Jumping on the cryptocurrency bandwagon

Blockchain and blockchain-based cryptocurrencies are all over the place these days. Is this just a fad or something that is here to stay? Are we talking about a valuation bubble or is this just the very beginning of a game-changing trend? I could not tell, and I dare say that the vast majority of people - even experts and those very familiar with these topics -  don't know wither.

In any case, I have been wanting to write a bit about this as, little by little, I am getting more immersed and interested in this ecosystem. I am not in a position to give a master class of any kind on blockchain and cryptocurrencies, so I will just jot down some notes about some topics that I find particularly interesting, in particular concerning the financial sector.

Blockchain-based applications and their legal fit
By providing an open, decentralized ledger of transactions, blockchain technology is challenging the status quo of information registration, authentication and distribution. In addition it is expected to provide additional transparency and lower transaction costs - I like how IBM simply and practically explains in this video how blockchain works.

Blockchain is not just a buzzword any more and a lot of applications and ecosystems are being built on blockchain across industries, including the broad financial one. One of the main challenges that I see is how blockchain-based applications are going to fit with existing legislation. One thing is disrupting processes and a different one is circumventing applicable laws which, in most cases, have not foreseen anything remotely close to blockchain.

A good example of this tension is the SEC's decision on initial coin offerings (ICO), according to which crypto tokens are to be regarded as securities under U.S. law. Renowned VC investor Fred Wilson wrote a blog post about this recently. I am sure other countries will follow suit. Again, ICOs may be a a way to disrupt money raising via cryptocurrencies; a different one is getting away from legal guarantees and requirements.

The cryptocurrency universe
A few weeks ago I came across the attached chart, which provides a pretty good view of this new ecosystem of cryptocurrencies that a month ago was valued at a "market cap" of around $80 billion. Yet Bitcoin, Ethereum and Ripple make up the most of that ecosystem, there are now 800+ cryptocurrencies out there.

According to a Bloomberg article, as of last July, more than 90 ICOs had taken place, resulting in more than $1 billion being raised - which exceeds the volume raised via early-stage VC financing.

Bloomberg further points out the fact that many of this ICOs are subscribed within minutes and, in many cases, based on simple product proposals, not on tangible MVPs or initial traction.

One last thing in the article that caught my eye is the fact that an increasing number of "traditional" bankers and investment professionals are migrating into this ICO universe.

Pricing cryptocurrencies
Many argue that there is a cryptocurrency bubble that could burst at any time following rapid price hikes in many tokens in the last months. Case in point: Bitcoin itself - price has quadrupled since January 1.

An interesting point to assess is the correlation between bitcoin and other cryptocurrencies. I dare say that it is not clear cut and there is no one-suits-all conclusion. However, it seems safe to say that, in general terms, tokens price are positively correlated. This and this analyses (charts below) I came across online exemplify this point.

So, are we witnessing a cryptocurrency bubble? This L2 video featuring a chat between NYU Stern professors Aswath Damodaran and Scott Galloway - definitely two of my very favorites while at b-school - provides some good insights:

• you cannot value (i.e. cashflow-based) cryptocurrencies, you can price (i.e. interaction between supply and demand) them;
• a lot of people have lost trust in paper money, central banks, governments... different crises (e.g. North Korea missiles) may be driving prices up, as cryptocurrencies become a sort of "haven" similar to gold;
• historically, the value of gold has relied on the "illusion" of people having the chance to sell it to someone else. A similar thing may apply to cryptocurrencies;
• people think that they have an insight to trade cryptocurrencies, they think they know more than they actually do. And that is a piece of the pricing game; and
• the subset of people who think that financial markets are overpriced is a fairly large one...and they may be moving to cryptocurrencies to find yield, driving prices up as a result.

In short, a super interesting, rather nascent ecosystem that is being developed at lightspeed and subject to permanent debate. Time will tell where the path ends.

Two weeks in Berlin: my first (biz tech) impressions

It's been two weeks since, with the dawn of 2017, I moved to Berlin. Not long enough to settle anywhere, even less so when you are joining a new company in a city you are not familiar with, where you do not speak the language and know nobody (plus the weather - two cloudy and snowy weeks - and short days do not help either).  But I am taking baby steps each day, slowly but confidently, supported by a couple of acquaintances - how important it is to have friends who can "refer" you anywhere - and a warm welcome at work.

