Valentin Stalf: After 298 Investor Rejections, He Built A $3.5 Billion Business That Is Disrupting Banks

Valentin Stalf is the co-founder and CEO of N26 which provides mobile banking solutions. The company has raised more than $600 million from some of the world’s most well-known investors, including Insight Venture Partners, GIC – Singapore’s sovereign wealth fund, Tencent, Allianz X, Peter Thiel’s Valar Ventures, Li Ka-Shing’s Horizons Ventures, Earlybird Venture Capital, and Battery Ventures to name a few.

In this episode you will learn:

• How fundraising changes at each stage
• How to develop yourself and your team as you experience hyper-growth
• How to test your hypothesis before building a product or writing any code
• The rise of startups in Europe

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About Valentin Stalf:

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a very exciting founder, definitely the founder of one of the most valued startups right now in Europe. We’re going to be learning a lot about fintech; we’re going to be learning a lot about building and, most importantly, scaling companies. And without further ado, I’d like to welcome our guest today. Valentin, welcome to the show.

Valentin Stalf: Alejandro, thank you very much for having me on the show. I’m excited to talk to you about what we’ve done so far.

Alejandro: It’s really remarkable what you guys have done with N26. But before we actually dive into it, I’d like to do a walk through memory lane here so that people really get to know you and to know how this incredible story came together. Originally, Valentin, you were born and raised in Vienna. So how was life there?

Valentin Stalf: I think Vienna’s a great city. Vienna is regularly, actually every year almost, it’s one of the best cities to live in around the globe. And so, I had the pleasure to grow up there. I enjoyed growing up in Vienna. To be honest, we just recently opened an office, as well, in Vienna. It is the latest office we opened, a product and technology hub. Also, one of the reasons why we did that is because the living quality is very high.

Alejandro: Yeah. Absolutely. Then you went and studied finance in San Gallen.

Valentin Stalf: Yes. At one point, when I completed school in Vienna, I said, “Okay. Let’s go out of the country.” I think it’s important to always challenge your own horizons. You always need to go to the next step. For me, going to a renowned university in Switzerland was definitely a good decision. A traditional university. I focused on Business Administration, my Bachelor’s Degree, and accounting and finance later on in my Master’s Degree. Definitely, looking back, it was an important decision. I think when you take that decision, at least in Europe — I think in the U.S., it’s much more common to think about universities and think about Virginia University you go to, but you have to take the European perspective on this. In Europe, most people study around the towns that they have been born in. So it’s not so common if people go to a different country or a completely different location to study. That was, definitely, for me, one of the important decisions in my career early on to say, “Let’s go somewhere else and study somewhere else.”

Alejandro: One of the things that I thought was super interesting is the decision that you made and the different internships that you did because I find that the best entrepreneurs that I speak with, they were able to develop that foundation for viewing things from either their time doing investment banking or perhaps consulting. But in this case, you did both, and then also accounting if I have a good grasp on the numbers. Can you tell us how those experiences shaped who you are?

Valentin Stalf: During university, and San Gallen is one of the universities, especially when I started there around 2006, ’07, ’08, and the following years, very classical. It’s a business school. People want to do investment banking. They want to do consulting. I was one of them, and I said, I want to work in an investment bank because everybody’s always talking about it, how challenging it is, and how great it is. I wanted to do the same and look into consulting. Then as I studied accounting and finance in my Master’s, I also looked at accounting. So I selected the different internships based on what people always wanted to do, and what everybody around me was doing. I wanted to see on the job how this was feeling and get a feeling for if it’s something for myself. Looking back, it was definitely something that has shaped my decision later on. We might have some time to talk about when I then decided not to go into consulting for a fixed job in investment banking, but then actually decided to move into the internet space. It was definitely important to see the challenging environment. Also, investment banking is an area where people work a lot, where it has a lot of great talent, as well — the same for consulting. Consulting is something where people know how to work long hours, and they get focused on certain projects. It is something that shaped how I think about working and shows you also the boundaries, how much you can work, and how much maybe you shouldn’t work.

Alejandro: You were pointing to the fact that you saw that everyone was going into banking or consulting. In Spain, for example, is the same thing. I think that it was the same thing all across Europe. My question, now, what comes up for me is, how have you seen that mindset shift over the years? Now, startups — when you’re doing a startup, you’re not someone that is completely crazy anymore.

