Silicon Valley and the future of Fintech with Maex Ament

Hey guys and girls, and welcome to the Foundersmart podcast with Patrick and myself, Suzanne. I'm always excited about our podcast, but today I'm especially excited because we are talking to Maex Ament. Maex is a successful serial entrepreneur with multiple exits under his belt, and he's a fintech guy Originally from Germany, but lived for 15 years in the San Francisco Bay Area and returned a couple of years ago back to Europe and is now in Madrid, Spain. In this episode, Maex shares his take on Silicon Valley, why he went there in the first place, and also why he left again, and also covers strategies on what entrepreneurs in highly regulated industries like the fintech industry can do to make their lives easier.

If this is the first time listening to our podcast, Suzanne and I are successful founders based out of Los Angeles in the United States. We make podcasts about entrepreneurship that are informative and cover founder investor stories. If you like our podcast, please subscribe so that you don't miss any future episode. And now have fun with the podcast.

Perfect. So let's welcome Max. Maex Ament, welcome to the show.

Thank you. Thanks for having me.

Awesome. So, you know, to get right into it, I think it would be great if you could just tell us a little bit about you and your background. And it also would be great if you could focus on how you actually got to the United States in the first place.

Yeah, happy to do so. And, um, so I was born and raised, and I gotta say, unfortunately spent a little bit too much time in a tiny little German town called Kaiserslautern that you know probably very well as well. Yeah, right. So, yeah, well, as I said, I was born there and then I decided, for more personal reasons, to be honest, to go to college, to university there as well. It was friends and girlfriend and convenience reasons at the time. Right. So studied math and computer science. In Kaiserslautern. And one of the things actually I realized in hindsight, I tried actually to get out. So in the 4th or 5th semester, I applied for exchange to Brisbane, Australia. Didn't work out, but I think at that time already showed a little bit my eagerness to go somewhere far away. And I was pretty big in computer games. Developing and playing at the time. So at home I coded a little bit and played like crazy Ultima Online and other stuff back in the days. So for me, the natural thing after college was to find a job as a computer designer, games designer, right? But there were not that many options in Germany at the time. So I did, after I got rejected by the 2 or 3 companies back in the days, I did the second best thing. I went to SAP, which they offered me a job as an engineer in accounts payable. So that's where I started my career back when I was 23, developing accounts payable software, which I knew nothing about back in the days, back at the time. So, yeah, spent 2 years, learned a lot. It was pretty awesome, and I'm forever grateful for SAP to give me that opportunity. Learned a lot about SAP itself, about payments, about accounts payable, about enterprise software. But then realized after 1.5 or 2 years that this is probably not my thing. And I got to admit that the trip to the United States, I think it was early 2000, there was like the end of the dot-com boom. But for me, it was still like in the middle of the dot-com boom when I was there in San Francisco. That made me then finally think I got to do something on my own. So I left SAP together with a few friends that worked at SAP and built our first startup outside of SAP. Started as a consulting company that worked, that did consulting for SAP. So it was a pretty easy move, and we built a product in parallel. So yeah, that is maybe my starting point. And since then, so that was 2000 or end of 2000. Then since then I had a couple of startups in the payment space, in the enterprise software space.

That's great. So basically going from games designer, games developer to SAP engineer in accounts payable. And did that job influence you to also go more into the fintech space?

Oh, absolutely. Yes. I mean, I would say, if I may dream for a moment, if I would have gotten a job at, I think it was Blue Byte, the company back in the days in Germany that did computer games, one of the two. If I would have gotten a job there, hopefully today I would do something in virtual reality games. But now I got an accounts payable job, got pretty good at accounts payable software, right? Got pretty good at it, understood it pretty well. And saw the usual, right? Saw the things that don't work, saw the gaps that enterprises had in that space, and built my first company based on that knowledge and took it from there. Absolutely. That shaped my career.

That's awesome. And you mentioned already you built quite a few companies. Can you tell us a little bit more about the startups you built?

