August 17, 2022

Reflections on 3 years of (Transfer) Wise | Part V: Other Strategic Topics


(^ Mission Zero - How? ^)

Let’s talk about strategies. Jesse, one of the VCs who invested in Wise explained why he thought Wise was built to last. I am equally bullish and agree with the reasons listed, a lot of which have been covered in earlier parts of this series. Here I look at a few other topics.

Fiscally responsible and disciplined

Anybody working at Wise would have remembered Matt’s frequent appearances on the biweekly team call, talking about everything finance. It left a lasting impression on me: the company was always run in a responsible way financially. It made sense post-product-market-fit in the scaling phase of the company.

It went hand-in-hand with the extreme form of autonomy that is mentioned in Part II, and let me explain. At times, I felt that Wise was run like a machine on auto-dial: everybody and every team seemed to know exactly what to do next. The numbers Wise was dialling? They were the likes of unit economics, CAC, LTV, revenue, EBITDA and most importantly, P&L. It rendered positive results as Wise had been profitable since 2017, which was rarely heard of in the fintech world even to this day.

Another way to look at this: given that Wise already operated at a micro/team level with a data-driven approach, it was natural to operate in the same way at a macro/organisational level, with a different set of data to drive decision-making.

My view on this is two-fold:

Lack of moonshot projects

I am a fan of moonshot projects because I believe for companies to continue innovating, unbounded creativity and innovation should be encouraged and put into practice by launching projects that have a longer payback period. The question to answer here is not the usual such as how we keep growing 50% YoY in the next 3 years, but where we see ourselves 5 or 10 years from now. It should be even more so for a profitable company like Wise because there is more space for cash made available to fund those initiatives.

My view of the reason why it lacked the initiative was that most moonshot projects are driven top-down with an appropriate level of resources to match, and Wise was not an organisation comfortable making those bets. Leadership might have been concerned about pushing it through against the autonomous tide, attracting noise against it. On the other hand, a bottom-up moonshot is almost impossible due to visibility and resource constraints.

As I often voiced during my time at Wise, I was in favour of leadership taking initiative in areas they had the fullest visibility. Kicking start moonshot projects was one of those areas in which they should have the conviction to make a push. It should not be seen as going against autonomy because no other group could have taken the initiative due to limited visibility. And the strategic value would outweigh any concern.

Crypto, what crypto?

Speaking of a moonshot, let’s talk about crypto. This topic is always interesting.

For Wise’s position at the time, I think it necessary to single out crypto (currencies) and then talk about blockchain separately:

In short, my view is that it was a waste of opportunity not to invest in areas such as blockchain which could become a competing payment rail to the existing, peer-banking-based rail that Wise has already been building. I don’t think it would be a strategic detour; rather it would have created another space for the company to innovate in. And there could even be synergy between the two payment rails.

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