Annelise Osborne on Blockchain, Fintech, and the Future of Financial Innovation

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36 min readAug 9, 2024

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Executive Summary

In this episode of Startuprad.io, host Jörn “Joe” Menninger interviews Annelise Osborne, Chief Business Officer at Kadena. Annelise shares her journey from commercial real estate to blockchain, highlighting inefficiencies in traditional finance and the transformative potential of blockchain technology. She discusses her book on blockchain and cryptocurrencies, the benefits of stablecoins, and the regulatory challenges facing Fintech in the US. Annelise emphasizes the importance of marketing, strategic partnerships, and adaptability for startups. The episode underscores the need for clear regulations to foster financial innovation and the critical role of networking in the Fintech space.

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Introduction

Welcome to Startuprad.io, your podcast for insights from the startup world. In this engaging episode, our host, Jörn “Joe” Menninger, sits down with Annelise Osborne, an accomplished author and the Chief Business Officer at Kadena. With a rich background spanning startups, commercial real estate, finance, and blockchain technology, Annelise brings valuable insights to the conversation.

From her unique experiences in Ukraine and London to her work at Moody’s, Annelise has amassed a wealth of knowledge on financial technologies. She reflects on her journey from the corporate finance world to becoming a pioneer in blockchain tech, shedding light on the inefficiencies in traditional finance and the transformative potential of blockchain.

Annelise shares the importance of marketing for startups, the role of digital and social media channels, and offers practical advice on navigating the regulatory landscape in the fintech sector. Her latest book demystifies the world of cryptocurrencies and blockchain, and she addresses the benefits and risks associated with this evolving technology.

Tune in to learn about the challenges faced by fintech companies, the impact of blockchain on traditional banking, and the essential strategies for differentiation and growth. Annelise emphasizes the significance of partnerships, flexibility, and regulatory awareness for startup resilience, especially in a dynamic market.

Join us for this thought-provoking discussion and gain critical insights into the future of fintech and blockchain technology with Annelise Osborne.

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Questions Discussed in the Interview

  1. Career Journey and Transitions:
    — How did Annelise Osborne’s diverse career path — from starting an advertising agency in Ukraine to working in commercial real estate and then in finance — prepare her for her current role in blockchain technology?
  2. Blockchain and Traditional Finance:
    — What are some specific inefficiencies in traditional finance that Annelise Osborne believes blockchain technology can address, and how might AI further enhance these efficiencies?
  3. Marketing and Digital Channels:**
    — How have digital channels and social media transformed marketing for startups, according to Annelise Osborne, and why is marketing crucial for the success of new ventures?
  4. Education on Blockchain Technology:
    — In her book, Annelise Osborne aims to differentiate between cryptocurrencies and blockchain technology. What are some common misconceptions she addresses, and why is it important for the general public to understand this distinction?
  5. Stablecoins and Cross-border Transactions:
    — Annelise discusses the benefits of stablecoins for cross-border transactions. What are these benefits, and how might stablecoins impact traditional banking systems?
  6. Regulatory Challenges:
    — What regulatory challenges do Fintech and blockchain companies face in the US, and how do these challenges compare to the regulatory landscape in Europe?
  7. Economic Downturn and Funding:
    — During potential economic downturns, what strategies does Annelise Osborne recommend for Fintech startups to manage growth, secure funding, and build resilience?
  8. Partnerships and Networking:
    — Why does Annelise emphasize the importance of partnerships and networking for Fintech companies, and how can these relationships contribute to differentiation and business growth?
  9. Impact of Older Legislators on Innovation:
    — How does Annelise Osborne perceive the impact of older legislators and regulators on the adoption and regulation of new technologies in the Fintech space?
  10. Learning from Mistakes:
    — Joe Menninger and Annelise Osborne discuss the importance of learning from mistakes. Can you provide examples from your own experience or industry where learning from mistakes led to significant improvements or innovation?

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The Guest

In this episode of Startuprad.io, we are thrilled to host Annelise Osborne, who brings a wealth of experience and insight to our discussion. Annelise has a diverse professional background encompassing startups, commercial real estate, finance, and the rapidly evolving field of blockchain technology. Her career journey is nothing short of fascinating: starting in Ukraine where she helped establish an advertising agency, she later transitioned to commercial real estate before relocating to London and then New York for business school. At Moody’s, she gained invaluable experience in commercial mortgage-backed securities, laying the groundwork for her keen understanding of financial structures. Motivated by the inefficiencies she encountered in traditional finance, Annelise ventured into the world of blockchain in 2018, driven to streamline processes and eliminate outdated practices like fax communications and manual errors.

Currently serving as the Chief Business Officer at Kadena, Annelise leverages her extensive knowledge to advocate for the integration of advanced technologies in finance. Her transition into the blockchain space was marked by her involvement in a regulatory task force for initial coin offerings (ICOs). This experience sparked her passion for blockchain’s potential to revolutionize finance. In addition to her professional roles, Annelise is an accomplished author, striving to educate readers on the distinction between the often misunderstood world of cryptocurrencies and the underlying blockchain technology. Her work aims to elucidate how blockchain can impact banking, retail, and investment sectors, ultimately advocating for its potential to transform traditional finance models for greater efficiency and inclusivity.

