‘Give us the rules. What­ever the rules are on Brexit, we will deal with it’

The Go­card­less founders tell James Cook how learn­ing from mis­takes was key to their suc­cess

The Sunday Telegraph - Money & Business - - Business -

They may only be in their early 30s but they are al­ready the clos­est thing Lon­don’s tech­nol­ogy scene has to rock stars. The three Ox­ford grad­u­ates be­hind Go­card­less, the Far­ring­don-based on­line di­rect debit business which pro­cesses more than £5bn worth of trans­ac­tions a year, are among Bri­tain’s most suc­cess­ful tech en­trepreneurs.

Hiroki Takeuchi, 32, re­mains chief ex­ec­u­tive of the com­pany but co­founder Tom Blom­field, 33, has gone on to start bank­ing app Monzo, and Matt Robinson, 30, is chief ex­ec­u­tive of prop­erty start-up Nested.

Be­tween them, the three men have raised al­most £200m in fund­ing, invit­ing in­evitable com­par­isons to Sil­i­con Val­ley’s so-called Pay­pal mafia, a group of for­mer Pay­pal founders and em­ploy­ees who went on to cre­ate busi­nesses in­clud­ing Tesla, Linkedin, Youtube and Yelp.

Six of them, in­clud­ing Elon Musk, are now ranked as bil­lion­aires. Go­card­less’s founders may be Bri­tain’s clos­est equiv­a­lent but it hasn’t all been plain sail­ing.

“I just don’t think we knew what ... we were do­ing when we started,” ad­mits Robinson, re­call­ing the early days af­ter they launched Go­card­less in 2010 – just two years af­ter grad­u­at­ing from Ox­ford Univer­sity and a brief spell work­ing as man­age­ment con­sul­tants in the City.

The first ver­sion of the business was Group­pay, a way to split house­hold and sports team ex­penses. Grad­u­ally, this evolved into Go­card­less, an on­line di­rect debit provider which lets busi­nesses and free­lancers eas­ily set up re­cur­ring or one-off pay­ments with­out the need for credit or debit cards. At first, suc­cess was elu­sive, ad­mits Takeuchi. “We made a lot of mis­takes,” he says.

One chal­lenge for Go­card­less was mak­ing its brand­ing too com­pli­cated. “In the very early days the strapline on the web­site was ‘next gen­er­a­tion pay­ments’. We re­fused to put di­rect debit on the home page,” Blom­field says. “It turns out not many peo­ple search for ‘next gen­er­a­tion pay­ments’.”

Per­haps the most sig­nif­i­cant point in the com­pany’s early his­tory came in 2011, when the three co-founders trav­elled to Sil­i­con Val­ley to take part in Y Com­bi­na­tor, a re­spected tech­nol­ogy “in­cu­ba­tor” pro­gramme which in­vests in start-ups and pro­vides them with men­tor­ing, as well as a taste of Sil­i­con Val­ley life.

Start-ups that take part in the pro­gramme are coached by tech­nol­ogy in­dus­try heavy­weights in­clud­ing Paul Gra­ham and Sam Alt­man, be­fore a “demo day” where the young com­pa­nies pitch their busi­nesses to a room full of in­vestors.

“The ses­sions with Paul Gra­ham were in­fu­ri­at­ing, and demo day it­self was quite a rough ex­pe­ri­ence. I got re­ally frus­trated be­cause they talked in mantras and heuris­tics and you were like ‘I just want you to give me the an­swer’,” Blom­field re­calls.

“They just had these su­per high­level things like ‘write code’ and ‘talk to users’ or ‘you should be grow­ing 10pc ev­ery week’. Like, we’re not! Well, go fix it. [Gra­ham] could be bru­tal.”

Blom­field says it was life-chang­ing: “At the time, it was what we needed, but it just felt un­com­fort­able.”

Even­tu­ally, the three men came back to Lon­don and con­tin­ued build­ing the business in the UK. Go­card­less had raised some seed fund­ing, but it needed more money to grow the business. One east Lon­don tech­nol­ogy fund, Pas­sion Cap­i­tal, has funded Go­card­less as well as both Monzo and Nested.

