Nikolay Storonsky prides himself on straight answers. “Ninety-five per cent of founders, they will bullshit you. I’m not going to do it,” says the co-founder and chief executive of Revolut, which offers app-based financial services. The matter-of-fact 33-year-old is talking about work-life balance. He has little time for it.
“I can’t see how work-life balance will help you to build a start-up,” he says. “You are competing with bigger players, with better funded start-ups; you’re competing for customers, you don’t have resources. So how are you going to win this game?”
There is no doubt that he is building one of the UK’s most promising and fast-growing young businesses, with brand recognition to match: all 59 Team GB athletes at the Winter Olympics in South Korea have been given pre-paid Revolut Visa cards.
Over the past three years, and with the backing of Balderton Capital and Index Ventures, two European venture capital firms, Mr Storonsky’s company has raised about £60m and had a valuation of £300m last year.
You can sacrifice your life . . . But you can’t do it forever. It’s just impossible
Fast growth brings problems. Revolut is grappling with the difficulties of finding and retaining the right staff, as it transforms itself from a tiny, scrappy business into one with hundreds of employees: from a “baby” to a “mature young person”, as Mr Storonsky puts it. It is taking time.
Revolut launched in 2015 with an app and card that allow travellers to switch between euros, dollars and pounds with ease and at little cost. In the past year it has added features and services at dizzying speed, including travel insurance, third-party loans and even the ability to buy and sell cryptocurrencies.
It has yet to make a profit. In 2016, the most recent year for which accounts were available, the company made a net £6.9m loss.
Mr Storonsky says Revolut has more than 600,000 customers who use the app each month. This is impressive in a crowded fintech field, where many well-funded upstarts — not to mention established banks — compete for business.
But the company has earned a reputation for a tough working environment, where employees work long hours, sometimes including time at weekends, at the office. Those in the tech start-up sector expect to work for long hours, but working life at Revolut is known for being particularly demanding.
Mr Storonsky says that on a typical day, he is in the office 8am-10pm. He dismisses the suggestion that his staff are overworked, but he acknowledges that he is demanding. “As you make the world better you will need to break walls,” he says. “And to break walls you really need to try hard, and unfortunately trying hard means in many cases you need to spend time on it.”
He claims he has never come across a burnt-out employee, and pledges to pay for a two-week holiday for any of his staff who feels overwhelmed by the demands of their job.
The number of customers who use the Revolut app each month
Mr Storonsky’s tired face betrays the long hours when we meet at Revolut’s office in Canary Wharf. The company appears to reject clichéd start-up office paraphernalia. Instead, the space is functional, with most people working quietly at their desks. No table football is in sight.
Each area has a sign indicating which part of the business it belongs to, and each employee has a name tag on their desk to help everyone get to know each other — a challenge in any fast-growing business.
Mr Storonsky is circumspect at first, but as the conversation flows he relaxes, leaning back in his chair, while maintaining the same firm, confident tone he uses whether talking about his childhood or responding to criticism.
He has spent his life working hard. Born in a small town on the outskirts of Moscow, he boxed as a child and then took up swimming as a teenager before studying for a physics masters degree at the Moscow Institute of Physics and Technology, a top Russian university. He became a state champion swimmer while at university.
His first job was as a trader at Lehman Brothers, which he joined before finishing his degree, while at the same time completing a separate masters in economics at the New Economic School in Moscow. He left Lehman before it collapsed, joining Credit Suisse at the start of 2008. In 2013 he left to set up Revolut.
Three questions for Nikolay Storonsky
Who is your leadership hero?
Elon [Musk] is the perfect combination of rationality and craziness. No matter how many times he fails, he picks himself up, learns from his mistakes and keeps going.
If you were not a CEO, what would you be?
What was the first leadership lesson you learnt?
Never to assume, which I learnt when I lost £500k while working at Lehman Brothers. That was a harsh life lesson for me. I back up my decision-making with data and logic in everything that I do. Assumption can be a killer in business.
Mr Storonsky has fond memories of his time as a trader before the financial crisis, and says that finance became less fun and fulfilling after regulatory intervention that followed the crash.
“There were still great career people and great performers, but then there were people who were not performers, but they were exploiting the existing political environment to actually rise,” says Mr Storonsky.
He has run into problems selecting people to fill senior roles at Revolut. Those difficulties were evident last year, as the company lost its chief operating officer, head of risk, vice-president of corporate services and head of banking and payments — the latter left just months after joining.
One former executive claims to have left because Mr Storonsky seemed to micromanage his senior management team, and have little interest in his staff’s work-life balance. “You can sacrifice your life,” the executive said. “But you can’t do it forever.”
Mr Storonsky says: “When I was hiring the senior people for us, it was a new skill set. So how do you test whether it is good or not? You can’t test it, so you hire the person and then you realise that those goals are not achie . . . .. Our first developer was the wrong hire, our first designer was the wrong hire, our first compliance officer was the wrong hire.”
He says he is not a fan of micromanagement. It restricts people from reaching their full potential, he adds, but some form of it can make sense “if continuous mistakes are made and targets are constantly missed”.
The company employs about 350 people and recently applied for a banking licence in Lithuania. The prospect of Brexit has made a UK banking licence less appealing for the business, given its European ambitions.
Revolut has been based in the Level 39 start-up accelerator in Canary Wharf since before launch. He says almost all of the companies at Level 39 when Revolut started out are now defunct. “Either you’re all in and you’re focused and you spend time on it, or you have little chance to survive,” he says.
Ask the outsider
Burnout can damage employees and companies, says Marissa King, professor of organisational behaviour at Yale School of Management. Unreasonable expectations and a lack of work-life balance have been linked to poor health, mental illness and even early death. In the US, stress at work contributes to an estimated 120,000 deaths a year. But those are long-term outcomes.
While stress can be beneficial in the short term, improving cognitive function and alertness, says Prof King, it cannot be sustained. “Eventually, everyone needs a break.”
Over time, chronic workplace stress leads to less creativity, absenteeism, high rates of employee turnover and a lack of engagement, she says. The extremely long hours commonly associated with high-growth start-ups, adds Prof King, will not take companies to the next stage. “A company’s 300th employee will rarely feel the same sense of ownership and commitment as its third.”
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