NomadX Live Interview with Stefano Solferini
🔥NomadX Live Interview with Stefano Solferini, Finance Guru, Entrepreneur, Investor, Part-time CFO, Digital Nomad and Global traveler!🔥
👉🏼 Stef is the founder of the Marco Polo Group. www.marcopologroup.net . He is an advisor to business owners and CEOs worldwide on how to 10Xs the value of their business by helping them get stronger, get scaled, get funded, and get sold.
✅ He has been an entrepreneur, built his start-up in funds management from a dream to getting $25m in funding from a global hedge fund with just a PowerPoint, to creating a business worldwide. He has learned the best business lessons from working with excellent people in this field as a CEO to a private equity group, a fund manager, an investment banker to brilliant entrepreneurs, and a strategy consultant at the big end of town. His last corporate role was to head up investments, ventures, and acquisitions, buying digital and tech businesses, for Accenture as the Regional Head for the Asia Pacific.
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We did it one minute late. So apologies, everyone.
It’s awesome, man. We’re super psyched to have you. This is going to be an amazing event. Stef has, as I was saying before, amazing experience, he’s traveled the world. He speaks five languages. And at the moment he’s in the South of Portugal. So I’ve seen Stef a little bit over the last several months during the pandemic. Tell us a little bit Stef. Where are you at the moment? What’s happening?
I’m in Portimao. So I am in the Algarve, I’m in the south of Algarve. It’s a very beautiful part of the world. It’s got some amazing beaches, beautiful rock faces. Unfortunately it’s all locked down at the moment, but it is a stunning part of the world. I love it. People are really nice. 300 days of sun, a year, great quality of life, very peaceful and highly recommended.
And really good for digital nomads.
You look great, man.
Like all of Portugal.
I think you look like you’ve lost at least 10 pounds since I last saw you. And you’re looking really tan and in shape. This lifestyle seems to be suiting you well.
Yeah, in fact, I’ve lost 30 pounds since I left corporate life. I could recommend this lifestyle more to all of you out there who want to become digital nomads. I think it’s a wonderful way of getting the most important thing out of life, which is your choice. And if you can find a way to fund it, you can have it all. And it’s never too late to start. You can do it in your 50s even like an old man like me.
Yeah. We all seem so old while actually we’re so young Stef. We’ve got so much time ahead of ourselves.
Right. We’re kids.
So we’ve got to pace ourselves, man. It’s all about the pacing ourselves and enjoying this life. So I hear you’ve been enjoying life quite a bit. You look very relaxed. Tell us a bit about this nomad lifestyle. Tell us a bit about some ideas you have related to financing the lifestyle. And what do you suggest for, a lot of people here are entrepreneurs. They’ve started their own companies. Some have been affected by this pandemic, some are doing great, some are in e-commerce, some are more consultants. So maybe just give us some tips from your perspective, with all your years of experience and financing companies and living the lifestyle.
Sure. So I think there’s a couple of things. First of all, in terms of when you start the digital nomad lifestyle, there’s a few things that you should get right, financially and operationally, that I wish I’d known. So first of all, I think you’ve got to make sure you’ve got at least six months cashflow runway. And I would conservatively estimate if you’re a modest digital nomad, at least have US$2,000 per month as an absolute baseline. So six months of that before you leave. If you can have your business set up and running before you start on this journey, because you’re trying to set this up and not have it while you’re doing this journey is actually quite disrupting and very difficult. But it’s doable. But if you can have a base and have it all humming and going, there’re people that I’ve seen done it well. They may be in Australia, America, wherever, when they started it. And then they got the minimum viable product and everything was working, and then they took off, and they’ve had a wonderful lifestyle. So that’s the second tip I would give.