Valentin Stalf: Absolutely. To put it in perspective, when I chose to go into the internet industry and startups stare a bit more, it was around 2011 when I decided to take that part — 2011, 2012. I would say since then, it has massively shifted. When I go back to my university now, they have a big event every year only focused on startups and innovation. It’s the biggest event at the university today, or one of the two biggest ones where they only talk about new industries, utilization, these things. In Europe, especially, the trend was massive in the last years, and it’s comparable to the U.S. trends that you’ve seen. But in the U.S., I would have said that the trend here is going to startup, was about three to five years earlier than in Europe. We see a similar development compared to the U.S. what we’ve seen earlier in the U.S.

Alejandro: Yes, and it’s definitely exciting to see that shift. I know that for you, after you completed the Master’s, you did a trip to Tokyo, and you spent some time there. This shaped the way you think about customers and this sign. Can you tell us about this?

Valentin Stalf: Absolutely. During my Master’s Degree, I spent one semester in Tokyo. I think there are two great things about — and maybe coming back to why I chose to study abroad, as well, from the beginning is, first of all, different cultures. I think if you go to Japan, a completely different management culture. People traditionally are used to working in one company their whole life. So the brand of an employer is really important, and it’s quite interesting to see that. The other thing, people are much more used to working in groups and in teams. That is also quite interesting, quite different to western management styles because if you know you’re working in the same companies for 100 years or 50 years, then also your approach to teamwork is a bit different. I’m not saying one or the other model is better, but it’s interesting to see how people work differently together. If you come more specifically to product and how people deal with customers, what fascinated me always in Japan is how people take care of their customers end-to-end. They not only think about the product purchases they’re doing, but they think about the total experience. If you go into a shop, how is the experience when you entered the shop — when you purchased a product? How is it packaged, and all these things? So they have a much more holistic view around the customer and always want to grab the best experience. I think that’s quite interesting.

Alejandro: How was it different, Valentin, from what you were seeing, for example, in Europe?

Valentin Stalf: In Europe, I always take the supermarket example. If you go to a supermarket in Europe, and you buy a drink like a cola or something, and when you open the can, you need to be happy that it’s not exploding and the Coca-Cola is not all over you. If you go to Japan, and you go to a supermarket, you’re greeted by the man at the door, wished a happy day. Then you get the Coca-Cola and make sure it has exactly 6 degrees. Then you go to the cash desk. They package it for you. They wish you a happy day, and you leave. It’s a different approach to the experience. The interesting thing in Japan is it’s on all levels from my experience. It’s not only for their expensive products or cheap products but the quality of how you service the customer is different too, I would say not only Europe but to any western approach to product. The good companies still, I think, do it in a similar way. If you enter an Apple store, how you’re taken care of — there would be a concierge that greets you in the beginning. It’s something that only materialized over the last couple of years. That is quite exciting. Then the other thing that was impressive in Japan for me was the attention to detail and the attention to design. If you look at product packaging, design, or categories have a big influence on this. This is something that I was always a big fan of. If you go to Japan, you see a lot of great products. That is definitely something that I’ve taken from the time. When you look now at N26, design is one of our core values, and our core principles, and also the simplicity of things and attention to detail. It’s something that I learned during that time. 

Alejandro: Very cool. Once you completed the studies, you got back to Europe, and then you made the decision to join the internet world. This was with Rocket Internet, so how did this happen?

Valentin Stalf: Not very planned, I would say. It was after university, and after the financial crisis, 2008. I applied for jobs, 2011. I was applying to all of the big banks, to consulting companies, and I got some good offers afterward. But then I asked myself and also looking at the experiences that I had during my internships, is that where I want to start? Is that where I can have the biggest impact in the first years? Everybody knows that if you start in one of those areas, the impact that you actually have in the first years is limited. So if you start in investment banking, the first three years, it’s not likely that you see any customers. You’re having a good learning curve still, but the impact is not so high. I was asking myself, “Where can I have the biggest impact,” and “What is an industry that is growing?” I was also thinking about the financial crisis that had just happened. Banking wasn’t the place to be, and do you want to work in an industry that is cutting jobs every year? Or do you want to actually go to an industry that is maybe growing by 500% every year? The question is only are you growing 500%, or are you growing 600%, or are you growing 450%? On one hand, there was a strategic decision for me, where I thought it made sense to go into an industry that’s growing. On the other hand, I was always interested to also work in digital, and I wanted to do that. I saw the opportunity somehow, and then just applied for a job at Rocket Internet. Looking back, actually crazy, I didn’t apply to many jobs. I just applied to this one digital job, and if I wouldn’t have gotten an offer, I would have gone into an investment bank. But luckily, I got an offer and then started with Rocket.

