 going to talk about talent, the war for talent, the scramble to find tech talent. And what can we do to make this easier? This is a theme, I feel, that has been very apparent here at Slush. Everybody's talking about how difficult it is to hire. And we've talked about lots of different ways of doing that. But I think we're going to kind of dive deeper into that now. So thanks, everyone, for joining the panel. And we will get to the question of whether stock options. But I'd like to start really with a general question, really, to Johannes and David, because you're both running tech companies that are scaling fast. You're hiring a lot of people. So how many positions do you have open at the moment? I mean, are you finding all the people that you need? Can you put the problem sort of into perspective for us? No, hiring is something that you always think about, right? You always are hiring. And we're a smaller company in terms of employees than you are, but we have been growing rather quickly. We're now, I think, around 200 people in Stockholm. We were 20 people a year and a half ago. And we also employ a lot of clinicians. So we have more than 400 clinicians employed. And of course, as a fast growing company, hiring great talent is something that's always on your mind. And what do you find hardest to hire for? Is it software developers? Is it other positions? I mean, what's the most difficult skill to find? It is always hard to find great talent. I think we have been in a good position where we have not been so much trouble to attract great talent. And I think that one of the reasons why we are attracting a lot of great talent is also that we are a very mission-driven company. But of course, there's a talent war all across Europe. But we know, both of our companies, we are attracting a lot of great talent. And, David, what about you? How many open positions are transfer-wise right now? We're a team of 1,300 globally. We have 10 offices. And we have more than 100 openings right now. So more than 100 open? I wouldn't be surprised if we hire 1,000 people next year. And definitely, every fast growing company thrives on talent. Access to talent is the most important thing. And in my experience, it doesn't even matter that much whether we're hiring in New York, London, or Singapore. It's hard everywhere. The issues are slightly different in different places. But in the end, it's about building a machine that can do the hiring for you. That's the only way you can succeed in the long term. OK. So is there a term? Just to give you a sense for the size of the task at hand, we looked at job postings on Venture Loop and on Angelis for European VC-backed companies. And we estimate that for next year, the number of hires to be made is about 100,000 across Europe, across these companies. So that's the scale of the task ahead for European startups. So 100,000 physicians are going to need to be filled. And are we confident that we have enough people to fill them? I mean, where are they going to come from? Are the universities producing this number of people? Yeah, I think the talent is definitely there in Europe. I mean, obviously, the education system is very strong. But what we've been campaigning for at INDEX is for companies to be in a stronger position to attract these people. And to us, there are two ingredients to make great startups, to fuel the growth of startups. One is capital. And that was the topic for the past 25 years in Europe when we started with INDEX. And we feel that's been mostly solved when you see the number of scooter startups being funded. Clearly, there is capital in Europe. So that's not really a topic anymore. But the other one that's even more important to us is the talent. And if you're a startup, you have only really one way to compete against more established, profitable company. You can't align yourself on salaries because you're not profitable and your runway is limited. And the only way you can compete and attract good talent is by giving them options. And where Europe is falling short in many places across Europe is on the option side. So we've published this report, which is the second edition updated version, which explains a lot about how to set up your option plans across Europe. So giving data and making sure that it is comparable and that we'll know how much to gain, to who and what situation. But we've gone one step further this year. And we've also launched a campaign to policymakers called Not Optional. And I think we're going to have a ranking of countries across Europe on screen. And the idea is to push policymakers to make it easier for startups to grant options to their employees so that startups can compete with the Google and the Facebook and the banks and the consulting firms of this world to attract this talent that does exist. But today doesn't necessarily have the incentive to join the startups at the very early stage. Getting lower salary, they need to get better reward and upside if the startup is successful. And just to kind of recap the problem, so yes, at the moment, US companies can find it a lot easier to give their employees stock options. And we don't really have that as a tool in Europe, partly because the regimes are different all over the, in every country as well. Yeah, so I think, so we did this research last year and at exit, employees in the US tend to have about 20% ownership of the company. In Europe, it's 10%, so it's half. And the other thing is two-thirds of these options in Europe go to the senior managers versus one-third for more junior employees. It's the opposite in the US. So as a junior employee in Europe, you get a fourth or less than that you would get in the US. So obviously, the incentive is just not as strong as it would be in the valley. And some countries have really good option schemes. I mean, you