Alumni Interview: Joe Cross

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By MICHAEL GALLO

TransferWise is a London-based start-up that allows consumers to exchange currencies at effective rates very close to the spot price, even for small transactions. Two Estonians, including one who was the first employee at Skype, founded it in 2011. TransferWise has since been named one of London’s hottest start-ups and has received funding from significant investors, including early Facebook investor Peter Thiel. According to the company, they process £2m per day, which is 10 times growth from the start of the year. TransferWise Student, their product tailored for students, allows foreign students to pay their UK tuition at the spot rate with no fees. Joe Cross is TransferWise’s head of marketing and holds a master’s degree from LSE in Media Communication. We caught up for a chat.

How does TransferWise work?

Let’s say you’re a student from France who’s paying fees to go to LSE. You want to send ten grand from France to the UK. We realised that at this same point in time, there’s somebody looking to send ten grand or thereabouts out of the UK to France. Rather than making

Joe Cross, LSE Alumnus

direct international transfers, we connect everyone up. LSE gets the other person’s money and their recipient in France gets your money. So the money is kept locally and there is no reason to incur any international bank fees at all, which is why we’re able to make the cost of sending money abroad about ten times cheaper than a bank.

Why did it take so long for such a peer-to-peer solution to emerge?

There’s just a real appetite for financial tech right now and people willing to give it a go in a way that they weren’t before—definitely in the UK. And that’s probably a result of this financial crisis and people losing faith in the banks. Scandal after scandal gets people thinking, “Hmm, maybe actually this isn’t as it seems and maybe I should look for alternatives.” The demand for alternative finance is definitely as high now as it ever has been.

Your team largely has consumer backgrounds. But lots of your competitors are former bankers. What advantage do you have?

The thing we have more than anyone else is a user-thinking and user experience. The kinds of conversations we have are almost always about customer satisfaction—how can we make the process easier. The net promoter score is an industry benchmark for measuring customer satisfaction and one of the two or three measures we really focus on.

Have you noticed anything unique about selling a disruptive technology to a British audience?

A lot of our audience is non-Brit in Britain, because we’re selling to expats and students abroad. We’re quite uniquely placed in that we’re kind of operating in Britain, but a huge chunk of our customers are French and Italian and American living in Britain. We think of our audience as global people. They’re the kind of guys who have lived all over the place and have jobs that require them to be in New York this week and London next week.

How do you keep the site away from dodgy people like money launderers?

There’s stuff call KYC, which stands for ‘know your customer’. International money laundering regulations say once someone sends a certain amount, we have to verify his identity. So if you were to pay tuition fees of a certain size then you’d have to show a scan of your passport. On top of that, we’ve built algorithms that will spot anything that we in any way deem questionable. They get flagged and checked out.

How do you convince your customers to trust you?

We get loads of our new customers through word-of-mouth. We build the best possible customer experience for our existing customers and also provide tools for them to tell their friends. We also know what language resonates with them. We found that when we talked to consumers about being able to beat the system and being smarter than the establishment, they were a lot more likely to forward on our emails to friends and to tweet about us and put us on Facebook than if we said “welcome to the cheap money transfer company”.

How do you go about finding and choosing a start-up to join?

I did lots of due diligence. I put myself in the shoes of an investor, because really you’re about to invest time, which is effectively money. Ask questions like “Who else is investing in it?” Look at how stable the company is and how much these guys really know what they’re talking about. Are there any competitors? If there’s a market for it, there’s probably someone else doing something similar already.

Why did they pick you?

They were looking for guys who didn’t come from banking, who had done Internet things and knew how to build a customer brand. That was something I had done before. I also did an insane amount of preliminary work before interviews. I put together a ten-page summary of everything I would do there in my first month. Which is something that, if you really, really want to get the job, I can’t recommend enough. It proves that you’re willing to go out there and do extra work and get shit done. Our basic formula in hiring is to ask two questions: is the person smart and do they get stuff done? People that tick both boxes are probably going to be great at a start-up.

Do any theoretical lessons from your degree come up in your job?

Yes. One thing that is definitely useful is statistics, and being able to look at a very large set of data and spot the idea and create a story out of the data. We might survey 10,000 customers. We have all this data very similar to the kind you get when doing a dissertation. You’re creating an argument from a body of research, but ultimately the output of your argument isn’t a dissertation. It’s probably quite a large strategic decision. Oh right, we should have focused on international students and then you go and focus on international students.

Picture: Interviewees own

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