Alejandro: It’s amazing how destiny puts the path forward for all of us because, obviously, for you this time with Rocket Internet shaped you and gave you the exposure to all the different things that they had access to. Especially like what you were starting to see here in the U.S., with Stripe, and with other fintech companies. Can you tell us what opened up for you during this time?

Valentin Stalf: The biggest learning for me during that time was, at university, you were always told everything is complex, and you need to — building an organization is you need to learn business administration and explains to you how you build an organization, and it’s all complex. What impressed me when I was working at Rocket was, you had an idea, shipping shoes, let’s say. Then three or four people sit together and say, “Do we want to do that?” Then six months later, 80 people are working with you on that, so a real team of 80 people. And you’re making a difference. You are shipping shoes every day, and you are seeing the demand from customers. So what I learned at Rocket was that it can build a company from scratch, and it took away the fear of this theoretical building a company to showing you sit together; you have a good idea. Call a couple of people, and it happens, “How do I actually do that? Where do I buy? How do I sell?” You build a website, and you start basically fairly reduced. For me, that was a moment of truth. It was a moment of “Okay, cool. You don’t need to work in a company for 30 years and then do a management buyout, but you can start something on your own based on a good idea if the idea is good. Your focus on the customers can have an impact. That was something that I had seen at Rocket and what took away the fear of being an entrepreneur.

Alejandro: So let’s talk about the incubation process of N26. At what point does the idea come to mind. At what point do you meet Maximilian, and how does everything come together? Also, at what point do you give your notice and say, “I’m going to go after my own thing now”?

Valentin Stalf: When I was at Rocket, I was working on one similar to Stripe and Square in the U.S. So I had a deep inside into fintech and all these models that are focused on payment and more B2B-oriented models. Not many people were thinking about fintech in Europe, especially not about B2Cs consumer-facing fintech. I realized during the time that all the companies working in the financial industry are slow and have big difficulties to transform their business model into digital. That was the main reason for us to say, “Let’s found something in that space.” From the beginning on, I remember we always wanted to be or wanted to go in the direction of founding our own bank and having a mobile bank that could easily be accessed. But in the beginning, this idea was much too big for us. So we started with a much smaller idea. We started with the idea of a prepaid card for teenagers. A card that kids could take to pay for their online purchases and items or anywhere else. Then you’ve got an app that could be used by parents. The kids were having the opportunity to shop, and parents could load the card and could see where kids were shopping. We started that idea. We pitched for it. First of all, we quit our jobs. The biggest transformation you need to do is from earning money to spending money on your own business. Then we invested the first 10,000 euros into the company. Then we raised a little bit of funds from Axel Springer, one of the biggest media companies in Germany. They offered us a place in the accelerator program. We started the company originally in Vienna and then moved to Berlin quickly. Then raised another $500,000 from angel investors. Then we produced and started developing the idea of prepaid cards for kids. Launched the product later that year into beta phase, I think in September, October, or November. Then we quickly realized that most of our clients were actually using the product, not for the kids, but for themselves, because the product was you got an app, you got a Mastercard attached to it. You could load it quickly, and you could see in real-time where you are spending. A lot of customers were approaching us and were saying, “You’re doing this product for kids, but actually look at my bank account and my mobile experience with one of the traditional banks, and it’s really bad.” Then they said, “The card looks much better.” Then we thought about it and said, “Maybe we don’t want to just do a product that we deliver to banks” — our original idea was we have this prepaid card for kids, and at one point a big bank could sell it with their accounts to the younger target group. Then we said, “Maybe the opportunity is huge.” It also took away a bit of the fear from us of developing your own bank or building your own bank because we were doing this prepaid card for kids. From a functionality perspective, you could load money onto the card. You could go to an ATM. You could pay Cashless. You could do transactions from the account. It was similar to the fully-fledged bank accounts with a different regulatory setup. It took away the fear from us that building a big bank is so difficult. Then we said, “Let’s transform the business from a prepaid card for kids into building a mobile bank. The problem at that time was we’d raised about 500,000 euros, and we almost spent everything, and we went into the beta phase with the first 200 or 300 customers. We were sure we needed to transform and pivot the modeling to a mobile banking model. Then going out fundraising with a great product that I think at that time already was great from the user experience. But going out and saying, “We have these 300 customers, and we more think about transforming it into a similar thing into the user experience. But something completely different or we would have to develop again for another 12 months. It was not the best time to go out and raise funds. Then it was a tough time, so we were almost running out of money. I think we had three more weeks of financing. There was also a time, I think, where I didn’t get a lot of sleep, and also, my co-founder didn’t. Then luckily, in the end, we had one or two — actually, we talked to 300 investors and got 298 who were declining us. Then we had two more investors left, and one investor, [0:18:32], was one of the best investors we wished for. Then [0:20:46] said, “I’ll lead another round.” Then they led our institution seed round; they invested about 1 million euros, and then we went on from there. I was on the border of being bankrupt.