Eileen Bur­bidge, part­ner at Pas­sion Cap­i­tal, said that she met Go­card­less’s founders when they moved into Pas­sion’s of­fice in Far­ring­don.

“We had a meet­ing with them and heard their pitch, but em­bar­rass­ingly we didn’t go for it. How­ever, in the months to come, we would see their pro­gres­sion plot­ted on mon­i­tors and white­boards they’d set up by their desks.

“Even­tu­ally, [Pas­sion Cap­i­tal part­ner] Robert [Dighero] couldn’t re­sist any more and asked to sit down with them and chat again to find out how they were pulling off these great charts. Af­ter that ses­sion and a fur­ther fol­low-up with all three of us, we de­cided to in­vest af­ter all.”

Go­card­less was grow­ing its business and had picked up enough in­vest­ment to hire more staff. But Blom­field wasn’t happy.

“The com­pany was go­ing OK but not great and none of us had ti­tles. We were all just ‘co-founder’ so any de­ci­sion re­quired a three-way de­bate, which was some­times very fun and some­times very painful.”

A meet­ing was called to fig­ure out who would be the com­pany’s chief ex­ec­u­tive. Blom­field, how­ever, had other ideas.

“We had the agenda set out, ev­ery­one sit­ting around the table, and I was like ‘I’d like to add an­other item to the agenda. I don’t know where we put it, but I think I’m go­ing to have to step down’,” he re­calls.

“The three of us just went and drank a load of gin. I ac­tu­ally didn’t know what I was go­ing to do next.”

Blom­field left the com­pany and briefly worked for a dat­ing business in New York be­fore set­ting up Monzo, the Lon­don-head­quar­tered bank­ing start-up which has be­come one of the UK’S lead­ing fin­tech com­pa­nies.

Robinson also left the com­pany several years later. “We sat down a fair bit be­fore I left and just said ‘look, I don’t want to be do­ing this for the next five or 10 years’,” he said.

While Go­card­less has been a glit­ter­ing business suc­cess, the story has also been marked by per­sonal mis­for­tune.

Two years ago, in Septem­ber 2016, Takeuchi was paral­ysed from the waist down af­ter a cy­cling ac­ci­dent in Re­gent’s Park, forc­ing him to un­dergo months of re­ha­bil­i­ta­tion, and prompt­ing Robinson to tem­po­rar­ily re­join the com­pany. “I started think­ing of my­self as the harbinger of doom,” Robinson said. “Ev­ery time I went back in to an­nounce any­thing to the com­pany it was like ‘oh God, what’s hap­pened now?’”

Takeuchi re­turned to Go­card­less four months af­ter the ac­ci­dent that has left him in a wheelchair, and con­tin­ues as the start-up’s CEO.

The three men are now run­ning three of Lon­don’s most promis­ing start-ups and also hap­pen to op­er­ate in three highly reg­u­lated in­dus­tries. How­ever, un­cer­tainty from Brexit isn’t a major con­cern, they say.

“There’s these other 15 things that are much more likely to kill us first,” Blom­field says.

“Politi­cians, go and fig­ure it out and then give us the rules. What­ever the rules are, we will deal with it.”

Go­card­less’s founders aren’t di­rectly in­vest­ing in a new gen­er­a­tion of start-ups in Lon­don, but see their suc­cess as a way to help founders who fol­low in their foot­steps.

“The best way that we can con­trib­ute is by cre­at­ing the most suc­cess­ful com­pany pos­si­ble and then see­ing those peo­ple go on to do big­ger and hope­fully bet­ter things,” Takeuchi says.

De­spite that pres­sure, he is still mod­est about the three men’s suc­cess. “The big­gest prob­lem we’re solv­ing is not be­ing man­age­ment con­sul­tants,” he jokes.

‘We re­fused to put di­rect debit on the home page. It turns out not many peo­ple search for next gen­er­a­tion pay­ments’

Hiroki Takeuchi, Tom Blom­field and Matt Robinson (left to right) have raised £200m of fund­ing be­tween them since start­ing the on­line di­rect debit business Go­card­less eight years ago

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