Until recently, many of you were probably stuck using paypal and If you were using paypal - you were stuck. I recently caught up with 1/3 of the Gocardless team, Matt Robinson who explains to me why the Gocardless team are focused on making online payment struggles a thing of the past.
Hi Matt, how are you doing? Great to have you on YHP?
I’m great thanks. Things are going fantastically well at the moment.
Who is Matt Robinson?
I’m a 24 year old entrepreneur. I’m a McKinsey alumni and Oxford law graduate.
How did you get into business? Were you exposed to entrepreneurship as a child?
I ran a number of different money-making enterprises from a young age. I ran my first proper business at the age of 16 which paid for my way through university.
Who was your inspiration growing up and why?
My Dad. He came from nowhere to build a successful life, business and family. Business wise (sadly) it was the stereotypical TV entrepreneurs like Alan Sugar and Duncan Bannatyne.
So tell me about Gocardless and how the idea came about?
I’m one of three co-founders. We had all experienced a lot of frustration with both making and receiving payments. Simultaneously we had been spending a lot of time working with financial institutions gaining an insight into the payment mechanisms that underpinned them. We felt that we could build something drastically better for business than what was on offer.
How did you meet your co-founders?
I worked and lived with Hiroki for the last 2 years before starting GoCardless. We met Tom as we were starting and quickly decided that we wanted him to be part of what we were doing.
What were you doing before you founded Gocardless?
I was working at McKinsey & Co as a Management Consultant having graduated from Oxford University.
What is Gocardless? What are you guys trying to solve?
GoCardless is an API wrapper for bank transfer. It lets Merchants collect money with no Merchant account, no credit card fees (they charge just 1%!) and no hassle. Collecting money, whether for business or from friends, is a nightmare. The problem we’re solving is that payments are fundamentally broken. As a merchant, card companies are a rip-off and the application process is eye-wateringly complex. If you're paying for stuff, the user experience is dreadful - most check-out processes leave me on the verge of tears.
What was your biggest challenge during the starting up phase?
The payment space is particularly hard to innovate in because you need to strike deals with banks and regulators just to get started. It's very difficult to get these as a startup with no trading history. What we've shown though is that if you work hard enough and can demonstrate the credibility of your team and your product it's doable.
You recently raised $1.5 million in investment, why did you decide this is the route to take?
Payments is a scale business and funding enables us to operate a scale model from day 1, speeding up Merchant acquisition and helping us get to scale more quickly.
How was the whole raising money process? How long did it take? What are some of the key things that you learnt from the whole process?
Hard work. We were exceptionally quick with the whole round taking less than 3 months from start to finish but it was still exceptionally hard. The key learning was how critical the type of intro is. With a cold email you have essentially a 0% chance of raising, with an intro from someone who has already invested in you, it’s close to 100%.
What advices can you give to entrepreneurs looking to raise money to grow their start-up?
Raising investment is a distraction from running your business. You therefore want to do it as quickly as possible. To do this you need to get significant traction, either in the form of users or deals, before you even think about raising money. Oh and something Paul Graham said: “When you go to investors asking for money you get advice; when you go asking for advice, you get money”.
You guys were previously based at White Bear Yard, what were some of its benefits?
Being based at White Bear Yard was great. We were in the same building as some of our investors and a number of cool startups. It was great to have both around us to pick their brains whenever we needed. Those benefits of clustering are a small microcosm of what is hopefully going to happen across the whole area.
What are the most crucial things you have done to grow your business?
User growth has come from a couple of great partner deals. Wherever possible you should avoid having to acquire customers one-by-one. If a single company has a relationship with lots of potential customers, going through them is going to be hugely advantageous.
Would you say the business has changed from the first initial idea?
Absolutely – I would be worried if it hadn’t! The key for us has been getting our product in front of Merchants asap and hearing their thoughts on what they do and do not want.
What would you say has been the highlight of your entrepreneurial journey so far?
I think it would have to be going out to the Valley and doing YCombinator. Although, going to No10 Downing Street and meeting with the Innocent founders at Fruit Towers are definitely up there for one-offs.
What can we be expecting from your company in 2012?
Growth, and lots of it! As well as a couple of cool new products which are going to shake up the payments space that you absolutely should keep your eyes out for and our expansion across Europe.
What three pieces of advice would you offer entrepreneurs starting out today?
Make something people want.
Focus on one problem at a time and forget everything else.
Find great people to work with.