Alejandro: That’s remarkable. Especially because when you do a pivot, and I’ve done them myself, it’s pretty scary, especially if you raised money. Because if people are not reinvesting, and obviously, it’s just a different type of model that you pitched them when they invested. If they don’t reinvest, then that sends super-negative signals to the market because then people are going to go, “Hold on. They’re not reinvesting. There’s probably something wrong with the business. How did you deal with that, and how did you keep some of those investors in the loop?

Valentin Stalf: This phase is difficult because you had to separate into three parts. First of all, as an entrepreneur, you pitched your idea that you originally raised funds for hundreds of times. So yourself, you have a bias where you believe in the idea. It doesn’t matter how bad the idea is, you raised funds with that idea, so take some time for yourself to get over that idea. Then you get over that idea, and then you need to get back to your investors and invest in the same thing. They have this investment decision. The investment hypothesis, and then you go back to them and tell them it’s actually completely wrong, or we have a better idea. It’s difficult then to get them on board for the new idea because also, investors are not so close to the business in the beginning. They were angel investors mainly, so you go back to them. You maybe only see them every couple of months, and then suddenly, you tell them, “You invested in this kids’ idea. Now we want to build a big bank.” 

Alejandro: Yeah.

Valentin Stalf: So, you need to again spend time in getting them to like your new idea. Then the third thing is, then you go back to the team. The team worked hard for the first eight months on launching the product. You launch the product, and three weeks later, you send people to the new model. The team worked really hard, and then you go back to them and say, “That’s not the right thing. We need to do something different.” So there are three steps you have to take that are difficult. Then, in our case, at the same time, we’re also raising funds. I think a tough time, but in the end, as founder, if you see, and that’s the most important thing that the customers want something. Then you need to follow the customers. That’s the most important thing. It wasn’t with us. Also, our original product wasn’t working. I think it would have been much more difficult to get it to a stage where we are now with N26. But I think it was much more important to see that customers want something specific. In our case, a mobile bank account and easy to use. Then focus on that product, and then follow through.

Alejandro: Let’s talk about following through on this. Finally, you guys did the pivot. You were able to secure the funding — unbelievable — three weeks away from almost not making it. Then finally, everything goes in the right direction, meaning that you guys continue to execute. At what point is there something that happens where maybe you know that you guys are headed into something really big?

Valentin Stalf: Then we raised new funds, and I think it was around March. Then we still needed to develop. We didn’t have anything. We didn’t have a banking license. We didn’t have a banking partner. We had a prepaid card set up for kids. So we completely removed that. Also, the app that we showed to investors where we said, “We changed a bit, and then we upgraded to being the best bank around the world.” We basically threw it into the trashcan, and then developed from scratch and started a new app development. It took us another ten months from that point where we raised funds to launching a product in 2015 to a broader market. I think when we realized that this was flying, that people need the idea, it was the first weeks after launching — the first two months after launch when we had a closed beta, so a beta lounge. Then we had a closed beta on the waiting list. We got more and more signups on the waiting list every day. Then we realized there was a demand of customers. Then when we were realizing that it’s an idea that the market needs. That was the time. Luckily, at the same time, all the investors realized that, and we raised another round. We raised our Series A, $10 million euros. That was the most unconventional round ever because we raised it within two weeks without any fundraising. That was also important for the first success of our company because everybody was listening who was, himself or herself, a founder. You will know how much time it takes to fundraise. In that scaling time where you see a huge demand for your product, it’s best if you can focus on the company. So Series A raising, the 10 million euros, doing it quickly was important for us.