The Book

From Hoodies to Suits: Innovating Digital Assets for Traditional Finance

You can find the book here: https://amzn.to/3AovhaB

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The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. Reach out to him:

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Automated Transcript

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:00:01]:

Hello and welcome everybody. This is Joe from StartupRadio. Io, your Startupradio podcast and YouTube blog from Germany. Today, I do have a guest from the s, Annalise. Hey. How are you doing?

Annelise Osborne | Author | Chief Business Officer Kadena [00:00:13]:

I’m great. I’m super excited to be here, Joe. Thank you for having me.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:00:17]:

Probably my pleasure. We may tell the audience we had quite some fun preparing this interview, so let’s see how this is going. At first, you are very interesting person. Your PR agency reached out to me because you published a book, but I found you much more so sorry. No offense intended than just an author. You did quite a lot of work before. Can you run us a little bit through your CV and what you did in order to arrive at being an author for Wiley. And and we should also tell, your book is called From Hoodies to Suits, Innovating Digital Assets for Traditional Finance.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:01:04]:

And at the end, you have to explain what this title means.

Annelise Osborne | Author | Chief Business Officer Kadena [00:01:07]:

Sure. Absolutely. So, yes, I’ve had a storied, professional experience. My favorite kind of when I graduated from university, I went over to Ukraine, and so that was my first experience in startups. I was asked to I was helping out with a political history project, but then I was asked to help, start up a advertising agency because Coca Cola was coming to town. So that was interesting because I am not Ukrainian. And so I was actually at the time learning Russian while I was there because that was the language that was spoken in business. And, that was wild.

Annelise Osborne | Author | Chief Business Officer Kadena [00:01:43]:

It was just interesting trying to figure out I think it it teaches you flexibility, which is I think is super important in the StartupRadio, about how some things are a lot harder than others, but you just figure out how to get it done. So I did that, and then I worked in commercial real estate there. And then I moved to London, with Joe Lang from Ukraine to London. And then and then I went to business school, and I came to New York for business school. I have been here since. After, you know, business school, I was trying to figure out I I wanted something more corporate. And so and I also was super interested in the finance side. And I’d done commercial real estate, but I really wanted to focus on kind of the money and the flows.

Annelise Osborne | Author | Chief Business Officer Kadena [00:02:22]:

And so I started, I had a great opportunity with Moody’s, which was doing commercial mortgage backed securities, which is a very interesting way of financing that shifts the cost shifts shifts the risk from banks to, bondholders that were generally insurance companies and large large companies, for for the most part, investors, kind of all the way down the risk up and down the risk spectrum. But it decreased the cost of financing. So it if I was a building owner, I could I could borrow cheaper, and I could borrow more money because of these bonds that took the risk off the bet the bank’s balance sheet. So that was interesting. That was started in 2003, and then I was there 12 years, and it was we did all up and down through the financial crisis, which again, you’d what’s the right rating of a bond and what’s the right way to look at valuation. And then, after 12 years, I left, and I wanted to to go back into kind of the entrepreneurial world. And so, I did a number of things kind of consulting with hedge funds, private private equity, family office. And then I did a lot of board work as well, and I was asked to join a regulatory task force for ICOs, and ICOs were initial coin offerings.

Annelise Osborne | Author | Chief Business Officer Kadena [00:03:32]:

And I had no idea about them, really. I knew I knew the idea of blockchain, and I absolutely knew the idea of Bitcoin, which was digital currency, but I was this was not my thing. And so it was really focused on regulation, which I understood. And this group of this group was so persistent that I finally agreed to meet with them. But to meet with them, I had to understand what all of this was. And when I learned about blockchain, to me, it was just an eye opener of how much more efficient it could make finance. And finance being traditional finance, being kind of the Wall Street capital markets world. And so that launched me into my first startup, which was, in 2018, which was, my partner had a had a broker dealer, and we looked at creating digital assets, which is in essence securities, but built on blockchain, for traditional financial markets.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:04:25]:

For that, we may add, how antiquated the capital markets have been at the time. I was myself in capital markets 2008 till, let’s say, 2018. Basically, at the time, it was not uncommon to have armored vehicles driving around between banks in London to have, like, physical paper based securities still delivered. It was not uncommon to have somewhere, most of the time in India, large back offices where people did a lot of manual work, including a lot of faxes, for clearing and settlement, and there was always a very high probability for those transactions, especially internationally, to go wrong. So it was at 1 point in a computer, then somebody faxed it to somebody else, then they manually put it in a computer again. And there was always manual problems with all of that. And that’s basically where the ICO came in. Right?

Annelise Osborne | Author | Chief Business Officer Kadena [00:05:28]:

Well, that’s where blockchain comes in. I’ll talk about the ICO in a minute, but blockchain, there still is people. There are people some companies still use faxes. So it’s crazy that this is still kind of backwards. Some companies still accept checks, which is just interesting that it’s so much easier to transfer money now than it was, you know, 10 years ago. So it’s interesting. It’s just interesting at this progress. So I always think I have I have 3 teenage boys, and they are never gonna know what a pay phone is, and they’re never gonna know what paperwork is.

