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It is a well-known trope that although failure is a challenge rapid success, though more desirable lol, can be too. In this episode we dive into the fascinating Case Study of Ecospend who went from startup to trade sale to world open-banking payments leaders Trustly in five years. Along the way they beat off incumbent competition for one of the UK’s largest accounts that of HSBCs self-assessment payments. Which as you might imagine amounts to quite a few transactions.
In this show James Hickman, CCO, discusses the journey and the experience thereof along with lessons relevant to all tech firms well outside of Fintech.
The journey starts with the build, then the marketing, then astronomical success, then the operational concerns attendant on having your volumes increase astronomically up all the way to the strategic implications for a business with such sudden success – various possibilities for raises to enable continued scaling or a trade sale and Ecospend checked-out both eventually preferring one route over t’other and explain their thinking in their situation, your firms might of course be different. At the end of the day it comes down both to rational business calculation but also to the preferences and long term aims of the founding team.
Overall quite some story and a tale that the cliche that massive success can be a right challenge/pain isn’t always correct.
Topics discussed include:
- James career in the media including as a media VC
- experiencing the massive tech disruption in the media world
- interest in open banking and pivoting from a long media career into Fintech
- processing £13bn within a few years of founding a firm
- is it risky having no “physical bank” bank accounts
- the pivotal role of getting the tech right right from the start in terms of the whole rest of the business chain that flows therefrom
- scaling tech volumes
- scalability of systems
- “if you are a small business you should start by servicing a small customer and build from there. We actually did the reverse – we started with possibly the biggest customer we could imagine”
- one million transactions in January
- the super-importance of easy scalability in tech success in general for all tech sectors
- scalability pre the ubiquitous tech infrastructure we have around us today
- people challenges in a tech business
- “business is all about the people”
- operational challenges – making them smoother
- fears of being over-run by customer service requests
- need to genuinely deliver value to buyer/seller and leverage existing societal trends
- “our volumes are growing by 500-1000% per annum and employee base by less than 10% per annum” – an amazing metric for the power of digital if one gets it right
- key success factors
- mindset as importance – “walking the walk” is a rapid transition when competing against the big players
- how easy is it to connect to UK banks in the current schema for open-banking
- strategic implications of massive increases in volumes
- management challenge of operational and strategic challenges at the same time
- central role of the founders vision
- checking out the VC route and lessons learned/advice
- no cannibalisation of product with Trustly who are PE backed and in the same space
- “in these emerging technologies you always see consolidation and smaller players merging with larger ones” – a useful point for many Fintechs (and others) to bear in mind in the current phase of growth/economic climate
- the media focus on “unicorning” as very misleading re the general path of successful startups/businesses
- looking for synergies in trade selling
- cultural aspects of exponential rise in volumes and trade selling – how does one approach these?
- alignment of objectives and cultural alignment as super-important
- shared vision and personal relationships
- Ecospend’s products and services
- “a replacement to cards” – multiple benefits
- the next generation of payments
- going live with Hargreaves Landsdown
- the road goes on forever…
And much much more 🙂
Share and enjoy!