Alejandro: I’d like to hone in on the fundraising in a bit, but I’d like to ask you here because, obviously, you’ve been driving and leading that marketing efforts, especially here when you guys were launching the new product or the pivoted concept. How did you approach it because it doesn’t matter if you have the best product in the world, if nobody knows about it, it doesn’t matter? How did you approach this super important launch for you guys to make it such a smashing hit?

Valentin Stalf: We took it step-by-step. We created a lot of PR buzz. We were first movers in the category, did great picking up from tech grounds and international tech blogs. We focused, not on purpose, but looking back, we had a great traction within the early adopters with Techscene and mainly through PR. Then we had this closed beta. Then the variety picked up. People were talking about it with their friends. If you look at the product we had, and we still have a transparent card, and no one had a transparent card in all of Europe. So when we shipped the product to the first customers, and it’s a product that you use every day to pay for things, people around them were asking them. It’s all about the variety and how high the frequency of your product is. The higher the frequency of your product, the better you can get the variety going.

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Alejandro: Very nice. Let’s talk about the fundraising. How much capital have you guys raised to date?

Valentin Stalf: We raised more than 600 million dollars.

Alejandro: Very cool. I think I saw that it’s over 3.5 billion and probably one of the most valued startups in Europe, which is amazing. What have you learned about fundraising?

Valentin Stalf: A lot of things. First of all, we’ve been lucky throughout the way to find the right investors for us because looking back now, I think we have a great board of investors that helped us to challenge also how we built the company from the beginning on. We have a couple of people that have been close to PayPal when it was founded. Valar Ventures, actually a fund based in New York that helped us to shape our thinking of how we should build the company, how important it is to grow, not to look at only the unique economics in the beginning, but focus on happy customers. I think that was important. I think how lucky we have been in the whole process with not knowing much about fundraising, in the beginning, to be lucky to get the right investors on board that are not pressing you into something you don’t want to do, but give us the freedom as founders — gave us the freedom as founders to develop the company as we want. That was important for us. On the fundraising process itself, I always say there’s not so much difference between raising 1 million and 100 million. It’s always the same, just the size of the funds change, and also the process is, obviously, much more professional if you raise 100 million or 200 or 300 million to raising 500 or 1 million seeds. But for an angel investor, a smaller fund, let’s say. A smaller fund that puts in a million, it’s as important to put in this million as it’s important for a bigger fund that puts in 100 million. In the beginning, it’s more about vision and growth. The further you go to Series C and D, it’s also more about data, it’s more about the unique economics, but it’s still a lot about the vision. Also, today, most of what we are going to build and most of the value that we’re going to create is still ahead of us. So I think the biggest thing that I’ve learned is, be passionate about your idea. You need to pitch it quite often, and if you’re passionate, and if you have a vision for the product, and if you are good in communicating that to investors, then you get lucky in finding the right investors early on, I think then the rest follows.

Alejandro: What about alignment, because we’re talking here about vision. But I think making sure that the alignment, that the expectations are clear, and then also that the investor doesn’t have a different agenda is critical. So can you talk to us a bit about this?

Valentin Stalf: The only thing that I know is that every business plan we did was wrong. So the alignment is a good thing to have, but in the beginning, especially, I wouldn’t spend too much time about detailed business plans and so on. It’s important to have your model to understand how your model works. Part of it is also to have a good business plan because it shows how your model works, but I wouldn’t argue too much on where the cross-sell would be two years from now, but I would think about the finances of the model.

Alejandro: How would you say that expectations have changed from financing milestone to financing milestone for you guys?

Valentin Stalf: In our case, expectations always have grown and grown. Today we’re valued, as you mentioned, at more than 3.5 billion. That brings a lot of expectations with us. Today, we have a huge team, a great team that can balance those expectations and also work on the expectations. I think it needs to be in balance. You always need to accelerate your team and the people you work within the same pace that the expectations are growing. Because in the end, you realize you cannot build the company yourself, but the team needs to build the company, and therefore, expectations are definitely rising over time extremely fast. But, at the same time, you need to also raise the team and recruit the right team that helps you to fulfill those expectations.