Annelise Osborne | Author | Chief Business Officer Kadena [00:06:00]:

Right? So because think about we would always talk about paperwork, but now everything is digital for the most part, not everything.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:06:08]:

Actually have to go once to a museum with my boys to show them those rotation dial phones.

Annelise Osborne | Author | Chief Business Officer Kadena [00:06:14]:

Yes. Yep. Yep. So it’s just so funny. But part of this is the is the point that the technology increases and it makes our lives more efficient, and it will be increased even faster with AI because AI will help us program quicker. And so it’s just recognizing. So it won’t it won’t take us long. So I think that’s that’s exciting.

Annelise Osborne | Author | Chief Business Officer Kadena [00:06:36]:

Joe, anyway, I got into the the StartupRadio space. I have done 3 startups prior to me joining a blockchain. So now I’m actually at a blockchain. So I have done a lot of the, in the early stages too. So working with, you know, seed financing, working with series a and b, trying to figure out revenue generation, staffing up for growth, which is actually what I’m doing right now. So a lot of different angles. I’ve also worked at a family office. We invested in companies, and then we invested and then kinda merged them in and and helped them, help them kind of with with revenue growth.

Annelise Osborne | Author | Chief Business Officer Kadena [00:07:14]:

I also have worked as an adviser to StartupRadio currently at Fiat Advisors, which helps start ups with a number of different, things that they’re looking to do. And then

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:07:25]:

What what sorry. For 1 interruption, a lot of very early stage entrepreneurs, They have the notion you build a good product and the customers will be coming. I’ve been working with such startups. You have been working with such startups. Would you say that statement is false?

Annelise Osborne | Author | Chief Business Officer Kadena [00:07:48]:

A 100%, sadly. It’s also not always the smartest person in the room that wins, even if you go back and look at, or the first mover. Right? Look at Yahoo, AOL, and Google. Right? Yahoo and AOL were were ahead. Look at you can look at Kodak or Blockbuster. People didn’t change

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:08:07]:

Atavista. Atavista. Yeah.

Annelise Osborne | Author | Chief Business Officer Kadena [00:08:10]:

Right?

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:08:11]:

It for for a lot of the audience, I may need to link the Wikipedia article article for the AltaVista search engine down here, I believe.

Annelise Osborne | Author | Chief Business Officer Kadena [00:08:21]:

Right? So you might have a great product, but if you can’t get it out to people and if you can’t market it, which is what so much of the this kind of startup world I think is focused on. But also, I feel like marketing is different, takes different channels now, and it’s more direct with all the digital world that we have, that we didn’t have, you know, 15, 20 years ago, especially with social media. So, yeah, so I totally agree with what you’re saying. So fast forward so that’s kind of how I got to where I am today. Really, I love to learn. I wrote a book because I have worked with my focus is creating, more better financial structures. And to your point, manual error, when I was at Moody’s, we would work with, people that paid out the bonds, and they would manually input Excel spreadsheets, and they would do it wrong. And so then this is ridiculous.

Annelise Osborne | Author | Chief Business Officer Kadena [00:09:11]:

This can all be programmed, and can be checked by people. It’s not totally autonomous, but I think I think sections of finance will become autonomous in time, but I feel like it’s baby steps to get to where we wanna go. So I’ve been working with institutions helping use this technology, which is more efficient, faster, lower cost. It’s trans you can see what happens. You can trace it. So there’s so many benefits. But it was right after FTX failed. So Sam Bankman freed.

Annelise Osborne | Author | Chief Business Officer Kadena [00:09:42]:

I’m not sure if the audience is familiar with FTX. It was an exchange that was also okay. So there was $10, 000, 000, 000 of fraud there. And a number, of people stopped looking at blockchain innovation. And 1 of the banks said we have a cease and desist, which is a legal term, which is a strong legal term to talk about anything in blockchain. And to me, that was just an eye opener about cryptocurrencies and fraud are not the same thing as this technology that’s going to make your banking real so much more efficient. And so that is why I wrote this book. The book is really focused on it’s it’s not a textbook.

Annelise Osborne | Author | Chief Business Officer Kadena [00:10:17]:

It’s really just ideally a lighter read for something in digital assets with stories and things that we can relate to. But the goal is to explain Bitcoin and blockchain are not the same Menninger. Why blockchain is such an amazing technology that’s going to help Main Street and Wall Street. It’s gonna it’s gonna be behind a lot of what we do. It’s gonna affect our lives in retail from both, a payments perspective and from a digital and from an investment perspective. It’s gonna give us more opportunities to invest in more things. It’s gonna give us opportunities to actually be able to lend out, like, to be the bank in the middle. So so that’s the goal.

Annelise Osborne | Author | Chief Business Officer Kadena [00:10:53]:

The goal of the book is to be an entertaining and educational read on how this technology makes a difference for both us, but also for the big for the big companies.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:11:04]:

And everybody who’d like to purchase your book down here in the show notes, wherever you’re listening to this or watching this, down here in the show notes, there will be a link to a very well known online marketplace where you could buy books. And, of course, it will link your book.

