Marco Tricarico is here to dispel your idea about the media-cherished clichè of the inexperienced university dropout founding a successful startup from its garage. He is basically quite the opposite.
Marco started as a professional athlete; he got his masters from prestigious universities – MSc at Luiss Guido Carli in Rome and an MBA at Bocconi in Milan – and various experiences in the corporate world – corporate finance at Deloitte, strategic consulting at Strategy& (PwC) – before to go full time on Switcho. Based in Milan, the fintech startup was founded by Marco together with Redi Vyshka and Francesco Laffi, to help people better manage their bills and save money.
Here we talk about his background, Switcho’s internal valuation model, open banking, fundraising, international expansion and the evolution of the Italian startup ecosystem. Enjoy!
From professional athlete to the Big Four before becoming a startup founder. Could you give us a brief introduction about yourself?
I am a professional with about 12 years of experience in different fields. The first part of my life was dedicated to sports (national team and world u-17 champion of fencing). Then I worked in corporate finance for 4-5 years, completed an MBA in 2016, and did another 2 years in a strategy consulting firm where I met my “partner in crime”, Redi (Switcho‘s co-founder) before starting with our venture. I am currently CEO of the company, dealing mainly with strategic and financial planning, marketing, product and fintech partnership.
I was very lucky to have such a wide range of experiences. I’ve always been looking for challenges in my life (probably because of my competitive sports experience). Every time I felt slowing down the pace of my activities or learning process, I looked to make a move to begin running again. The most challenging experience has been starting my own company and growing it so far.
Where did the idea for Switcho come from?
To be honest, we had a quite structured approach in selecting the idea. We wanted to start up a new venture in fintech, and one of the most important trends in 2019 was open banking: we soon realized the lack of a solution to manage personal finance with a sprinkle of action (the saving action), and that’s why we came up with Switcho.
At the moment, how do you measure success? What are your metrics (both at personal and company levels)?
At a company level, we look at the classic business metrics (revenues, contribution margins, EBITDA, client acquisition cost etc.), which remain very important. We are pretty practical, and we never sit on thinking about vanity metrics. Besides that, there is a number of more qualitative/long-term value-creating metrics such as the number of users, customer retention and lifetime value, customer engagement and customers feedbacks, of course.
We also developed an internal valuation model for people, accounting for 3 different pillars: hard skills, soft skills and fit to company culture.
Personally, in these last years, I had much less attention from the organization on my personal growth, so I had to think about where I could improve my skills. I mainly tried to smooth some aspects of my behaviour coming out when under stress. How? First of all, by understanding my limits in taking on additional stress and taking time for myself to relax and think about the next moves in a less noisy environment.
Last year was particularly tough for the fintech ecosystem. However, the situation in Italy has been quite different, with record-high investments and international VCs starting to look at local startups with more interest. Do you think it’s just because of the Satispay and Scalapay mega-rounds, or are we finally at a turning point?
I think the Italian startup ecosystem is growing, but it is definitely still too small if compared to other countries (even in proportion to its GDP). This means that it is very competitive to raise money, and it’s still quite challenging. I saw many other cases of well-prepared startups with solid business plans unable to raise money – this is a problem for the whole country because it means that valuable innovative companies cannot grow. We also see a lot of foreign startups raising big rounds outside of Italy and opening branches in Italy, damaging excellent local startups that, instead, could not raise those amounts in Italy.
Success cases such as Satispay and Scalapay are a good injection of confidence. Nonetheless, in the last 6 months, we have seen a capital market crisis, with a lot of companies’ valuation dropping, a lot of pressure on margins and economic sustainability, and many tech companies undertaking massive people layoffs. This means that startups also need to rethink their target, now not only in terms of growth but also in terms of profitability.
You set up operations in Milan at a time when many Italian fintech founders decided instead to do it in London or other places where the market was already more developed. From your viewpoint, how is the Italian startup ecosystem evolving over time?
Honestly, it was quite a spontaneous choice to stay in Italy, where our home and network are. I think the Italian ecosystem, besides the financing / size problems, is growing well, and Milan is the place to be if you want to make things happen, as it’s offering the best opportunities.
We have also been helped in connecting to corporates such as banks to develop partnerships: we have seen increasing interest from traditional corporates to get in touch with us, which is a really good signal. In general, the ecosystem in terms of people and relations could also be a bit noisy, and you need to be able to navigate it without being too distracted from the shiny superficial narrative that might populate it sometimes, remaining focused on your goals.
Are there any current plans or strategies to expand internationally? What are the primary challenges you anticipate in expanding the business to a global market?
The plan is to do it once we reach profitability in Italy. Managing the complexity of expanding into another country is very high. You need to have a rock-solid foundation in the management team and the opportunity to scale the business without many additional complexities. Otherwise, it becomes really hard, and the risk of losing control, quality and money is very high.