The following interview is a conversation we had with Steve Pomfret, CEO & Founder of Cygnetise, on our podcast Category Visionaries. You can view the full episode here: $8 Million Raised to Build the Future of Signatory Management
Brett
Hey, everyone, and welcome back to Category Visionaries. Today we’re speaking with Steam. Let me redo that. Hey, everyone, and thanks for listening. Today I’m speaking with Steve Pomfret, CEO & Founder of Cygnetise, a signatory management platform that’s raised 8 million in funding. Steve, what’s going on today?
Steve Pomfret
Hi, it’s great to be here. Brett, thanks very much.
Brett
Yeah, excited to have you, and thanks for joining so late. If you want to tell the listeners, tell us what time it is there.
Steve Pomfret
It’s 11:00 p.m. Here in Chile, London.
Brett
You’re a madman for taking it so late, but we appreciate you being here and we’re super excited to have you. Let’s go ahead and just kick off with a quick summary of who you are and a bit more about your background.
Steve Pomfret
So, obviously, my name is Steve Pomfret. My background is I spent about 20 years working for large banks, but I’m not a banker. I haven’t been a banker. I worked in operational change and as more of a process guy. So I kind of help the banks resolve their inefficiencies and help to work with technology, which kind of explains why I’m doing what I’m doing at the moment. And during that time, I’ve worked in New York and Florida, so I’ve been stateside and also places like Moscow, Switzerland, Holland, France, Italy. So I’ve been around a little bit.
Brett
What was your favorite place you’ve lived?
Steve Pomfret
Oh, God, that’s impossible to say, but I’m going to be for the audience, maybe New York.
Brett
It’s a safe bet. Now, as you were going through your career working at these banks, did you have in the back of your mind this idea that someday you were going to start your own company, or where did that come from?
Steve Pomfret
I would have loved to whilst I was doing it. I guess it’s like a confidence thing, you know, I’ve always admired other people running their own company, but whilst you’re actually working for a big corporation or a big bank is you kind of, there’s some kind of security. And I guess it was only after like, 20 years where I began to think maybe I should make the leap. So it was always in the back of my mind, but I never really, let’s just say, had the confidence until I matured, to an extent.
Brett
What gave you that confidence then, in 2016, when you founded the company, where did that come from?
Steve Pomfret
Well, so I kind of did a stepping stone. I loved what I did for the banks, but not being an actual banker and let’s just say front office trading or corporate finance or something like that, you don’t get paid the big bucks. So I kind of saw my career ceiling, you know, becoming, hitting the ceiling, and I left to do exactly the same thing, but as a freelance consultant. So I set up a limited company, and then I started earning some more cash. And then, of course, because you’re kind of like half being a freelance consultant, you’re like half doing your running your own business. So then I guess I started thinking about it a little bit more and then decided to take the leap.
Brett
When did you take the leap then? Was that in September 2020?
Steve Pomfret
No, no. So it was in 2016. So I left. I finished my last contract in December of 2015. And at that point, I realized that if I was going to continue doing what I was doing, I need to understand more about innovative technology. So essentially, I was advising banks on how to work more efficiently and what technology to use, and everyone was talking about blockchain and other innovative technologies. So in the first couple of months of 2016, I kind of schooled myself, went to meetups, went to classes to understand more about new technology. And when I understood more about it, I realized it was in a great position to actually do something about it because I understood the problems that the banks faced, and now I actually understood more about the technology.
Steve Pomfret
So at that point, I thought it was a great time to actually do something. It was like the perfect opportunity.
Brett
In those early days, how did you define the problem that you were setting out to solve?
Steve Pomfret
Right. So I kind of did it the wrong way around. So when I actually understood more about blockchain technology, what you were hearing in the news and people saying, I was going to revolutionize the world, it’s like, soon it’s going to change banking. I realized that there were loads of great use cases for enterprise blockchain outside of cryptocurrency, but what people were talking about is going to be really impossible to adopt. So I started analyzing problems that could be suited to the use of blockchain, and then which ones would have the best use case. So which ones would actually be, let’s just say, replacing a manual process and not replacing another technology, which might kind of, we’ll probably talk about this a little bit more about the category creation.
