FYGGEX: Welcome, Hans. Glad to have you with us at the Fyggex VIP Insiders interview series. The first question to you is linked back to your previous role at Nordnet, which is the biggest 100% Digital bank covering all Nordic countries. What is most important for a CMO and a chief analyst in a digital bank?
Hans Strömbland: In a digital bank, you need to approach your customers through digital channels. So you need to understand the digital landscape and know how to approach customers in the right sense of way. I’ve been both the chief analytics officer and the Chief Marketing Officer.
My background is in analytics. To be honest, I am not the typical CMO in a company. I’m data driven, but today I would say that marketing is more or less data driven. And so having an analytical approach and letting the data show you what is the correct approach is the way to go. So rather than thinking that you have the silver bullet you try numerous things, and let the data tell you what works and what does not.
FYYGEX; When did you leave such a high position and why?
Hans Strömband: In the beginning of 2018, I left the company. I always wanted to start my own company. I had been thinking about that for a couple of years. But as many others say, it’s a big risk to start your own company and jump off a high paying salary and not have any funding at all. So that was and is scary.
I came to a point where I wanted to do something else. And I was considering moving on to another company or going off to do something on my own. And after some thinking, I decided that this was the time to start something on my own.
I started talking with a couple of old colleagues at Nordnet (the largest online stock broker in the Nordics). So, we were discussing different ideas about what we could do in our own venture. After a while the idea took shape so we decided to jump ship and start our own company.
FYGGEX: Your former employer Nordnet bought a company called Shareville in 2013. Could you tell me a little bit what involvement you had with Shareville and how that led you to start your new company Altpocket?
Hans Strömblad: Yes, Shareville was a big inspiration for the product that we offer today on Altpocket, Shareville is a social media platform on top of your investments. It enables you to share your stock portfolio with other investors/traders. You are able to find interesting investors to follow and filter out based on their previous performance. You are then able to see their distribution of holdings and their transactions. If you find a top performer you want to be inspired by or copy, you follow them and will get instant notifications when they make a trade. You can hide behind an alias and the exact amounts will not be shown, just percentage distributions. We bought Shareville for two reasons:
Firstly, we wanted to increase the transaction volumes within the online stock broker Nordnet. That’s how we make money in stock broking, by increasing turnover e.g. increasing the number of trades. And secondly, we also wanted to use it as an acquisition tool and a differentiator to our competition.
All stockbrokers have the same inventory, i.e. the stocks that are available to trade. And it’s more or less the same within the crypto space. So Shareville was a way for Nordnet to differentiate themselves against the competition.
In the beginning we were a bit scared that maybe people wouldn’t want to share their portfolio because financial information can be quite personal and sensitive. But it turned out to be a huge success with over 50% of customers below 45 years old signing up for Shareville. We had hundreds of thousands of users sharing their portfolio with a lot of skilled traders to be inspired by or copy.
We started to discuss with a couple of colleagues of mine that we hadn’t seen this kind of service in the crypto space. And to me, it’s the same thing. I mean, you want to be able to look into other people’s portfolios and find really good investors to see who’s performing best. Basically, we copied the Shareville model and moved it into the crypto space.
Instead of only being tied to one exchange, we are connected to several. We have the portfolio tracker in the bottom so you can connect all the exchanges that you’re using, and get an aggregated overview of your holdings. And then you’re able to share that aggregated view to other people. You can look into other users and see their holdings. You can see their transactions and you will get notified of the users that you follow. You will get notified when they make a trade. So if you want to copy someone, you can do that instantly and have a real time update on what is happening in other people’s portfolios. I would say that the most important thing here is, these are verified trades. So, you know that the other person has really done the trades on an exchange. It’s not someone just boasting in a forum. These are real trades from the real exchanges. To me, that’s an incredible source to get inspiration from and help in your trading. With Altpocket you don’t have to be an expert trader yourself. You can copy other successful traders’ moves and be like the experts.
FYGGEX: How and when did you get into the cryptocurrency industry? What’s your background?
Hans Strömblad: I was part of the Nordnet management team and we were forward leaning. I felt it was my responsibility to understand the crypto space in order to determine if it was something for Nordnet to move into or not. So actually, it wasn’t interest or my own curiosity. I felt it was an obligation for me in my position. But once I started to dip my toes in it and started to realize the potential, then it became a huge interest for me as well.
So that was the start.
FYGGEX: How was it for Nordnet banks competitors back then? Were they looking into the crypto space? Do you think banks will go even further or are they still hesitant?
Hans Strömblad: If we go back to 2017, I would say most banks were looking into it definitely. But there’s a big divide in the banking industry. Some people saying that crypto is a scam and nothing to pursue and other people that are for it. And I guess banks were quite hesitant to be the first mover in the space, because they didn’t really know where things were heading and no one really dared to take the first step. At Nordnet and the other online brokers in Sweden, I guess they use the ETF version where you can get exposure to crypto, instead of having the entire infrastructure themselves.
I think it will remain like this for quite some time, because banks need to set-up quite a lot of stuff internally in order to be able to move into the crypto space. But I would say that as the development within the crypto exchanges move on, you will be able to integrate to existing exchanges and have the trading through them so that it becomes more easy for banks to be able to open up for real crypto trading for their customers.
FYGGEX: A Question about your company Altpocket. What is it? Can you explain it a bit more and what’s your role in the company?
Hans Strömblad: There were three founders that started the company and all the three of us founders are driving the company. At the moment, we have 110,000 customers on the platform already.
FYGGEX: Sounds interesting! Tell us how you were able to attract so many people?
Hans Strömblad: We had a nice, slick platform that we now have developed further and enhanced quite a lot. So, to be honest it’s the same with most startups. It’s a bit of luck and a sharp, quality product. We had them both and struck gold. Hence, we were able to attract lots of customers. Almost 40% of our customers are based in the USA. And then the rest are basically all over the world.