The third tip is get all your basics right with your business. So when you do this digital nomad
thing, what I found out is that the modern world is not equipped for people who are doing geo arbitrage or they’re living in one country, they’re getting money from another, they may have residents in a third, the banks and everything, their head explodes when you do that. Right? So what you should do is you should have things all set up wherever you start. And probably keep that. Because I got rid of everything and I started with new place and stuff even though I’m a finance professional. The world finds it very hard to process and cope, and with compliance and all of that, it’s difficult. So it’s doable, but I wouldn’t recommend this. I recommend, get all your ducks lined up before. Don’t change bank accounts, don’t do these things, don’t try and optimize tax because unless you’re making a million bucks a year from your
thing, don’t even think about that. Just get it to work.
Basic things like Stripe payments, getting that machine to work, you’ll be amazed what
happened. What happened to me is that, if you have cross border accounts, you’d find that Stripe wouldn’t accept US dollars in another country like in Singapore, whatever. It was really complicated.
Now the good news is that COVID has accelerated that world about five years. So a lot of the problems that I was having even a year ago, I’m not having logistically with all these finance things, right? And then I would recommend people to get virtual banking solutions set up from day one. So things like TransferWise are really important. Things like having digital wallets set up already, and do that before you leave. Because again, it gets very hard to get approval for those things if you don’t have a permanent place, right? I mean-
Just for the rookies out there, what is a TransferWise, Revolut? Maybe just give us a little insight
because these are newer companies. I know they’ve been growing a lot with some huge valuations, but maybe just tell us a bit because some of the newbies may not be as familiar with them.
… Sure. So traditional banks, and traditional cards, and all of that are very expensive. Okay. When you’re a digital nomad, it is too expensive. It’s very inefficient. So some smart people from the finance world, who manage with technology, have found ways to accommodate people like us who may have bank accounts all over the world, may have this geo arbitrage going on and don’t want to pay exorbitant fees.
Because PayPal and all these other things are actually expensive. And bank fees, telegraphic transfers are extremely expensive. So TransferWise allows you to change currencies very, very cheaply. It’s fantastic. It’s an app. You have it on your phone, and so you can set up bank accounts. So you can have a US bank account, a Europe bank account, a UK bank account. And it happens like that. Now that is gold, right?
Otherwise you will have to fly into the country itself, try and set the bank account and you need
to have a permanent address. I mean, with COVID, it would just be impossible. One, TransferWise is very good for managing different accounts. And if you have to convert one currency from, say, US dollars to euros, from euros to Australian dollars, whatever, the fee that they charge is very, very low. And you can do it instantaneously. And you can actually withdraw money from an ATM with a TransferWise card. To do that, very low cost. The same thing for Revolut, only Revolut is not so much on the transfer payments. It’s like an ATM card and you can use it… When I was living in Malta where it’s widely adopted, you could just ping money to people because everyone uses Revolut. So if you’re 35 or under, they all know about Revolut, right? So they just transfer money. It’s really, really good. It’s a very cost effective way. Because again, if you have… I come from Australia, right, which is a very expensive place when it comes to all these financial services. Every time I would have to take money out of an ATM there, it would be like $3, $5, right. And then all that adds up. So what you got to do is you’ve got to get lean and all of these things you can set up before you leave. So foreign exchange, ATM card, Revolut. Don’t go for your typical big banks, go for these tech innovators from FinTech companies that are wonderful. They do this very well. Look, there’s a whole host of them. But the main thing is get your business set up from the start, right? Get it ready and get a minimum viable product, get some cash buffer, get your basic banking right, which is FX and banking. That’s the basics. Then you’ve got to also work with a good laptop, right.
Some of the professions which are very successful to digital nomads, you know them better than me, but it’s being in the digital world marketing, or they’ll be doing drop shipping, or they’ll be working in Amazon, or they’re freelancers, or their consultants, or their traders, whatever they are, make sure that you’ve got all your software and everything set up before you leave. For example, I do invest in clearly. It was very difficult to set up a trading accounts. When you live in one country, you have a residence in the other and you may be investing in another, it’s a nightmare, right. So get it all sorted out before you leave because if you do that, it’s going to be easy, right.
Look, to have it ready, let’s talk about practical stuff, to have a really good, robust laptop, right?