see, there was the ranking. Estonia is exceptional. UK is very strong. France has some good scheme. But some countries are very low on that scale. Belgium, Germany, Spain, for example, are very poor. So what we're trying to do is at least start with getting all the countries to a high level. So let's say to the UK level, I think it's a good benchmark. And then the next step, which would be harder, will be to try to harmonize things across Europe. Because today, not only some countries are really poor, but as you said, the schemes are different in every country. And like France, for example, is very good for French companies with French employees, but not really good if you're a foreign company wanting to open a subsidiary in France. So those are the two dimensions to take into account. But let's turn this to Tavet and Johannes for a moment. I mean, are stock options something that your employees are asking you for? I mean, Tavet, I think you had some experience where people were able to realize they're stock options for the first time last year. So I mean, definitely it's a thing where a cultural Europe is behind the US. But maybe taking a step back, so I was part of the teams that build Skype, and I had stock options in Skype. And Skype did well, so I was pretty lucky to benefit from that. So to me, it was very much a no-brainer so that everybody at TransferWise should have stock options. So we started giving some out to every employee since the beginning. And for us, it's always felt important. I do think that you have to think more holistically about what is your kind of talent proposition. Stock option is one thing, what kind of works it is. There are many things which actually make a company attractive. But back on stock options, so we've been doing it since the beginning. But I've always had these nagging feelings that however much we explain to people how they work, still, some people believe in it, some people don't. But I mean, the other thing about options is you have to turn them into money eventually. And given that companies take longer to go public and so on, that becomes an issue on its own. So last year, where we had our last fundraise, we actually allowed certain people to exercise their options. So people who'd been with us for more than a couple of years were able to sell a share of their options. And they actually had a really positive impact because even the people who previously didn't quite value them said, actually, this is something real. So that's, I think, really, really good. And then I think as a kind of ecosystem, we should think about how do we make these things more common and how do we create the culture where these things can happen more frequently without companies needing to be public. And legally, this whole thing is a minefield. And it's hard to give options in Europe in different countries. But then if you're doing it globally, it's even more of a puzzle. And unfortunately, way too much money goes to lawyers for figuring it out. But you're lucky in the sense that you're in Estonia, UK, and some of these regimes where it's actually relatively easy to do this. Again, if you were going into, say, Germany, or speaking to thinking about doing something in Spain, I mean, again, how much of a sort of hindrance do you think that would be for you? To be honest, when we open a new office, I'm sure we look at it, but it's not the major criteria. Probably as a result, what can happen is that certain people might just suffer a little bit more. If the tax regime in Spain is really bad, then I actually don't even know if it would give them more options or say it would just be able to realize less. And we'd say, hey, you have to go and campaign with your government to fix your tax laws. And Johannes, is stock options something that you're talking to your employees about? Is there interest in this? And in Sweden as well, the law is changing and evolving on this. Also, since the ecosystem keeps on evolving, I think that people are now trying to understand what stock option is. And yeah, of course. And we have the, I would say it is a disadvantage of being a European company, since we have to have set up different schemes in different markets and high complexity. And in many markets, as we know, it's not super favorable for the employees and for us. But yes, we are currently now looking into how to do this, since we're now growing and setting up local entities and local offices in many European markets. And I understand that Sweden is in this kind of halfway house where it's easy to give stock options up to a certain size and then it becomes much more difficult. So again, I think one of the problems in Martin, maybe you can speak to this. It feels like it's a sort of harmonization problem in Europe, which is, we quite often have harmonization problems in Europe and all sorts of things. Stock options is one of them. But isn't it both? You have markets where it's really, really bad. And Sweden have been one of those markets up until recently where there's now some initiatives in place. And that's up until 50 employees. Now, it's fairly easy to do it. And we were far from that number when that was implemented. So it's no, for us, it's no benefit. It didn't help you at all. And then you have the harmonization problem. Like you have a lot of companies within European ambition going off the many European markets. So it's both of those problems. And in many of those markets, like it is, you could solve it, but it's highly complex. It's a lot of legal effort and a lot of complexity. And if we were a US company, that would have been easy. So of course, it's a disadvantage. And I think it's both some harmonization and it's a cultural issue. And I think we need to tackle both of them. Like the technicalities of how to do it, it needs to become easier and hopefully