By looking at these past 15 days I can already point out a few local behaviours that have surprised me in areas where technology has been (and is expected to continue) playing a significant part. 


1. Cash is king
After having lived in New York for a long time I got used to paying 90% of anything with debit/credit card (I feel like Spain, or at least Madrid, has also evolved a lot in terms of accepting this payment means in the last years), as I find it convenient and it works great to track my expenses via apps, etc. 

That is not going to work in Berlin, I am afraid. Big bummer. Multiple places - not talking just about the doner kebab shop around the corner - do not accept cards and paying in cash is the only alternative. The same limitation goes for the Stripes of the world. Plus it kind of strikes me that, in particular in a city that has positioned itself as a top European tech hub, payment technology - one of finch darlings - is so detached from the day-to-day.

2. No Sunday shopping 
I typically do not have time Mon to Fri to buy stuff, other than groceries. When it comes to clothing, furniture, personal care, etc, it is Saturday and Sunday for me. 
Realizing that shops close on Sundays in a major and touristy city like Berlin has been a surprise. 

At a time where people are increasingly buying stuff online, this just gives people another reason to continue to do so - for instance, German online retailer Zalando keeps increasing sales vigorously quarter after quarter. I do not see that trend stopping around here (competition isses with Amazon and others left aside). At the end of the day you can buy online any day at any time.

3. No food delivery wars?
In the last few years a lot of money has been poured into food delivery companies such as Deliveroo, Just Eat, etc., just as other players such as Uber launched businesses (UberEats) to get a piece of the action. 

In two weeks I have just seen riders - and not a lot I must say - who work for one company: Delivery Hero's Foodora. I do not know the reason but I must admit I was expecting more activity and more players in the battle field. 

4. Berliners do not like their banks...either
Obviously I needed to open a bank account for my daily operations in Germany. I asked people around and there was no consensus whatsoever about what bank to pick. The consensus was actually on how disappointed most people were with their respective banks.

So, I have decided to give a shot at N26 (formerly Number26), the new German challenger bank backed by Peter Thiel and other VCs. I will be able to provide more info in a few months but I must say that the whole process of opening an account and of getting my cards and activating them was easy, seamless... and all online!

5. Car-sharing is hot
Before arriving in Berlin I had heard stories about how much Berliners use their own bikes - I have not seen a Citibike-like service such as the one in New York - to commute to and from work. Totally true, even if it is -8C outside and snowing. But public transportation - a great network of S-Bahn, U-Bahn, trams and buses is in place - is also very much used. Another thing that has somewhat suprised me is that traffic flows rather nicely when compared - based on my limited perception to date - to New York or Madrid. 

But one thing that is really hot in here is car-sharing. In addition to Mercedes Benz-owned Car-2-Go (which I already used in Spain - the same app works nicely, which is great), BMW has also its own car-sharing service called DriveNow.

There is a lot is to be learned when you relocate to a new country and keeping an eye on how things work is enriching. The European Union may be one single market, but at the end of the day, the differences among country members and their citizens are still very relevant. And I do not see that changing in the short and medium term, it is in each country's DNA.

Moving to Berlin: my new challenges ahead in fintech

My new challenges in 2017

A lot has happened over the last 16 months. I have gone through a roller coaster-kind of professional experience where I have had the opportunity to experience the good, the bad and the ugly of what working at a young startup means. I will reflect about such an experience in future posts but one thing is clear to me: I have learnt a lot at multiple levels. And now I am confident that such experience - paired up with my existing background which, as unexpected as it may be, is going to prove pretty helpful shortly - will help me succeed in all all my forthcoming challenges.

There is doubt that 2017 will be bringing me new challenges, opportunities and, in short, a new life in Berlin, Germany. As of January 1, I will be joining Crosslend, an innovative debt capital platform, as Country Manager for Spain.

Crosslend: what is it about

Near-zero and even negative interest rates make it increasingly difficult for investors to get higher returns, while increasingly tighter legal requirements make it harder for financial institutions to lend and push money down to the real economy (ie. SMEs). 

By means of an innovative and disruptive cross-border, single-loan securitization structure, Crosslend is creating a marketplace where both investors and debt originators can better achieve some of their goals. On the one hand, the company wants to help investors obtain higher yields by investing in a sort of new asset class, so the former can better meet their mid and long term yield goals. On the other, there is the challenge of becoming an important player in building the European capital markets union that should helps bridge the existing funding shortage between financiers (banks and others) and underfunded borrowers, by given the former a new alternative to free up capital and keep on going with their lending activities.