Alejandro: How many people do you have now?

Valentin Stalf: Today, we have around 1,500 people, most of them in Berlin. We have an office here in New York where I am today, with about 70 people. Then we have another office in Barcelona with around 100 people, and we recently opened an office in Vienna where we have the first 20 people. And we have another office in San Paulo where there’s a handful of people there.

Alejandro: Very cool. In terms of, for example, scaling, to dive deeper here in what we’re thinking about, which is the team, you’ve scaled a lot and fast, how did you scale at the same pace? Because the last thing that you want is for the company’s growth to outgrow you.

Valentin Stalf: Do you mean how I’ve personally scaled with the company?

Alejandro: Correct. How did you personally scale yourself to continue at the same pace with the scale of the business, itself, because I find that who you are when you start the business, or your mindset, or the approach, is completely different to where you are later in the lifecycle of the business where there are different problems, different analysis. How have you transformed yourself at the same speed at which the company has been growing?

Valentin Stalf: It’s always a challenge to transform at the same speed as the company is growing, especially in our case, because our company is transforming quite quickly. Also, if you look at the team going from being two people on a couch, and finally, the company is 1,500, something completely different. I think the key to that is to always question yourself as well if you still have value-adds to the company. I think you need to be honest about it. As long as you feel, and currently, I still feel together with my co-founder that we can help our company to grow further, and it’s good. How did I develop over the last years? In the beginning, it’s easier because you can talk to everybody. Apparently, if you have a team of 10, 20, even 100, 200 people, you can know people if there is any conflict if there is any unclarity in targets. You can do a fast Q&A. Everyone can ask a question. You can answer it. If you have 1,500 and you want to do a Q&A where everybody has a question, you sit there for three days and answer questions. So the way of how you communicate is completely different in a bigger organization. Communication is always important, but it gets even more important. The structure of communication gets even more important, the bigger the company is. On the people around you, I think the biggest challenge is also challenging your team around you and always working with the best people. Helping your people to also grow with the company is important because it’s a huge challenge. Everybody here is working. You need to be on the border of acceleration. Everybody that works at N26 needs to accelerate fast. It’s not always easy, so they have been helpful, and helping people to grow is important. So developing people, helping to grow people gets more important, the bigger the company is. If you have ten people, it’s easier. If you’re at 1,500, you need to think about it more from an organizational perspective. How do you grow people in the organization? Is there a development process for everyone and all these things? For me, personally, I think how I perceive my personal work, obviously, different communication today, different symbols of the things that I’m doing — also, many more topics today within the organization of the company and the size of the company. But, honestly, at the same time, as a founder, the company you’ve founded is the most important thing for you from the day you founded the company. And it didn’t change, so for external people now, they say, “We have a company that’s over 3 billion, has 1,500 employees, and now everybody has a great company.” But for me, and also for my co-founder, when we founded the company, it didn’t matter if we had ten employees or 1,500 employees, it was always the most important thing in terms of what we were working on. Therefore, I think my personal work didn’t change too much in terms of intensity because, in the beginning, you have ten people, five people reported to my co-founder, five people reported in to me. Today, still, I have five that report, and my co-founder has five that report to us. Obviously, now these people that are reporting to us have hundreds of people in their teams. So it’s different, and also, it’s symbolic of what you’re doing, and the topics you’re discussing are different. But from the intensity of work, it was similar to when we started, and importance also of what we were doing for me, personally, was always the same, be it today, or be it five or six years ago when we started the company.

Alejandro: Got it. We were talking about vision before. Valentin, if you were to go to sleep tonight, and you were to wake up in a world where the vision of N26 is fully realized, what does that world look like?

