One of the million and one things not universally agreed upon is the definition of a developing or developed country. However, some basic parameters like level of industrialization and the Human Development Index have served as scales. Today’s Blockleader, Philipp Lesche would be sharing with us his story about his decision to join the blockchain space and how he is using blockchain for good, by developing blockchain solutions for developing countries.
For background, here is how he responds to people when asked, “what is blockchain?” He says, “Of course there are the obvious definitions you can find in any book about blockchain technology. As my background is more business-sided, my first answer is always, that blockchain is an innovative technology that helps increases trust and transparency while reducing transaction costs. I’ve learned that those definitions are way easier for people to understand than technical definitions.” What does that mean for a developing country? Philipp and his team at CDF “are building an investment platform through which international investors can invest in promising, high-impact startups from developing countries, addressing the financial exclusion and the funding gap of entrepreneurs. As I have a business background, I am responsible for the strategic development and operations in CDF.”
Banking the unbanked (or for some, unbanking the banked) seems to be the decentralized mission of those in the blockchain and crypto space. Philipp’s best industry to work in is “definitely the finance industry. Blockchain technology is there to disrupt the way we are doing banking. In my opinion, banks buy themselves time by saying that blockchain is irrelevant and will have no big use cases in finance. But as soon as they have figured out how to use blockchain they will promote it and sell the blockchain as ‘new way’ of doing finance.”
Access and exposure have always played a role in where we find ourselves in life, which is how Philipp got on the blockchain train. “After high school, I started studying at TUM School of Management with semesters abroad in Paris and Milan.” Not everyone had the access and exposure of schooling in a top university and getting to do semesters abroad. “I clearly came into blockchain because of Prof. Dr Philipp Sandner who was my supervisor at the Technical University of Munich. I wrote my thesis with him, and back in 2017, he built the Blockchain Center at Frankfurt School of Finance & Management. We were always in contact and someday he told me about blockchain and the Blockchain Center he is building. That was when I decided to join the decentralized space.” Word of mouth evangelism, the most successful method for introducing new concepts to people. Thanks to his post-graduate professor, Philipp became a blockchain believer. “I joined the blockchain bandwagon during university, so before that, it was basically the university that kept me busy. Besides that, I did some internships, mostly in the automotive sector.”
Wondering what little Philipp, “born south of Munich, not far away from the alps,” was always up to? Well, like most kids his age, attention was always on winning one sporting competition on the other. And as we all know, talent is not enough. There also needs to be determination and discipline, virtues which have survived with him into adulthood, helping to shape his current activities and experiences. Make no mistakes about it, he still very much has a competitive spirit, as he was a professional sportsman until recently. “Until 2016, I was a former sportsman in road cycling, taking part in European races and national championships. I still do a lot of sports, but clearly, I do not have as much time as I had in university.”
Helping groom such a dedicated adult through his formative years is not all Philipp owes to his parents. He also owes his interest in technology to his parents who worked in technology fields. “In my childhood, I was always crazy about sports and performance. This is still a big thing in my life and a valve for me. What you learn in sports is focus, determination and discipline – things that you need when building your own company. My parents both work in an area that is quite technology-driven. I had early contact with technological and innovative products and solutions. This clearly shaped my interests in new technologies.”
When it comes to helping out developing countries properly utilize their own resources to better improve their circumstances, joining the all-talk-no-work club does not appeal to Philipp. This is why he is currently collaborating with people from far and near, all united with a singular vision of revolutionizing the investment landscape for these developing countries. “With the CDF we are aiming to revolutionize the investment landscape for good. To achieve this, we need to work together with people who share our vision. This is crucial for us. So far, we have people in our team from Yemen, Pakistan and South Africa – they see the benefits of our solution from their own experience in their home countries and therefore share our vision 100%.”
He hopes all his efforts leave a legacy of a better investment landscape for Africa. “I really believe that we will change the investment landscape for good. In 10 years, I want people from Europe to say that they couldn’t understand why there were no investments into African startups from other parts of the world for so long. Our vision is to open up investments in African startups and therefore help startups to accelerate growth.”