Co-CEO Dagmar Bottenbruch summarizes some of the key point sin this short interview at the LendIt conference held in last October.

Getting into fintech

Fintech has always been a sub-sector I have been attracted to and that I have had interest in, mainly as a user/consumer of new tools (wealth management robo-advisors, personal finance tools, international wire transfers, etc.), and also as a follower of disruptive B2B trends (crowdfunding, crowdlending, FX, etc.).

Some friends and colleagues have pointed out in the past that it could be a good destination for me. I think I enjoy an above-average understanding of finance as a whole thanks to my education and work experience, plus now I am able to bring in a more compelling tech / startup background (yet from a different industry) to the table. I am very happy to see that both ends are meeting now and excited about this new opportunity.

Berlin: a great place to be

Anyone who follows the European startup scene knows that in recent years Berlin has become - alongside London (even more so post-Brexit) - the European startup hub. A wealth of entrepreneurs and investors, the availability of international talent, a cosmopolitan environment and a reasonable cost of life (in particular when compared to Paris and London) have given rise to a thriving startup ecosystem. 

Plus Berlin is also a key player in the powerful German (and European) fintech ecosystem - see picture below - which spans across multiple sub-sectors and products, in both B2B and B2C segments.

However, I would be lying if I said that the idea of moving to Berlin has not been a surprise to me. I was not counting on starting my life pretty much from scratch...again. New country, new language (even if you can supposedly live off English quite nicely in Berlin), new friends... it gets harder as one grows older, but still... 

After weighing in Crosslend's promising project (backed by reputed VCs such as Lakestar and Northzone) and inspiring vision, a role that offers me a challenging opportunity and everything that Berlin has to offer, I have made up my mind. It will be curious to jump on a plane on January 1 to kick off such a new time for me.

To an exciting and fruitful 2017!!

My summer vacation and the sharing economy

Speaking about the sharing economy is nothing new. However, when you think about it, it has not been around for such a long time even though we may feel that it is indeed the case. But the truth is that the first companies of this kind were born less than a decade ago - do you remember (some are still around) Ecomodo (2007), Crowd Rent or Share Some Sugar (2008)? Neither do I...

In short, technology has disrupted several industries by making them more efficient, in a way not seen before. This video explains in three minutes the fundamentals behind the rise of the sharing economy, being efficiency the key word at stake.  

But in addition to increased efficiency, the sharing economy as untapped multiple regulatory issues. At the end of the day, the regulator runs always behind the market - you cannot regulate something that has never existed before - and the incumbents in the market are not happy when the, in many cases, quasi-monopolies they enjoy are threatened. The legal issues that, even today, global sharing economy leaders such as Uber (drivers employee status, antitrust issues vis-a-vis taxi drivers) and Airbnb (apartment owners crackdown) are facing in key markets such as the U.S. and Europe have been notorious.

In my view, certain trends cannot be stopped, even more so when users love the service. Incumbents, adapt or get ready to die.

Spain has been, and still is today, a particularly tough market for sharing economy companies. However, little by little the latter are finding ways to overcome legal hurdles and to adapt their business models and operate. And for those of us willing to use them they are increasingly becoming irreplaceable.

A good example of how relevant they have become to me has been my latest summer vacation: Car2Go, Uber, Airbnb, Blablacar. I have used them all and they all have had a common denominator: cost savings + convenience + addressing a need. In other words EFFICIENCY:

(1) UBER: I used it to kick off my vacation in style, by getting from work to the train station. I had to make a stop on the way to pick up some stuff and, even with such a stop, I saved 30% over a regular cab (I hate it when cabs charge you an extra just because you are getting to/from a train station).

After multiple regulatory issues and fights with traditional cab drivers, UberX is finally running in Madrid. The service differs slightly from that in the U.S., as drivers need a specific license to operate (therefore, not anyone can be an Uber driver). Brand new cars in great condition, friendly drivers, increasing supply of cars and competitive pricing. Bye bye taxi!

(2) BLABLACAR: for the second phase of my summer vacation I needed to get from a town in the province of Almeria to another town in the province of Cadiz, both in Southern Spain. In the absence of my own car, I had two alternatives - bus and train - each involving a 5h+ trip and approximately €20. I took a Blablacar for €10 and within less than 2 hours I was at my destination. Plus I shared the ride with three very friendly people.