Annelise Osborne | Author | Chief Business Officer Kadena [00:11:20]:

Yes. Thank you so much. So yeah. So I’m super so it launched a couple weeks ago, 2 weeks ago, and, it’s been great. I’ve had great reviews. I’ve had, you know, it’s I feel like they’re always come from the places you don’t expect. So so it’s been wonderful feedback. I’m happy for anyone that reads it, for feedback.

Annelise Osborne | Author | Chief Business Officer Kadena [00:11:38]:

It is broader than just digital assets as well as well. If you think about how how an industry is trying to move forward, and different steps along the way. And there’s also a bunch of tangential businesses, I think, that can work together with that. But, you know, it goes into kind of how PayPal is creating a stablecoin. And a stablecoin, if you think about it, is is faster and easier in the sense that we can transfer I could transfer money today to you, and you can use it immediately, which isn’t always the case if you’re dealing with, like, cashing checks. I had cashed a check. It took 5 days to cash. And, also, the company had to mail me a check.

Annelise Osborne | Author | Chief Business Officer Kadena [00:12:15]:

They couldn’t wire it into my bank account. So, so this way, you get money right away, and you can put it out right away. And companies are gonna wanna do that because you can allocate your money right away.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:12:25]:

Remember when I came back from Texas, I I was working on campus, and I still had a check from them sent by mail and took something, like, almost a month until the money arrived in my German bank account from this US based check.

Annelise Osborne | Author | Chief Business Officer Kadena [00:12:39]:

Yep. And cross border transactions. Like, immediate like, you you you’ll decrease fees so substantially with cross border transactions. And so that’s where I think stablecoin will make a difference for all of us. But also, there’s a bunch of, opportunities from from investing is that there’ll be more invest more wealth is in our hands now than companies. From a global perspective, it’s 51 in the re 51% in retail hands and 49% in companies’ hands. And so companies that are looking for investors are gonna start going to retail, and this technology allows that to happen, which actually you asked about ICOs. So ICOs were initial coin offerings.

Annelise Osborne | Author | Chief Business Officer Kadena [00:13:17]:

And they’re the thought process of, like, if you think of an IPO, an IPO is when a company goes public, and it’s a very established company. Well and it’s generating revenue, and it has a valuation. The ICO is at the at the beginning of the company’s ideas. You and I can create an idea, and we can have an ICO because we have an idea and in essence a business plan of what we wanna do, and then people fund that. Well, to me, what was interesting is that globally, it had raised 1, 000, 000, 000 of dollars for the ice like, the idea of ICOs because people wanted to find ways to invest their money. Be that they missed out on the tech boom, right, with the with the original tech boom. And they thought, I wanna have an opportunity to make money like these companies and private equity firms do. And so they wanted to invest in an early stage opportunity, which is really venture capital.

Annelise Osborne | Author | Chief Business Officer Kadena [00:14:04]:

And so that was an eye opener to me that there’s this whole world out there of people looking to to invest and and generate returns that other people have had opportunities to, but they’ve been shut out of.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:14:16]:

Do you think you’ve been you’ve been talking about wealth, institutional versus retail, company versus retail. Do you think a lot of those, like, very brave initial retail investors have been burned with a lot of the stuff that has been going on with ICOs, cryptocurrencies, and so on in the last few years?

Annelise Osborne | Author | Chief Business Officer Kadena [00:14:38]:

Absolutely. Well, I see us there was a lot of fraud associated with them as well, which was both probably intentional and then also unintentional in the sense that, if if 2 people who were 18 years old and had no experience in business decided to start a company because they had grand ideas and schemes and Mark Zuckerberg did it. And they tried and it didn’t work. Right? So a lot of people that invested money in the idea and it and they lost money, which is why regulation so I think that was unintentional, but I do think there was a lot of intentional fraud where people took people’s money and ran away with it. So I do think that’s why regulation comes in. So regulations is really around to protect investors. But where do you find, you know, with innovation and how do you find a way to regulate innovation when there’s more ideas coming out with this technology, which is something that we’re we’re having, you know, difficulties within the US. I think Europe is much more forward

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:15:33]:

thinking. Talking about US and Europe, that’s something we also want a little bit contrasting because you’re very knowledgeable. And I wanted to get the opportunity to have, like, a kind of a guide for people, especially Fintech entrepreneurs from Germany, Austria, Switzerland, but also from all over the world looking at the US right now. And I have a few questions for you. For example, how can Fintech companies in the US navigate and mitigate the risk posed by potential economic downturn and funding shortages? Of course, the funding funding got less and less, especially in light of the recent collapse of small banks. You you remember, like, all the small banks? There there have been stories Silicon Valley Bank just 1 prime example and the bank that bought it. Do do the the the the background a little bit to the question is it seems like from the outside right now that in the US, the concentration of banks is always working a little bit more and more towards Wells Fargo, Bank of America, JPMorgan, and so on and so forth. And it kind of sucking up, like, all the small competitors and how could Fintechs compete there, especially if a if a downturn is coming?