So I’ve seen people go with these ultra thin laptops. And if you’re in Indonesia or wherever, it just breaks or melts down and stuff. So have a laptop that is not too heavy, but very robust because these laptops get knocked around quite a lot when you’re a digital. A great tip for you, I’m getting quite granular here, is something called a solace. The internet battery. There’s this orange Unical solace, which guarantees that you get internet, even when all around you shuts down. Now I’ve used that so often. I got it in Singapore, but it’s global. You can get it sent to you on your mailing address. It’s really, really important because you will find that internet is very variable wherever you are. And that’s just a great backstop, right? That’s definitely a really good tip.
What about the insurances, Stef, are there…?
All my words. Yes. Good point. So here we go, insurance. Two things, health insurance is really tricky, right? Because once you start traveling around the world, it becomes very expensive. For example, the health insurance I had in Australia didn’t become really valid once I started moving around. It’s a lot more expensive, right. So you’ve got to make that decision very wisely and make sure that it’s global.
Actually when I started my journey, I consulted you on this subject. I remember you gave me some great tips. I can’t remember. There was [inaudible 00:13:11], there was a couple of others. But health insurance is a must, right? Because you cannot realize, especially now, right? You’ve got to get health insurance. And then you have to get insurance for your belongings and your things, your laptop, and all the things that really matter.
So make sure you get an insurance policy for that because we’ve had instances where our
laptops got stolen or broke down and that really helped. And while we’re at it, if that happens,
absolutely make sure that all your data is cloud-based. So don’t have anything on your laptop that if you lost a laptop, would jeopardize your business. Absolutely key. I have everything up on Dropbox, G-Drive, or things like that.
Cool, man. Well, I think those are some awesome piece of advice. I think a lot of times people are just anxious to get out there or they haven’t thought it through completely. And then they run into these issues. And so I think it’s important. Take Stef’s advice, really think this through, and make sure you’ve got six months of operating cash. You’ve got your bank accounts, credit cards, ways to transfer money super easily, the right insurance policies, the right equipment to use. Those are awesome pieces of advice, Stef. I’d love to learn a little bit more. You’ve got an amazing background in finance, you’ve invested in a lot of companies. Right now, what are you up to at the moment? I know you’ve done a little bit of a shift as you’re making a little bit of a transition. What is it that you’re up to these days? What’s keeping you busy?
So I have advised very large company CEOs on my life and before I used to run the corporate
development and NMA Department for Accenture. We were investing about one and a half billion dollars of cash every year buying businesses. I’ve done a lot of investments. But the stock market’s really crazy now, guys, right? So be very careful. We are at all time high valuations where the earnings future of companies is the worst I’ve seen in years. We’ve got this very artificial increase in the stock market due to the fed just pumping into it. And it’s like somebody on steroids getting pumped. But it’s not reflecting reality. And actually it’s higher in terms of the valuations now than after 1999. It’s actually higher. So for anyone who is a rational investor, the stock market is totally crazy now, right? So I can’t justify it. But if you’re a punter and you’re a retail investor, you’re playing with fire because corrections will come. So what I do is I advise now CEOs all over the world of, what I call mid- market companies. These are $5 million to $500 million companies. I help these CEOs to help them to grow their business, get it stronger, get it scaled, get it funded, and get it sold. So if you’re a $50 million
business and you’re looking to become a $500 or $600 million business, how’d you that in the period of five to 10 years. If you’re a million dollar business and you want to get to $10 million business valuation, and you want to know how to do that, what are the key skills you’ve got to learn to do that. Because as you know Dave very well, so Dave is a master at this, by the way, right. He’s done it way better than I… He’s basically thought of key pains that clients have, he’s find ways of addressing them. He’s built scalable businesses and he’s exited them multiple times.
