I find it interesting reading the articles about toxic cultures at Revolut. If you Google "Revolut Culture", the second search item is this one:
“You're nothing but a number to them with dollar signs attached.” That's how Revolut, one of the fastest growing fintech startups in the UK, described traditional banks when advertising for business development manager vacancies last October … but former Revolut employees say this high-speed growth has come at a high human cost – with unpaid work, unachievable targets, and high-staff turnover.
Then I saw another discussion last week about N26, saying that they're also going through growing pains:
According to two people close to the hiring process at N26, annual staff turnover was a little above 40% between 2020 and 2021 … “if the company brought in 10 people every month, it was likely that four or five of those would be gone,” said one of the sources involved in hiring at N26. “This is not something you can build a business on; people changing that quickly.”
These are not the only ones. I’m aware of many foibles and mistakes made by many FinTechs, the most famous of which has to be the demise of Powa:
Powa Technologies collapsed in February after blowing through more than $200 million of investor money. Insiders claim its flagship product was a "basket case" and company was plagued with management dysfunction. Former staff recall wild Christmas parties with bottomless champagne and topless dancers … CEO surrounded himself with "yes men" and allegedly wouldn’t listen to criticism.
What a lot of this indicates is the growth challenges of start-ups from launch through toddler years to being a teenager and finally a grown-up. Maybe this goes back to my analogy of the parent-child relationship. Banks are grown-ups, well some of them, whilst FinTechs are kids.
More than this, it goes to the heart of who is the founder and what is their outlook on life. Many of these start-ups are driven by high achieving males who believe a testosterone fuelled culture of work hard, play hard is the way to go. For others, it’s the growing pains of moving from a company that started with high values and lowered them, as the pressure of investors and the VC community bore down on their shoulders. For others, it is the issue of how to change from a hang loose, live free company, to one that now needs clear sales metrics and cost management.
It is the move from being the new kid on the block to being The Man.
Is that sexist?
I would say yes, but only 7% of FinTech start-ups are founded by women … even in 2020, 65% of venture capital firms have no female partners and only 1% of capital goes to female founders.
Would female founded FinTechs perform better than male founded ones?
I’m not sure, but what I do see is that there a lot of male founded FinTechs who are driven by goals and structures that are inappropriate for the 21st century.
[Mike] Cagney, who cofounded SoFi in 2011, sent a company-wide note announcing he'd be gone by the end of the year following a lawsuit by a former employee alleging a toxic culture of gender-related discrimination and harassment.
A survey conducted by InChorus revealed high levels of workplace harassment, of which 85 per cent is gender based and mostly men harassing women. If you are in a FinTech where you feel you face these issues, there is an option that InChorus created on Slack:
Our InChorus slackbot empowers individuals to anonymously report everyday instances of bias & harassment and to recognise micro-affirmations (actively inclusive behaviours).
InChorus also offer a charter that you can sign up for:
The Charter’s aims:
- Support FinTechs in becoming more diverse, by focusing on building inclusive environments
- Commit FinTechs to protecting employees from harassment by establishing a ‘speak up’ culture
- Recognise that different FinTechs have unique starting points and needs - each organisation should set a strategy that is right for them
- Require firms to confidentially share key steps they have implemented: (1) the name of the exec made accountable for diversity and inclusion; and (2) evidence of their policy or the creation of one.
The 5-point Charter:
My organisation pledges to tackle harassment & promote inclusion by:
- Having one member of our senior executive team accountable for Inclusion & Diversity
- Creating & promoting an effective Harassment & Bullying (H&B) policy
- Developing employee awareness around what constitutes harassment & encouraging inclusive practices
- Providing a range of appropriate reporting channels so that employees can speak up safely
- Ensuring that action is taken as per our H&B Policy
If you want to sign up for the Charter it’s here.
Meantime, it is not easy founding a company, growing a company and seeing it to maturity. Each phase has different challenges and each phase often needs different people. But, just to be clear, any form of harassment or exclusion or bullying in an office environment needs to stopped as soon as it is seen. It is unacceptable.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.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...