Steve Pomfret
So I literally was analyzing problems and which one would be the best suited for the use of the technology and which ones had, like, a better chance of making a business.
Brett
How long did it take for you to have a product that was ready to be sold.
Steve Pomfret
Oh, gosh. So, started the company at the end of May 2016, and it was probably two years before actually made the first sale. So, yeah, quite a long time.
Brett
That’s pretty standard with a lot of the guests that I have on it. It takes time, especially if you’re looking at innovative and new technology. What were those early sales conversations like, and how did you get that first one across the line?
Steve Pomfret
Oh, gosh. Heavily discounted. So lots of people were interested in what were doing. Big companies are never going to take the risk on you. The first question we always got asked is, like, what other customers have you got? And, of course, if you haven’t gotten me. So we actually started looking at the market in the Channel Islands. So the Channel Islands to the UK are probably what the Cayman Islands and British Virgin Islands are to the US, where you have a lot offshore trust companies and some big name brands with small, autonomous little offices. So we targeted them where they can make decisions by themselves. And you don’t have to go through the long sales cycle and the bureaucracy of, like, selling into a headquarters that might be located in, for example, London, New York, Frankfurt, Paris.
Steve Pomfret
And they’re a lot more, believe it or not, they’re a lot more open to innovative solutions and also, like, a smaller ticket size, they really didn’t have too much to lose. They could run their existing process in parallel, so they weren’t taking on too much of a risk. But those first couple of tickets were, like, pretty small, and we still have them as customers now, though.
Brett
At what point did it start to really feel like you had a product here that the market was going to want?
Steve Pomfret
Probably when we got our first bank on board, which was one of the pivotal moments. So I can say who they are, society general, going through their due diligence process and being trusted by them, I guess. Man, hang on a second, we’re really onto something here.
Brett
How have you seen the conversation around blockchain evolve? I know in 2016, it was probably a very different story than it is today, and there’s been quite a few ups and downs, even since 2016. How have you seen that conversation with customers evolve?
Steve Pomfret
I’ll be really honest, the customers actually don’t care, so well. They don’t care about the technology, they don’t care about the main blockchain. They do care about the facets that it provides. So the benefits. So we kind of sell the immutability, the fact that you own your own data and you can share that on a peer to peer basis, as opposed to like any kind of like normal centralized database. And that is still the case. Now, of course, when we go through technical due diligence as part of the sales cycle or the onboarding process, that the tech people are quite interested in the technology, but the actual users, they’re interested in the application and the benefits that it provides. They don’t care about the underlying technology. That makes sense.
Brett
That does make sense. How about the education, the marketing, the sales? What’s the philosophy? There maybe just a more simple way to ask that. What’s the marketing philosophy and approach?
Steve Pomfret
Oh God, we change this all the time. I think it’s probably typical of creating a category. The education is like paramount, it’s super important. So we’ve tried different things and it hasn’t worked or we thought it was working, then you switch and try other things. I’m going to say it’s really tough and you need a lot of time to do it. And we’re still changing it frequently now. We’re still changing our messaging all the time. We’re only really learning from the customers we have. So it’s a bit of a chicken and egg. It’s like if you’re starting from scratch, it’s like you don’t necessarily know what the best messaging or the best marketing approach is. And only then when you start getting some customers and you get their feedback and then it just goes into that big circle which is still happening now.
Steve Pomfret
And it will continue to happen, I’m sure.
Brett
When it comes to the market category, is it signatory management or how do you think about the category that you’re in today?
Steve Pomfret
That really is a good question. So it started off as signatory management. As it turns out, this is like a broad umbrella term and we have learned that there’s different kind of subcategories. So signatory management is more of a kind of an entity. It comes under the legal counsel and company secretary kind of area and is more operational. But the big thing for us now is more in the US you call it authorized cyanos in the UK, bank mandates. So it’s from treasury departments that have to share their employees details on who can do what on behalf of the organization with their banks. So that’s the real big thing for us. There’s also authorized traders. So within the finance world and the commodities world, the trading floors after provide registers to each other of who can trade and what they can trade.
