Sending money abroad has been one expensive proposition. Much like long-distance calls and international roaming, it just seemed.. natural. "It's how we've always done it, boy," an angry voice from the sky would thunder. "What kind of evil sorcery is this? Show some respect!" 

Founded by two young Estonians in 2011, TransferWise didn’t fear the pinstriped banker in the sky. It laughed at ridiculous exchange rates and puffed-up fees. Their basic pitch? "Banks charge a lot for foreign-currency transfers. We don't." 


Two years of explosive growth later, the service is loved by users, adored by the tech and business press, and supported by the world’s top venture capitalists. We asked CEO Kristo Käärmann to tell us what it took to get there -- and whether it takes Estonia to conquer the world. 


Kristo Krmann
* Kristo Käärmann, TransfereWise, CEO 
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What's the end game for TransferWise? What kind of a world are you looking to forge?
We believe that sending money anywhere in the world should be fast, convenient, and it should not cost an arm and a leg. Banks are raking in an estimated $100bn worldwide annually mostly in hidden fees on these cross-border transfers. Directly or indirectly, we, the consumers, are paying for it. 
TransferWise, if successful, will shake this $100bn industry down into a $10bn industry and will be powering a meaningful chunk of global money transfers. Much like the way that PayPal powers much of e-commerce and Skype is the standard for long-distance calls. 
 
Did your Estonian background help or hurt you in coming up with the idea behind TransferWise?
The Estonian background set two important cornerstones. Firstly, internet banking here had set a high personal expectation. So much so that setting up my first bank account in London felt like a trip back to the Charles Dickens era. But beyond seeing faults in Western-European banking, the Estonian experience taught me the can-do mentality. 
When I was growing up, I saw a group of young Estonians set up Hansabank from scratch and grew it into the largest banking service across the Baltics. We should not underestimate this hugely powerful confidence that building up the country in the 1990s programmed into our generation's psyche. 
 
TransferWise has attracted enormous attention (and VC funding) as a ballsy startup that's happily punching through bank-built walls that seemed impenetrable just a few years ago. How much did it cost you to get going?  
 
We managed to be very realistic about what we need before launching the product. We did not require an army of lawyers to get us through the bank-like licensing process. It just meant studying 400 pages of mind-numbing regulations and dealing with the FSA in the UK to authorise us. It cost us a mere €450 to begin offering our services legally.
Founders with a technical background often tend to overengineer the product. We realised that we only needed a few nice-looking web pages for people to enter their payment details and a bit of code that deals with peer-to-peer currency conversion. Adding some coding and a professional design, we managed to launch a new cross-border payment service for €2000.
There is a natural tendency for people to worry about too many things before launching the product. Yet the answer to your most important question -- does anyone even need your product -- will be revealed only after you launch. You need to look at yourself in the mirror every morning and ask, "What's still keeping me from the launch?" 
 
What separates an great startup team from an average one? What should a young founder or potential employee aim and look for? 
 
Startups usually foster a unique atmosphere. They tend to attract incredibly ambitious and talented people, for whom traditional business challenges are too boring or just not rewarding enough. Where in the traditional career, people are selected by how they "fit the role" or "match the skillset". 
In startups it is very straightforward: you can only hire people that get sh** done. Preferably people who get lots of different colours and flavours of sh** done. And fast. The only other hugely important thing for a startup is that the people have to be fun to work with. There is no startup without a fun team.
Today we are working through a flood of job applications from people at large UK and European banks. Unfortunately it only takes a three-second look at most such CVs to know that TransferWise is not the place for them. 
 
Although TW's founders are both Estonian, your first functional website was programmed in Omsk, deep in Siberia. Estonia is proud of its software engineers, so why did you go to Russia for code-writing expertise? 
 
Estonia is rightly proud of its software engineers. We've had huge success in IT outsourcing (e.g. Nortal) and in product-building with Skype, Playtech and the banks. This is both a blessing and a curse. It's very hard for someone at Skype to step down from their cosy well-paying lead-engineer role and start working on a wacky unproven idea.
When we needed to launch the product, it would have been incredibly narrow-minded to think that the best engineers would only come from the same village that I did. There are millions of incredibly smart people around the globe just waiting to work on the next wacky idea that could change the world.
Today I'm glad to see that the mindset of Estonian engineers is also changing. Now, more often than ever, a typical corporate IT job is just too boring for people who believe that they should spend their time on building something more meaningful. 
 
This is a good place to ask you about efforts to attract foreign IT students to English-language degree programs in Estonia. What's your view on this joint initiative by the government, universities, and Estonian tech firms? 
 
This is a no-brainer. Research and innovation are international. The more talent we can pool together to match homegrown talent with foreign-born experience, the better the chance to seed meaningful ideas and build truly global products. We need to keep reminding ourselves that we have only a tiny fraction of the smartest people in the world. There are many born in Siberia and the villages of Kerala. Most successful founders in Silicon Valley were not born in the U.S. 
 
If you were stopped by someone considering an Estonian IT education, would you encourage them? On the heels of recent startup success stories, #estonianmafia hype, and the halo of Skype -- would you say that Estonia gives an advantage to someone looking to spread their wings, compared to other more established tech centers? 
 
Definitely. Estonian CompSci education has become a great mix of the original no-bullshit technical training in discrete maths, stats and theoretical computer science, and modern software engineering taught by practitioners from Skype and other world-class engineering houses. 
More research-oriented people have the luxury to work with world leading bioinformatics and robotics groups, or to join the innovators in cryptography and cyber-defence. People with entrepreneurial ambitions can put their skills to test with TransferWise or many of the other earth-shaking startups. 

Words by Villu Arak
Photo by Kristo Käärmann