The Fintech Week Lithuania spoke to Tony Greenberg, the CEO of Ramprate based in Los Angeles, California, about his views regarding current market conditions, startups, and the future.
Tune in to see and hear Tony on the 18th of June during the Fintech Week Lithuania.
- What do you know about Lithuania?
It’s a place with a lot of history over the last millennium – from the being one of the major regional powers on its own to probably being the biggest European superpower this side of France and the Ottomans for a few centuries as part of the Commonwealth with Poland to struggling for independence from Russia for the last century – which is continuing in some ways. For all the turmoil in that history and the hundreds of thousands of people it lost to the Nazis and the Soviets, it’s remarkable how much talent and positive culture remains. It’s hard to escape the USSR without a lot of deep scars and Lithuania is one of the few countries that managed to make that transition back into the western market economy with relatively little corruption and other hangovers in terms of culture, work ethic, etc. You guys are survivors with a ton of brilliant young talent, and that’s very exciting.
- What situation do you feel is in the tech industry, tech financing and startups right now?
First, the obvious: there’s a lot of uncertainty in terms of what world we’ll find ourselves in by the end of the epidemic. If we’re in a full-blown economic depression, a lot of good businesses just won’t be able to get traction because they’re luxuries, not necessities. If there’s more of a V-shaped recovery, obviously a lot of this uncertainty turns into major opportunity. So there are some projects that are in wait-and-see mode with a skeletal staff.
On the other hand, the tech startups that are part of the backbone of the work-from-home and distance learning economy are hitting unprecedented growth and demand – along with competition from the big guys. It’s no accident that Google and Facebook are creating competitors to Zoom right now. For these guys, it’s critical to scale intelligently – and we’ve cut our teeth with gaming and media companies that skyrocketed overnight so we know the challenges that brings – poor service, overpaying, outages, etc.
- How do you feel that Covid has affected businesses, startups, and economy as a whole?
The short term is what I just said – 30% of the economy is on the brink of collapse and 5% is going like gangbusters. But the long term is much more interesting because the crisis has really brought the question of what’s truly important to the forefront.
For example, it turns out that traditional offices aren’t really that important and everyone is just as productive working from home – which we knew for years and years because we’ve had universal work from home since the founding of RampRate.
But in terms of broader demand, it’s also about people really refocusing away from conspicuous consumption and buying stuff they don’t need and thinking more about how they make the most of the world. There’s a real refocusing around social responsibility and taking care of each other and the world. Of course that might not last past the crisis, but I hope it does.
- What do you think will be the way forward?
We’re making a big bet on a new approach to doing business. You know that the traditional view of the corporation is that of a psychopath – solely focused on profit and willing to step on everything and everyone to reach that. We think that the slow trickle of new leadership – millennials are now execs and CEOs – will accelerate into a corporate consciousness of their impact on others around them so that there’s a focus on more constituencies – the employees that are treated fairly, the customers that are not taken advantage of, the planet that’s not polluted, and so on.
- What is the current status quo of the fintech industry in the U.S.A.?
Fintech is generally working on longer timescales than most industries – there are a lot more speculative projects trying out very early toolsets, and a lot more bureaucracy around getting into production or replacing failing tools. So the impact of the crisis is a bit slower. But obviously if the economic conditions start leading to defaults on payment obligations that were thought to be safe, a lot of institutions will be affected. And the way we’re seeing this play out in terms of tech is the compression of timelines for major projects – no one knows if they will still have the budget to get things done by Q4 so they’re pushing to get the long-term transformations done ASAP. A lot of overworked IT folks in that industry right now.
- Are U.S. companies looking into expanding into Europe, Lithuania; are they looking for investments and / or acquisitions in this region?
There are always companies looking for global expansion. I can’t speak to someone building offices or branches there, but in terms of data centers and information hubs, which we do know fairly well, Lithuania is generally not on the radar. Some of it is perceived geopolitical risk – not as high as for Ukraine, Georgia or even Estonia, but higher than, say Sweden or the Netherlands. And with Russia’s data repatriation initiatives from around a decade ago, there’s no much business in serving Russia from over the border.
To create opportunity for expansion from a digital perspective, you have to win on one three factors – power cost / availability (which is why hydro in the middle of nowhere in Norway / Sweden does well), connectivity (which is why Amsterdam / London attracts investment), or a favorable tax climate (which has helped Ireland and Luxembourg). We have a whole tool for the factors that go in, and those are usually the top 3 underlying reasons for choosing a place to expand from a data center perspective.
- Do you think it is important for European / Lithuanian companies and startups to position themselves in the U.S. market?
In many ways, it’s an increasingly global world. We can serve customers worldwide with just a small team in the US because of communication innovations and the many local partnerships we’ve built over the years. And US companies are often global leaders so unlocking them creates opportunity not only in the US, but back in Europe, in Asia, in Australia, etc. For example, some of the work we’ve been doing with our Lithuanian friends at NOIA is around building partnerships with high-tech and telco giants from the U.S. If done right, even one or two of these closing instantly puts hundreds of salespeople on NOIA’s team – and there are at least 3 of these discussions that are very far along, so we’re hoping to have some very tangible proof for you soon.
- What are the top three business areas that you think are the winners in the near future?
First, as I said before we’re making our bets on social responsibility and impact – we think the world is tired of business as usual and is ready for a change.
Second, the pendulum is swinging back towards decentralization in terms of compute and technology. The history of IT is this pendulum between the centralized mainframe to the decentralized client-server; and then from decentralized data centers to centralized hyperscale clouds. We think the time is ripe to shift more things to the periphery – merging the best of CDN and cloud; building intelligent SD-WANs like NOIA, etc.
Third, and this might be a bit longer term, I think we have a huge jolt for the melding of physical and virtual worlds. We’re working with some very exciting motion capture technologies that will allow kids to get out of their seats and really act out their games. And while offices have been exposed as giant petri dishes for disease, there’s no substitute yet for human contact – and Zoom is just a poor surrogate. But imagine if you could shake hands with someone over Zoom – that’s the next revolution.
- What are the top key trends that you are interested in right now?
I’m interested in trends that are a bit contrarian – the ones in their trough of disillusionment where investors and customers are expecting less but technologies are able to deliver more than ever. For example, I’m a partner in a new merchant bank that’s focused on tokenization of illiquid assets. It’s been tried before, but while the technology was ok, the underlying assets being tokenized were junk. But these guys are coming in out of Rothschild and JP Morgan and these other high-end financial companies, and they’re building funds for blue-chip real estate and tokenizing art and doing all sorts of cool stuff, which I think can work.
- What exciting are you working on currently?
I think I’ve covered off quite a bit of it earlier – between impact sourcing and real-time motion capture and merchant banking, it’s quite a wide variety of exciting projects. I also have several in natural wellness – we have a lot to learn about plant medicine, and there’s some very cool stuff I have going there.
The way that I get to touch all of them (besides being an investor) is helping accelerate these projects by auditing their technology, helping them refine the pitch, and then bringing them into new customers and partners in the Fortune 1000 that they would otherwise spend years banging on the doors of without luck. So it’s been an incredibly rewarding experience working with these startups.
- Would you like to say anything to Lithuanians, send a message?
Hang in there – the world may be shaky and chaotic now, but the next generation of leaders will be better than the boomers that are in charge now. Over in the US, we certainly have a lot of work to do to get our house in order, but we will. We’re going to build better businesses and better governments, and as Martin Luther King said, “the arc of the moral universe is long, but it bends toward justice”
