What downturn? Why it’s a good time to be a fintech firestarter...
With global stock markets tumbling, and the beleaguered Rand on a dizzying rollercoaster ride, South Africans are worried. The general sentiment is overwhelmingly negative, and business owners are casting worried eyes at shrinking profits and escalating costs. So what does this all mean for entrepreneurs? And particularly for entrepreneurs making their big move in financial services and fintech?
Lorien Gamaroff, founder and CEO of Bankymoon, a local Bitcoin solutions company, insists that it’s actually a great time to be an entrepreneur – and that entrepreneurs have plenty of reasons to feel optimistic about the coming year.
“In lean times, customers are looking for cost savings, and for different ways of running and managing their businesses,” explains Gamaroff. “In addition, it’s getting more expensive for larger incumbents to operate, which creates an opportunity for smaller and more agile competitors to move in…”
He also points out that certain things become cheaper and more accessible for the smaller players, and the talent pool tends to deepen. Indeed, in a downturn, young and talented people have fewer opportunities within established corporates, and are often more willing to take a risk on startups that at the very least, provide them with an exciting start…
Riding the Fintech Wave
“There are definitely some unique gaps and opportunities emerging in the fintech space, as people become less trusting of the bigger institutions and look for alternatives,” adds Gamaroff. “Particularly in Africa, where over 80% of the population is unbanked, there are unique opportunities for startups that can provide alternative payment technologies.”
He notes, for example, that Africa is the most expensive continent when it comes to remittances, and says that he is currently working on a project that will leverage blockchain technology to lower the costs and speed up the remittance process.
Gamaroff has several tips for entrepreneurs looking to implement their disruptive ideas in the downturn…
“Stay lean and mean, and keep costs down as much as possible,” he advises. “It’s also so important to find the right people to work with, and to really nurture and hang onto those people.”
This might involve giving them equity in the business, and allowing them to take on challenging roles and responsibilities.
Finally, and particularly with regards to the fintech sector, Gamaroff urges entrepreneurs to focus on a niche – and not try to solve too many problems at once.
“Look for inefficiencies in the current system, take one small thing or insight out of it, and just go for that,” he says. “Become educated [around that niche], and run with it. Startups always have less to lose – so taking a chance is a good thing.”
For Gamaroff himself, this bold approach has certainly worked so far. He identified the opportunity within blockchain technology several years ago, and his ideas are fast gaining traction in the African market.
“I’m a software engineer, so I was fortunate in that I could look at the technology, how it worked, what it meant, and how it could make an impact,” he adds. “It’s real, there is a science behind it, and I was fortunate to be in this space at the right time – with the right skills…”
Testament to his work and credibility, Gamaroff was cited in a recent report released by the Commonwealth of Nations that calls on its 53 member countries to speak out about the legality of bitcoin and other digital currencies.
Lorien Gamaroff is the CEO and founder of Bankymoon, a software company providing blockchain solutions to the financial services industry. He developed the world's first prepayment solution for smart utility meters and has been invited around the world to speak on crypto-currencies and their benefits to emerging economies. He has addressed the IMF, World Bank, FBI and Commonwealth Secretariat and a host of banking professionals in Europe and Africa. He is a partner in the Bitcoin Academy which aims to spread information and awareness on blockchain technologies. He is currently developing a crowdfunding platform for disadvantaged African schools which will allow foreign donors to directly fund their utilities.
For more information visit the Bankymoon website.