Fireside chat with Taavet Hinrikus
Last week, we had our first “fireside chat” with Taavet Hinrikus, CEO & Co-Founder of TransferWise. Just one day after announcing TransferWise’s latest round of funding and being valued at $3.5Bn, Taavet came to the Zego office to answer questions submitted by our team.
This chat took the form of a question and answer session, in which we covered everything from the challenges of being an entrepreneur to working at a company during a time of hypergrowth. Taavet offered lots of interesting insights based on his own career and experiences.
Before starting TransferWise, Taavet was Skype’s first employee. He’s also a big fan of extreme sports, including kite-surfing, skiing, running and wakeboarding, and he has invested in a number of startups including Bolt, Tweetdeck and Mendeley.
In this post, we’ll cover some of Taavet’s responses to questions on a variety of subjects, ranging from TransferWise’s beginnings to his thoughts on work/life balance and starting your own business.
When did you first realise that TransferWise was going to be successful? What was the key thing that made you realise this?
We launched TransferWise in January of 2011 after we saw that there was a problem in the world and we thought that we could offer a better service. When we came up with the idea, we had to decide what we would do next. We could go and write a long business plan and try to raise money, which takes a lot of time and is kind of boring, or we could go and build it and see if people would use it.
So we built it and we launched it and a friend introduced me to a journalist at TechCrunch, who wrote an article with a cleverly spoon-fed headline, “TransferWise: The Skype of money transfer” and then the first people started to use our service. When we saw that people were starting to trust two guys from Estonia with thousands of pounds of their money, we thought it could work.
But it’s all a matter of perspective. In a way, it was a very slow start. When I left Skype, we were signing up two thousand people every day. When we launched TransferWise, we had maybe 70 users in the first month. The next month it dropped to 60. It was hard to see how it was ever going to work. Slowly, we got on a growth curve and it probably took us quite a few years until we really believed it was going to work. Maybe 3 or 4 years later, we thought it actually had a chance of working.
If you could go back to when TransferWise was around 70 people, what would you do differently [regarding people and culture at TransferWise]?
Culture is a funny buzzword. Everyone talks about it, and we’ve certainly discussed it as well. The way that I have unpacked culture in my head is that it comes down to what the founder and the early employees are doing. It’s about what the founders do and, perhaps more importantly, what they don’t do. Inevitably, people copy founders quite a lot and their behaviour becomes the norm.
At TransferWise, we started out just trying to be good human beings. Then, when we were about 50ish people, at one all-company off-site, we spent the day trying to figure out where our culture was. We split people into groups - there are many ways of doing this type of thing. We came up with a bunch of things that we felt described our culture and that was the first time we wrote it down.
Then we started using this as a screening tool, checking if the people we were hiring would fit with our culture. We started using it during new employee onboarding and typically talking about it quite a bit during our all-company events.
On the cultural side, I’m pretty happy with what we did, so it’s quite difficult to say what we would do differently. One of the areas where we did make mistakes is that we were very growth driven. This focus meant that we did not invest enough in technical infrastructure - what you might call a platform team. We didn’t do that and that came back to haunt us 12-18 months later when we realised that our platform was in a pretty bad state. We should have fixed things like this earlier. Things are always fixable, but it’s easier if you fix them earlier.
It’s about having a healthy balance between being really KPI and growth driven and doing things which you need to do, although you might not be able to measure them perfectly.
How can you make sure that you build a culture that will scale as quickly as a business grows?
Hypergrowth, almost by definition, is bound to be a very messy journey. You have people who maybe come in as a specialist. Then, 6 months later, they’re asked to be a team lead. It’s a very hard journey to go through and as a result, you sometimes have people who burn out, get too stressed or don’t perform.
You have to find ways to give your team leads some support - perhaps by hiring people from outside who know what they’re doing when it comes to leading people. You also have to be clear with people. You should say to them “Yes, you can take on the challenge of being a team lead”, but you should also explain to them what a good team lead looks like. You have to be clear about what you expect from people and understand that it won’t work out for everyone. You have to be flexible and accept that not everything will work out perfectly.
What keeps you awake at night?
It used to be my kids. But now, nothing much. Still my kids sometimes. Sleep is important. I used to aim for 6 hours of sleep and maybe 4 years ago I changed this to 7. Without being able to quantify it, I can definitely feel a pretty big difference. Being well-rested is super important and there are too many people out there trying to be heroes and sleeping too little.
What emphasis would you put on work/home life balance?
It’s a hard one. It’s very important but at the same time, being honest, you’re not going to be successful if you work from 9-5. No tech company is going to be built working these hours. It’s about finding out the balance.
Also, you can only work 12 hours a day for so long. You can’t force people to work these hours either, as you’ll be burning through people and churning through them. It’s about working hard and giving people flexibility. There are things you can give in return. It doesn’t matter if you come to work at 9am or 10am - we don’t need to count the number of hours you’re sitting in your seat. I think you can reward people with flexibility.
It also comes in waves. There are times when everything is really critical where you have to pull extra hard and times when things are easier. On a larger scale too, in your own life, there are years where it’s heads down and you cut down on other things, and there are years where you can enjoy those things more.
What’s your advice to anyone looking to start their own business?
Entrepreneurship is not for everyone. But trying it out makes everyone a better person and a better employee as well.
Entrepreneurship will become more popular too. Tech entrepreneurship is perhaps too hyped nowadays, but I do think that it’s an incredibly valuable experience.
The personal reward of learning makes it all worthwhile. I would argue that the flip side is that you have nothing to lose. Maybe you’ll spend 2 years living on your parents’ couch and not earning a high salary. Guess what? You’re going to go out and get a much better job as a result.
I think it’s worth trying but it’s a hard life and being a founder is a pretty lonely one too. But you can be an entrepreneur in many different ways. What Zego or TransferWise do is just one extreme of it. There are many other ways of being an entrepreneur.
It was a pleasure listening to Taavet's thoughts and the insights he offered into life as a founder and CEO. It's fair to say that sitting down to speak with Taavet has set the benchmark quite high for future fireside chats!