An empty roll of toilet paper representing entrepreneurship failures

Entrepreneurshit – 6 Common Failures of Entrepreneurs and Start-Up Companies

“Don’t fear failure, learn from it.” That’s what my coffee cup says. 

Matthias Gall, co-founder of trimplement
trimplement co-founder Matthias Gall is not shy to talk about entrepreneurial setbacks.

Easy for it to talk. 

Sure, entrepreneurial mistakes can teach us valuable lessons. But honestly: Some failures are nothing you can just brush off. For instance, when you have launched a company and it goes downhill. You will have invested capital and time, plus you have employees you may not want to lay off. In hindsight, it might make a good story for a F*** Up Night. But wouldn’t we prefer if it all had just worked out? A coffee cup does know nothing about the nuances of entrepreneurship. 

I can speak from experience. Over a decade ago, my two co-founders and I established our fintech software company trimplement as a German limited liability company. As matters stand now, it turned out pretty well for us. A lot could have gone wrong, though, and I want to help aspiring entrepreneurs avoid such mistakes. 

Here are some common failures newly minted company founders face – let me tell you, I know them from experience.  

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Two people with VR goggles, representing interactions with the metaverse and its payment systems

How FinTechs and BigTechs Bring Payment to the Metaverse

Photo of Natallia Martchouk, co-founder of trimplement
trimplement co-founder Natallia Martchouk takes us on a trip through the thrilling prospects of payments in the metaverse.

The Metaverse has been one of the hottest topics in business and tech in the last few months. Is this only a buzzword and a hype or does it have a real longer-term potential to become the “next big thing”? You can find supporters for both opinions. However, a lot of big consultancy companies believe that there is no way to fail for the Metaverse.

For example, according to CB Insights “the metaverse could represent a $1T market by the end of the decade”. Deloitte has published a white paper about the potential of the Metaverse and they believe in even higher numbers: “The metaverse may become a paradigm shift for consumer and enterprise behavior, analogous to the introduction of smartphones. It could create a potentially massive new market, with recent estimates of the commercial opportunity as high as $13 trillion and five billion regular users by 2030.” Accenture has launched the Accenture Metaverse Continuum business group to help their clients to understand and make use of the Metaverse opportunities. Its head Paul Daugherty stated that “The next generation of the internet is unfolding and will drive a new wave of digital transformation far greater than what we’ve seen to date, transforming the way we all live and work”.

I’m also rather on the optimistic side of supporters believing that Metaverse is not the hype but a next step in the technological, social and economical development of mankind. 

However, before we analyze the current development status and prospects of the Metaverse, paying special attention to the payment topics, let’s review what “Metaverse” actually means and how it is different from “Web 3.0”.

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Three board game pieces symbolizing German companies getting into fintech

5 German Companies Blossoming Into Fintech Players

We don’t only buy from them. We also pay with them. 

In contemporary e-commerce and digital service platforms, we observe a growing number of players who enter the realm of fintech. Those originally non-financial companies understand that offering embedded financial services has become a key success factor. And for some: A profitable side business (if they can sell their self-built payment or wallet systems to other companies).

Those companies realize their fintech ambitions in various forms: Some just rely on external partners and simply embed financial services, such as insurance or loans. Others have higher aspirations and aim at core payment processes. They want to run their own payment solutions. Perspectively, external enterprises or customers not associated with their primary business should use them, too.

If we had to guess: The former paragraphs had specific brands pop up before your mind’s eye. Apple, Amazon and Google. WeChat, perhaps. And of course, the term “Pay” attached to all of them. 

But besides the big names, non-financial companies from various industries have broken ground in fintech. 

And as we have a certain affinity to the German fintech scene, we want to take a look at 5 of new fintech players from Germany and where their ambitions lie. Here goes, from B to Z:

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A violet LEGO brick, symbolizing the platformization of fintech and Stripe's and Klarna's role in it

The Platformization of Fintech: What Stripe and Klarna Do Right

Matthias Gall, co-founder of trimplement
trimplement co-founder Matthias Gall shares his thoughts on the ongoing platformization of fintech.

In the financial industry, we are never shy to celebrate a good rivalry. Neobanks compete with banks who compete with fintechs who compete with Google, Amazon or Apple who compete with each other (and WeChat). Yet, the industry has also become known for promising partnerships. Technical providers, fintech platforms, merchants, telcos etc. combine their resources and expertise. 

