When a business is looking for funding and they get rejected by a bank, they are now more likely to head to the internet.
Funding Options is a price comparison site for this exact scenario, working a bit like a dating site to match lenders with businesses depending on their specific needs.
According to founder and CEO Conrad Ford, Funding Options finances tens of millions of pounds in finance to businesses each year from some of the biggest lenders out there.
But the company wasn't always so lucrative. Funding Options went through a few tough years when it began.
"There's a few startups in fintech that seem to have got things right on day one and exploded from there and became unicorns," Ford told Business Insider. "We certainly weren't in that category. It was two or three years before the torch paper lit and we fired into life."
Business Insider sat down with Ford to discuss his story and what he would recommend graduates do if they're looking to get into the fintech industry. Here are 8 pieces of advice he learned from his own experiences.
1. If you're offered a grad scheme, go for it.
If you want to get into the fintech world but you've also been offered a job at a big financial institution, Ford says you should always take it.
"I personally think that in the very early stages of your career, unless you're extraordinarily entrepreneurial, joining a large institution that has a graduate program, it's probably the best thing you can possibly do," he said.
In short, after three years you will have made a lot of money and gone through a very structured program, which taught you technical skills around the industry. Ford says it's also good practice to learn how to behave in an office. Moreover, you'll be better equipped to take risks.
"The world of constant change is only going to accelerate, it's not like the opportunities won't be here in three years time," Ford said. "And you'll probably be better prepared for them when you've done that."
2. Be prepared to be wrong...
When Ford worked in strategy for a major bank, it was very much a case of making small changes and having more or less a certainty of the outcome. When he started up Funding Options, he quickly worked out that the vast majority of what he thought to be true turned out not to be.
"I did customer surveys, I did desktop research, all these expert skills I learned at large institutions," he said. "Every piece of desktop research told me something was a great opportunity, then when I tried it in the real world, it failed miserably."
3. ...Because failing is a good thing.
According to Ford, no business plan will survive the first contact with a customer. So there's no point worrying about making something perfect the first time around.
"To survive and to make a startup work, you need to be like a motor boat," he said. "You need to take advantage of the fact you can whiz around and change course. You don't have that inherent momentum [like a bank] but you can afford to get it wrong. So getting it wrong and failing fast is really important."
4. Adopt the mindset of a startup.
At a bank, Ford says he could work for endless amounts of time on a project. When starting up Funding Options, the team worked for about a year before releasing it to the public, only for it to fail. In hindsight, Ford says he could have learned just as much if they had launched on day one.
"It was just learning the brutally hard way with other people's money and wasting a year of my life," he said. "You have to be fast and agile. That was the biggest challenge for me."
5. You don't want to get too big too soon.
Funding Options has seen a 14-fold increase in revenues over the past couple of years. Ford puts this down to not raising too much money too early on in its genesis.
"I'm kind of glad that I didn't immediately raise lots of money early on, because I would have taken just as long to learn some stuff, and spent a lot of other people's money along the way," he said.
Also, when a company raises a lot of money, the team generally grows along with it. Funding Options is currently at about 25 employees, and Ford likes it this way because it means there are no politics or back-stabbings going on. He calls it the company's "strict no d***heads policy."
6. Ask yourself if you're psychologically ready.
Ford says he found a resilience in himself he ever knew he had when starting Funding Options. In the first two or three tough years, when things weren't going to plan, he discovered how to deal with the things that are — in the startup world — a matter of life or death.
"Nothing can prepare you for not being sure whether you can pay your staff the next day," Ford said. "Or not being sure if that funding round is going to close, then literally you're down to you last £5000 or whatever it might be in the bank account."
He says he asks people that want to join the company whether they are psychologically happy with treating a job at a startup like it's temporary. Working at a startup may sound glamorous, but it's also a massive risk that you need to be prepared for.
7. Don't get complacent.
Things are going well for Funding Options right now, but Ford often thinks about all the things that could still fail.
"I've never lost the view of the world that says one day I'm going to wake up and something is going to go fundamentally wrong," he said. "I think it's stupid to get complacent."
8. Be ready to adapt.
Fintech isn't something that appeared out of nowhere. There was a time when ATMs didn't exist, and when they came out they were massively innovative. Ford says fintech has always been around, but the rate of its evolution has accelerated recently. When the next big thing comes along, Ford is confident that Funding Options will be able to adapt to it.
"We're still small and scrappy enough that we're still used to things going wrong," he said. "I don't think there's something that's going to happen that quickly that we can't respond to it. We are a technology company, there's nothing technological we couldn't do."
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