Annelise Osborne | Author | Chief Business Officer Kadena [00:16:53]:

It’s tough. So if you well, okay. So we have the the big banks. Right? Yeah. And then you have kind of smaller regional banks and community banks. I do think there was there was almost a run on the banks before when everyone pulled their money out, and that was a big issue with the banks trying to and increasing interest rates. So if they had bought treasuries to counteract their their deposits, Those treasuries weren’t worth as much because there were higher interest rates, so the newer treasuries were worth more. And, anyway, so a lot of people pulled their money out, and that was a run on the banks.

Annelise Osborne | Author | Chief Business Officer Kadena [00:17:26]:

And then I think the banks, some banks went under. Silicon Valley Bank is still around, actually. They, you know, they I just did they did they sponsored a book event for me, actually, in San Francisco, which was great. And they are, 1 of the problems in in our space, in the kind of if you call it the crypto space, even though it’s blockchain oriented, is that people don’t necessarily wanna bank you because people look at crypto. Crypto is the technology of cryptocurrencies or cryptology of blockchain. It’s 1 of the few technologies that any banks in the United States, if you touch it, you have to tell your regulators you’re gonna touch it. So you don’t have to touch it. Like, if you’re working with AI or quantum computing or any of these other steps along the way, you’ve never had to tell your regulators you’re using using this technology, which I think is which is strange.

Annelise Osborne | Author | Chief Business Officer Kadena [00:18:10]:

Right? It’s kind of like if you think about technology, cell phones are technology, you know, different things in your kitchen are technology. So that I think is is kind of a ping against crypto and blockchain. And a lot of the banks don’t wanna bank don’t wanna let you open an account. And so what happened what was before is a country of those banks actually had crypto accounts, had were were actually banking crypto companies. So then it was even harder for StartupRadio open a bank account. Or if you had negative if you had something that had happened in the in the press, like, if you were in discussions with the SEC, then it’s difficult that you it’s even harder to open a bank account. So how do you how do you make that work as a start up company? It’s kind of, you know, it’s like you have the deck stacked against you, but I do feel that, there are companies that will do it. It’s just and more now, I think.

Annelise Osborne | Author | Chief Business Officer Kadena [00:19:00]:

Especially now, if you look at large institutions are using blockchain technology for tokenizing funds. BlackRock, the world’s largest asset manager, has tokenized funds. And JPMorgan’s the world’s largest bank by asset by market cap, and they are token they have a lot of blockchain projects as well. And they are saving money with their blockchain projects. They’re they’re making so I I feel like there’s a lot of like, that’s helping change the tune of this not being about volatile cryptocurrency, but more being about blockchain technology, if that makes sense. So I feel that, yes, it’s been a difficult like, any startup, some it’s harder to get banked than than others, especially with using the tech. So I think that’s, you know, that’s you are also let’s go back to this. The idea of Bitcoin came out in 2, 008.

Annelise Osborne | Author | Chief Business Officer Kadena [00:19:49]:

In 2, 008, you had occupy Wall Street sitting downtown trying to take the power away from the banks because the banks were in such control. And so Bitcoin and these cryptocurrencies actually offer you a way to get rid of the intermediaries. Right? It was a peer to peer payment system, which is how it was set up. So I think the idea of Bitcoin and which is kind of the idea of cryptocurrencies was kind of anti anti banking, but it’s interesting kind of how that actually helps the banks too. But it will help put the money back in your hands. So if you if I hold if I hold stable coin and I hold it in my wallet, which is technically like an account that I’ve opened, but I’m holding say, I have a $1, 000, 000 in Stablecoin. Otherwise, I’d probably have a $1, 000, 000 in the bank. And the way the bank makes money is the bank lends out that $1, 000, 000 to other people, and they make a spread on the interest.

Annelise Osborne | Author | Chief Business Officer Kadena [00:20:43]:

Right? But if I’m holding it in my wallet, then I’m holding that $1, 000, 000, and I can actually there’s there’s opportunities in different companies that you can lend that money out to other people, and I make that spread. Right? So I can make interest on my stable coins. So then I’m becoming the bank. So I do think so I’m kind of going to the side of the question that you asked, but I tried to answer that and then kind of extend. But there are ways that this current this technology can cut out banking. But I don’t think everybody wants to be the bank, and lend the money out themselves. Sometime you know, they might just want the little bit of interest they can get by putting their deposits in a bank. Because my mother, for example, is 80 years old, and she does not want to be the bank herself.

Annelise Osborne | Author | Chief Business Officer Kadena [00:21:25]:

She’d rather have someone manage her money. So I do think that banks are going to have to figure out how to work with this technology, or they’re gonna lose revenue

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:21:36]:

streams. Sorry. Just writing down my question so that I don’t forget it. I was really smiling when you said, now I’m holding it in my private wallet. As you said, they they make money on the interbank, market. But, also, what what I realized there were a lot of people listening at Finanzant and IRS right now to this, and their toenails were rolling back because they were not sure if they could tax it properly if it’s in your private wallet. So I do believe there will be some challenges to this in the future. Maybe also the the the requirement to hold it in a bank’s wallet or something like this.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:22:16]:

But, I I get your idea. It’s it’s something different, and you can really, really accelerate international transactions. You can then more make them more reliable, but you also have to make more you have to do some more steps privately to keep them secure, than what the bank would do.