Valentin Stalf: In the end, we try to build a company that empowers people to live and bank their way. That means we want to build the company and a bank that 100 million people or more around the world love to use every day. This, again, means and specifically what we are doing, it’s a much more personalized experience for customers. I think the bank can be much more than only a transaction booker, to enjoy your opportunities, to enjoy if you get a rental car, maybe you want to have additional insurance for 5 euros. It should show you if you travel to Tokyo, where do you get cash at what exchange rate. It should be much more personal and much more proactive, and not only book transactions for you in a retrospective. The second thing is, we work very much on the flexibility. How can a bank be more flexible and enable our users to live and bank their way? So giving them the flexibility to freedom of living however they want to live. Maybe you live together with five other people, so you may want to have a shared account, and you want to share that account with one click. These are the things that we’re working on. Maybe you want to shop online, and you don’t have your credit cards in your wallet, so maybe in the future, you want to issue a new credit card as digital, and you want to do it with one click. So for us, it’s all about the flexibility and the freedom that we can give to our customers and how we can transform how people perceive banking as more not being something that is restricting you to something that is giving you opportunities and helps you to realize your own life and your own idea of your life.

Alejandro: Got it. Super powerful! One of the questions that I always ask the guests that we have on the show is if you had the opportunity, knowing what you know now — it’s been quite a remarkable journey since you guys started back in 2013. If you had that chance to have a chat with your younger self, with that younger Valentin that was about to give the notice in Rocket Internet before starting N26, what would be that one piece of business advice that you would give to yourself before launching a business and why?

Valentin Stalf: It would be definitely, even focus more on the customer and do much more customer and testing of products in a real-time scenario with customers. For a lot of things that we’ve launched, we’ve only too late realized that we should have launched things a bit different. We still have been successful in the product. I think one of the strongest things that we have at N26 is our product experience and a mobile experience. When I look back, I would focus much more on user-testing early-on with real screens and real journeys before actually investing into developing technology in the background. We have always tended to develop too early and then too late find out that it may be a product that we should have developed differently. That would be one advice that I always try to also give to young startups. Focus on the customer, even more, do more user journeys, reading the design screens. I think that is important.

Alejandro: That’s really interesting because, especially for the first-time founders, they tend to execute and build based on assumptions rather than data. Obviously, now, at the scale in which you guys are, it’s super easy to see people’s behaviors. But for the folks that are listening that are still maybe not even on the prototype and perhaps like validating some of their ideas, how would you tell them to go about it?

Valentin Stalf: It all starts with a strong hypothesis. What I think is important is that user-testing thousands remove the strong hypothesis approach. First, you with your co-founder, with your team, you need to sit down and say, “This is the best product. That’s exactly what I want to do.” You need to, in concrete detail, put it onto a screen or design a screen or flow, and then have a hypothesis on what you’re changing for users. Then you can approach users. It doesn’t need to be ten-thousands of users, it can also be a smaller group of users, and you can show them, and then verify a bit that you have — everybody’s inspired that you interview, and they’re friends of yours. Normally, they tell you it’s great, and in the end, you realize no one wants it if you launch it. That’s the difficult part of it. Also, how do you get this testing group of users? I would strongly work on the hypothesis. Be clear on what you want to change and what you want to change for customers. Then, also, find out what should the MVP be that you’re launching, change, or what do you want to get out of that MVP? Do you want to see that people return to the product? Do you want to see that people choose a premium function? What do you want to test? That’s where you need to focus.

Alejandro: That’s fantastic. Valentin, for the folks that are listening, what is the best way for them to reach out and say hi?

Valentin Stalf: To myself?

Alejandro: To yourself or maybe you have some social media, or maybe there’s an email that you recommend that they reach out to yourself or the team.

Valentin Stalf: I think everybody who would like to follow us more closely, there are a couple of ways to follow us. First, you can follow me on my Instagram profile. It’s #valentinstalf – you will find me easily on Instagram. This is my name. You can follow our company on Instagram, #N26 – then you can follow up throughout all the social media pages. Also, you can follow my LinkedIn. On LinkedIn, I always try to post more business-relevant things. On Instagram, we do more about how does the company work, and how do we work together at N26? That’s also quite interesting for entrepreneurs to see how we do things, how it actually materializes? What does a Friday celebration look like? How does a Monday standup look like? How do people come together? What’s the setup? On LinkedIn, I try to do more things that are business-related. You can find us around or other times blogs from us or our employees. Those are the best channels to follow me. And then, you can reach out through Instagram or LinkedIn.

Alejandro: Fantastic. Well, Valentin, thank you so much for being on the DealMakers show today.

Valentin Stalf: Thank you very much, Alejandro, for having me. It was very exciting.

 

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