A Financial Revolution is coming

I would like to start off by saying, Populous is arguably one of the best projects to come out from the blockchain space. But that’s my opinion as I am Populous’s founder and CEO and I’m biased to say that. After reading this article I hope you will agree with me and clearly see the vision and the potential benefits the Populous Platform will bring to the future of finance and the blockchain.

Populous portfolio page

So who am I and how do I fit into all this? Well, this is a good question and probably a very important one, to say the least. I am Stephen Williams, simply call me Steve, a relatively young man brought up and raised in an area called Lewisham which is in South East London, UK. My fascination with data started at an early age when I would often wonder how people built big businesses and became successful.

That lead me to purchase my first copy of the FT, I had no idea what I was reading but I was drawn by the figures presented on the front page of the financial times newspaper. There I began reading and studying every day on the financial health of businesses and how they operated and mostly importantly how company data played an important role in the whole process of trade finance and credit decisions. It was not long after my self-studying I began to think of ways I could get in on the action and by this time I found I had the skill to analyse data and its sources.

I would often travel back and forth to the city business library to access company financial information as the library had subscriptions with large data vendors and it was free to use as a member. After many years of studying and acquiring the basic knowledge that I needed to start my first business, I was delivered a setback when I was not able to move forward with my plan because I did not have enough experience and capital required at the time.

So I decided to dive deeper and deeper into researching more about financial data. It wasn’t long after then, that eXtensible Business Reporting Language ‘XBRL’ was replacing the way in which businesses had to file their yearly annual accounts to the Companies House.

I started to play close attention to ongoing developments as they unfolded and by that time I had begun programming and developing software I saw an opportunity presenting itself to me. Now XBRL is sort of like XML and I knew how to extract data from XML, so when the Companies House announced that it would now be giving bulks and bulks of XBRL company accounting data out for free to the public, this was a no brainer and I instantly knew the important role this data would pose at a later date. So I developed a tool to extract UK company XBRL data from the format that it had been filed in.

Extracted XBRL data

Now since I had my first knock back in getting into an industry which I craved to make my mark in, I decided to try alternative approach by selling data to the main players in the invoice finance space. Eventually, I found a way to use the XBRL data I had extract into lists of thousands of companies who were asset rich but cash poor, I did this by using the Altman Z-score formula which I research and discovered the formula on the internet.

Altman Z-score Formula

This same formula is currently used by rating agencies such as Moody’s to determine the likelihood of bankruptcy by a business. Armed with my targeted client list of companies who have cash flow problems I decided to go along and pitch my product to various banks and financial house who specialise in the invoice finance market. Although I found success in selling the data I released how backdated these banks and other financial institutions were in finding these types of clients.

For example, most firms hire 100s of sales personnel to go out and knock on doors of businesses in their area to see how that business is doing and whether they need additional cash flow. I would sometimes imagine how long and how many sales staff it would take to find 100 potential clients when I could easy do this at a click of a mouse. It was not long after having those thoughts coming more regularly that I decided to build my own invoice finance platform.

Bitcoin, Ethereum and Blockchain what are they? I somehow missed the first Fintech wave because I was too involved in the data I had been analysing and selling to various banks and institutions. Late 2015 I had a call from a friend he was trying to explain to me about bitcoin and how he made money by buying and selling it.

I immediately wrote him off as a day trader and I did not initially find any interest in what he was saying as I had often day traded in the past and felt trading was not for me if I wanted to keep the rest of my hair. It was not until a few weeks later when the same friend invited me out for drinks and decided to pay for the drinks the whole evening.

I asked why he insisted on paying for everything and he replied that he had made a decent profit from a big bitcoin trade, at that moment I looked into his eyes and saw something different about him than I had seen before.

The next morning I was up on my laptop researching bitcoin and what the technology could do when I came across smart contracts, wow what is this I thought to myself. A computer contract but how, I read more and more and could not get my head around it or the code that is very much an offshoot of JavaScript. So I decide to go to a meet up in London, I attended one called Coinscrum which was my first meet up and came away from the meet up the first time feeling excited a little with new friends I made that evening who also seemed a lot more excited than I was.

I finally started to understand what the whole bitcoin thing was about and a new blockchain called Ethereum. I kept trying to merge my understanding of SQL and NoSQL with the blockchain and realised that I had to let the past go in order to move forward. A few months past, I finally felt ready and knew exactly what I had to build this time round and on a scale not attempted yet. So I started to build a real-time financial marketplace using XBRL data on the blockchain, Populous.

So what is Populous? Well, the term Populous refers to the people of a community, state or country. I chose the name Populous after I fell in love with the cult game that bears the same name that was created by Peter Molyneux. Populous is in as much as the game, is a platform where we the people of the community come together as a whole to provide finance to businesses who need an injection of cash.

This is done by two funding practices known in the financial world as invoice and trade finance. Populous is unlike any other invoice finance marketplace, as the platform is built on top of the Ethereum blockchain and provides investors and sellers with a way of trading invoices in a hybrid auction/crowd funding model done by smart contracts. I thought long and hard how this the platform would work if I had to use only bitcoin or ether and because of the volatile nature of both cryptocurrencies I decided to create our own ‘Pokens’. This now allows the platform participants to trade in a more stable environment and across all currencies and nations.

Today I will speak more on invoice finance and in my next post dive deeper into trade finance and why so much money as been poured into blockchain projects by banks and financial institutions that are trying to come up with a blockchain solution these areas of finance.

I assume we all know what an invoice is? For those reading this article from countries that are not familiar with the term invoice, I will try and give a clear explanation of this type of business instrument. Well, other than an invoice it is known as a bill or tab. It is a commercial document stated by Wikipedia. It is given by a seller of goods or services to a buyer who purchases these goods or services from the seller. The invoice general asks for payment of the goods or services within a certain time frame. The length of time given to pay an invoice is agreed by both parties and can range from 30 days right up to 90 days and longer in some cases.

So what’s the issue here? Because entrepreneurs, small and medium size businesses try very hard at the start to make their businesses work, they sometimes jump or find themselves in these type of sales arrangements in order to complete sales of their products. The payment terms may not always be favourable to them but that’s business and they need to sell their goods or services to keep the business from going under. This sometimes causes what is known as a cash flow problem if the seller of the goods or services needs the money sooner to pay other things like wages, suppliers or other types of business expenses.

Did you know that the invoice finance industry is self-regulated? This means that anyone can lend money to businesses and you do not need a license to do that. I’ve often wondered in the past why this industry is dominated by banks and financial institutions and not by the people. The simple answer is capital. But that is all about to change with the arrival of Populous. I’m aiming to brake down the barriers to entry, giving everyone the opportunity to invest from as little as $100 and earn interest investors could only dream of. The other side of the coin is that we are going to use XBRL data to open the market up to businesses across the globe making it easy for them to obtain the cash flow finance needed to grow their businesses successfully. A financial revolution is coming, don’t miss the chance to be a part of it. Invest in Populous ICO.