Annelise Osborne | Author | Chief Business Officer Kadena [00:22:39]:

Yes. I agree. It’s, but I also will say that, the IRS has been working with the wallets in the United States, like Coinbase, for example. So there is a tie to be able to it wasn’t that way before, but now it’s much more, for income report or reporting of gains so they can be taxed. But there are a lot of like, this is a global this makes us even more global. Mhmm. And so that is, you know, there’s always been kind of money in different places, but it’s harder to track when you’re using international companies.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:23:15]:

Mhmm. Talking about Fintechs here, competition. How can they differentiate themselves and compete against the banks? Well, you’ve been talking about growing revenue. You cannot do this if you’re like a product like everybody else. You have to be different. You have to be differentiated. Can you spell a few secrets, like 1 or 2 tricks, how it worked for your clients in the past?

Annelise Osborne | Author | Chief Business Officer Kadena [00:23:46]:

Sure. So Fintech is a very broad term. I think the Fintechs has a lot of the payment space has been Fintech based. I haven’t worked in the payment space. I will say that. But I do feel like the people that were able to differentiate themselves in the payment space, it might be something that’s less sexy, but obviously needed. I feel like that way, if you look at Plaid and the way Plaid created, which is really the banking anything in banking system now, you can I can transfer money because it connects through Plaid, which is really kind of like APIs for a difference? So I think that was that was super interesting. So okay.

Annelise Osborne | Author | Chief Business Officer Kadena [00:24:21]:

So how do you 1, I think partners are super important. You get a lot of business from partners. Right? Your partners in the space as in, like, you everyone’s doing slightly different services. And so when you have bigger companies coming in, they’ll talk or paying clients. Right? They’ll talk to 1 and they’ll introduce you to someone else. And so that provides a different service. That, I believe, is how the community is so important. I think it’s very difficult.

Annelise Osborne | Author | Chief Business Officer Kadena [00:24:49]:

No 1 is on an island that’s gonna go out and make a whole bunch of money by themselves on an unless you’re day trading. Right? Because then you’re in you’re but you’re probably getting information from other people as as well. So maybe not maybe you’re not in an island, but anytime when you’re in the StartupRadio ecosystem, networking is super important. And finding those people that provide similar, like, different services that plug into yours. That’s how I’ve gotten a lot of a lot of different business because it’s also they’re vouching for you in essence when they recommend your service. So that I would say is probably the number 1. The number 2 is making sure that you Menninger sure that you know what you’re talking about. Right? You put together kind of a good pitch.

Annelise Osborne | Author | Chief Business Officer Kadena [00:25:30]:

You recognize how when you approach a client, you recognize how you can add value to that client. And everyone I call a client. Right? I to sit with a mindset to think of how can I provide them as a good or service that benefits them? So I feel like that is helpful too. Getting in touch with the right people and then making sure that I’m looking at that when I’m sitting down with them with my team. So it’s not just me, as in it shows, like, there’s more people focused on this and it kind of builds credibility, then you’re showing how you can help them. And I think that also I think those are probably the 2 main, like, when you’re approaching this, recognizing that that you’re offering you’re doing something for them, thinking about it that way. And I think you have to be flexible. Right? As a StartupRadio we’ve pivoted.

Annelise Osborne | Author | Chief Business Officer Kadena [00:26:18]:

I’ve pivoted, and people my first my first startup, I was told that was a dirty word, but I don’t think it’s a dirty word. Right? Because you have to recognize what you thought was the right business line, and then maybe you have more more interest on another side. So, hey, let’s use the same technology, but approach business this way. And so a bit of a pivot. And so I think that that’s what that actually shows that you have done your research and that you, you know, you’ve put yourself behind it. And the other thing I would say is don’t be afraid of failure because failure is what we learn from and build off of. Right? If you couldn’t like, I wouldn’t be where I am today if I didn’t if it if it had worked out the first time. Right? Right? That would have been different.

Annelise Osborne | Author | Chief Business Officer Kadena [00:27:03]:

But we were way too early. Like, in digital assets, 2018 to say, this is what institutions this is how we can change capital markets. But I think it’s it’s it’s a it’s a slower crawl because you’re dealing with big institutions and you’re turning a tanker. You’re not it’s not kind of as as, maneuverable as a bicycle, say. And so it just takes longer. And so I feel like we’re moving to get there. But, I definitely say work together with other people, recognizing the benefits you add, and then be flexible and don’t be afraid to pivot. Mhmm.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:27:37]:

You’ve you’ve already talked about a lot of stuff that I have for you for my next question. I was just curious because we just come out of a pretty tough downturn, especially for StartupRadio and and especially for fintechs here within the start up space. How would you recommend start ups building resilience for the next downturn? I know tip number 1 is raise more funds. I know. But besides that

Annelise Osborne | Author | Chief Business Officer Kadena [00:28:07]:

It’s budgeting. Right? It’s also recognizing I I know a lot of StartupRadio I have worked at Sun generally after this has happened. But when they raise a bunch of money, they spend a bunch of money. And so I think that you have to have the mindset of how are we you know, what could what do we need, and what would be the the nice to haves and the must to haves. But I do think, like, budgeting and understanding, I think growing too quickly can be a it’s growth is tough. You have to manage it so that you do grow quick enough, but you don’t overgrow. Grow. Right? So how do you how do you find that? How do you have that fine line? Right? You need to have people in place to for growth.

