Why Switzerland is Unfriendly to Fintech Startups and How to Fix it

Why Switzerland is Unfriendly to Fintech Startups and How to Fix it

by December 18, 2015

It requires grounding to become realistic, reshape your personal or environmental development and make progress. A highly exaggerating press and a ton of only cheering coverage led to my conviction about writing this article.

Dennis JustDennis Just, Founder and CEO of Knip

FinTech is hot. InsurTech is hotter. And Knip is one of the frontrunners in Europe serving tens of-thousands of customers and convincing backers to invest more than CHF 17 million in total funding so far.

I would like to reflect on the hype and concerns from the perspective of a CEO and Founder who is trying to break new ground in one of the oldest businesses on the planet: insurance. This viewpoint is very personal and reflects my feelings, observations and thoughts from a Swiss insider’s perspective focussed on scalable consumer businesses.

Everybody talks about cryptovalley, accelerators, the Dübendorf FinTech hub and start-up associations. Talking is the core problem of the – not exclusively – Swiss ecosystem for supporting start-ups. Talk is worth nothing if behaviour and thinking stay old fashioned and risk averse. And it requires hard work to change consumer habits and restructure lazy processes.

I present my observations and hopes for change below:

1) The ecosystem

As a start-up you don’t need a start-up ecosystem. You need customers! Well, an ecosystem allows you to easily start and close a company, to get fast access to people who really want to help, and the funding that you need to test and trial. But an ecosystem does not distract you with meetings and meetups that do not help you in building a business or product.

It’s only you and your product against the deeply-rooted pre-internet behaviour of the customer, and you learn by doing it. If you really want to create something – start to build and do not listen too much. Make mistakes. Bang your head against the wall because you cannot solve a big, business-critical problem and do it the next day by thinking laterally. Do not rely on promises, nor on consultants, lawyers or external mentors. Only on yourself, your team and your will.


● Successful founders should stick together to fund and support start-up ideas – Switzerland has a lot of them that who actively invest and bring operational and scaling insights – e.g. GetYourGuide with Pascal & Johannes, Roland’s Travel.ch, DeinDeal from Adrian and Amir, and EAT.ch, founded by Lukas, Daniel et al. – but it’s hard to get onto their radar.

● To our beloved politicians: do something (about the founder tax situation, bank licence, etc.) or don’t care, but just talking is the worst thing that you can do. It creates expectations that you cannot match and will be of no use to man nor beast.

● People who want to risk something by developing themselves and their environment – stand up!

● Switzerland looks after a lot of money, but most of it is parked and not actively invested. Invest it into visions and close the Series A/B gap with it! Suddenly we have only very few real institutional VCs here that make investments of 2+ mio CHF e.g. RedAlpine and Creathor.


2) The culture

From the outside, it is hard to imagine what it takes to build, run and grow a company. If you are just noticing the success stories in the news and are not part of the system, you probably have a restricted view of entrepreneurship. To be an entrepreneur means:

● Giving up years of your life, social connections and friends to focus on changing an industry and building up a company. It’s in your head 24/7 and dependent on what you do 12/7 without an end in sight.

● Being under pressure day-to-day to pay the salaries of your 95 employees and develop the business as expected

● Failing 80 per cent of the time, never losing the will to get up and prove everybody wrong

● Going without recognition as nobody understands what you do and why you put so much pressure on yourself

Nevertheless, it is the best pastime in the world and I cannot imagine doing anything else.

I do struggle sometimes with the way in which society views entrepreneurs as well. A big financing round does not mean that I’m a millionaire, nor does it prove that anything is right or wrong in terms of the business. The pressure and expectations are growing. Having 95 employees does not mean that 95 monkeys now do my work and I can sit back and play with my golf clubs – on the contrary


● To value the impact on society and people that start-ups generate, rather than their contribution to GDP.

● To share your ideas and thoughts. If you hold back information, nobody can help you. If you think that holding back information will help you win – you will lose the game anyway.

● That failure should become an accepted part of the economy and society, and in fact it is the only way to grow and learn quickly. (as well as being a chance to redefine yourself and keep smiling like Marcus

Failure as a Necessity for Start-up Ecosystems – Marcus Kuhn from idezo on Vimeo.


3) The media

When it comes to start-ups it’s all about exclusivity and quality of presentation. Ideally a Swiss Uber-like AirBnB clone that raises 145 million euros for a two-billion-euro valuation from Google and Ashton Kutcher to finally turn Swiss cheese into the next big thing – just like Weedtech in the US.

When you write about all these amazing and ground-breaking successes without understanding metrics like liquidation preferences, tag-alongs and cliffs, and even having tried the product and having some interest in what it offers the customer by way of rethinking an old fashioned business model – such writing does not come from the heart and will not reach the heart of the customer and reader. And even worse – people will not get used to trying out and appreciating something for their own good. They will still continually complain about new problems because they have get themselves into gear and do something about it themselves.


● KTipp, Beobachter – everybody needs objective feedback and you can only grow with it. But before posting a politically or industry-based article, test the product and service yourself and point out the value for the customer as well. Keep it fair and support your local entrepreneurial scene!

● 20min, Watson, Blick, NZZ – these show that cats and boobs sell the best and create new interest in a saturated business sector. But be aware of the responsibility that you have for young enterprises and give them at least a chance to be heard. And not just on the bottom left of page 43. There are a lot great products out there!

● There are so many start-ups out there that solve a problem for all of us. It is really worth all of you taking a look!

● Where is the one source of lots of consistently high quality Swiss tech know-how? (Oli has already made up his mind about it – http://www.oliver-flueckiger.ch/der-schweizer-startup-szene-fehlt-ein-gutes-online-magazin/

4) The regulators

Regulation is always a barrier to entry for start-ups. But depending on the support, it can present opportunities to create new things. Looking at a country with eight million inhabitants, the market is just too small in its own right to create something ground-breaking in the domestic market.

What is needed is for the starting gun to be fired and for risk-takers to get inventing. How big is the risk of a start-up in banking or insurance failing in the face of the volatility around double digit billion returns and losses by a national bank? What benefit can society get from it and how can it make the lives of customers easier?


● Thinking needs to shift from a “risk averse” attitude towards supporting start-ups and young enterprises and a far more engaging and open culture. Everybody on our side is happy to explain what we do, how we do it and why it is better than before.

● To enable real innovation (no “me too” products or a 511th lender!) – let us create a blueprint for regulation and investigate the possibilities of a new way of regulation itself and allow real P2P insurances or a standard API layer for banks.

● To place convenience over safety! Digital onboarding and qualified signatures with IP watermarks would make the life way easier.

● If you enforce regulation, also enforce the need for date-sharing by banks and insurance companies over technical APIs to connect the dots. It’s the customer’s right.

To wrap it up

At present, Switzerland is a start-up-unfriendly country and we want to change that by being a role model for what is achievable by focussing on the customer and giving him or her new experiences with a vast legacy supply system. But there is still a tremendously long way to go.

I love Switzerland and everything about it that helped Christina and me to build up Knip, and I will not accept any alternative suggestions unless they bring about a positive outcome for every company founder and his or her desire to improve the world, an industry or just a process. The only way to achieve that is to have a realistic view of the present and of the right next steps to move forward!


Featured image credit: Photo by Claudio Schwarz | @purzlbaum on Unsplash

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