Summer is here and it is HOT!!

Opening Note:

Hello Dear Readers, I hope you are well and May has been good to you. Please do forgive the shameless and frankly awful pun to start this Newsletter. Those of you in NYC, or who have lived here before, will know that the sun in this city is like a volt of electricity to the streets. With that in mind, my excitement is warranted, as is my irredeemably complex pun.

FinTech Nexus - Main Takeaways

This event really was quite something, 4000 people strong there to discuss everything B2C and SMB FinTech. A very strong turnout, everything from C-Suite, to Sales Reps, to VC Leaders, overall an incredible event.

This section won't be overly long, B2C or SMB finance isn't an area of expertise of mine, except for hemorrhaging money from losing Options trades on Robinhood, it's not an area I've dealt with too closely over the years. However, there was some really interesting takes from some of the panels.

"Gateway Banking" and the Blockchain:

On the second day I had the pleasure to hear the CEO + Founder of Custodia Bank ( Caitlin Long ) speak about Blockchain Innovation and Regulation. I was a long time believer that the real innovation behind Cryptocurrency was never the newer asset class, but the infrastructure and technology behind it that made it possible, specifically the Blockchain. So it was great to hear a true expert discuss the sector.

One of the main conversations around Blockchain is it's potential application to make settlements quicker, both in retail and in Capital Markets. However, as Caitlin discussed, the issue isn't the application of the technology, it's the restructuring of Banking's cash positions to deal with quicker settlements processes, and ultimately, quicker capital release.

I don't think anyone wants to see what a quick reversion of T+2 would do to capital markets, but that's a conversation for another time.

However, from a retail and SMB perspective, Cash position's in banks are structured around those settlement structures. So for the new age of money movement, we need to bring in a new form of banking structure, something which Caitlin coins as a "Gateway Bank". A bank that is far more liquid than traditional banks. A really interesting thought.

The TAM of FinTech:

This one really caught my attention. On Day 1 Nigel Morris of QED Investors discussed "FinTech's Trillion Dollar Future". What started off as a punchy headline quickly became a jaw-dropping realization.

In true VC fashion, Nigel discusses the sector in terms of TAM (Total Addressable Market) and the economics of the sector. As of today, the Global Financial Services industry brings in $12.5 TRILLION in revenue, with an average profit margin of 18%. Which means the FS industry makes $2.3Tn in profit per year. Which as Nigel pointed out, is higher than the GDP of Italy and only slightly behind France.

FinTech, at the time of the speech, only makes up 2% of global FS revenue, or a modest $245bn. Which is truly insane when you think about it. If all the FinTech's across the world, collectively grew FS Market share of 3%, you're talking an additional $367bn in revenue. All I've heard and seen over the last 5 years is FinTech eating the world, and it's barely even finished half of it's appetizer.

For a sector that many have long thought is saturated, this really puts into perspective how far away it is from that even being a consideration.

The Current Recruitment Market:

The market is trending quite well in all honesty and is a pretty decent place overall. As I've mentioned before, the market isn't what it was the last couple of years, but that market was far more of an exception than the rule. Here's my advice for Candidates and Clients who are currently active in the market:

Candidate (Looking for a Job):

1) Honesty Wins: There is a lot of fear atm, firms are laying off, people are scrambling to get work, the news is continuously pushing it's endless end of the world narrative. When people are worried or afraid, they have a habit of bending the truth to present it in a way they believe people want to hear. For example, I've had multiple people over the last few months blatantly lie to me about them being let go or restructured out, when that indeed was not the case. Saying they were on a contract, which again, was clearly not the case. People who interview or hire consistently, know when something isn't adding up when speaking with a potential hire. Don't lie, don't lie about your skillset, don't lie about your situation, don't lie about anything when interviewing. The most valuable and sought after attributes for any client hiring I've ever worked with is honesty, integrity, and accountability. Being dishonest immediately show you have none of the above.

2) Compensation Expectations: This is something that has thankfully begun to level off from the highs, but it's still something I'm seeing plenty of, candidates with very high comp expectations. Far be it from me to tell someone how much they should value themselves, however, you also need to understand the level of performance you have to bring to warrant the numbers you request. No one in FinTech, or business in general, are running a charity. If you're looking for that low-to-mid 6 figure compensation package, you better be damn well prepared to make yourself worth it.

