Tim Kelly, Founder & CEO of leading financial services firm BitOoda talks about his experience and journey setting up his fintech startup while also sharing his thoughts on the latest consolidations and mergers in fintech.
Catch the rest of this interview to read Tim’s thoughts on the changing fintech landscape and what he hopes to see from this segment in terms of a better maturity in infrastructure, processes, and regulations.
Can you tell us a little about yourself Tim (including your hobbies!), what a typical day at work is like for you and what your fintech / entrepreneurial journey has been like so far. If not a Fintech entrepreneur, what would you have rather been?!
I’ll answer the last part of that question first: I describe myself as a serial entrepreneur; that’s what gets me up in the morning and what I love to do. I grew up outside Boston, attended Tufts University, spent time on the trading floors of Chicago and New York, and I’ve been building and selling companies ever since. My first solo venture was Chatham Energy, an OTC brokerage firm that I sold to the Intercontinental Exchange (ICE) in 2007. After staying on at ICE as a Managing Director for a few years, I co-founded another OTC commodity brokerage firm called Forward Insight Commodities, which was bought by INTL FCStone.
After taking a year off to catch my breath, I felt drawn into the exploding new world of digital assets, started BitOoda in 2017, and away we went! These days, there is no typical rhythm at BitOoda – every day is different, which is what makes it exciting. In a given day, I’ll typically check in with customers before the trading day picks up steam, and will engage with my team on the day’s priorities. After that, it’s a whirlwind of sales calls, brokering trades, exploring new products and projects with my team, and driving the company’s vision forward.
Oh, and when I’m not in the office I enjoy boxing, and also rough-housing with my two German Shepherds!
How have you seen this segment evolve over the years and what are some of your top predictions for this segment in 2020?
I feel like the pace of change in the digital asset finance space is best measured in weeks or months, rather than years.
When I started BitOoda in 2017, crypto was even more of the Wild West than it is today – everyone was trying new things, taking the market in different directions, and reacting to rapid developments in the regulatory and technology arenas. Today we’re seeing some consolidation among market players with a growing pace of mergers and acquisitions, some firms folding because of financial or regulatory reasons, and new partnerships and industry associations forming.
The other trend I’m seeing is a greater migration by market participants toward the use of regulated and compliant platforms and products. I’m personally encouraged to see this trend, as I founded BitOoda with a strong focus on compliance and doing things the right way. BitOoda is a fully regulated platform, with approval as both a CFTC Introducing Broker and an SEC Broker Dealer, and we pride ourselves in helping our clients transact with confidence and in a fully compliant manner.
Our goal at BitOoda is to integrate the traditional financial world and the technological aspects of cryptocurrency – merging the “fin” with the “tech.” As the space has evolved, I’ve seen the gap narrow between the tech experts and those coming from the capital markets world. What I’m seeing now is the development and launch of more sophisticated capital markets solutions such as futures, options, and complex derivatives that are offering institutional investors a greater range of products to consider as they engage in the space.
My hope and prediction is that the markets continue to both mature in terms of the infrastructure, processes, and regulations, but that it continues to innovate and push advances in the digital asset frontier.
As a fintech startup owner, what are some of the common challenges you face and what would you advise other fintech founders to do, to overcome these common challenges?
Running a successful Fintech startup is a tough balance between managing capital to keep the company running, while doing the actual work – in our case, developing and managing a market-leading brokerage and advisory firm. In a space like digital assets, that balance is complicated by the costs and time required for compliance and other complex legal requirements, keeping our day-to-day operations efficient, and of course keeping up with rapid substantive and technological changes.
I would advise other startup founders to focus on recruiting the best initial team possible. Your first core group of employees needs to gel to get through a lot of long hours, challenges helping to get a new business off the ground, and initial ups and downs.
That first team also needs to have perseverance, an entrepreneurial approach, and the willingness to wear multiple hats at the same time (e.g., business development and IT lead!).