So I help CEOs to do that, and founders, especially for people who it’s their first time, they may
be in their 30s, late 20s, and they’re really trying to work out how to do this. And they haven’t had the benefits that Dave has had of having done it many times. Because he’s got 20 years doing this stuff. So helping them. But then I help typically a lot of CEOs who are in there. So I’ve got the tech clients, these are payments companies, the internet companies, cybersecurity. They’re all wanting to become unicorns, right? And there’s go like, how did it become a unicorn, right. And teaching them that just running and trying to get venture capital before you prove that you’ve got business that actually addresses a unique pain and there’s got a robust business model is a dream, right.
And then also that raising venture capital is not the best route most of the times. I mean, some
of the greatest businesses in the world, like [inaudible 00:17:51], it’s a $46 billion company in tech. In Australia that was totally bootstrapped, credit cards and cash flow. Why would you give away part of the apple when you can keep it yourself? Right. So I’ve been doing that and now I advise these companies.
Because I think so many entrepreneurs, they read the books and a lot of times
when you read the books, they say, “You go get funding, you get the BC or you get some angels.” And that’s what everyone thinks success means. Once they get that BC check, they they’ve made it and they’re the next unicorn. But I think as we all know, it’s quite the opposite. You’ve sold your soul to the devil. Few of those companies actually make it. Maybe just give us a couple of pointers. There’s some options out there. It doesn’t have to be equity, you’ve got debt, you’ve revenue financing, right? There’s some new options on the table these days.
… So Dave is absolutely correct because he’s been around the block, right? So for me, getting money from external bodies is the last resource, right? Because the day that you take money from someone else is the day that you’ve sold your company. It doesn’t matter even if they got 10%, right. And you will start compromising. You have to compromise, and compromise, and compromise. And they can completely derail your business because it’s your baby, right, that you’ve tried to build and thing. And then they come in and they’re trying to compartmentalize it and take it to a completely different direction sometimes, and maybe in conflict. Remember, to them, you’re just one of many companies.
You just a portfolio. They’re all salary people and they’re making a very nice living. Whereas for you, you’ve only got one baby and it’s your life. And you’ve usually put all your money in and it’s a very stressful situation. So you don’t want to get derailed.
So what are the other options? One, and this is my favorite one, get it from your customers.
What does that mean? Well, if you’ve got a really great product, focus, focus, focus, focus, focus on addressing the unique pain points, scaling it up, and getting that cash flow to fund operations. And don’t dilute. Because the more you prove you’ve got a minimum viable product, the more the strength of those cash flows increase, the higher your valuation becomes. The more you turn that cash into a recurrent revenue model, the higher your valuation. So why would you compromise when you’re at the most vulnerable point of your valuation? All it requires is time, and energy, and focus. And if you spend that rather than taking the short-term hit, Oh, I want to get this cash, you will benefit much, much more.
What I’ve seen is a lot of the smartest people have not taken the cash from these third parties.
They’ve done it the hard way, they’ve bootstrapped. And if it works, they’ll then take the money when they’re at two, three, 400 million, just to take some money off the table where they’ll say, Well, we’ll give you 20% for 200 million bucks. I’ll take the 200 million bucks or million bucks or whatever. And then I can look after my family and friends for the rest of my life, but I’m still running the shop. That’s one.
Second is grants. People do not use grants anywhere near as much. And they really should, whether it’s a research and development grant or government grants, instead of going around shopping in the Silicon Valley, which is actually very difficult, if you’re not part of the game, Dave, you know how hard that is, right?
I mean, it’s super difficult. I think they typically like to fund guys or women that, they’ve been successful in the past. They’ve raised money. They’ve had exits. So if you haven’t done that, unless you’re like Markn Zuckerberg or something, it’s super challenging. And so it can take up a lot of time. It becomes a big distraction. Whereas like you said, instead of focusing on raising the money, you’re focusing on generating client revenue, that creates a lot more value for the company. And if you think about it, every dollar of client revenue might be worth 10 in valuation. So if you’ve got a million dollar SAS company, that’s probably worth at least 10 to 20 million. So every dollar in revenue you bring on is worth $10 in valuation. That’s a little motivation to start getting some clients onboard.
