Ray Youssef and his bitcoin exchange Paxful are changing the world one sovereign entrepreneur at a time. We may even look back in ten years and realize that Youssef and his team spawned an entirely new and bespoke category of entrepreneur — the “sovereign entrepreneur.”
There are many entrepreneurs in the West but very few have had to overcome the kinds of financial repression and other obstacles that an entrepreneur has to endure in Africa. To say that African entrepreneurs are resilient is an understatement, as you listen to Youssef talk about the talent he finds on the African continent and the obstacles those individuals must overcome to launch their businesses. “Anti-fragile” is more like it.
A One-Of-A-Kind Bitcoiner
In a recent interview with Youssef — who will be sharing the lessons he’s learned from his experiences as CEO of Paxful at Bitcoin 2022 — we discussed what drives him to develop the entrepreneurial talent in Africa and how he does it using Bitcoin and the Paxful platform.
His life story and career before discovering Bitcoin are remarkable. He’s a first generation immigrant who was born in Egypt and came to the U.S. when he was two years old. He grew up working at his parents’ newsstand in Columbus Circle and Hell’s Kitchen in New York City in the 1980s, which were radically different neighborhoods back then. He grew up working the gritty streets of New York City and learned how to deal with people.
He got a computer at age 19 and taught himself how to code. His first two startups were successful and he sold both. He achieved his dream of buying his mom a brownstone in New York and made a radical career pivot by getting into mixed martial arts (MMA) boxing and traveling the world. Eventually, he ended his MMA career and came back to New York and began launching new companies. He figured he had the Midas touch and would be successful again, but instead he experienced 11 company failures in a row. Talk about resilient! Failure is a highly-underrated form of spiritual transformation.
He feels that without those 11 failures, he never would have launched Paxful. Easy Bit was one of these failures, and he said during a May 2020 podcast episode with Anita Posch that it was highly instructive because, “We were trying to solve a problem that didn’t exist.”
He resolved never to make that mistake again.
When Posch asked him during the 2020 podcast why he got into MMA, Youssef made it clear that he “didn’t do it for the money.” He did it to “understand myself and learn the kind of person I was.” He was searching to find himself. And I’m happy to report for all of us (and, in particular, the great people of Africa), Youssef found his purpose when he discovered Bitcoin, the African entrepreneurial spirit and, in particular, the Nigerian people.
Financial Apartheid
Youssef is the only person you will ever meet who went into New Orleans shortly after Hurricane Katrina struck and who flew into Egypt on an empty plane while the Arab Spring was becoming very dangerous and who went into Africa eight years ago to better understand how the people from that continent might use Bitcoin as a solution to their economic problems.
Youssef is the first and only person I know in Bitcoin who uses the term “financial apartheid” regularly to describe the extreme unfairness of the financial system in Africa and in other nations throughout the emerging world. Our job is to educate these young entrepreneurs to a new way to think about money, as Youssef inspires.
To those of us who grew up in privilege, Africa has over 2,000 payments systems and only 3% are able to talk to each other. That way slavery lies. Many of us have much to learn from the African people about resilience at personal, family, community and career levels.
What Youssef understands deeply and is constantly reminding us of is how these walled gardens for money lead to financial apartheid. He explained that Paxful has established 300 trade routes to date and feels it could have another 3,000 in short order. Not only is Youssef’s insight about financial apartheid grounded in experience, but you get the sense that calling them “walled gardens” of money is far too kind. Walled prisons of money is a better description for how the .1% maintain full control of the masses and repress the bulk of humanity.
I’m happy to report that bitcoin and Youssef will be a wrecking ball to financial apartheid in Africa.
While he never described himself this way, it becomes quickly apparent that Youssef is skilled at spotting and developing entrepreneurial talent in people that the rest of the world has forgotten, written off or ignored. Therein lies opportunity — he sees Africans as his family.
He pointed out during the May 2020 podcast with Posch that, whereas most people in the developed world are aiming to protect their privacy and become invisible, the people in the emerging world have the opposite problem.
“We don’t want to be ignored or invisible; we want to be seen and heard,” he said. They want to trade with their neighbors in other countries. They want to have control of their own destiny and the best path for doing that is with bitcoin.
A circular economy that allocates capital more effectively? What a concept. Youssef sees Africans and other emerging markets as unstoppable with Bitcoin, the fairest monetary system ever invented, created or discovered.
Developing Talent From Around The World
As Youssef puts it, Paxful encourages African talent with “boots on the ground.” He doesn’t try to figure out what Nigerians, Kenyans or Salvadorans need from an ivory tower in New York. Quite the opposite. One of the enduring values he lives by is “staying connected to the street.” Youssef is consistent in this approach and mentions it on every podcast or interview I’ve listened to.