over time it will. But I think the other one is a cultural one. And I think for the cultural one, actually having success stories is going to be the best things that help. So I'm sure that in Sweden, so there were quite a few people who benefited from Spotify, transfer-wise, all other European iconic high-gross companies, they will create people who create some wealth as a result of it, which I think will force a cultural change to happen. Like if I look at what happened in Skype, Skype was 10 years ago and I'd say, the amount of options given in Skype was tiny, it was by far not 10%. But the impact that it had on Estonia was huge. The amount of monies that Estonia made and which went back into the ecosystem. And as a result, everybody in Estonia is going to ask for stock options now. That might not be the case in Lithuania or some other country where the ecosystem isn't that mature yet. Yeah, it's really amazing actually to see what the Skype alumni sort of did later on. And I think that's the ecosystem effect that we're kind of going to see. I think there are two things. One, I mean, there has been a service showing that companies with high entrepreneurship are faster growing, more profitable, and create more jobs. So it's a win-win for obviously the employer who can attract more talent. It's obviously a win for the employee who can get participating to the upside. And it's also a win for the country. So that's why we're pushing hard. And I think to the harmonization point, I think these are national government policies. It's not an EU level policy. So the harmonization is going to be further down in the future. I think you really need to understand that there is a real pain point for a lot of countries across Europe. Take Belgium, for example, where it's a place where basically you get, so it's not only about the tax rate. It's about even the tax timing. So in Belgium, you get taxed on the stock option the day you receive. You get granted options for something that in 90% of cases will be worth nothing. So you pay taxes upfront for something that in 90% of cases will have no value. And then if it ever gets successful, you don't even get taxed anymore. So obviously when it gets successful, people are like, these people are not paying taxes. It's such a shame what is happening. So the result is that it is unfair. Employees don't want stock options in Belgium because they don't have the cash and they don't necessarily want to take the risk. And it's just totally counterproductive. So you do have, before even harmonizing, you have a lot of countries that need to really step up their game and some large ones, like Germany, or including in that bucket. And it's not, again, it's not only about, we're not pushing for a flat tax rate or a low tax rate. It's not a question of you tax whatever you want. It's a question of admin, making it easy to do and manageable. One issue is voting rights. So for example, in Germany, you can't have a different class of shares. So every share has voting rights, which means that if you have 1,000 employees with options and they exercise their option, you've got 1,000 people to vote on every decision. So you need to go and collect physical signature for 1,000, so it just doesn't work. So there is the admin part and then there is the tax, it's not even the tax rate, it's about when you tax. If you tax people before they've received any cash, that is never gonna work, right? So I think that those are the two things we're pushing for. And just to give you a sense for why it's real is that the campaign, we launched it with 30 people who signed. So, you know, Tabet, Johannes did sign the letter when we published it. Then we have 500, and you name it, any of the top CEOs in Europe is a signatory and top BC is a signatory to that campaign. So I think the pledge and what we want to keep from this panel is really to say, policy makers, this is a real issue. There has been value being created. People want to redistribute it and be able to compete and build the next, the 100 billion dollar company from Europe. Yeah, and just for anybody in the audience who's interested, you can sign up to NotOptional. So if you check out the hashtag or NotOptional.eu, I think it's remarkable actually that you went in a week, you started with thirsty signatures and now it's gone to 500. So I mean to me that feels like it is a real indication that this is a common pain point for a lot of companies. Doesn't even have to be, I mean it's nice that we have some of the biggest company names on there but it doesn't have to necessarily be a big company. I mean it's too early yet to have feedback from the regulators but my understanding is that this isn't necessarily one of these issues that would become a big battleground. I mean it doesn't have an enormous implication in terms of government revenues or anything. I mean it's more of a, it's an administrative change that could be made relatively easily if there was a will to do it. It's high impact and it's fairly low difficulty. It's more of a question of education. Again, it is something until you had seen the transfer wise, the Spotify, the Addian, it wasn't really an issue because employees and policymakers don't really realize that the value and the strengths of options to attract talent and then create an ecosystem but now that it is, value has been created and people have started to notice. And so I totally agree. I think as I said there is a win-win-win so it should be feasible to push for it but you need to educate and you need to explain why it is so important and why this is the single most, potentially most powerful lever to really build these very large European companies. What's interesting also, sorry, I'm just gonna say that even the EU's own research though indicates that when employees, employee ownership of the company