Annelise Osborne | Author | Chief Business Officer Kadena [00:28:45]:

So what else? Funding, I think funding has been, you know, it it obviously slowed down. I feel like it’s it’s coming back now. Valuations, I feel like it ties in with valuations. There’s a lot of, money looking for investments in the US, for sure. I’ve worked with I’ve worked with venture capital as well, and I’ve invested in a few venture funds, and some startups. But, it’s finding the right, you know, it’s finding the right partners. Because also, if you take money from someone, they are your partner. You are married to them, and you also have to recognize how how they think.

Annelise Osborne | Author | Chief Business Officer Kadena [00:29:20]:

I, was at a family office, and we invested in companies. And there is I there was a company. I said, you you know, don’t take our money because they think a different like, the family office thinks a different way than you do, and it would it would be, it wouldn’t you wouldn’t work together. That marriage wouldn’t work very happily. So remember that whoever you’re taking money for, ideally, are strategic partners. Who can they help introduce you to? Obviously, everybody wants kind of money, but people people that invest money also wanna work with other people they know that are investing money. So it’s almost like a club that if you find somebody that’s really interested, ask them who they like to partner with. And then it could actually that could help you fill out your fill out your fundraising.

Annelise Osborne | Author | Chief Business Officer Kadena [00:30:01]:

A little different than the question you asked, but it’s just kinda different approaches. The other thing is I would just be show up and be around, create those networks because those networks are gonna help you when it comes to finding financing. Also, when you’re in a downturn, those networks are super important if you need to find some sort of bridge loan, because they’re the ones that are gonna because in the venture world, it’s people. Right? It’s like people and ideas for most part. Right? And, you just wanna make sure that you have that that connection because whatever we’re doing in technology is fantastic, but it is still people that are making the decisions because these decisions are fiduciary, and you have to trust. I know. So those are those are a couple ideas. Mhmm.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:30:45]:

You you actually answered already the next question that I had that there’s there’s only 1 left, on on the US Fintech side, the role that regulatory changes and government policies will play in shaping the future landscape of fintechs in the US, especially how can they foster innovation and customer protection?

Annelise Osborne | Author | Chief Business Officer Kadena [00:31:09]:

That is 1 of the hardest questions. Right? Because how how do you regulate in yes. How do you regulate innovation? It’s really difficult, because you’re continuing to you don’t wanna over regulate, so you can’t actually innovate, but you still need to have rails in place. So I think, Micah in Europe has done a great job for kind of the blockchain industry to give idea blockchain slash crypto. Give ideas of this is this is what you can and can’t do. Right? You need you have to be black and white as opposed to gray. Problem in the US right now is that if there’s no if there’s no rules, then you don’t know if you’re gonna be if it’s black or white, you can’t play in the gray. And so, I do think it’s difficult, but I do think that what regulators should do and now this is becoming political because it’s an election year, with with crypto regulation.

Annelise Osborne | Author | Chief Business Officer Kadena [00:32:01]:

So I think you just need to talk to industry leaders. Right? Our that’s another reason I wrote the book is to educate Joe so regulators can understand the thought process here and not be afraid of it. I think people are afraid of change. And how can you regulate this innovation? Learn more about what it what it is, right, and what it does and doesn’t do. So I feel like there’s a very there’s very negative mentalities in the US. There’s some that came out with custody that there were a number of banks that are custodians that were looking at actually offering custody services for for cryptos. And the some legislation came out that said or actually was an accounting standard that came out and said, if you hold if you custody a crypto, you have to hold the same cash on your balance sheet, which makes it not work. Right? That’s it’s just it’s just onerous.

Annelise Osborne | Author | Chief Business Officer Kadena [00:32:52]:

And so I feel like that’s not listening and understanding the technology. I think it makes much more sense to to work, with, forward? Because the US is a superpower, a financial superpower. And I think there’s forward? Because the US is a superpower, a financial superpower, and I think they’re hurting themselves right now with having not clear regulation and not and not and there’s a lot of regulation by enforcement, which is horrible. Right? They say Mhmm. You can do this, and then they say, oh, no. You can’t. We’re gonna charge you. Actually, they never really tell you you can do it.

Annelise Osborne | Author | Chief Business Officer Kadena [00:33:23]:

They tell you you can’t do it. But then you think that you’re, you know, you’ve got you’ve you’ve worked with them. Coinbase, for example, had just gone public, so they got an SEC approval, and then they’d be get a a Wells notice from the SEC saying they’re doing it wrong. Right? And so but they’re not there’s no there’s not the conversations in the middle. That’s the problem.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:33:41]:

Yep. Just yes and Joe. 1 and 0.

