Florian Matthaeus Spiegl, Co-Founder and COO of FinFabrik, is featured as the second founder in our Meet the FinTech Founder Series.
Florian was a mentor in the inaugural SuperCharger program, and actually met the co-founder of his current startup as they mentored one of our previous SuperCharger cohort companies. Find out more about the story below!
I sat down with Florian to learn more about his journey as a startup founder and his latest startup FinFabrik. Read more to learn about FinFabrik’s unique philosophy when it comes to funding, the milestones they have achieved, and for Florian’s tips as a founder of four ventures.
Can you let us know a little about FinFabrik?
FinFabrik is a B2B software as a service company focused on capital markets tech. Companies use our platforms to provide investment services to their clients. That can range from the active side which is end users trading in stocks or financial instruments directly, all the other way to the passive side, which is clients’ money being managed either by a human portfolio manager or by an intelligent machine leveraging artificial intelligence. We are building integrated platforms that financial services companies but also technology companies can use to bring these kinds of services to their clients.
So this is not just about FinFabrik, but also about you as a founder. You mentioned that you were involved in four different ventures. Can you talk a little bit about your journey how you started your venture and where you are now?
That’s a long story so I’m going to go high level. In the end it is all about entrepreneurial spirit. Even when I worked in corporates, that was always there. Basically, I just followed that spirit. In the beginning, you do it in a very unstructured way and you make a lot of mistakes. I can say I learned most from those. You get to understand how things work inherently, how you can make a small company successful and grow it. Going through that journey is really why I enjoy being an entrepreneur. The mistakes and the learning curve are just as much a part of it as the success stories.
So how did FinFabrik start?
That’s a very good question because it actually started while we were at SuperCharger. Alex, my co-founder, and I were both mentors at the program. We were mentoring Neat and worked with David and his team [founder of Neat]. They were presenting and we were giving feedback. Alex was commenting. I didn’t know him, but I said to myself, that guy knows his stuff. Alex tells me he was thinking the same about me. In terms of perspectives we were on the same page. We have also both been around the block in banking. Naturally we met straight after that session and clicked immediately on a personal level. Both of us were open at the same time to create something in FinTech. Shortly after we met Marcel, our CTO. It was several good things coming together.
What a great story, even for SuperCharger!
Yeah, it’s true. It happened at SuperCharger — that’s where we first met. Serendipity.
I know you guys are relatively early — you have been running for six months. So far what has been your proudest milestone? There can be many.
It’s several ones. Important turning points, by the way, sometimes happen because you are lucky. You need to be prepared for your luck, but also be humble enough to recognize it as a factor.
The first one — beyond the founders meeting each other — was the acquisition of a company called Investlab. That really helped us to get out of the gates very quickly. We got enterprise-grade trading technology that was built over five years, and it was ready to go. Basically, it allowed for us to enter the brokerage technology market rapidly, and helped us to get to where we are today. Having client revenue, being cash-flow positive and not really needing funding right now; it all resulted from this first milestone.
Second was closing our first client. This was a super important moment because we saw that at least to some scale our model was working — we have a product that has a market, and clients see the value it delivers. It solves critical problems for them and they are willing to pay for it. The beauty of enterprise software business. That was a very important validation in the development of the company.
Lastly, I would say, beginning of this year was the third milestone by seeing some major sales seeds that were put into the ground last year come out of the ground. It shows that it is really worth speaking to everybody — to large banks if they approach us, to small brokerage and wealth management firms and also technology companies that want to offer financial services. That confirmed that business is about the relationship first, and also that you have to be opportunistic in what you do and a deal pipeline will develop eventually.
It’s a tradeoff — right — because you have to prioritize your time while also developing a pipeline of deals. Is there a strategy you guys have? Was it talking to everyone in the beginning and then becoming pickier afterwards?
It’s not so much strategy but rather two things: focus and a clear strength of synergy in the team. Above all sales efforts, focus on execution comes first. Some fires you have to let burn, and some opportunities you shouldn’t go after. As I mentioned, we don’t actively pursue the large banks at this point. We decided against spending energy on that for now, unless they reach out to us.
Secondly, I believe we are in a specific situation with the founders complementing each other. Our CEO [Alex Medana] is a connector. He has endless energy to develop personal relationships. Every business is a people business and Alex is fantastic with generating traction and PR on a broad basis. Once we are in more concrete conversations with a potential client, I usually come in to add structure, a sales process, and to find out fast if and how we can help that client. At the next stage our CTO joins the conversation which by that point is already very concrete. So, we are broad in the beginning but quickly narrow things down to only pursue leads that are meaningful to us commercially and strategically.