Deciding on projects to work with is easy, Philipp requires they simply have to be socially beneficial and also bring in financial returns. “With regard to the projects we are working with, we focus on startups that generate an impact on their society. For example, we work with Wallet.ng. They are offering mobile payments as well as dollar cards to everyone in Nigeria. That tackles the problem of financial inclusion. By the way, we use Wallet.ng ourselves whenever we are in Lagos as a lot of shops and restaurants do not accept our credit cards. Wallet.ng is one startup besides many others, that could solve big challenges if they receive financial investments.” Cross border payments is a really big issue which I was unfortunate to experience first hand during a recent trip to Ghana and Kenya. My cards were rejected, literally rendering me stranded, but for bitcoin which saved the day. Although, I had to convert to Fiat, as I couldn’t spend crypto directly.
Still on access and exposure, these two words could be rightly said to be a major factor in the success of the startup scene in developed countries, thanks to heavy funding from investors. “Everyone can see the great results of private investments in startups taking place in Europe, Asia and the US. We see an immense and huge potential of investments in African Startups, but also some problems such as small deal sizes and relatively high fixed cost when evaluating them, still hold major investments back. We aim to solve those problems and therefore stimulate the local economy. I really like the quote from Emmanuel Macron: ‘We need more African entrepreneurs to succeed in Africa and more Europeans to have positive views about Africa. If Africa doesn’t succeed, Europe will fail in the long-run.’ I completely support this thesis, but I would rather say that not just Europe will fail, but the whole world.”
Regulatory uncertainties in the blockchain and crypto space have been a huge challenge clipping the wings of some startups and businesses trying to solve problems using blockchain and cryptocurrency. “An interesting event I was part of was the Arab FinTex Symposium in Abu Dhabi last December. We were invited to talk about cross-border remittances and I presented our business to a crowd consisting of central bank governors but also startups. For me, it was interesting to actually see the big problems of regulators coping with companies that build a business model that consists of blockchain/crypto and payments. It was great having discussions with both sides and trying to push the topic. Sadly, nearly everywhere in the world there are still big problems with regards to regulations, but I am quite confident that we’ll find good solutions in the near future.”
One common trait that keeps recurring with blockchain and crypto enthusiasts is that they all have a high dose of curiosity. Philipp urges newcomers into the space to develop a curious mind. “Be curious about new things! Currently, things are changing fast in the space so you always have to be willing to learn new stuff and develop a critical mind and the willingness to question presented solutions. That will help you to achieve a much deeper understanding of the problem and to filter out the nonsense. If you want to connect in the space, just go to a crypto-/blockchain meetup that sounds interesting to you. It is an easy way to get into the space, or just drop me a message :-)”
Big on mentorship, he has both mentors he looks up to and mentees who inspire and keep him on his toes. “We have several mentors in our team and their expertise and extensive network help us a lot. We are currently having five advisors onboard, covering blockchain, impact advisory, development aid and investment advisory. On the other side, we have some students working on a social impact project that is part of their curriculum at their university. It is always good to get some fresh minds in the team, that bring up different perspectives on things. That stimulates our work and helps a lot.”
Thinking about how bitcoin is always tied to cybercrimes and touching on the crypto for crime debate, he mentions how he finds the debate itself ridiculous. “I always kind of have to laugh about the money laundering debate. I mean why should you launder your money via crypto? To me this makes no sense because it is easily traceable.”
Now is probably the best time to be alive as young people, more than ever before, have near unlimited opportunities before them, available for grabs. This perhaps accounts for why an overwhelming number of blockchain and crypto believers are young folks. “I do not think that we necessarily have to encourage more young people to enter the crypto space. I saw the rising interest in the last two years and with the technology going strong, there will be many young and talented people join. This is a normal process and there are already good initiatives to get into the space. I have no worries about young talents in the future.”