“F10 Employees and Members Really Understand the Finance Industry”
Markus Graf co-founded F10 FinTech Incubator & Accelerator with Andreas Iten. After three years of contributing heavily to the success of F10, Markus leaves Switzerland and takes off to Asia and America. Read in this interview how the name “F10” was created, how the Zurich-based Accelerator as the Home of FinTech brings Startups together with renowned financial institutions and what Markus considers the most relevant trends in the finance industry .
Markus, you co-founded F10 FinTech Incubator & Accelerator. How did you come up with the name?
Initially, we had just used “F10” in emails or short messages as an abbreviation for the office address: Förrlibuckstrasse 10. When I was invited for a live interview about the newest FinTech accelerator in town, the SIX spokesperson had warned me not to use the word “F10” as this abbreviation was supposed to be for internal use only and an official name had yet to be found. But imagine someone tells you NOT to think of pink elephants; what will be on your mind the next second? Pink elephants, exactly. The same happened to me in front of the camera. Within the first seconds of the interview, I called our newly founded company “F10”. This led to the spokesperson securing the name rights and F10 FinTech Incubator & Accelerator was officially born.
F10 has ranked multiple times among Europe’s best accelerators. Why does Switzerland need F10?
It has long been believed that FinTech companies compete with banks for market share and therefore, the outcry of traditional financial institutions was loud. In the meantime, it has become clear that the best results can only be achieved when banks and FinTech providers work hand in hand.
F10 as the Home of FinTech is a place where Startups with disruption potential come together with established financial institutions and hence co-create the financial products of tomorrow. Our corporate partners regularly communicate the areas where they see aneed for innovation and F10 supports FinTech, RegTech and InsurTech Startups solving actual problems of the finance industry on their journey to successful companies ready for both investment and collaboration. This approach minimizes a risk that many Startups all over the world face: to develop creative solutions that the market has never asked for.
Do you know how the future prospects of the Startups supported by F10 are?
So far, the survival rate of all Startups which graduated from F10 is 98 per cent. This high number is partly due to the duration of the program. In six months, young companies can make enormous progress. We also set hard milestones to maintain a high quality standard – if the Startups don’t deliver, they have to leave the program.
Another critical factor is the people behind our accelerator: F10’s employees and members really understand the finance industry as most of them held high positions in financial institutions before joining F10 FinTech Incubator & Accelerator. They, therefore, understand the needs of corporations in the finance sector and can match corporate partners ideally with innovative Startups.
Where lies F10’s secret to success? What makes F10 unique?
We value quality more than quantity. For each batch of our “Prototype to Product” program, we usually scout about 300 FinTech, RegTech and InsurTech Startups out of which we invite 60 for one-hour interviews. In the end, just 15 Startups make it into the program. During the program, the teams have to reach three milestones before their graduation to ensure that the young companies are investment-ready by the end of the six-month program. Startups that have graduated from F10 are fit for the market and ready for collaborations with investors, corporations or other Startups.
The finance industry is undergoing far-reaching changes. What do you consider the most relevant trends?
Blockchain has long been named as number one technology trend in the FinTech industry and I like the concept of enabling trade with people outside of your trust circle and without intermediaries. However, I think that the expectations had been too high in the beginning. The whole finance industry had been stressing about Blockchain and Bitcoin, but the significant break-through is yet to come. Five years after the first big hype, there are still performance and scalability problems and today’s protocols are just not mature enough to actually disrupt the finance sector.
The second technology trend is Artificial Intelligence (AI), but the tendency to develop machine learning further is hardly new. Since the 1940s, there has been valuable fundamental research, but AI and machine learning are not ready for most applications needed in the finance industry.
The most relevant trend that most banks still have not grasped is that today’s university students – who will be attractive bank customers in ten years – are not interested in offline personal interactions with their bank advisors. Loyalty towards financial institutions will shift from longstanding personal relationships with advisors to good user experiences on the chosen touchpoints.
In your position as Startup coach, you witness and accompany young firms’ first steps. What do you consider the most significant challenges when founding a Startup in Switzerland?
A stereotypical characteristic of Switzerland’s culture is the lack of courage and an extremely negative attitude towards mistakes and failure: most Swiss are afraid to fail and often hesitant to embark on a Startup journey – even if they have fantastic ideas.
When it comes to collaborating with Startups, established financial institutions in Switzerland are often slow to take decisions and a long time between the first contact with the young company and the signing of a contract passes – time the Startups don’t have.
Another innovation barrier in Switzerland is the high wages and living costs which make bootstrapping more expensive than in other countries. It is just easier for university graduates to get a well-paid job in a bank than to set up their own Startup, gain customers and find investment capital.
How can F10 help Startups revolutionize the (global) finance industry?
The Startups of our “Prototype to Product” program usually have great first prototypes and ideas on how they want to participate in reshaping the finance industry. At F10, these FinTech, RegTech and InsurTech Startups learn everything they need to know to run a business from scratch: to do market research which guarantees they are solving actual problems of the finance sector, to working out their unique selling proposition which distinguishes companies from competitors, to find the ideal team structure, how to solve conflicts, to draft business plans and develop investment strategies.
Moreover, F10 brings Startups and members from financial institutions together to facilitate collaboration between them with the aim of boosting innovation in the finance industry. The Startups in our Accelerator Programs pair their ideas and resources with the needs of banks and insurers. Together, they create the products and services for the finance industry of tomorrow.
What is your favourite F10 success story?
I love to think back on Apiax, a RegTech Startup that underwent our “Prototype to Product” program: when we first met the newly founded company, the co-founders were on stage with nothing but three Powerpoint slides. Two and a half months later, they already had a proof of concept with a Swiss tier-one bank and by the end of the six-month program, Apiax received 1.5 million CHF investment and has been successful ever since.
We are also extremely proud of ThinkYellow, a Startup that offers gender-lens products and was supported by Julius Baer and Baloise. I think that topics such as gender equality and corporate social responsibility deserve support in the finance world which is still mainly dominated by men. The greatest thing about Think Yellow, however, is that Julius Baer and Baloise did not invest only out of corporate responsibility reasons, but because they actually do business.
You were an integral part of the Fintech Games whose concept has been adopted for the upcoming F10 FinTech Hackathons in Singapore, Vienna, Zurich and Sao Paulo. What makes these events unique?
A distinctive feature of our Hackathons are the real-life challenges provided by the Platinum Sponsors as well as F10 in collaboration with our corporate partners. The Hackathon participants get the chance to solve actual problems of the finance industry using cutting-edge technology in a competitive but playful environment. Thanks to input sessions and workshops by mentors during the Hackathon, every participant can enhance their knowledge and acquire new skills. What the Hackathon teams do within the 48 hours of programming and ideation is actually hard work, but the event character makes it a fun and educational experience. And in the past, already four Startups have come out of these Hackathons and participated in the F10 P2 “Prototype to Product” program afterwards.
What do you wish F10 for the future?
Keep up the dynamism, guys! Witnessing the involvement of every employee and member has been awesome. It should not be taken for granted that big corporations regularly have their high-ranking managers attend Startup events and enable an exchange on eye-level. I wish for F10 to transport the collaboration message to the world.