Everyone loves coconuts. They make you think tropical beaches, Piña Coladas, tasty chocolate bars… and now an awesome new banking service. That's right, Coconut is the new alternative bank account for freelancers. And not only does it have a totally tropical name, it will also help you with your taxes, tracking your expenses, even getting paid on time. Sounds pretty damn good, right?
We were so intrigued, we demanded a chat with Sam, one of the co-founders, to find out more…####
You were originally called Monizo, tell us about your brand change to Coconut. How did it come about and what inspired you?
Monizo was an OK name for a B2B brand but we soon realized we needed to be more than that and wanted something that would connect with our customers. They are creatives, independent minds, and entrepreneurs – people who have said screw you to the system. What they do is exciting. When freelancers start out they often imagine themselves working from a tropical beach somewhere. But then the money stuff brings them down to earth. We want to take people back to how they felt when they first started out – tranquil and peaceful about their money.
We had a shortlist of three but I'm not going to tell you what the others were, sorry! Safe to say they were much less exciting.
Where did the concept come from?
When we started out we were looking more broadly at SMEs and thinking that something needed to change in that market. But when we talked to people from medium-sized businesses down to independent workers, we realised that the difference in their requirements is enormous. The freelancer community is massive and for a long-time banks have neglected this group. Banks business models are based on traditional products like foreign exchange, lending and deposits, which means they naturally focus on bigger businesses. That means there's this big community of people that have been really let down and there's a huge amount we can do to help them.
Freelancers worry about how much tax they owe and whether they're saving enough. There's also the pain of keeping all your receipts in a shoebox or plastic bag. Another thing is making sure clients pay on time. These are big problems for freelancers who generally don't have finance, accounting or legal support. When that dawned on us, we realised we should do something about it.
Who is behind the business and how did you meet?
Adam and I met at PwC where we worked for 3 and a half years. We became friends and were living together with 3 other people in Shepherd's Bush. We'd chatted a bit about an idea for our first business and then when I was on a night out I texted Adam and said, 'we need to do this!'. We quit pretty soon after that then worked at other jobs while starting our first business, Proconfirm, on the side. That was a hit and we sold it to Confirmation.com a couple of years' later. We stayed on for a year or so and did some cool stuff, but after a while we got the bug to start something else. And the rest is history!
So, two businesses down, you two really are serial entrepreneurs! Your position has changed a lot since accountancy– what are your roles now?
Accountancy wasn't exactly where either of us wanted to be long term. I'm definitely not an accountant anymore. My main focus now is growth and Adam owns the product.
What separates you from your competitors?
We love what's going on in consumer banking with companies like Monzo and Loot who offer personal banking services. We're different because we're your business bank account. We deal with the specific challenges self-employed people have every day in their business like figuring out how much tax they owe, keeping all their expenses and receipts in check and getting paid on time. When you're an employee all these things are just taken care of, but when you're on your own you need to do it yourself. We're using real-time payments data to automate a lot of this stuff and make it really easy.
How important is technology to your business?
Technology is fundamental to Coconut. Building something that works on a mobile phone that does a lot of complicated things in a simple and satisfying way is at the core of what we do. And it has to be completely safe and work reliably. We're using data that already exists in payment networks to do things that people haven't thought about before. That requires some solid tech and an outstanding user experience.
What are your plans for the future?
We're currently onboarding customers to our BETA product and we'll launch the full bank account later in the year. Our waiting list is pretty sizeable now. Then for the next five years, we'll be building something that's amazing and that really helps our customers. Freelancing and self-employment is the fastest growing segment of the workforce and it provides a lot of flexibility and benefits. But one of the things that's hard about it is money management and financial security. There's so many ways to help this group of people, so that's our goal for the foreseeable future.
A day in the life
What time do you get up in the morning?
I usually set my alarm for about 6:30 and do my emails first thing. I see what's going on in the world and get up around 7.
What do you typically wear to work? I try and keep it quite casual with shirt and jeans. You can look smart and still be casual which I prefer!
What do you do on your commute?
I come on the tube from Brixton. I'll either read a book or go through my emails – I'm working on inbox zero with moderate success
Where do you work? Co-working space? We work at Huckletree which we love– it's full of interesting people! It's over two floors and it's just a fun, social environment with lots of things going on. There's a Slack community so we can send out a message if we want to do any customer testing or anything like that. We also work with freelancers wherever we possibly can so it's good to be surrounded by them.
What do you do in the morning at work
Often we have breakfast meetings so come in a bit after 9.
For lunch We tend to have lunch together. There's a nice collection of hot food places in the middle of Finsbury Square. There are tables out there so if it's warm we sit in the sun, otherwise it's a case of going to M&S.
In the afternoon
Work, work, work! I spend a lot of time out and about meeting investors and partners. A lot of my time during the day is meeting people and I spend time catching up in the evenings. I usually try and make it home for bath time for our daughter and after 7.30 I can get my laptop out. It's really easy to burn out and exhaust yourself so you need that time off. Flexibility increases my productivity. There are periods of time where you have to work a lot and that's fine, as long as you balance it with some time off.
How do you relax / have fun in the evening? We try and have some structured time off . I like to go kite surfing at least once a month or spend some time with my family. Once a week my wife and I like to go out for a meal on 'date night'. At the weekends, we go away to visit family or hang out with friends in London. We go over to Herne Hill where there are nice pubs to have a roast on a Sunday.
Some pearls of wisdom
What's your best piece of advice for someone starting out?
Talk to as many people as possible about what you're doing. Don't just sit in a room and start building something. And don't worry about people stealing your idea or competing – success mostly down to execution.
One of the things that we've got right is talking to as many customers as possible. When we started we set ourselves a target to talk to at least 150. It can be hard to find them but you can generally reach the first few through your network. And if you start generating interest outside of your network you're probably on to something.I'd also suggest reading up on customer interview techniques so you're not asking leading questions that create confirmation bias. You don't want to ask questions that justify your assumptions; you need to find out what problems people have.Often this process leads to a change in your business. We started out focussing on SMEs but after 150 conversations with a range of small businesses and one-man-bands we realised that freelancers are the group we wanted to help because they are so underserved.
What lessons have you learned from your business journey so far? We've learned to get the right people around us who plug the gaps in our skills. You need to understand where your weaknesses are and find advisors or hire the right people in those areas. We met all of our advisors through networking. Getting the right people around you to tell you what you're doing wrong is the best thing that you can do in business!
What are your pain points with business insurance and what caused you to switch providers/choose Digital Risks?
Business insurance isn't very exciting. Last time we bought a policy, we went for quite a traditional option and they tried their best, but the whole experience with Digital Risks is a lot more exciting – the website, the messaging and your whole process is a lot simpler and cleaner.We felt like you guys have a clear understanding of our business and our needs. There was a level of care that attracted us as well.
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