I can relate: Where partners with different backgrounds support each other, it’s easier to create approach problems from different angles and overcome obstacles (shoutout to my co-founders here). Likewise, partnerships between fintech companies allow them to tackle new portions of the market and improve customer experience or services – and that’s often the goal. What’s more, where technological partners join forces, we can also see huge jumps in innovation regarding infrastructure. Those companies often lay the groundwork for other companies to utilize in their products and services. 

For me, the recent co-op of fintech platform Stripe and Buy Now, Pay Later provider Klarna stands as a prime example of this later case. The cooperation of those two effectively presents a straightforward route to BNPL for single online shops and platforms. Online businesses just have to tie in the Stripe integration and their BNPL is basically ready to go. 

However, this would not be as significant, if both Stripe and Klarna had not become known for their extensive service portfolio. Stripe acts as a payment facilitator for online marketplaces while, at the same time, being a fintech platform itself. It’s an expression of a trend some in the industry call the platformization of fintech

What do I mean by that?

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A woman interacting with a virtual reality, symbolizing the post-platform payment world

Payments in the Platform Economy – What’s Next?

Photo of Natallia Martchouk, co-founder of trimplement
trimplement co-founder Natallia Martchouk knows what comes next for payments in the platform economy.

If you live in a developed country in the modern world you probably do your shopping on Amazon, connect with your friends on Facebook, book your apartment for holidays via Airbnb, order a pizza at Delivery Hero and call an Uber car if you don’t want to drive yourself. 

Each one of these companies is an example of a digital platform business and all together they build a so-called “platform economy”. 

There are many definitions of what a “platform” is. In the broader meaning, a platform can be any kind of online sales, transaction or technological framework allowing people to connect for any kind of economic, technological or social interaction. Some sources differ between “online matchmaking” and “innovation” platforms, some mention more types of platforms, for example, “innovation platforms” (like Apple iOS or Google Android), “transaction platforms” (like Airbnb, Etsy), “integration platforms” (combining capabilities of innovation and transaction platforms) and “investment platforms” (like Priceline or OpenTable).  There is no unique approach in the classification of the platforms. 

In the context of this article, we will look at the digital matchmaking platforms (also called transaction platforms) in the first place, like the above-mentioned Amazon, Airbnb, TaskRabbit, Etsy or eBay. The goal of these businesses is to give their users the opportunity to find a service, worker, resource or product that is best fitting to their needs with the lowest possible transaction costs. We will have a special focus on how those platforms are doing the payment processing part for their customers as we believe that frictionless payment is one of the key success factors for online matchmaking providers. And the most interesting challenge would be to try predicting how the payment experience may look in the next stage of economic development, in the so-called post-platform world.

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A desk with calendars, symbolizing 2021 and its fintech industry developments

The Fintech Year of 2021 – An Industry Recap

Writing a 2021 recap of fintech has been a tough call. No misunderstandings here: A lot has happened in the industry. But we have gotten so used to the future of payments being both digital and mobile (and some would throw a decentralized in there, too). Long familiar talking points continue rotating in the press: 

  • Embedded Finance keeps breaking through.
  • BigTech companies still follow their payment ambitions. 
  • Invisible payments in mobile and online payment remain attractive for customers. 
  • Embracing Open Banking is significant for all financial players. 
  • The promises of Artificial Intelligence await around the corner. 

So what is to write, when we can expect all of this to define the financial industry in the next years? Well, the devil will be in the details: How will those factors play out on the level of specific target groups, use cases or nations? How is the fintech industry holding up as a whole? And what happened in the crypto sphere? 

You see, there still is a lot we can talk about… 

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Vertical Banking: Why Banking for the Niche Is a Growth Market

Imagine a bank. What does it look like to you? 

We assume that most of you reading this would picture it as a building. Perhaps with a sleek, dark blueish glass front. Perhaps with towering pillars reminiscent of classic empires. Definitely with ATMs and clerks giving out cash, taken from underground vaults.

But let’s be honest here: Nothing of that represents modern banking services. Since the introduction of online banking and smartphones, banking is no longer confined to a physical place such as a bank building. Banks become platforms: Nor more need for the branch offices of the financial giants. What’s more Open Banking initiatives make SME banking easier, leaving much room for the smaller, more focussed financial institutions. 