I have recently become a Blablacar user. It essentially saves me time and money on frequent routes (I still sometimes feel like traveling on my own using "traditional" means, though), and I have now realized that it may be a life saver on less common ones.

(3) AIRBNB: finding a nice and affordable place to stay at a popular spot on the second week of August - peak season in Spain - a week in advance may be impossible. You either sacrifice quality or price. Airbnb did it for me: I found a room at a great house next to a golf course and 10 minutes away from the beach at a very low price.

I have been using Airbnb for many years, mainly for leisure trips and renting the whole place for myself. However, over the last six months I have gone a step farther, using it for work travel and renting private rooms within a larger house. So far so good.

(4) CAR2GO: I used it upon my return in Madrid to get home, instead of taking a cab (or Uber). There were cars available nearby at the time and I was not in a rush to get anywhere. A very cheap and enjoyable drive in an empty Madrid to get ready to get back to work.

The new electric car-sharing platform that has been around in Madrid since last November has become a must for me. It is one third cheaper than a cab, it is convenient as you can park anywhere for free, plus you are "in control" as you drive yourself. A perfect subway match to move around the city and to prevent you from the temptation of buying your own car.

Well, it seems like these four guys are gonna stick around for quite some time. I am sure others will be joining soon too.

Learning from tech leaders I admire

Today I have read a very interesting piece that Fast Company - one of my must-read publications -  has recently produced on Uber and its CEO Travis Kalanick. It is priceless to better understand the company's ethos and driving forces. This has led me to think a bit about some of the people in tech I admire.

When it comes to leaders in the technology space, a few names come to mind quickly to the general public. A simplified classification I have come up with - Forbes, for instance, has its own ranking of "The Richest People in Tech" - would break down such leaders in three groups:

(1) those who are no longer active or in executive roles but whose influence is still undoubted today (Steve Jobs, Larry Ellison, Bill Gates);

(2) those who have rather recently disrupted the world (and continue to do so) and have already significantly cashed out (Mark Zuckerberg, Sergey Brin and Larry Page, Jeff Bezos, Mark Cuban); and then

(3) those whose companies are on the verge of becoming - to some extent they already are - the next big thing (Travis Kalanick, Elon Musk, Brian Chesky)

Week-in week-out I read a lot of stuff about many of them. And there is always stuff you can learn and try to apply to your more mundane existence. Some takeaways for my own sake are the following:

- long term vision vs. short term profit: I love Amazon's Jeff Bezos' approach to this and how he continues to drive innovation at Amazon by continuing to invest heavily in new services and products (Prime, Amazon Web Services, you name it...), instead of giving in to The Street's pressures for boosting the company's present stock price. At the end of the day, and as obvious as it sounds, the latter will be accomplished if things work out just fine - the last months' stock price evolution being a good example.

- challenge the statu quo: I am gonna go with Uber's Travis Kalanick. I love his strength to challenge what is widely perceived as a legally-protected dated monopoly (i.e. cab service) in pretty much all countries around the world. When customers love your service the regulators can do nothing but ultimately changing the rules of the game.

- dare to dream: nobody in my view is better at this than Elon Musk. From the hyperloop train to life in Mars; from space "tourist" travel to the perfect car. If I had to pick one guy as "the" visionary, I'd pick him. Such "visions" are sometimes broadly praised and some other times hammered. However, few people feel indifferent.

- learn, learn, learn: when Mark Zuckerberg started to take the stage as Facebook's CEO and main spokesperson he was widely criticized for his relative weakness with presentation and public speaking skills. He has invested time and effort in getting better and the results have been evident, his notorious recent presentation in Chinese being a great example. Just because one is at the top of the world does not mean that he knows it all. Be humble and never stop getting better.

- be generous: you can call tax planning...or you can call it giving back to the community. Or you can argue that it is a bit of both. But the huge contributions that the likes of Microsoft's founder Bill Gates continue to make to try to make the world a slightly better place should not be unnoticed.

These are just some ideas. There are a zillion others. But I do know that working for and/or with someone you admire and look up to makes your work more rewarding. Plus it commands an extra "something" that at the end of the day results in self-improvement, additional commitment and increased loyalty.