In Q1 2018, Deutsche Bank, Germany’s biggest bank and one of the worlds leading financial institutions, recorded a profit of $146 million. Binance, the world’s biggest cryptocurrency exchange, recorded a profit of $200 million.
Binance, a cryptocurrency startup that was only set up just under a year ago having a larger profit than a bank that was established 148 years ago is nothing short of amazing and even more impressive when taking into account that Binance has only 200 employees whilst the banking giant has a whopping 100,000 employees. A sign of the times!
Changpeng Zhao (also known as CZ to those in the cryptocurrency world) is the CEO of Binance sand said,
“Binance is the world’s largest cryptocurrency exchange. In the first 3 months from inception, profits amounted to $7,500,000 USD. In the 2nd quarter, profits amounted to $200,000,000 USD. The 3rd quarter is still in progress, and is expected to have further growth. Any country that can attract Binance to open a branch in their location will receive a handsome tax income revenue.”
Christian Sewing, who was appointed as the new CEO at Deutsche Bank, stated that the bank will move away from hedge fund investment and focus on stabilising on a few areas the bank where the bank is still dominant. With an $800 million restructuring plan and a massive cut of employees, aiming to generate profits by the end of 2018. The bank has already begun cutting staff, firing 400 U.S.-based employees this week. The pace will accelerate and eventually result in more than 1,000 cuts
“Deutsche Bank is deeply rooted in Europe – here we want to provide our clients access to global financing and treasury solutions. This is what we will focus on more decisively,” Sewing commented.
This is Deutsche Bank’s fourth turnaround plan in only 3 years.
A while back, I had a chat with someone very senior Deutsche Bank and he told me off the record that they had met with around 1000 startups that year and his frustration was that they only did anything with 4 (partnership or acquired) The reason? Well Deutsche Bank deemed the other 996 startups as “unsophisticated entities” which meant the startups couldn’t get past their risk analysis, a lot of which is based predominantly on the startups ability to sue them!
The reason he was frustrated was because Deutsche Bank in effect were strangling all innovation by red tape and reassuring themselves they were innovating by creating sandbox environments in which they identified startups that had products or services which they badly needed. But because of them being deemed “unsophisticated entities” it was like having a ball at your feet in front of an open goal and instead of shooting… waiting to be tackled.
When I asked him what would happen for example when a challenger bank starts impacting on their main areas of operation, he said that the opinion internally is that “they would just buy them”….. I just laughed and thought of Blockbuster, Kodak et al
The thing I find fascinating with huge corporates is that they don’t start to struggle or go out of business overnight, it happens because of culture and a false sense of security. Corporates stop listening to their people and create a toxic, political, backstabbing culture of fear which reminds me of the old saying “Leaders who refuse to listen will eventually be surrounded by people who have nothing significant to say”
People always say it is the large or huge size of corporates that is their achilles heel giving #Startups an advantage. I don’t necessarily agree with that because ultimately no matter what size a company is… it boils down to leadership, communication and innovation!
I have experienced small startup size companies (long past the #Startup stage) that struggle because of a corporate attitude and culture. Nearly always because of dictator-esque “leadership”, poor communication and toxic cultures of fear. All a recipe for disaster and there are plenty of #startups with these traits and quite often they die because of them, some get lucky & raise investment, which means they live on for a few years as the cracks don’t always get seen (or they if they are they get overlooked) until the growth slows down.
So it really isn’t size alone that seals the fate of companies that struggle, be it startups or corporates it is various problematic factors that can happen and grow in any company. An old boss used to tell me “there is no such thing as a bad employee, there is only bad leaders” I believe that leadership teams must understand & truly embrace the value of an open, honest & innovative culture. Ensuring empowerment and ownership of strategy that doesn’t only focus on where the ball is now, but also where it will be.
Binance didn’t do anything that Deutsche Bank didn’t have the power, resource or ability to do… But they need people like CZ, plus give them the backing and room to innovate to succeed!
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