FYGGEX: How about the Nordics? Do you have users from Nordic countries?
Hans Strömblad: Yeah, but small in numbers. Nordics are small in terms of crypto users compared to the rest of the world. So in percentages, it’s not that big. But there are a couple of thousand Swedish, Norwegian and Finnish customers using our platform.
FYGGEX: How is Cryptocurrency development in general here in the Nordic countries?
Hans Strömblad: I would say that we are really early when it comes to technology developments. But I believe that we have missed out some when it comes to Blockchain. We’re not putting a lot of effort into Blockchain compared to other technology developments that have happened in the past where we have been really in the forefront. I’m not sure we’re bad, but compared to how great we have been in other technological developments, I would say that blockchain has fallen a bit behind. I’m hoping that we’re starting to catch up now, but I would say we were a bit late.
FYGGEX: Are you the pioneers when it comes to the Social investment income in cryptocurrency?
Hans Strömblad: I would say that we are that within the crypto space. But as mentioned before there are similar products in stock investing.
FYGGEX: Remarkable, so let’s say some people want to invest in this space today. How is it going to happen, say, in the US or Germany for instance, once they install your application?
Hans Strömblad: Basically, you don’t keep any money at Altpocket. You connect through the exchanges that you’re using. Let’s take an example. Let’s say that you have transferred your crypto to Binance and started trading there. Then you generate API keys, giving us the possibility to read your holdings and your transactions. Then we gather all the information to Altpocket. So you can see your entire view of your holdings and all your transactions. And that’s basically how you set it up. Once on the platform you can start checking out the toplists and find other investors to be inspired by. Check out their holdings and transactions and start following those who you want to get notifications from. You can also jump into the crypto discussions in the social feed that we offer.
FYGGEX: Amazing for people to learn and understand about the exchanges. How many of many exchanges do you support in connecting to their API’s?
Hans Strömblad: Today we support six exchanges. But if you ask me how many we will support in the near future, then it will be 25. We are right now integrating with a lot more exchanges so that we cover all the relevant exchanges that we need to cover.
FYGGEX: In your opinion, while reading news about the cryptocurrency industry, what are the things that are missing?
Hans Strömblad: Scalability. That’s the biggest problem for cryptocurrencies today. We need to increase the scalability so that it actually becomes useful. I mean, to be honest, Bitcoin is not useful as a payment. And that’s also why people are now starting to call it digital gold instead of instead of being a payment method. The projects are moving in the right direction. Ethereum to 2.0 is approaching with increased scalability and they have a solid plan going forward. But scalability needs to be increased in order to become really useful as payments but also all other possibilities that exist around smart contracts.
FYGGEX: Yes, back in 2017 or 2018 you could buy kittens with cryptocurrency and I think at the time it was almost 20% of all of the exchanges on Ethereum platform. There were kitty cats worth 100k USD or something.
Hans Strömblad: Yeah. completely insane. I wonder how they feel about that investment right now.
FYGGEX: Do you have statistics of the average age of your users? Youngest versus the oldest using your services?
Hans Strömblad: We do not know that much about our customers. People in the crypto space tend to be quite secretive. So we don’t really want to push them into having to give too much information. So I can’t tell you that because I don’t know. We let our customers be anonymous.
FYGGEX: Okay, let’s jump into the dark side. You know, there’s a lot of people that still are hesitant into going into the cryptocurrency world. People know about bitcoins, but they will be surprised to hear that there’s over 5000 other alt coins out there. A lot of people that went on YouTube made themselves famous by saying that they invested in something and made thousands or even millions of dollars. And that led to the huge boom we had in 2017 and 2018. What are your reflections of the biggest threats to the cryptocurrency?
Hans Strömblad: If we look back to 2017, the ICOs (Initial Coin Offerings) were pretty much driving the markets. There was money on the street. You could have a white paper and issue your own token and get millions of dollars. You didn’t really have any obligations. Legally, it was really hard to go after people who made ICOs and brought in a couple of million US dollars and that just disappeared. That was and is a huge threat to the cryptocurrency industry, because it impacts the trustworthiness in cryptos. Trust was diminished because of that.
For the ICOs it was an extremely young market and completely unregulated. Much more is coming and the authorities have caught up with it as well now, and are starting to deal with it. It’s maturing and I think it needs to be more mature in order to attract the big money and the big investors. But I would say scammers were definitely a big threat to the cryptocurrency industry especially in 2017. ICOs aren’t that big right now anymore.
FYGGEX: How about the bubbles? What happened after 2018 after the big crash that many people even predicted that was going to happen and it did happen? What is your view of what has happened in the past two years?
Hans Strömblad: At the moment, you don’t have that much fundamentals to base values on cryptos. It’s still very speculative. You don’t have the profit or loss to look at and determine the value of different projects. People are speculating on which of the currencies will be one of the major ones going forward. There will be a lot of consolidation of currencies and some will succeed and others disappear. If you pick the right ones, they will be worth quite a lot in the future.
FYGGEX: How much?
Hans Strömblad: The million-dollar question. If I only knew.
FYGGEX: Thank you for the Interview Hans. We encourage our readers to check up on your firm and wish you continued success with Altpocket!
KEYWORDS: Cryptocurrency, exchanges, blockchain, trading, investors, scalability
*Disclaimer: Fyggex, does not give any guidance, advice or recommendations to neither invest or not in any available cryptocurrency directly or indirectly via any trading platform, exchange or provider. Our sole purpose is to make you aware of the related real or potential risks and opportunities so that you can make your own research prior to any financial decisions you may want to take. Past performance and position are not a guarantee of risk-free future returns.