Yeah. So the first startup was a company by the name of Ebidos. We named it Ebidos. From one of my favorite books from Ted Williams, Otherland. And we actually, we just want to leave SAP because we felt it's ready and there was this dot-com boom that I mentioned before. So let's do just something. And what was something at the beginning was consulting. Let's just find some customers that we can do some SAP consulting work for. But then in parallel, we came up with the idea of filling one of those gaps that I mentioned before in the accounts payable space. Where we thought about incoming invoices that large corporations receive in the thousands a day, incoming invoices that are pretty expensive to process, pretty hard to match. So there's a lot of people and a lot of operational inefficiency. So we built a tool based on top of SAP to help with those deficiencies, with those issues. Again, in 2005, I moved with that company to the US, to San Francisco. Established our US subsidiary and brought in a few more people. And then in 2006, we actually sold it to a Swedish OCR scanning company, and I stayed then with the acquiring company for the next 3 years, partially because there was a certain earnout to be achieved, let's be honest. But the second reason was I didn't have a green card at the time, so there were certain legal reasons I needed to start a company. But I think the most important reason was it was actually a pretty enjoyable job where I learned a lot from the acquiring company being larger, not super large, but a larger international company. So I could fill up the knowledge gaps I had. So yeah, there was the first company in 2006, sold, then stayed for 3 years. In between 2006 and 2009, in those 3 years, we had actually a couple of projects on the side where I did a mix of advising and angel investing. So tried a little bit mobiles, barcodes, I would say moderately successful. So again, good learnings and a little exit on the side. But then in 2009, we did actually decide to continue our journey from the first big company, from Abydos, and built and founded a company by the name of Taulia. At this time, we knew actually exactly what we want to build. So we wanted to build something that, uh, yeah, moves the cash from large corporations into their supply chains. So in simpler words, we want to help small medium businesses to be paid earlier. So instead of waiting 30, 60, 90 days, find a way with a click to get their money earlier from the large corporation. And that's what we built then in 2009. Company name is Taulia, still going strong. And since we knew exactly what we wanted, since we were an established team, same founders as before, we were pretty set on raising venture capital, which we did. And even without a network in Silicon Valley, we were quite successful after we had our first client, Pfizer, to raise traditional VC. And yeah, in hindsight, I would say we raised quite a lot of venture capital over the 7, 8 years I was there. But company's still, as I said, going strong and found a new CEO then about 3 years ago. And that's when I came back to Europe.

That's awesome. And you mentioned like quite a few exits along the way. When you first started the company, did you think about from the start about exiting or did it just, you know, came out of an opportunity?

You're never actually, to be 100% transparent, when we founded a company, I never thought about the exit. I mean, when building something, at least that's how I see it, and everybody needs to have their own flavor of it, but when it's about building something, I personally build it just to last, to do something that makes an impact. Sounds super cheesy, but I say it anyway, but something that is impactful And yeah, last, actually, the proudest thing for me is still a piece of software that I built back in the SAP days. My first job at SAP was to build or help building parts of a payment program. So that little piece of software that pays suppliers and employees that every large corporation uses. I guess it was 25 years ago almost, or 22 years ago. And this software is still used by the majority of Global 2000 companies. That makes me proud. Build something that lasts. And there was no exit that I had in mind. I mean, it was software that I built while at SAP. So no, actually, to answer your question, I never thought about the exit in mind. I know that there is this mindset, and I don't want to throw anybody under the bus, but there's the rocket internet mindset of finding an idea and a couple of MBA dudes in a room trying to copy it and then hopefully next 2 years get acquired by the next big competitor. Not me. Not nothing wrong or right with that, I guess, but certainly not my, my, my thing in life.

Yeah, I understand that. I think Germany has in the US like kind of a reputation because of Rocket Internet, right?

I think so too. I think so too. I mean, yes, uh, there, there's a little bit of a negative connotation in German startup land.

Yeah, absolutely. And speaking, speaking of that, so many founders, uh, from especially Germany actually want go to Silicon Valley, want to start their company in Silicon Valley. And what's your take on Silicon Valley, especially compared to Germany, for example?

I'm mixed. Look, there's no place I ever experienced that much entrepreneurial excitement, that much— I don't say that— that much inspiration than San Francisco. I mean, I remember when I arrived there, 2000. I mean, I got it in 2000 when I was there. That's when I got the bug the first time. So I will be forever thankful for that. But it continued as well when I was there in 2005. We sold in 2006. Those years between 2006 and 2009, before we actually founded Talia, I met so many great people on conferences, in Starbucks, in VC pitches, wherever I was. It was so inspiring. I gotta say, although London, Berlin catching up quite dramatically and very in a positive way, I never got that vibe again that I had in San Francisco. I just be honest. That said, after a few years, for me, it was more than for most people that came. For me, after like 10-ish years, so 2015, and there's a variety of reasons why it happened that way. But for me, in 2015, it became boring as well. Boring or almost annoying because, well, I realized there's a little bit more than tech and startups in life. So just going in Starbucks and again, going back to the Starbucks, and just hearing like the tech bros speaking left and right about their next idea and the billions that they raised became then actually annoying for me. It lasted for 10 years and then yeah, in 2015, '16, I planned actually my return with the family back to Europe.

Yeah, I understand that. I think the reason why we're also not in San Francisco, Silicon Valley, but in LA is because of that same thing. I feel like Silicon Valley is not very diverse, right?

That's very true. I mean, no, diversity would not be the first thing that comes to mind when it comes to Silicon Valley. Yes, correct.

And you mentioned that, you know, you moved back to Europe. So how would you say that Europe changed, especially from, you know, startup land perspective?