Those institutions are the domain of the so-called Vertical Banking. Providers engaging in this form of banking cater to a specific customer niche that larger financial houses and neo-banks don’t address as purposefully. But what do those niche banks look like and what role will vertical banking play in the future? 

We start with the basics. 

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A women scanned thoroughly, symbolizing know-your-customer procedures

What is KYC: An Overview for Fintech Companies

KYC, meaning Know Your Customer or Know Your Client, refers to the processes conducted to verify the identity of a customer and assess the risk of the business relationship with them. 

KYC is a crucial regulatory requirement for fintech companies and other institutions with financial responsibilities (like banks, credit institutions and insurance providers). Laws and regulations oblige those actors to validate the identity documents their clients provide. That’s equally true if the clients in question are legal entities instead of persons. KYC also requires companies to evaluate the clients’ financial status and monitor their monetary accounts for suspicious transactions. 

The goal: Adhere to Anti-Money Laundering (AML) and Countering the Financing of Terrorism regulations, prevent fraud and constrain the access of users, who don’t fulfil certain standards of credibility.

But Know Your Customer policies are not just boundaries. They also act as competitive factors. KYC yields insightful data on one’s own services and customers.

It thus helps establish a reputation as a secure and trustworthy company as well. And trust is likely the most valuable asset for any financial business today.

So it’s time for a deeper look into the meaning and definition of KYC, its chances and its challenges. 

This Know Your Customer Introduction for Fintechs Contains:

  • A definition of KYC
  • A discussion of key KYC-related concepts such as AML or EDD
  • An overview of legacy KYC procedures and their modern counterparts
  • A list of typical challenges fintech companies face with KYC

Now, shall we? 

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A hand holding a handy, on which a stock market app is running, representing the SPAC investment type

Opinion: What the ICO Hype Can Tell Us About SPACs

Hypes are a good thing. No, think about it: They generate attention for products, activities and ideas. And where there is attention, there is scrutiny, too. The humming of the mainstream buzz makes us turn heads and observe closely where the noise is coming from. 

Matthias Gall, co-founder of trimplement
Matthias Gall, co-founder at trimplement, analyses the potential and possible drawbacks of Special Purpose Acquisition Companies.

For the hype-sensitive stock market, this has proven a boon in many cases. Wall Street is loud, and the more volume an investment trend generates, the more it will catch regulators’ interest – besides that of eager venturers. And currently, one investment trend generating much noise is that of SPACs. 

SPACs (short for Special Purpose Acquisition Companies) stood on the sidelines of the stock markets for a few decades. But in recent years, they made a comeback in the investment mainstream – mostly thanks to the web. And there, I could not help but think of another social-media-driven hype of the 2010s: ICOs. 

In fact, SPACs already show the same signs of overvaluation and ultimately disintegration that have befallen ICOs a few years back. But will SPACs go down the path of the ICO? 

In this article I will try to answer this question and a few more, like: 

  • What are SPACs? 
  • Why are they popular?
  • What are their risks and disadvantages? 
  • Is the SPAC hype comparable to the ICO hype? 

Okay then, here goes: SPACs, the specifics… 

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Opinion: The NFT Craze on the Art Market

Intro

trimplement co-founder Natallia Martchouk
trimplement co-founder Natallia Martchouk shares her thoughts about the NFT-based art

Everyone and his dog have been talking and writing about NFT (non-fungible tokens) in the last couple of months. I don’t know where exactly this hype is currently coming from. NFT is not a new concept, it has been around for a couple of years already. 

Back in February 2019, I wrote an article about different use cases of blockchain technology in art, which also mentions a couple of older non-fungible token projects like Crypto Kitties or Rare Pepe Trading Cards, so-called digital collectibles. In October 2019 we even started our very own NFT project Value Manifesto together with the art historian Timo Niemeyer, mechanical engineer Matthias Frank and producer of Nixie Tubes Dalibor Farny.

So, nothing new under the sun. But suddenly everybody is talking about the NFTs and NFT-based art is being sold for tens of Millions of dollars. It looks like the concept of certification of art ownership on the blockchain is suddenly lightning-fast going mainstream. However, what currently happens in the art market, rather reminds me of the famous dot-com bubble at the end of the 1990s. Let’s have a closer look at the events of the past few months.

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