Correct. Look, this is the bottom line with building a business, it’s going to hurt. Do you want to get freedom in life? You want to get independence? You want to have control over your life the way that Dave has? It hurts. It hurts a lot, right? And if you can just stick with the pain for a short while, a number of years, you will come out the other end and you will have freedom for the rest of your life. So the question is, are you willing to take that trade? Or are you going to be like everyone else that thinks, Oh yeah, I’m just going to build this unicorn and get some funding. But the reality is that most of these businesses blow up. And the reality is 99% of the people who are playing that game don’t know what they’re doing.
They’re going to get absolutely outmaneuvered by these players, right? And so I’m very
passionate about teaching entrepreneurs, that do it old school. The greatest businesses in the world were not funded by external people. They were funded by cashflow. There’s a great book by a London business school professor called Professor Collins on customer funded businesses. It’s a seminal piece of work that I did when I was doing my MBA, which shows that the best businesses in the world fund their cashflow initially in the first year from internal cash from their clients. And what better validation is there for your business model? So don’t take the shortcut if you can help it or else get grants. And then if you’re going to go down the route, one year a bit more mature, get that, all right. So that happens is once you’ve got reliable cashflow, because you’ve proved that you’ve got something that people actually are willing to pay money for, you’ll find that banks will lend you money, right? And why not take some debt at a time when interest rates are at an all time low, rather than dilute yourself with equity. And you’ll find that past this liquidation phase that we are going to go ahead in the next year, the banks will want to lend more and more to people who are very liquid. And now who are performing lots. So people who are, they’ve got a good business model, will get offered more money from the banks to make acquisitions.
We got a lot on the finance side. And I think for anyone that has questions related to finance, just drop them in the comments, Stef will get back to you. If you have any interest in talking to Stef directly, just private message him. He’s very responsive on Facebook. He’ll get back to you very quickly. If you guys want to do a consultation with him. Before we were trying to keep these to a certain length, I wanted to know a little bit about your travel experiences, Stef. Because you’ve done a lot of traveling throughout the world. Maybe tell us about some of the hotspots that you visited, where you really like to go to, where you think are great nomad destinations for our group to know about that they might not have thought of before. I know you’ve got a lot of experience.
Yeah. Look, I’ve traveled in about 120 countries. I’ve lived in Asia, Europe, and the US. I really like Portugal. I think it’s a great place to do all this stuff. Clearly there’s parts of Southeast Asia that are really great for digital nomads. And I don’t mean to spell it. I mean, places like Kuala Lumpur, Malaysia, I think is fantastic. It’s got a great cost of living, the internet works really great. It’s fantastic. There’s a whole bunch of places in Europe that are just delightful, like Croatia. I mean, it’s just amazing. I’ve loved living in Spain. I was living in Valencia. I had a great time there. I enjoyed Malta. Malta has got fantastic internet and it’s a really beautiful stunning place. There’s many places in Eastern Europe that are now really up and coming. There’s a buzzing scene there. The cost of living is low, the internet is great and they’re creating big things. It’s very hard to be in Lisbon if you’re really, really into being a digital nomad. I mean, I met David in Lisbon and I got to tell you, NomadX runs some awesome events, right, which you will have to attend when this COVID things comes down. Lisbon is exceptional for digital nomad’s situation, Portuguese in general. But also Central America is fabulous. Costa Rica, all those countries around there that you know well, Dave. And Mexico, I think Mexico’s great. You’ve had some of the people that have worked for you that I’ve lived there, I know. It’s a great place to be a digital nomad. But you can live a wonderful life where the cost of living is much lower, the pressure’s off, it’s not pretentious. If it’s got good internet and you can earn US dollars or euros, why would you not do it?
Exactly. Yeah. Especially coming off this pandemic, we’re going to see a lot of people that are looking to adapt to this new lifestyle at least try it out maybe for a month or two, head home, and regroup, like you said. Because I think sometimes you can try out the lifestyle, go out, go away for a month or two, come home and get a better taste of what it’s like, maybe what you need while you’re on the road, how much money it costs you. I have some friends, they went away, went to a visa, not only lasted so long, but for most of the nomads they are minimalists, they’re traveling with their backpacks, they’re working from their computers. It’s really cool, awesome lifestyle. And that’s what we’re trying to share with this community. I guess before we wrap things up here, Stef, is there anything you’d like to leave for the audience here? Any final tips, or tricks, or suggestions, we’d love to hear from you.