Yeah. Um, look, when I left Europe, uh, 2005, I will fully admit, at least in 2003, '04, in the middle of my first company, I had no freaking idea about venture capital or that this is even possible. I remember a conversation I had around that time, 2003, '04, maybe '05, with Dresdner Bank, where we grew like crazy in this company that I just mentioned, in Ebbidos. But our revenues were fantastic, but obviously, cash collection was a little bit behind because payment terms were a little bit lengthy. So I remember a conversation that, by the way, was one of the reasons why we built the next company, because we had this problem ourselves. But I remember one conversation I had with our banker at Dresdner Bank, and it was related to the cash flows that were lagging behind, but it was as well related to just getting a few hundred thousand euros for growth. But he said, I don't understand, you have money on the bank account right now. Why would you need money for growth? You just continue growing organically and you'll be fine. So that mindset was like completely absent back in the days. So now back to where I spent the last 3 years, which, well, living in Madrid but working in Berlin actually until about 6 months ago. There is now ecosystem, definitely exciting ecosystem in London of venture capital, of supporting banks, of further middle that are actually quite helpful. So that changed, at least in my book, dramatically. There's a couple of other things that changed. I mean, I do remember that when I started my first company, and I would argue actually my second one as well, that people in Germany looked at me a little bit like, oh, sorry that you have to start a company, you didn't find another job. I mean, that sounds incredibly stereotyped and you read it in many blogs, but I had that feeling. I mean, people like, A little bit sad for me that I'm that poor guy that is not able to find a good banking job. I think that is a little bit gone. I think people have some admiration now and some respect that we try pretty hard shit by being an entrepreneur.

That's awesome. Yeah, I think especially in fintech, like Europe is really catching up, especially London. I think they have like quite a few unicorns in the fintech space. So this is great. And obviously you are like a fintech expert and fintech is like highly regulated. Any advice for people starting out in fintech these days?

Yeah, look, I think my first answer to that is that we did at Taulia— this is the supply chain finance company— we kind of outsourced that part of regulation. What I'm trying to say is we focused on the product, on the tech, on building a network, connecting buyers and suppliers. But when it came to the actual financing and how the money flows, how the payments is done, uh, well, how credit was extended, we used a partner. Uh, so there was a good and a bad decision. The good decision was, back in the days, I didn't have to bother at all about the regulatory aspects because that partner, which happens to be now my employer Greensill— so that's how the cycle closes, or the circle closes— um, uh, that that, that company Greensill Capital took care of the, the fin part in fintech, uh, and we took care of the tech part. Now that changed, to be honest, in the last 3 years when I had my blockchain startup in, uh, in, in Berlin, where, well, we built on a public blockchain decentralized finance applications. That's where we needed a lot of regulatory insight and, uh I don't think there's a, there's a silver bullet other than if you go that route. I think it's very hard to bootstrap a fintech. I think normally I'm a fan of whatever works, bootstrapping or VC, but you need hundreds of thousands of dollars in legal fees, uh, in advisor fees. Um, and that's exactly what we did. So we, we, we found the best lawyers that we, that we, uh, from the peers in, in the space and work together with them. Got as well in-house advice, so counsel in-house, uh, that, uh, that was more affordable. But I don't think there's, there's any silver bullet I can share with someone other than either outsource it to a partner that does all that for you, actually did Italia, or go head-on and, uh, just be aware that this will be expensive.

That makes sense. And do you think, like, in general, like, there is, like, you know, more space for new startups in fintech? Because it seems to get a little bit crowded. Crowded now?

Um, no, I think actually, yes, it seems crowded and it is definitely crowded. Let's, let's, let's not, uh, let's not argue about that. That's a, that's the correct observation. But the more I'm actually spending time right now on the fin side of the fintech, uh, house. Yeah. Good. With my new employer, the more I see how inefficient actually the banks are. Oh yeah. Not my company, but it's still, I mean, even after those, how old is fintech? Depending how you count, 12 years, 10 years, depends where you, where you set the starting point. Even after those 10 years, there's so much nonsense unattacked, unsolved, just because people— because banks or the financial industry made things incredibly complicated. That starts with just some 3-letter acronyms that nobody understands, and then nobody dares to challenge. And if you look behind the scenes, you see so much opportunity. So no, it is crowded, but there's like 10 times more opportunity than is right now attacked.

That's great. And also to be respectful of your time, last question for you. What would be like one piece of advice for aspiring founders?

One piece of advice. I think one piece that I— well, I make it two. The first one is a short one. Whenever you can afford it, when you have actually raised capital or you have a little bit, or you're profitable or whatever it is, for me, one of the game-changing things in my career was working with coaches. Like, however you call them, executive coaches or whatever, life coaches. But having someone that once a week or every 2 weeks you can talk to that went through the same shit, that was probably super helpful. And the first thing that I learned, and that's why this was so helpful for me, is I was a very black and white person. I always thought there's just one right way and every other way is wrong. I think what I learned over the last 10, 15, 20 years is that gray is a fantastic color. It's not black and white, but there's a lot of gray. And to be comfortable in that zone of not going left and right and just going one way, knowing that it might not be the perfect way, but it's a way, that helped me quite a lot to be able to operate in that mode.

That's awesome. Great. And thank you so much for your time today. It was great to have you on the show. And guys, I hope you learned something from Max.

Thanks for having me. Thank you.

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