has all kinds of beneficial effects. So let's even take it out of the tech realm and the startup world for a moment but just employee ownership of companies is generally proven to be beneficial in terms of productivity, in terms of returns and all sorts of things. So you would imagine that we'd want to do something to encourage that. And I think in countries where the government is listening to tech sector is actually pretty simple. In Estonia, the prime minister hosts regular round tables with the ecosystem and these issues bubble up naturally and it's actually a great way for the governments to show that they care about it. It is relatively simple. The tax authorities typically don't have anything against it. It does take processing to go through it but it starts with having the will to do it and having the government listen to tech sector and if that's the case, then it's easy. Johanna, are you talking to the Swedish authorities about the tax issue at all or? Yeah, we are. Yeah. I think there's a willingness to change it. I think as you said, it's a matter of understanding the benefits of doing this and it's the name of the campaign. It's not optional. Like we are competing to be talented on a global scale and as you said, in order to achieve that we could build great companies from and huge companies from Europe, we need to just fix this and it is fixable in all markets. It just needs to be done. And similarly in UK, when there was a prime minister who was dealing with the country, and there were regular discussions and these things came up. So which country do you think, Martin, should it be modeled on, do you think? Is there, I mean, is Estonia the example that we could follow? I think UK is probably the more, Estonia is so unique and so ahead. I think for larger countries it's going to be difficult. There's a flat tax rate, very low tax rate, for example, which wouldn't probably suit Germany or even France. I think the UK is a really good model and I think it's a good target to hit. If everyone could just copy that, I think Europe would be in a much, much better position and then we could, she could make it pass portable so you can use the same option plan across Europe. That would be even better, but let's start with moving everyone. And I think Sweden has launched a new pilot kind of program which is very similar to the UK just with a lower threshold. The only thing, I guess, about the UK is that the threshold was great when companies were smaller. I think now we're seeing companies like Transferwise and like a few other are growing really fast, fairly large number and the threshold is a bit too low so it would make sense to make it a little bit bigger. We would want to make it too big either because we don't want to have larger corporates benefiting from it. It has to be something that's very well suited and focused on the earlier and the younger in the smaller companies, otherwise it just defeats the purpose. I actually, I would disagree. I don't see why it should be special for startups. And in UK, the UK EMI scheme is really good. So trouble is it caps out the 250 employees which we hit pretty quickly. And even then it could be made simpler, like it should be like by default. There's no need to apply anything special. It just feel like, but I guess the argument would be that once you have a scheme, then it's easier to sort of move the cap upwards than to come up with new regulation. But again, do you think there is some resistance to kind of taking it to bigger companies? Do you think that people are worried that then it would be unsusable companies or companies that they didn't have in mind taking advantage of the tax? I actually haven't heard of it. I think if you talk to policy makers, some of them will be worried that there will be some excesses and, you know, because stock, let's say France for example, stock options have a bit of a bad right because they've been used for a lot, you know, top executives of large companies that may be too generous in some cases. And so because of that, there is some suspicion. So that's why limiting it to a certain size makes it much more of a no-brainer. If you start pushing for every company, then you get into this, you know, why is total benefiting from this? You know, you started getting into these arguments, which is definitely not where we're, you know, we become way too political. We're not here, and it's not a political campaign. It's just, we believe it's a win-win-win, and it should be kind of a no-brainer to kind of, to pass that. And having some form of threshold makes it just much easier. So, but Talvit, so did you, in terms of, you know, the, we'll come back to this question of when you see people realize there's stock options. I mean, what did, you know, what did the employees typically then do with that? Did they, you know, I mean, did they, did it increase their motivation? Did they kind of invested in something else? What have they done? Crazy binge drinking and buying Ferraris, see? You know, I think we have pretty sensible people, so. I don't think anything, anything ridiculous happened. Did it, did it increase motivation? Maybe for a moment, you know, I think, you know, there's plenty of research actually saying that, you know, increasing someone's pay has a very short-term impact. So, but I think it's just the, it's the biggest impact, it made it real. So, we've always spoken to people, hey, we don't have bonuses. You know, we have a simple salary and then you have options. And I think, you know, people have been discounting their options to a degree and I think now it just actually makes it to kind of like a full, like a real citizen. So, just makes it real, which I think is really, really important. Just to give a sense for the impact you can have. So, in France you had Crete or going public and