Fintechs are often lauded for their ability to transform an industry, but can they do it while maintaining a healthy work-life balance?
It’s a well-known fact that it takes a certain kind of person to be able to build a company from the ground up, let alone disrupt a whole industry à la fintech.
But does fintech’s obsession with hyper-growth come at the cost of a work/life balance?
Before turning to what people ‘in the thick of it’ think, it’s first important to understand the theory behind the relationship between hyper-growth and a less-than-ideal work environment.
Pinar Ozcan, professor of entrepreneurship and innovation at the Saïd Business School, University of Oxford, has studied the astronomical rise of fintech and what the growth of new and emerging markets can mean for an industry.
“Everybody knows by now that these guys have difficulty growing and making money. In essence, fintechs are in a race to profitability, in order to survive and in order for the investors to keep backing them,” Ozcan told AltFi.
“For a lot of these businesses and platforms it is a ‘winner takes all’ or ‘winner takes most’ kind of game and fintechs are all fighting to be winners. When one platform grows another one shrinks,” she added.
For instance, student-focussed banking service Loot fell into administration this time last year after failing to compete with other digital challenger banks that famously also have young demographics, like Monzo and Revolut.
So just how do these fintech giants survive?
An example of a company that has grown rapidly but not at the cost of its employees is digital pension provider, PensionBee.
“Our short-term achievements are important and we use metrics to measure our success, but we are building a company that will support our customers for decades.”
Savova also said that PensionBee has five core values that it sticks to: “Love, honesty, quality, innovation and simplicity.”
Similarly, Scott Mowbray, co-founder of financial management app Snoop, told AltFi: “On the surface, working for a start-up and having a decent work/life balance seems like an oxymoron.”
“It’s relentless and there’s always something that needs to be done yesterday but it’s massively important to take the time to do ‘other’ things,” he added.
Despite Snoop being a very recent newcomer to the fintech arena, it’s employees aren’t, and have the experience to know that you need to come up for air every now and then.
It’s no secret that fintech founders often come down firmly on one side of the fence or the other.
After it was recently revealed that both Tom Blomfield of Monzo and Nikolay Storonsky made it onto the Sunday Times’ Rich List for the first time, it was apparent that the two founders have completely different strategies.
Storonsky declined to provide AltFi with a comment but told The Sunday Times that he “can’t see how work-life balance will help you build a start-up”, and puts his success down to “working super-hard”.
In the very same Sunday Times article Blomfield said he had recently taken up pottery, which he finds “meditative”, and was very passionate about maintaining a healthy work-life balance.
This is evidenced by the fact that Monzo is very focussed on having a welcoming work environment, championed in recent months by Sheree Atcheson, the digital bank’s first head of diversity and inclusion.
Founders are not the only people who have to focus on the healthy scaling of a company.
Martin Campbell, strategy and communications specialist and founder of Beacon Strategic, has been on both sides of the fence when it comes to a fintech pushing for both a healthy work-life balance and growth.
Campbell spent seven years at Virgin Direct under Richard Branson’s “growth at all costs” leadership and later was an early adviser to peer-to-peer lending platform, Zopa.
He told AltFi he’s seen “how poisonous going gangbusters for growth can be.”
“It’s no fun to work with people stuck in macho hour-keeping, terrified of the boss’s latest mood, controlled by a board of greedy gambling addicts playing the blame game, while the startup’s long-dropped original mission fades on a meeting room wall,” Campbell told AltFi.
Nick Keppel-Palmer, co-founder of The Good Growth Company, whose main aim is to help companies to adopt a healthier way of working, told AltFi: “When future generations ask exactly why ours messed up so badly, they''ll identify the fetish for rapid and limitless growth as our core idiocy.”
“We''re cheerfully burning natural and human capital on the altar of exponential growth. Investors and founders are blindly obsessed with it. Thousands of promising young businesses have had all their potential for good annihilated in the pursuit of rapid scale,” he added.
There really is no right or wrong answer to the question about whether or not fintech’s astronomical rise and growth is bad, but, in order to stick around for the long-term and prevent high staff churn rates, fintechs must also focus on the human aspect of building a business.