Can you talk about some of the most innovative fintech solutions today that according to you are set to create new benchmarks in the industry?
Not to put on my sales hat, but I truly believe what we’re doing at BitOoda are some of the most innovative solutions I’ve seen in my career, and setting new industry benchmarks is exactly how we describe our vision for those solutions.
Our BitOoda HashTM Contract and BitOoda DifficultyTM Swap are in the process of creating a commercial market for hash power.
That said, we’re working in one of the most innovative industries in a generation, maybe ever, and digital asset firms around the world are constantly setting new standards and advancing the market.
For example, Tagomi’s order routing platform is one of the hottest developments in crypto. I see great potential in the ability of platforms like Tagomi to broaden into a multi-vertical institutional-focused set of solutions that will increasingly be the model and benchmark for successful crypto firms.
What according to you will drive demand for new innovations in fintech and what will the landscape look like in the next few years?
For digital assets, the name of the game is getting larger institutions to engage in the space. That will happen when a more robust capital markets infrastructure is developed that enables seamless execution and frictionless transactions across functions and verticals (e.g., price discovery/transparency, trade execution, settlement and custody, and borrowing and lending).
The other factor, and this may seem illogical at first, is that I believe more regulatory clarity will increase the incentives and demand for innovation because U.S. firms will have a better sense of the boundaries in which they need to operate, and institutional customers will be more confident in their ability to transact compliantly. That will keep more innovation in the U.S. and enable fintech firms to play by a known set of rules on a level playing field.
Given the rapid pace of change in fintech today, what would your top five tips be for reskilling/upskilling initiatives for teams belonging to this niche?
One: look beyond today’s “hit of the day.” ICOs, IEOs, and other short-lived phases are not as enduring as longer-term mature market products and services. That’s where our focus is – opportunities 2-4 years away.
Two: learn everything you can about your industry as a whole. Don’t limit yourself to your firm’s niche, whether (in digital assets) that’s mining, custody, derivatives, or something else.
Three: hire a team with different skills and perspectives. Diversity of thoughts and backgrounds is the best formula for ensuring you get the best ideas and solutions to the problems you’re trying to solve.
Four: be prepared to pivot your short-term trajectory while maintaining your long-term focus. This may require you and your team to pick up new knowledge and skills quickly, while keeping your eye on the strategic prize.
Five: maintain solid corporate partnerships with firms that can complement your team’s skills. That’s an efficient way to multiply your firm’s reach and knowledge without spending additional resources.
Tag (mention/write about) the one person in the fintech industry whose answers to these questions you would love to read!
Your favorite FinanceTech quote:
“Your fat margin is my opportunity.” –Jeff Bezos
“Learn to fail fast.”
BitOoda is a digital asset platform based in New Jersey. Founded in 2017, BitOoda has its roots as an agency-only brokerage firm, and in the past year has made a name for itself developing and executing products and strategies using its first-of-its-kind platform that merges digital finance and applied science. BitOoda’s core expertise is providing institutions with high-touch capital markets advisory, product engineering, and brokerage solutions. The BitOoda team brings substantial leadership experience from conventional financial services and energy commodity advisory, trading, and execution, and the firm’s operations include an SEC/FINRA-registered Broker-Dealer and a CFTC/NFA-registered Introducing Broker.
Tim Kelly is a serial entrepreneur with over 20 years of expertise in financial markets. He founded and built Chatham Energy Partners, an energy derivatives brokerage, which he sold to the Intercontinental Exchange in 2007. Staying true to his entrepreneurial spirit, Tim launched Beacon Energy in 2010 under the ICE umbrella, and after his time at ICE founded Forward Insight Commodities, a commodity brokerage firm, and successfully exited to INTL FCStone in 2014. Tim is a graduate of Tufts University, and holds his Series 3 license with the NFA and his Series 7, 24, and 63 licenses with FINRA.