Once he is on the ground in a country, he is looking for trade routes and trade corridors and native born “co-founders” who can develop them. When asked about how he developed this novel approach, he said he got the idea from studying the history of money going back to the Roman Empire, which didn’t allow for agency. It relied on trusted networks. And the most lucrative trade routes hundreds of years ago were dangerous.
Today they’re “dangerous” in the sense that these opportunities are more often found in gray markets or gray areas of the law.
When he speaks to talented young people, Youssef urges them to “find your trade route.” He told the story of a Kenyan woman living in Berlin. She needed to find a way to send 100 euros back to her family in Kenya who wanted to turn euros into Kenyan shillings. Using bitcoin and Paxful, she has managed to not only solve her problem, but she has established a trade route for other people in her situation.
As Youssef put it, she has “set up a mini Western Union” or an alternative to Western Union that doesn’t require her to deal with massive Western companies who are middlemen profiting from these disadvantaged populations of unbanked or underbanked people found in every country.
Instead, she has established a trade route that allows her and trusted third parties on Paxful to remove the barriers from these walled gardens. These sovereign entrepreneurs might end up employing as many as 60 people and using what they have learned from Youssef about trade routes on Paxful to generate millions of dollars in annual revenue.
Paxful calls itself a “people-powered marketplace for money transfers with anyone, anywhere, at any time.” Its mission is to empower the forgotten and underbanked around the world to have control of their money using peer-to-peer transactions.
And today, Youssef and his team at Paxful have two main avenues for recruiting talented entrepreneurs and staying connected to the street. The first is to tap into the vast peer-to-peer network of Paxful’s almost 10,000,000 customers. When El Salvador first appeared on the Bitcoin scene in June 2021 by designating bitcoin as legal tender, Youssef and his team were able to set up dinners with people Paxful already knew on the ground in that country. The peer-to-peer approach that Youssef and his team take is to be on the alert for the bright spots and entrepreneurial talent in that region.
Its second approach to entering other countries is doing university campus tours. In Youssef’s mind, education is for everyone and it is central to how they help these entrepreneurs help themselves. In 2019 alone he did eight campus tours through Africa. What Youssef tries to get across to us coddled Westerners who live a life of privilege is how often the people in Africa are being scammed by all kinds of people from the West. During these campus tours he often encounters enormous skepticism towards Bitcoin.
To overcome this, he conducts what he calls “entrepreneurial crash courses” at each stop. He will tell young aspiring entrepreneurs that in order to start a business, you must solve a problem.
“We’re willing to teach anyone,” he said.
The hardest part is to help these highly-educated people realize that their everyday situation is both a problem to be solved and an opportunity to start a business. Most people think of their everyday situation as nothing more than their life, not a business opportunity in the making.
Youssef said that if there are 1,000 people in the room, all he must do is find 10 people who see the power of peer-to-peer trading and bitcoin. It’s perhaps a gross oversimplification to say each one of these entrepreneurs finds trade routes using Paxful’s platform. Once he identifies these talented entrepreneurs, he’ll ask them “where is the friction?” And he knows that there is financial apartheid in every country.
He helps them reframe this extreme unfairness as an opportunity. Remove the friction or find a work around and you‘ve got yourself a business. He tells them “when your country keeps money trapped, that’s what keeps you poor.” All we have to do is remove the barriers and blockages.
Stated simply, his approach is to find the problem, solve the problem using bitcoin and the Paxful platform, and then do it again for others who have the same problem. Rinse and repeat.
Unleashing The Power Of Sovereign Entrepreneurs
What is it about Youssef that allows him to see the abundant entrepreneurial talent in Africa while the rest of the world ignores this invisible yet potent talent pool? Is it the fact that he was born in Egypt and has a real affinity and connection to Africa? Perhaps. Could it be that he is ruthlessly devoted to the peer-to-peer nature of Bitcoin? Perhaps. Could it be that he is as antifragile as any Bitcoiner you’ll ever meet? It’s probably all of those things.
In addition, he operates with an abundance mindset that sees the future as vastly more exciting and promising than the present. And that mindset is infectious. It’s as if he shows these sovereign entrepreneurs how to turn scarcity or lifelong obstacles into abundance. There is little question after listening to Youssef that peer to peer is foundational to his approach, but as we concluded the interview, he made it clear that one of his other keys to success was to “keep an open heart.” And that made me realize something about Youssef that had not been evident until that moment: To him, peer to peer equals heart to heart.
For those of you fortunate enough to be coming to Bitcoin 2022, I suggest you make a point of hearing Youssef speak. You won’t be disappointed and, who knows, you might just find yourself a trade route and a path to becoming a sovereign entrepreneur.
