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Balancing experience and vision

A year ago, I wrote a piece about Fin and Tech being like Father and Son. The thing that I was noting is the chasm between bank leadership teams, who are generally men over 50, and FinTech startups, who typically have young visionaries and significant diversity.

It’s a theme I’ve returned to regularly. It is not that I have a problem with old men running banks, but I have a problem when it is all mature people on the leadership team, especially if we believe, as I do, that banks are technology firms. Especially if banks are technology firms in the FinTech age.

It is because I see so many new ideas coming from young people. Mark Zuckerberg was at college when he started Facebook, as were Serge Brin and Larry Page when they set up Google. John and Patrick Collison were 19 and 21 years old when they came up with Stripe. Elon Musk was 28 years old when he started his second business X.com which later became PayPal (he started his first business Zip2 with his brother when he was 24, which sold for $22 million). This list could be lengthy, and the message is clear: youthful visionaries get tech. In fact, it was interesting reading about the Collison brothers over the weekend, as Bloomberg made them their cover story.

You should read the whole thing, but here’s a few highlight:

How Two Brothers Turned Seven Lines of Code Into a $9.2 Billion Startup 

“We think giving two people in a garage the same infrastructure as a 100,000-person ­corporation—the aggregate effects of that will be really good,” Patrick says …

Ironically, it was Moritz [Mike Moritz, one of PayPal’s first investors] and PayPal co-founders Peter Thiel and Elon Musk who wanted in. They got that its technology hadn’t kept pace. “The propeller of the good ship PayPal was pretty encrusted, and a lot of barnacles had formed on the hull since we invested in the company more than a decade earlier,” Moritz says. “The observation that accepting payments was still too difficult rang very true” …

“If you think about the broad trajectory of the internet, most of the breakout successes are still to come,” Patrick says …

Three years ago, Stripe had 80 employees. Now it has 750.

Three years ago, Stripe was valued at $3.5 billion. Now it is valued at over $9.5 billion and, considering that valuation is almost a year old, I would estimate it would be more like $11 billion.

But payments is a brutal battleground. Countless startups, big banks, and companies such as Google Inc. and Apple Inc. are trying to grab what pennies they can with their own systems. This competition, combined with the industry’s minuscule profit margins, has left pundits asking whether Stripe’s lofty appraisal makes sense. “We’re a ways out before they can satisfy that valuation,” says Brendan Miller, an analyst at Forrester Research Inc. “They’re valued higher than a lot of players who have been around for years with thousands of employees, tremendously more volume, and clients all over the world.”

One way to justify the number: Stripe’s new partnership with Amazon. com Inc., the largest and most sought-­after customer on the internet.

Right now, it’s a great time to start up anything, because it is so easy. And that is why so many young entrepreneurs are doing it. But it’s not just young entrepreneurs. It’s entrepreneurs of any age and ethnicity.

Rise of the grey entrepreneur: meet the over-50s starting their own businesses, The Guardian

And if you don’t want to create a start-up, you can always join one.

At 76, would you join a start-up? This scientist did

There is actually as distinct a need for people with experience to join tech start-ups, as there is for people with experience to bring on board bright young things with new ideas. There is a synergy here. The young have the tech vision; the experienced have the ability to see the risks and opportunities.

That is why I was amused when I read the story about Bob Crum in the Financial Times this week. Bob had worked with HP, Sun and Cisco but, at age 62, was made redundant and no one was interested in his richness of experience anymore.

“I was told ‘we decided to give this job to someone earlier in their career, your experience was a long time ago’. Those were hurtful things to say to someone who was eminently qualified,” he says. “After several months trying to get back into the tech world, I just threw up my hands and mentally told myself, I’m retired from high-tech and will move on to bigger and better things.”

This is true of a lot of people in technology (it is less true in banking), where the average age that you become a has-been is 45. According to research by Hired, salaries begin to fall aged 45, with candidates in their fifties and sixties getting the same pay as millennials with just two years’ experience …

Dan Lyons, who wrote a book, Disrupted, about his experience working at start-up HubSpot, says tech companies need to recognise the value of a “blended multi-generational workforce” and show how many older workers they employ in their diversity reports. When he joined the start-up, which boasted its average age was 26, he was 52 and surprised by the “weird stereotypes” some of his younger colleagues seemed to have of older people. One called him grandpa. “I had this really big blog, I was internet famous, I had developed a TV show and worked in Hollywood, and they were like, ‘wow, you can use Twitter?’” he recalls.

I picked up on Dan Lyons book before. He didn’t last long at Hubspot due to the clash of cultures of young and old.

I “hear a story about janitors coming in one Saturday morning to find the following things in the first-floor men’s room: a bunch of half-empty beers, a huge pool of vomit, and a pair of thong panties. The janitors were not happy. They get even more distressed when, one morning, a twenty-something guy from the HubSpot marketing department arrives wasted and, for reasons unknown, sets a janitor’s cart on fire.”

It does not have to be that way of course. I’ve seen plenty of experienced people being used as mentors for their younger counterparts, bearing in mind that 90% of startups fail. That means there is a duty of balance here between being young and hip and old and experienced, and I’m not sure that FinTech firms or banks have got that balance right yet.

Oh, and one has-been over the age of 45 is Elon Musk. If you’re interested, here’s how his career panned out (from The Adioma Blog):








About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Andrew9999

    I don’t understand your point – are you implying that only young people can think of ideas – or are you saying that the Silicon Valley business model would be good for banks? Either way that seems obviously bogus. The Valley model is “disruption by losing vast amounts of money whilst putting your competitors out of business, and ignoring social, legal or ethical issues along the way” (you can apply that statement to any of the companies you mention – including the media darling, Musk). A large majority of “ideas” don’t even get funding, or fail to get past their first round of investment.
    For example, do we really want a world where “youthful ideas” are used to build bridges, 90% of which will then fail, whilst putting the experienced bridge builders our of business in the process? Or that are used to manage your money? Thought not. Personally I’d rather have the common sense and experience of age applied to serious topics such as how my money is managed – and leave “youth” to focus on those really important areas like social media, and how humans get to Mars… or to put it another way, where’s the app that solves climate change?

    • Chris_Skinner

      You misinterpret Andrew. The point I’m making is that a balanced boardroom of technology know-how, that typically is in a millennial, and banking experience, which typically is in a more mature person, is needed. Not just one or the other.

  • Great piece, Chris. I remember having worked in automation of merchant-to-consumer ordering systems for 10 years out of San Jose State, and then hearing my CEO say “there’s this new name for what we do, that’s going to help us grow. It’s called ‘electronic commerce'”. I went to work in financial technology for about another ten years before the word ‘fintech’ came along. Through and through, it’s been mostly gray-hairs deciding when to let the young folks apply creativity, with the younger ones often struggling to also bring about business acumen. It’s a real struggle on both sides. Now my son is the manager of payments research for Business Insider in NYC, and he’s showing far more promise than I ever did! One note: the dates in the excellent Elon Musk infographic are a bit off, for the Continuity/X.com/PayPal era. I interacted with Elon in the late 90’s as an industry analyst/consultant, yet the graphic shows PayPal not being created until our current millennium.