On Building When the World Is Burning

Wonga’s beta system processed its first loan in late 2007. We opened to the market the following summer, weeks before Lehman fell.

I don’t think there’s been a worse moment, by any external measure, to be running a consumer-finance company that almost nobody had heard of. Banks that were too big to fail did exactly that. Capital evaporated, European ventures more or less shut down, and trust in traditional finance collapsed inside a single news cycle. Most of the founders I knew spent that autumn defending rather than building: cutting headcount, pulling marketing, calling investors who weren’t picking up, and asking whether they’d still be alive in March.

We did the opposite. We built faster, on the strength of the insight the company was founded on: that by 2005 there was enough data, including alternative data, for machines to make less prejudiced, more consistent and more appropriate credit decisions than humans for many financial purposes. Credit decisioning was still dominated by bank managers whose intuition, however well-meaning, was implicitly biased and structurally slow. The thesis was unfashionable, the product was unproven, and the crisis arrived two years into the build. But if the insight was right, the crisis made it more useful, not less. What we did in the eighteen months that followed shaped the company, and it has shaped how I think about backing founders ever since.

Nearly two decades and more than seventy-five first cheques later, the willingness to build through bad conditions is still the first thing I look for. The conditions of 2026 aren’t the conditions of 2008, but they have the same shape. Capital is harder to raise than it was in 2021. Trust in several categories of legacy institutions has thinned. The founders who recognise the pattern are the ones who’ll compound through the next decade.

Two lessons came out of that period, and neither was theoretical at the time. Each was the difference between a company that survived 2008 and one that didn’t.

The first lesson was about capital discipline

Capital scarcity is, in retrospect, the best operating constraint a young company can have.

When money is plentiful, the temptation is to outspend the problem. You hire ahead of demand because the next round will absorb the run-rate. You buy growth because growth is what your investors are pattern-matching their next investments to. You layer optionality on optionality, because an extra hire feels cheap next to the risk of being caught flat-footed when the market turns. Everyone agrees discipline matters but nobody has to practise it because the capital covers the difference.

When the money disappears, the whole calculation inverts. You’re forced to build unit economics that actually work, and to build them now. There’s no later, and no Series B to fix what the seed round let slip. The runway is the runway, and the company either makes the maths work inside it or it doesn’t.

Wonga grew profitably through the crisis because it had to. The people we hired in those eighteen months were the foundation of the world’s first real-time AI system in consumer credit, and by 2012, four years after market launch, the company was originating loans, decisioning them in seconds, collecting at scale, and producing revenue of around £309 million and net profit in the region of £62 million. The discipline of 2008 outlasted the conditions that created it.

The companies that didn’t learn that lesson, the ones that scaled their cost base on borrowed conviction in the easy years, are the companies whose names turn up in this decade’s down-round and recapitalisation announcements. Discipline learned late is a survival reflex.

Discipline learned early is a competitive advantage.

The second lesson was about the transfer of trust

In good times, trust accrues to incumbents. The brand does the work, because switching feels uncertain and the alternatives feel unproven.

In a crisis, trust moves, and it moves fastest in the categories where the incumbents are most exposed. In late 2008 the banks were the most exposed institutions on the planet. Customers who had spent a decade assuming their deposits were safe, and that someone sensible was deciding who got credit, watched both assumptions break inside a quarter. The willingness to try an alternative, any alternative, rose with the front-page headlines.

Wonga in that moment offered something the banks didn’t: a decision in seconds, and a price stated in cash terms up front, with the repayment amount and date fixed before anyone committed. Customers responded with their wallets and their referrals. The product had been built for a generation of people who had been quietly excluded from the formal financial system by institutions that didn’t trust them. That generation came to us, and then they told their friends.

The lesson generalises. When trust in an incumbent thins, the customer wants relief from it, not a slightly better version of it. The companies that win in that moment are offering a way out, and the product is how the customer takes it.

I watched the same thing happen at Tide, which I co-founded in 2015 and funded from the start. Tide launched in January 2017 as a digital current account for UK small businesses, a year before PSD2 took effect in the UK. The banks hadn’t lost the public’s trust the way they had in 2008, but they’d worn it down among small-business owners who were tired of waiting six weeks to open an account and being charged for the privilege. All Tide had to be was a relief from all of that, and hundreds of thousands of small businesses chose it on those terms.

Why the two go together

Discipline and trust are each a real advantage on their own. Together they’re the reason a crisis can be a window rather than something to survive.

A company built with fiscal discipline ends up a different animal from one built through abundance: tighter unit economics, deeper customer relationships, colder decision-making, a more deliberate product, and more senior operators in place of the growth-hacking specialists who flourish when capital is cheap.

I think about this often when I write cheques. The conditions for building have rarely felt easy since 2008: a financial crisis, a sovereign-debt crisis, a pandemic, a war in Europe, inflation, a collapse in venture funding and a reordering of global trade, all inside one career. Founders who wait for conditions to be benign tend to wait too long. The window closes while they’re still preparing for it to open.

Building when the world is burning comes down to recognising that capital discipline and trust transfer are exactly the advantages the incumbents lose first when conditions turn, and that a young company can pick them up cheaply if it’s willing to build while everyone else is defending. The advantage isn’t there despite the crisis. It’s there because of it. The dust road is most useful when it’s the only road open.

The companies I’ve backed since Wonga, almost without exception, were started in conditions the market called wrong. When I joined a few other angels in the first round Wise ever raised, in 2011, moving money across borders cheaply was still a fringe idea. Bitcoin, which I’ve defended in public for a decade, has been treated by the rest of the financial system first as a curiosity and then as a threat. Even to most of the people I respected, each of those looked like the wrong moment to commit. Each turned out to be the only moment that mattered, and none of it looked obvious at the time. The work is reading the conditions while they’re still bad, before the consensus arrives and while the reasonable thing still looks like waiting.