Steve Pomfret
And this is typically not within your exchange traded stuff. It’s more like OTC over the counter trading, which is kind of more bespoke.
Brett
And off exchange and is signatory management. Is that a line item that a lot of these financial institutions, these traders, these banks are already going to have, or are you working to try to convince them to create that line items?
Steve Pomfret
No, no, they all have it. They all have it and they all need it. Only in Hong Kong is it actually regulated. At the moment, but the regulators are looking to make the management of it a much more monitored thing. But at the moment everyone has to do it, but there is no tool to do it. So they use like Excel and word, literally just to store registers of who can do what, authorize signatories. So I guess I’m overconfidently maybe saying that up until now there hasn’t been a tool to properly manage, a fit for purpose tool to properly manage and share this information, which is what?
Brett
Why do you think that is?
Steve Pomfret
So we’ve learned that banks and large corporates have tried to build their own databases to do that, and then they offer their counterparts to actually have access to view their internal databases. Now financial institutions do not want to go through firewalls and have access to other people’s counterparts internal databases or files. So there isn’t really like internally they can manage them like on their own fit for purpose database, but there is no sharing mechanism. So this doesn’t really help them. They still need to convert it into documents that they actually email via PDF. So one of the problems that they have is actually updating and sharing those. So for example, if somebody leaves an organization, they would need to update the database, but then they would need to redistribute that to all of their counterparts.
Steve Pomfret
So I used to work at Deutsche bank and they did this once a quarter. So they would email like in one department that I worked in within the UK, they would have to email a thousand of the banking counterparts whenever they updated it. And you can’t do that on a daily basis by emailing PDF’s.
Brett
You mentioned Hong Kong there and there’s regulation there. Now, do you anticipate there’s going to be more regulation in the US, in the UK and Europe?
Steve Pomfret
Absolutely. So we have conversations with the FCA in the UK who are looking at this. All of the regulators are looking at new technology and what is available to be able to, I guess like preempt how the regulations will change. And when there’s tools on the market that enable companies to be able to have better control and manage things more closely, then they kind of use that as a driver to change some of the regulations. At the moment they’re less strict because you end up like hamstringing the businesses because it makes it too much of an administrative burden to be that tight on like managing things like this.
Brett
What’s the customer base look like? Is it mostly in the UK? Is it split between UK and us?
Steve Pomfret
So it started offshore locations. Trust companies and corporate service providers were our initial customers. Then went into more finance. Hedge funds. We have hedge funds in the US and in the UK. Then Switzerland became a bit of a hotspot for us and now the US. So we have an increasing amount of customers in the US and it’s horizontal. So we have oil companies as customers, tech companies, now public companies. So it’s kind of geography agnostic. And I guess our growth so far has just purely been kind of organic. But we in the last few months have been focusing more on the US, obviously, because that’s like the biggest market with the biggest demand.
Brett
Do you find that the messages have to change depending on who you’re speaking to? So if you’re speaking to someone from an oil company versus a hedge fund, is that a completely different message or are they all experiencing the same problem? So the messaging doesn’t have to change?
Steve Pomfret
So the messaging changes more for the geography and the size of the company and the area within the company that you’re going to. So, for example, if you take a big oil company that’s based in the Middle east and you’re selling trader lists, for example, that’s going to be exactly the same as like a smaller hedge fund in the US, treasury departments. In large corporations, the messaging is pretty much exactly the same. Like, doesn’t matter what industry it’s in. In fact, it doesn’t matter what geography it’s in, but it does differ and we do have to. It’s like the typical marketing Personas. Who are you selling to? Depending on the size of the company, depending on the area, etcetera.
Brett
To date, what do you think has been the most important go to market decision that you’ve made.
Steve Pomfret
To date? We have kind of an outburst found a pipeline generation machine which works, which is kind of like a numbers game. We’re fortunate enough, we’re pretty much following similar to the tableau model. We’re lucky enough to have an advisor from that area, from there. So it’s like, I think it’s because the market is so broad and actually. Sorry, can we stop that and redo that bit? It’s not a thing.