overnight you have 50 people becoming millionaires and most of them today are some of the largest and most active angel investors in France and all have restarted, you know, other company of their own. And that's how you, you know, that's how you kind of, you get started. Yeah, I guess that's the, this is the ecosystem problem and I think it's quite interesting because every city that you go to now is very interested in creating a tech ecosystem and there's, you know, they're giving spaces, you know, facilities, they're trying to make sure that they have things like, you know, fast internet and trendy restaurants and all this kind of stuff. But actually maybe they're not thinking about what they could do on the back end is just make it easier for people to realize some of the gains from these companies. I was just doing a back of a napkin calculation that employees own hundreds of millions of dollars of transfer-wise stock. So, this will, you know, a lot of it will get invested back in the startup ecosystem eventually and, you know, this number over time will become bigger and bigger. So, it's pretty significant. But I think that's of course, it's great when it's a big exit that you have the new generation of angel and so on but also, you know, if we look back in our history like early on when you don't, you can't afford big salaries. People join and they take a big, big risk. They do big pay cuts and so on and it's just fair that they could, now that we can provide them with some extra option skin. Yeah, I'm always quite intrigued by the salary relevance. I mean, that's always something that's interesting in the state of European tech report is when you see that actually, you know, the big American companies, the ones that have been established, they obviously they have much higher profitability and all this, you know, they can pretty much outbid in terms of a base salary level always. So, you know, this is the daily battle for you guys. Yeah, I mean, the only way you compete with that is and is with a very exciting options package. But even, you know, not competing with the Facebook, you know, you're hiring someone and, you know, it's very typical that somebody used to earn 100,000 pounds and they'll come to a startup and they'll get 60. And, you know, it's not the trivial choice to make for anyone. And the only way, the only thing you can apply is, well, stock option is one thing. And, you know, hopefully you can talk about the more meaningful work you're doing and the better environment and so on. But, you know, the options part, I feel it needs to be there as well. And do you think that... It's not only, I think it's not only about the tech sector. You know, you're not only competing against Facebook and Google, look at, you know, Tavett. He's hiring people from the financial, you know, service industry. No. And, well, you know, some of them. And, you know, those people are going to get paid, you know, 200, 300, 400, 500K in London easily. And they will get a bonus over the years. Plus bonus, exactly. I mean, as a startup, you can't, you know, even the CEO doesn't get paid anywhere near that, you know, so that just, that just, you can't compete against that. No. You need to attract this talent from, you know, not only from Google and Facebook, also from these places. Yeah. And you're also potentially competing, not just with someone deciding to work for you or company A, B or C, but also that they could do their own thing. I mean, if, you know, we were just hearing earlier today, it's never been easier to set up your own startup. Then you would own it. So then the choice becomes, you know, do I go to work for someone else? And I don't even get a, you know, a stock option or a share of ownership in this company. You come work for us for four years and then you go start your own company. That's a sales pitch. Really? I mean, we had a number of people who were with us early, go and start their own company. And I think that's super exciting, you know. And I'm hoping for a transfer-wise mafia which will beat the hell out of all the previous mafias. So is that, Johannes, do you, when people come to work for you and you try to convince them to take this pay cut, is it like, come here and learn how to do a startup and then you expect maybe they go off to do their own company? Well, for us, I hope that people don't join because of the options scheme. So that's, like, it's, I would not put that on top of the, that's why people should not join because of that. But it's great if we can have a good options scheme and people could actually create some wealth. Yeah. Well, I think we're out of time. But I mean, I think it's gonna be a live issue and it's something that, you know, at Sifted which is this new media platform that we're focusing on European tech. I mean, I think it's one of those issues that we want to keep following. Because I think it cuts across Europe, it cuts across all tech companies and everybody is gonna have to take a view on this. And maybe, you know, hopefully, we'll get some sort of feedback soon from regulators in terms of whether they're willing to... Yeah, absolutely. So you can, again, you know, you can go sign on notoptional.eu and we're sending the letter with all the signatures to the policymakers in early January, all the local ones and the commission in the EU as well. But this is a local affair. So go sign, pledge with your CEO or an investor because I think with the momentum there is behind it, change will come next year. Yeah, we'll keep you posted, watch the space. But I mean, certainly, you know, once the letter's out and we start to get some feedback back, that will be a story to follow. So thanks very much for putting, you know, shedding some light on that and good luck with all the hiring. You have your work cut out. Thanks a lot. Thank you.