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Building a business to reach a US$480 million valuation and selling it would be considered a success by anyone’s standards, but some entrepreneurs have a fire burning inside that makes them continue to build towards greater things. Michael Gastauer did that very thing.
Starting with a payment services company in early 2000, he sold his business only five years later to an international banking group for US$480 million. In 2014 he started his next venture, the digital banking platform Black Banx. The FinTech startup covering real-time account opening and cross border payments for 180 countries, grow within ten months after launch to over 1 million customers. In September 2016, Black Banx reached a US$2.2 billion valuation. In June 2018 Black Banx was ranked amongst the fastest-growing companies, reaching a US$9.8 billion valuation. Current speculation values the global group at US$50 billion, which would make Gastauer one of the 25 wealthiest people on earth according to the Forbes Billionaire list (10/2022)
Being a billionaire entrepreneur in your forties and having reached a net worth of more than US$10 billion would allow you to settle down and enjoy the nicer things in life. Michael does the opposite, he sees life as a journey where a new opportunity starts when another ends. Money is not his motivation, what drives him is his passion to solve a global problem.
Solving a Global Problem
The problem that Michael’s digital Bank solves, is huge in retail banking and affects millions of people and businesses trying to open a bank account in other countries or send money internationally. There are many good reasons why someone needs a local bank account or has to send money to another country. In 2014 the reality in retail banking was that cross-border payments took several days and typically cost 3-5% in fees for currency conversion and payment processing. If you tried to avoid these fees by setting up a local account in the country that you regularly send money to, it took weeks and thousands of dollars in travel expenses to meet your local banker and get an account. Michael`s online solution Black Banx cut down account opening time from weeks to seconds and saved customers billions of dollars in fees every year.
Making it Happen
One of the biggest complaints most entrepreneurs have is not being able to get started. They struggle to raise the money or they don’t know how to keep going.
So how did Black Banx manage this level of growth? Michael Gastauer bet big and invested over US$250 million of his own money to fund Black Banx`s early-stage growth. Similar to Elon Musk who used his money from selling PayPal to start Tesla and SpaceX, Gastauer used more than half of his money from selling his payment company Apax to fund his new venture Black Banx. He didn’t bring in any third-party funding not to get diluted at an early stage. It meant that he bootstrapped and focused on making revenues. Michael firmly believes that one of the biggest mistakes many StartUp founders make is to focus on getting VC funding rather than keeping their focus on building a healthy business model that is able to generate revenues at an early stage.
Standing Out from the Crowd
The FinTech industry is like many industries, it’s almost completely saturated with new startups. That leaves entrepreneurs in a position where they’re often unable to gain enough visibility.
Black Banx had a similar problem, but Michael didn’t let this deter him. He came up with a completely new concept in banking. Michael realised that for certain industries it is even harder to open bank accounts than for the average customer. Back in 2015, the Cryptocurrency industry with millions of users was one of those. Michael decided to focus on applying the Black Banx solution to solve the banking problem for the Cryptocurrency industry first. He partnered with the largest exchanges in the industry to offer them Bank accounts for their business and millions of clients. The Black Banx solution allowed customers to buy mostly Bitcoins from their preferred suppliers in real-time, using the Black Banx account-to-account transfer (ATAP) which is instant and free of charge. Black Banx went even further and implemented as first digital bank Bitcoin as a currency that could be converted into any other fiat currency in real-time. Having successfully acquired its first 300k customers from this industry, network effects and focus on further industries led to Black Banx`s early success and created momentum that soon became unstoppable.
So What’s the Key to Building a Multi Billion Dollar Company?
Reading through stories like this can make many people wonder how it happened and how it can be replicated. It’s possible to build a company like this, but it requires a few key ingredients to make it work, regardless of the industry involved.
The problem you are solving has to be global and big enough and your solution needs to have unlimited scalability. Hitting an arbitrary glass ceiling will only stop your business in its tracks. Your scalable solution has to solve the major pain point in your target market. Your business model needs to be able to produce revenue and aggressive growth.
It’s far from easy and there’s no real blueprint for this. Michael Gastauer came across the Black Banx concept through fifteen years of experience. His model is global and some could say his idea was timed right for this market. There was already an appetite for it, particularly since trust in traditional banks has hit historical lows.
Last Word – The Will to Expand
What separates Gastauer from most entrepreneurs is despite being so successful he hasn’t decided to call it quits and go home. Entrepreneurs who love what they do will never retire because they’re indulging in their passions. And that’s not just an inability to call it quits. It’s what drives them forward in the first place.
When founding his company, Gastauer worked for the first three years on an average of 100 hours per week to grow Black Banx into this global banking group he envisioned. The best entrepreneurs will do anything it takes to get their ideas started and grown. When you asked him, Michael didn`t feel stressed or say he has any complaints about the time he spends at work. For him, it was pure fun and he truly enjoyed what he did.
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