I also want to touch on the point about your funding situation and how it isn’t the traditional Silicon Valley VC model. Can you talk a little more about that?
We’re following a different model by being founder funded. First of all, not having investors early on gives us complete freedom to do what we think is right without having to justify every single step. We are not kids and that brings some advantages. We believe that we know a few things in our business area and maybe see developments a little earlier. Some decisions that we take now may seem like a waste of time or not the right thing to do to other people. That doesn’t bother us. By being the main risk takers, also financially, we can act opportunistically and work hard to prove our point.
Secondly, I think from the perspective of an entrepreneur’s journey it’s more enjoyable if you don’t have to think about satisfying investors. In contrast, you can put all the energy into helping clients and building a business. Our company is still small and fragile. But we’re profitable and that gives us unlimited runway to grow step by step and do what we enjoy.
Of course, one day we will go into markets we don’t understand enough or need to hire a lot more people and digest growth. Then we will find the right partners to get funding at that point. That’s a different story.
From the outset, philosophically, we want to stay as long as we can, as much as it makes sense, a founder and employee owned company. We are aggressive about solid execution and real business growth, not how much funding we collected. We want to wait for the right opportunities, and I think to some degree you need to take your time with making these decisions. They can make a real difference in your trajectory, positive and negative. We take the time to think through these things and wait for the right partners.
That’s fascinating. Definitely a different approach from some of the other people we’ve been talking to. The next question is what are some tips you would give other founders or potential founders?
Well it’s a couple of things. First of all, before you jump into a startup, ask yourself if you can be in a situation where you have to survive on very little. Pressure to bring in significant income or having to support a specific set up — whether it’s a mortgage or just the family situation — is not a good starting point. It’s emotionally taxing in general to run a startup. If you have a difficult financial situation on top it’s a huge distraction. It takes a lot of energy. I think the fewer obligations you have when getting started, the more flexibility it will allow to do the things you believe in. I am incredibly lucky to have that freedom at this phase of my life and the unconditional support of the people closest to me.
That is also a question of attitude, by the way. We were all making good salaries in banking before. Now we say that we want to invest every single dollar into developers. We don’t pay ourselves a salary at this point. The highest return on investment is not me taking a salary but paying top-notch developers above market to build solutions that we can monetize. It’s a very rational approach but you can only follow it if you don’t have a set up that requires you to have a certain amount of income every month.
The second thing when you think about starting a company: be aware that running a startup is 10x more taxing and 10x more of an emotional burden than you think right now. So only do it if it’s a topic that is really important to you, that you deeply believe in, and that is close to your heart. Let me put it that way: you will encounter situations where you want to drop everything in that second and stop because it’s so bad. Thankfully that hasn’t happened yet at FinFabrik, but it happened to me before. If you don’t really love what you do, you will not keep going in challenging times. But being resilient against these challenges is one of the requirements for success. Do what you love. Otherwise I wouldn’t get started, or I would wait longer to find out what that thing is.
The simplest tip in the end: find the right co-founders. It will make all the difference in how successful you will be, how this experience will let you grow as a person and how much you will enjoy the ride.
My last question is what are you excited for in FinTech?
I’m excited about a buzzword that I don’t really like but that I am using because people can relate to it. It’s called financial inclusion. To me, that is opening up the field of wealth management to a much broader part of our society. You know, people still understand wealth management in the wrong way. In their mind, they see a rich person that has their money managed. The truth is, people who don’t have as much money also want to send their kids to a good school and also need to plan for retirement. The money that they saved, even if it’s little, needs to be carefully managed. That’s their wealth. Today they have no one to turn to, simply because in the traditional set up, banks cannot afford to serve these clients. They are too inefficient, too many things are done manually and complexity costs, for example regulatory, are too high.
With automation, we are able to provide a much more efficient set up to our corporate clients and help them to unlock this entire market, which is obviously also attractive from a business perspective. That is why we are working on bringing artificial intelligence onto our platform, not just as a nice label but a true differentiator. It will have significant impact on how people navigate their financial lives and is a great market opportunity at the same time.
So would you say that this kind of financial inclusion is the mission of FinFabrik or is it just what you are personally excited about?
It is part of what we do and why we exist. Across all the founders, this is something we believe in and also why we went into digital wealth management.
Our mission is quite simple. We want to enable companies to provide better financial services to their clients. That’s the starting point for us and financial inclusion is part of that.
If you ask me what the motivators are behind that: it’s certainly important to us to unlock these kinds of services for a much broader set of people, and providing them with a much better user experience than what they get today.
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