Brett
Yeah, no problem. Where do you want to begin with that question?
Steve Pomfret
I think you said, what was the most important go to market?
Brett
Oh, okay. From the top. Perfect. Let me ask that again.
Steve Pomfret
Yeah.
Brett
And from a go to market perspective, what’s been the most important decision that you’ve made to date?
Steve Pomfret
So it’s our direct outbound sales pipeline generation. I’m going to call it a machine that we have, which is, it’s like a numbers game. So we have a strict process in place, and we hit certain markets.
Brett
We.
Steve Pomfret
Get Personas, and we do as much of it as we can with the amount of employees that we’ve got. And the sales output is pretty much a function of the size of that team. And we have taken that model from tableau, where we have an advisor. And obviously tableau were amazing at just covering as the broader market as possible.
Brett
Being a Founder is often a glamorous thing. If you just at least look at the media, it looks so fun, it looks so cool. It looks like you just get rich very quick. But I know from speaking with other founders that’s not the case. There’s a lot of dark moments, there’s some painful moments. What’s the darkest moment or maybe a low point that you’ve experienced so far in building the company?
Steve Pomfret
Yeah, I certainly agree with you, though. I don’t think there’s anything glamorous about being a Founder until probably you’ve exited. This is probably going to be similar to what most people say, but when you’ve only got, like, a couple of months of Runway left, and then you’re just trying to, like, fundraise, and then you have these unpredicted without going into detail, one particular instance where there was, you know, you can’t call it bit of bad luck, bit of a bad decision, and it feels like you’re just at the bottom of a hole that you can’t get out of. But I think that’s pretty common for most founders.
Brett
How’d you navigate that? How’d you see that through?
Steve Pomfret
We’re really lucky. We’ve got an amazing board of directors who are some of the earlier investors who have all been there and done it. They’re all, like, in financial technology, there’s three of them who have very experienced and have been very supportive. So without them, I mean, God knows what would have happened.
Brett
As I mentioned there in the intro, you’ve raised 8 million to date. What have you learned about fundraising throughout this journey?
Steve Pomfret
I’d say fundraising was completely new to me, and I didn’t really have that much advice on it. But it’s quite clear that just being really honest, when you’re pitching and you’re meeting potential investors, seemingly the ones that we have, they like you for who you are and how you offer it, which makes it really easy for you to work with them and then, and get follow on funding as well. So if I would advise anyone with regards to funding, it’s one of the most important things is to get investors that are going to help and support you. So therefore, you really need to be able to get on with them. You need to be aligned.
Steve Pomfret
And in order to be aligned, the best thing is just to be completely straight up, honest and open, and then you can see which ones that you actually get on with and who you can work with. I think that’s the most important thing.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision here?
Steve Pomfret
Okay, so at the moment we’ve been doing direct B2B outbound sales. That’s where we get 80% of our revenue from. Now we have significant interest from channel partnerships that can be banks, big four, other large tech companies. We’ve been talking, they’ve been interested in some time, for some time, but now we’re actually ready for it and we’re beginning to have formal discussions. This is where we see the hyper growth coming from because they can hit the market significantly quicker and at scale for us. So within the next few years, I’m pretty excited. As soon as we start having these channel partnerships and large enterprise deals, then this should be where hopefully we can take the market and get to that winner take all position.
Brett
Amazing. Love it. All right, we are up on time, so we’re going to have to wrap here and we’ll have to let you get some sleep before we do. If there’s any founders that are listening in that want to follow along with your journey, where should they go?
Steve Pomfret
They can contact me on LinkedIn or direct through the website. You know, we have a contact page there, so a lot of people contact us whether it’s regard to sales or just interested, or you can email me at steve@cygnetise.com dot amazing.
Brett
Steve, thanks so much. Really appreciate it.
Steve Pomfret
Thanks very much indeed, Brett. Really, really appreciate the interview.
Brett
All right, that was awesome. You’re a great guest.
Steve Pomfret
Okay, thanks a lot, Brett.
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