Dubai: As an ambitious kid, Swiss national Alexandre Gaillard recalled often secretly wishing to one day build his own bank. The now 40-year-old former banker is closer to realising his dream after having started two businesses in the last 15 years and is now getting hundreds of banks to go digital.
“My family owned textile and real estate businesses, so I always had an entrepreneurial mind-set. So after spending years working in various banking roles in the finance industry, I got to start my first business in Switzerland when I was 26 years old,” Gaillard said.
“My first financial technology company was built in 2008, but sadly it failed. I learnt a lot from this, and started a second one as a family-owned firm over nine years ago in Geneva, and got banks, insurers and governmental entities to digitise how they manage investments, and automate related tasks.”
Having digitally on-boarded 120-plus banks, wealth managers, insurers, brokers and other companies across three continents, Gaillard's business recently automated a Arab private bank and a french retail bank in Switzerland, while also signing up with embassies in the region. With a base now being set up in Dubai, Gaillard said he found the cost of creating a company in the Emirate to be "very reasonable".
After spending years working in various banking roles in the finance industry, I got to start my first business in Switzerland when I was 26 years old
“When we started in 2014, I recall first meeting with private bankers in London and Geneva who were extremely reluctant to support us, and it was a real challenge up until the sixth year when we finally got a phone call from two major clients,” Gaillard added.
“Like the ‘J-curve’, a growth-tracking trend line that shows a sharp loss immediately followed by a dramatic gain, we quickly found that the initial market fit was not that easy. After five years, we were quickly distressed cash flow-wise and the revenues were insufficient to support faster code development or any marketing initiatives. Then business finally started looking up.”
As an entrepreneur, the most important lesson for Gaillard from this challenging experience was managing the business’ cash flow, he said, while adding that eventually two banks helped kick-start his financial technology project, but he then also had to improve the business software.
“Cash flow is important particularly if you don’t raise external financing initially. We didn’t raise funds and didn’t cash out for three years. So my investments are very much in for the long-term. Also, profits are used to expand into new markets and this is how we could expand to the UAE.”
Initially, the investment made into Gaillard’s second business was about 100,000 Swiss Francs (Dh415,000), with 80 per cent of those proceeds used for the technology. “Investing into technology has been the main concern of since the beginning,” he added.
“We have also been investing in marketing but very carefully as the software product was initially in development stage. I always preferred a well-built product over heavy marketing as I saw too many of my peers overpromise and deliver less.”
From the beginning, Gaillard said the focus of the business was on automating sales using Artificial Intelligence (AI). “This could also explain why it took us more time than other financial technology companies to build the Minimum Viable Product (MVP). I knew that it would take many trials and errors to deliver, and not just exit after three years,” Gaillard said.
Gaillard’s affinity towards entrepreneurship and financial prudence stems from his childhood, he said. Growing up, his parents gave him money when he needed it but they did not want to “allocate” a recurring weekly or monthly amount, and this enabled him to be financially disciplined, he said.
“It is a smart way not to prevent kids to spend as they intend, but also for parents to teach their kids how to spend wisely. I will do the same with my two daughters. When I was a kid, I would also collect coins my parents would give me as spare change. It was not “pocket money”, but I were to treasure them instead. Now I ended up giving those coins to my kids!”
However, Gaillard love for investing came later on in life, he revealed, while also detailing what strategies he applies to them in order to grow his money for both the long- and short-term.
“As an ex-head of equity and head of advisory services, I love investing obviously. I started my company when Bitcoin started to become something, when it was at around $1,000 (Dh3,672) in 2014. Back then, and still today I remain very prudent on this asset class,” he added.
“With personal investments, I’m ‘long’ in gold for about a third of my investments, with the rest being invested in exchange-traded funds (ETFs) that I rotate based on macro decisions every 6-months, like when I put money on firms going ‘long’ for instance in China, and ‘short’ in the European luxury business.”
Gaillard feels that his biggest mistakes were investing in two companies – a Chinese milk powder group Yasheli, where he remembers investing $150,000 (Dh551,000), and a US mining company ‘Patriot Coal’.
“In both, my judgement was wrong. For the first one, I believed that Chinese people would buy more expensive artificial milk after the protein scandals as Yashili was exclusively importing premium milk. However, mothers did not buy five times more expensive milk and the firm’s revenues were hit.”
“The second investment loss was a result of a legal fight between unions at one of the largest coal mine companies in the US. I believed that there would have been an issue to the crisis, but the miner filed for bankruptcy. So now my best investments are in companies that produce products or services I use, like Netflix, Israeli cyber security fund, LNG shipping, and the likes.”
The lesson Gaillard learnt from these mistakes is: “When it’s not the right price – you better have an exit plan. I‘ve seen this with the collapse of global investment bank Bear Sterns, the infamous bankruptcy of Lehman Brothers .. and now cryptocurrencies worldwide.”