am now tasked with making a reality.
Over the summer of 2019, I took a few weeks off. I felt something was not working for me and I did some soul searching. To make a long story short, I realized that the combination of being in the new CEO role and playing in crypto, a space where I didn’t feel 100% comfortable knowledge-wise, was taking, not giving me energy. I just didn’t have the impact that I wanted to make. The role, as it is with a startup CEO, required millions of tasks that didn’t immediately result in measurable outcomes. And the crypto space requires constant learning to keep up to date, things change almost on a daily basis. In hindsight, I feel extremely comfortable happily handling the CEO role or working in a new space, but both at once felt like I was fighting an uphill battle; a battle that felt impossible to win. As a kid, I played handball in the position of a “Kreisläufer” (see it here), something like a forward in soccer. I was pretty good at it. My CEO job at Centrifuge felt somewhat like being thrown into American Football as a quarterback.
Realizing that, I immediately spoke to my co-founders to work on a plan. The opportunity for a new role came later and accelerated that plan slightly. What made this hard decision easier for me is knowing that the team at Centrifuge is stellar and continues to deliver on the vision we started together in 2017. Under Lucas’ new leadership, Centrifuge will get the right guidance for the years to come. I am incredibly proud of the team and happy to be allowed to stay on for the journey, even if in a much smaller role.
Back to my new gig. At Earnd (as it would be called), I am heading product and technology, with a focus on partnerships, as well as heading our activities in the new area of employee payments. For me, as much as Centrifuge is a natural extension of what we did at Taulia, accelerating salaries to employees is a natural extension of the entire SCF space, just in a different dimension. Who are the most valuable “suppliers” of a business? Their workers. Providing access to well-deserved liquidity when an employee needs it is the right thing to do. Ending the nasty practice of so-called payday loans, charging employees sometimes triple-digit interest rates is wrong, hurtful, and just increases the poverty premium they have to pay, making it harder, often impossible, to escape the debt trap. This is payday poverty, and we can end it using the proven SCF funding rails to access the most affordable funding, committing to keeping it completely free for employees are two key ingredients to successfully ending the status quo. I am ecstatic about what’s next and am honored to have the opportunity to make what I hope will be a significant impact.
If you are keen to help ending payday loans or like to chat about Ultima Online, ping me ;)