Client (Trying to hire):

1) Complacency Kills: Due to the amount of people on the market, firms are getting complacent in their offers and their timelines. At the start of the year this actually wasn't too detrimental, but things have readjusted. Top talent will always have multiple offers, even if the sky is on fire. Both myself personally, and our whole business, has seen a major uptick in candidates having multiple offers. If you get complacent and think you're the only show in town, you're going to lose out on your top pick and end up back to square one. If anything, this is the time to be decisive. Buy when other are fearful springs to mind. If you move quick through a process and offer with purpose, you will attract and retain talent your firm likely would have struggled to attract in previous markets.

2) Illusion of Choice: Have spoken with numerous clients recently who are saying "We have all these applicants, so we're taking our time". The reality is, the vast majority of applicants on every single job advertising website are incredibly irrelevant to what you're looking for. I would guesstimate on average, for every 100 applicants I get on a Job Ad, there are about 10 who are relevant enough to screen, and only 4-5 (if I'm lucky) who are interested/worth formally submitting following the initial screen. It's immensely time consuming and there's lot's of trial and error. If it's time consuming for me, when it's literally my job, then imagine how time consuming it'll be for your leaders to review and screen all these people. Unless lightening strike, which tbf it does, you're going to spend 1-2 months before you even find a person you truly like, and then they may no even take it. Quantity doesn't mean Quality.

Firms that have caught my eye:

There are a couple types of firms that always catch my eye. Firms that solve a problem that is small in a vacuum but compounds with volume, and firms that create technology infrastructure. So with that in mind, here's two firms that have caught my eye over the last couple of weeks:

Justt AI:

"Justt is the only company fighting chargeback disputes for merchants and winning.

We've combined superior industry expertise and machine learning to build a solution that effortlessly fights fraudulent chargebacks and intelligently builds a tailored solution to gather evidence, submit disputes and claim back lost revenue on behalf merchants, automatically."

Anything that utilizes AI or ML and incorporates it into their workflow to solve problems is a winner in my book. Along with that Justt solves a problem that is a nuisance for many, while being too much of resource hog to bother with sometimes, Chargebacks to Merchants.

They have created technology that automates and handles Chargeback's from the Merchant side, as to avoid unnecessary pay backs and refunds. Their technology can support anything from a National Retailer, to a mom and pop shop. Very intrigued to see where this one goes.

Oasis Pro Markets:

"Oasis Pro Markets is bridging the worlds of traditional finance, blockchain, and decentralized finance. Oasis Pro Markets is an SEC-registered broker-dealer, regulated by FINRA, that provides investment banking services. It also operates an alternative trading system (“OATSPRO”) to allow subscribers to trade digital securities on the blockchain and make payment for those digital securities in digital cash (e.g., stablecoins) or fiat currency."

OPM ticks a lot of boxes for me. Infrastructure, Regulated, Blockchain, Tokenization, and Alternative Assets. In a sector that has been rife with controversy and deregulation, investors who operate in the space crave some form of accountability and safety, it doesn't get much safer in Capital Markets than SEC Registered and FINRRA approved.

Certainly one to watch, they have a really strong leadership team along with Technology to solve one of the most interesting problems Capital Markets faces now and will continue to face, transparency and accountability in a digital world.

Closing Thoughts:

Overall, things seem to be rebalancing a bit after a rocky start to the year. We're seeing lot's of client interest in growth, some big funding rounds popping up, and general sentiment has become far more positive. Which is great, I was getting pretty sick of the doom and gloom personally. I read recently that Mercury has been in Retrograde, which is no longer the case, so people should be happier. I have no idea why that would be the case, or what Mercury being in Retrograde even means, but who knows.

Aside from that, as the saying goes, when the Sun is Shining and your heart is beating, it's a wonderful day to be alive. As this is being posted during Mental Health week, I'll make a small comment about that.

Oft times in high pressure careers, such as Technology or Finance, it's easy to lose perspective on what really matters in your life. It becomes a bubble where professional and economic success is all that matters. In reality, none of that stuff really matters, or at least, not as much as we like to think it does.

Be kind to yourself, hang out with your mates, call in sick to work one day so you can sit in the park and read a book. Touch some grass and breath some country air. Take care of yourself and those who matter to you and, if you're in NYC, go out and enjoy some of this BEAUTIFUL sunshine before it becomes the 7th ring of hell again as it often does in late summer months.

All the best and thanks for reading,

James