Yes. So the first one is, it is a really fabulous way of living and is very addictive, but it can be very draining if you’re not careful, right? So the best piece of advice Dave gave me when I started this journey was to do slow travel, right? Which means go in a place for three, six months sometimes and really get a feel for it. Initially what happens is people just go way too much. They go and do way too many countries and speed it a lot. And you’ll find that it’s quite draining after a while. And to run a business and to constantly have to get your bearings around your surroundings, I don’t think is very practical, nor do you get to enjoy the best thing about this digital nomad, which is to get to really know deeply the culture and the people. So I would say to people, take your time when you travel to places, take your time, get to enjoy and stay a bit longer. Use things like the NomadX platform to stay several months. Don’t do a week here and a week there. I don’t think you’re going to get much out of it. Would that be fair, Dave?
Yeah. I think that’s right on the mark. I think depending on how much time you have to travel, the slower you do it, the easier it’s going to be professionally. I think the more connections you’re going to make in each city that you go to. We had a chance to even meeting some local people. And then the fun thing is even returning to some of these places after you’ve been traveling around for a while, because it almost feels like home in a way and you feel a lot more comfortable, you got your connections. And so Jen and I, for us is we were traveling the world, it was really fun to go back to places like Morocco or Portugal, the places that we thought were just totally epic. And so we liked to do that. Although that prevents us from visiting new places, it is quite fun. They’ve turned to places you’ve been to. Now you’ve become really like a global citizen. You’re not just visiting as a tourist, but you’re more returning as a local.
Yeah. Look, the bottom line is that the richness of this lifestyle will give you in terms of your life
experiences is very hard to beat because you can become a truly global citizen and get to know cultures deeply. And for me, that is one of the biggest gifts of my life. I’ll give up all the finance things that I ever did for that. It’s a wonderful way of being, it’s a great level. And I think it makes you into a better human being. It teaches you to deal with ambiguity, and it teaches you to be a lot more tolerant and compassionate to others. So I’m a huge fan of [inaudible 00:30:28] Dave and NomadX for really showing me how to do it in a much less painful way. Because I was pretty clueless when I started this. And Dave was my mentor. I highly recommend everything that they do cause I think it’s a great platform.
Thank you so much, Stef. I just want to thank you for the interview today. It was amazing. Any of you all out there that want to connect with Stef, contact with them directly on Facebook, he’s more than happy to offer advice. He’s good at giving great advice to us and he’s a real guru in the financial space. So wejust wanted to thank you, Stef, for joining us today. I’m glad we can make this work out. And we look forward to catching up with you very soon and some future Facebook lives as well. So wishing you all the best and looking forward to catching up soon. Thank you.
Thank you, Dave. And thank you to the nomad community and keep on rocking everyone.
NomadX is a European accommodation marketplace for remote work travelers and digital nomads with over 11k listings across 18 countries with stays for 2 weeks to 12 months and average stays of 3 months. The business was started to meet the needs of the rapidly growing global community of location-independent remote workers, or “Digital Nomads”.
As Digital Nomads ourselves, we know what the market is looking for: trusted, affordable accommodations in highly-attractive locations worldwide at 50% less than AirBNB. We also run the popular NomadX Private Travel Community where we share hacks, tips & special offers to our community members which can be found @ https://m.facebook.com/groups/nomadx/
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ABOUT THE AUTHOR
Dave Williams is the CEO and Co-founder of NOMADX with his base in Lisbon, Portugal. Dave is a US pioneer in the digital marketing, advertising, and ad tech industries as a serial digital entrepreneur over the past 20+ years with multiple exits in the early formative stages of the search engine marketing, social media, and ad tech industries.