The Real Deal With SOLO Founder & CEO Georgina Merhom

StartupScene’s ‘The Real Deal’ asks some of the region’s most successful entrepreneurs to share their stories, passions, struggles and personal thoughts on the workings of the ecosystem and their own entrepreneurial journeys. This is a glimpse beyond the headlines, the raises and the often misleadingly tantalising veneer of the fast-track.

This week our guest writer is Georgina Merhom, founder and CEO of SOLO -  a business financial management platform founded in Egypt that currently operates in three regions. Prior to founding SOLO, Merhom was on the regulatory side of the fintech landscape. She was an investigative data analyst at Flashpoint Intelligence, where she supported governments and legislators on cases of tech-facilitated crimes, implicating major fintech players. She started her career as a researcher and then policy advisor at the G20 on non-traditional security threats and played an important role in the G7’s introduction of blockchain legislation in 2019.

This is Georgina Merhom’s REAL DEAL…

I’m an accidental entrepreneur; the pandemic coincided with a semi-quarter-life crisis (a story for another time) that keyed into a delusional idealism and a reckless amount of guts.

In June 2021, I left behind my life in New York, where I was pursuing an investigative career in cybersecurity, to build a start-up in financial technology and re-imagine a life back home in Cairo.

People would describe me as bold. That may be because I don't shy away from controversy, and when I believe in something, I do go to unimaginable lengths to fight for it. The narrative we’re all sold makes these traits sound aspirational and badass. Go against the norm. Write your own rules. Don’t give up. And never take no for an answer.

LEARNING FROM NO

Yet, surprisingly, the most important lesson I’ve learned as a founder is to be flexible, to adapt to circumstances and to recognise when you actually do need to take no for an answer. This is a kind of badass that doesn’t quite sound as sexy. It’s subtle, but as I’ve come to learn, courage doesn’t always roar.

Entrepreneurs thrive on the bravado of being disruptors and making bets on what the future will look like. I know I do. Many investors, too, contribute to this blustering ethos.

But the reality is, sometimes you’re ahead of the market. The environment is not ready. The infrastructure doesn’t exist yet. The political will to ratify new legislation is just not there. The vision you have simply cannot be implemented. And sometimes, more often than we’d like to admit, we miss the mark and make a bad bet.

The biggest mistake I made was pursuing the delusion that my resistance to a reality that didn’t align with mine was resilience in the face of adversity. I believed that “no” was a challenge to prove I was right.

THE NEW GEN OF SOLOPRENEURS

So, what actually happened? Am I just a cynical exhausted founder?

Partially. But hear me out and then decide for yourself.

During the pandemic, new and frankly strange forms of business started to emerge. Sixteen year old TikTokkers were making millions of dollars creating ten-second videos in their bedrooms.

With COVID-19 driving the massive growth of a remote workforce, young talent in the most rural areas of Egypt, Brazil, Pakistan and India were being recruited to develop products for startups in Berlin, London and San Francisco. No-code-tools were making it possible for anyone in their pyjamas to go direct-to-customer and sell digital products to a global market in a few clicks. Silicon Valley investors were investing in offshore founders they had never met.

The future of business was becoming boundless. Yet there was a major disconnect because financial institutions hadn’t caught up to these new forms of business, and this next generation of solopreneurs (which, by 2027, is estimated to make up more than 50% of the US economy) had skipped learning basic finance. I saw an opportunity to bridge the gap and become a new streamlined layer of financial translation between these stakeholders.

Of course, trying to explain this to regulators and financial institutions was a mission and a half. But having worked on the other side of the regulatory landscape for years, both at the G7 and in cybersecurity, it was a mission I was well-trained for.

After 102 pages of partnership proposals and 73 hours of meetings (I went back and counted), I finally signed a partnership agreement with the National Bank of Egypt. To their credit, they trusted me to move forward without fully understanding the segment or nature of business we were operating in. And I say ‘I’ because, at this point, I had no team.

THE BIGGER CHALLENGE

The first version of SOLO was a beta platform that enabled solopreneurs to accept invoice payments from anywhere in the world, manage their expenses, and access growth capital. In under a year, we had served 4,000+ Egyptian entrepreneurs, helping them consolidate payments, manage finances, and access growth capital through our financing network. It was – and remains in its continuing evolution – a significant success.