Annelise Osborne | Author | Chief Business Officer Kadena [00:33:45]:

Yeah. It’s it doesn’t it doesn’t work that way. It needs to be kind of an oh, if if let also, another thing is a lot of the legislature is older or regulators are older, and this technology is newer. Right? If you look at Gen z and millennials grew up with this technology or just technology in their hand. Whereas if you have people that are, you know, in their seventies, that is not the case. And if it’s not fit if it’s not broken, why fix it? Which is a terrible idea, in today’s Joe, but it’s you know, you’re comfortable with what you’re comfortable with. Why do you want something else coming in and messing it up? But we would still be riding horses if that were the case. So all things to think about.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:34:27]:

Going a little bit from a focus on the US to a little bit comparing the US and Europe, given that Fintech companies in Europe need to file to for regulatory approval just once and then just notify the national regulator that they’re doing business there. The understanding of many start ups is you have to file for 50 approvals in the United States for each state where you want to do business in. What do you think is the impact there in terms of cost and speed for Fintechs in both regions?

Annelise Osborne | Author | Chief Business Officer Kadena [00:35:03]:

Very slow. So there it depends on what you do if you have to file in every state. Joe, obviously, banks have to file in every state. Securities have to file in every state. But there’s also more, like I guess when you’re starting up, you’re starting up smaller, so you’re not starting up from a national level. But I think it’s tough. It’s onerous. It’s, you know, you’re dealing every state has its own government, which is why it makes it just difficult to get through the government in that process.

Annelise Osborne | Author | Chief Business Officer Kadena [00:35:30]:

Finding partners is great way to help you, but then it’s how to, you know, how do you find partners? You have to, you know, start somewhere. Right? Start somewhere and figure out what’s the best, best, biggest market for me, and see and start making inroads there. And then it is expensive, and it’s a lot of legal fees. There’s a lot of legal money that goes into startups, which is good and bad. You wanna work within the laws. Absolutely. But then it’s kind of ridiculous how much money a startup has to pay because every startup is paying that same amount. Right? Mhmm.

Annelise Osborne | Author | Chief Business Officer Kadena [00:36:05]:

Joe, yeah, it’s difficult. It is difficult to work within regulation, as in from a financial perspective. Absolutely, we work within regulation, but when the regulation doesn’t necessarily make sense. But it if you’re provided at, like, a SaaS product, then you’re not having to register in all the different states. So if and it depends on what service you are providing. If you are a money transmitter, then you need to register, in in the different states. So it’s just that defines what you’re doing, what the registration is, and and who your regulator is. Because there are many different regulators.

Annelise Osborne | Author | Chief Business Officer Kadena [00:36:37]:

And banks there’s even different regulators for banks. It depends on how you fall.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:36:42]:

Mhmm. Bottom line, I do believe talk to a smart lawyer.

Annelise Osborne | Author | Chief Business Officer Kadena [00:36:47]:

Yeah. Yes. And you know what also I think, you know, there’s lawyers are different prices. But I would I would prefer, I have learned, that I would rather not pay my lawyer to learn. So if you if you have usually the lower like, a cheaper lawyer, you’re paying them to learn. And I would rather have someone I’d rather pay more money for less time when they already know it. So food for that.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:37:10]:

Okay. And and the last question to kind of close this interview, do you think there are lessons that you, as based Fintechs, can learn from the European counterparts?

Annelise Osborne | Author | Chief Business Officer Kadena [00:37:22]:

Absolutely. Look at I think, well, I think regulators, US regulators can learn from European regulators. But but both. Right? I feel like there’s I think that regulation helps encourage innovation in Europe. So right now for blockchain, I’m looking to a lot of companies in Europe and what they’ve created, and actually working on focusing focusing on Europe because there’s more there’s more guidelines in Europe or there’s more regulation. So institutions are more comfortable working within that. So there’s, you know, there’s a lot of loans, debt, corporate bonds that are being created on chain in Europe digitally, that aren’t in the US because of that cause of that regulatory question. There’s stable coins that are launching.

Annelise Osborne | Author | Chief Business Officer Kadena [00:38:08]:

I think there’s a lot of innovation that comes out of Europe. If you look at, telecommunications, like cell phones were much bigger in Europe than they were in the US. It took a while for US to adopt. But what what can we learn? You know what? I I also try to always find smart companies and see what they’re doing and kind of what can I learn from them, even if they’re slightly they’re not exactly the same thing? And then getting to know getting to know them. Right? Getting to know reaching out because, again, it’s that it’s that community. I would rather learn from someone else’s mistakes than have to make the sick mistakes myself. So I’m happy to I have made mistakes myself, but, you know, it we can help each other by learning from others as well.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:38:53]:

Think that are amazing closing words. So, as long as enough people here on celebrate that I’ll share their mistakes, I do believe there’s always opportunity to learn.

Annelise Osborne | Author | Chief Business Officer Kadena [00:39:05]:

Absolutely. Absolutely. And I think this podcast like yours are super important. I I listen to podcasts all the time, and I think that’s sharing of ideas and knowledge and thought leadership. So thank you, Joe, for doing what you do and sharing this.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:39:20]:

Thank you very much. Annalise, it was a pleasure talking to you. Best of luck, and as always, we’ll link your LinkedIn profile, the website of your book, as well as the book itself.

Annelise Osborne | Author | Chief Business Officer Kadena [00:39:31]:

Fantastic. Thanks so much, Joe, and thanks everyone for listening.

Jörn “Joe” Menninger | CEO and Founder Startuprad.io [00:39:34]:

My pleasure. Have a good day. Bye bye.

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