In the process, we interviewed hundreds of founders, solopreneurs, independent online business owners and others. We identified three main challenges that were market agnostic.

First, the reality is that most of the solopreneurs we were targeting don’t run their businesses like a business. They see their operations as a casual project. If you ask any of them about their burn rate, unit economics, runway, growth rate or break-even, most will answer, “Huh?” There’s a high level of volatility and informality in their understanding of finance.

Second, although it has become common for two parties that have never met to engage in business, there is still a lack of trust, a high rate of fraud and a need for either escrow payments or manual, on-the-ground due diligence.

Third, if any of these independent businesses applied for financing at a bank, they would be turned down. Financial institutions don’t speak their language or consider these new business models to be legitimate. As a result, they cannot access capital.

These lessons made it clear that we had only scratched the surface of the problems we had ambitiously set ourselves to solve. We knew we could help here. Yet there were so many components of the product we could not launch because of regulatory constraints. It felt as if we’d wasted the investment into a product that would never see the light of day. It was good but it was achieving so much less than it could.

FACING REALITY

By that time, I had gathered a team of 23 brilliant professionals in the US, Europe and the Middle East, and we spent a year and a half building an end-to-end management platform offering real-time financial information to business owners to allow them to make better decisions, and to give external stakeholders real-time metrics. This could include institutional banks, investors and even supply-chain participants requiring proof of liquidity.

The core of the solution was real-time consolidation of verified financial data and business intelligence metrics. All this was achievable, but it relied on a technical infrastructure referred to in fintech as ‘open banking’.

Open banking is how banks enable the sharing of financial data and access to payment processes. Much like other components of fintech infrastructure, open banking is not regulated in Egypt. There is no legislation or technical infrastructure to support its security.

To make this vision a reality, I spent an entire year pursuing it in Egypt. I presented, argued, nudged, cajoled and did everything but beg the entire universe of stakeholders to get on board. I even proposed that SOLO pay for the development of infrastructure, transfer ownership of it to the central bank, and pay (again) to licence it. My CTO in Berlin is an open banking veteran, but we’re not even in the infrastructure development business, and he and my team thought this offer I impulsively made was nuts.

Going all in, I had promised to do it all by ourselves. But the central bank wouldn’t go for it, and frankly we probably couldn’t have done it. The answer, finally, was “No.”

And that’s when I finally heard it. I had been willing to go to crazy, ridiculous lengths to make it happen. But ultimately, I had to come up for air and actually evaluate where the market was at.

EMBRACING ‘THE NO’

It can be a challenge to accept reality, and expensive.

Other founders in this ecosystem have lobbied for the past decade, educated the market and nurtured relevant stakeholders. They are the ones who have made it possible for fintech founders like me to even start in Egypt, so there’s definitely an argument to be made for playing the long game. It’s entirely possible if your investors are willing to wait ten years to see your product in the market and make a return. But if that’s not the case, how can your business survive long enough to play the long game?

Resisting the market’s response can, in reality, be not a matter of resilience or determination but at best sunk-cost-bias and at worst plain stubborn ego.

For me, taking no for an answer has been the most liberating moment of my career. I am learning that I don’t have to deploy steely determination at every turn to bend reality to my vision. I can still disrupt, but be pragmatic and fluid in my approach.

SOLO is now getting ready to launch two new products, in partnership with an American Fortune 500 enterprise (stay tuned) in 21 countries at the end of this year: SOLO One and SOLO Finance.

SOLO One is our financial management platform for businesses. SOLO Finance on the other hand is a marketplace for financial institutions (yes, banks) and businesses to connect and engage in trade financing. SOLO One is the foundational layer for SOLO Finance – and many of our future products. – because it gives external stakeholders access to previously inaccessible data. In this way, sponsors can assess the financial health of a potential supply-chain partner or debtor they would have otherwise never considered.

We are proud to be an Egyptian-born startup, and will continue to adapt our products to meet the Egyptian market where it's at, working with whatever regulation and infrastructure is available, even if it's not the experience we envision to be ideal.

That being said, we are no longer basing our product roadmap or growth trajectory on the speed of adoption in Egypt, nor are we lobbying against “No” — whether it's coming from a regulator, investor, customer, or bank. I’ll be on the first flight home when they’re ready.

Until then, in the words of Ariana Grande, “Thank you, next.”