The intention of our ‘Product | People | Potential’ content series is to feature and showcase the very best UK start-ups with grand potential, truly inspiring businesses that are shaking up their sector.
We capture and share the stories behind the name. We collate authentic peer to peer real-talk while celebrating the growth and success thus far and gather a glimpse of what’s ahead. As part of this, we caught up with Liad Shababo, founder of Wollit.
Liad: Great to meet you too, Jake. I’m Liad and I’ve been a tech entrepreneur for 15 years. Wollit is my third start-up. I previously founded two other companies, one in games and one in eCommerce and built them into real businesses.
This time around, I decided to move into Fintech because I felt it has the potential to really benefit peoples’ lives.
Liad: Wollit is essentially an income stability tool that allows people to take home the same amount of money every month, even if their earnings and hours are different.
There are about 14 million people in the UK who have a job where their income is different each month. If you think, for example, people who drive for Uber, or are on zero-hour contracts or freelancers. They have no idea how much they are going to earn each month, which makes life really hard. You can’t budget and you can’t plan if you don’t know how much money you’ll have.
The stress of not knowing how much income you’ll have each month also permeates all the other areas of your life. Think mental & physical health, strained relationships, and various productivity and morale issues at works.
We’ve found this problem for a large and growing market and we thought “is there a way we can solve it with a combination of creative thinking and innovative technology?”
Liad: Creating a VC backed start-up going from 0 to 5 so far has been relatively easy because we’re a socially-focused, mission-driven start-up, and people really buy into the mission.
As a CEO there’s a ton of factors involved as well. They have to trust you as a leader, they have to trust that you’ve got the cash flow to pay them, and there are many other facets that they have to consider.
What I can see clearly is that if you go to market with something that is really focused on the mission and has a goal and a vision that is compelling and offers a lot of consumer benefits: Many people who are passionate and ambitious tend to come forward.
There’s 5 on the team so far, and we have a few job offers out, so we’re hopeful of getting to 10 people in the next few weeks. We’re always looking for high calibre team members who buy into the vision and looking to help us make it happen. The issue is now, the job market is quite frothy, especially for experienced developers!
Liad: Maybe! But even well-funded start-ups can’t compete with large incumbents. When we were doing the research before we even started writing the job specs, and I was looking at what well-funded and not so well funded start-ups are offering at the moment, I couldn’t believe the length of things in the perks column at the end. With all the best will in the world, most start-ups can’t compete. Forget the salary, but the perks like unlimited duvet days, away days & trips, learning budgets, etc. The only real tool in our arsenal, in my opinion, is to actually offer compelling work and a compelling vision that our potential team member really buy into.
You asked about scaling past 10 to 50 for example. That’s a completely different challenge.
Previously, I made the mistake of hiring for the role I needed at the time and thereafter I put leaders in to manage those employees.
This time around, I’m doing the opposite. I’m actually hiring the senior leaders first and then they will go off and hire the employees below them. That way, the team seems to be being built in a much more robust way and there are no surprises down the line.
It’s more expensive because senior people are expensive, but they come with a level of expertise, networks, and connections. My plan is to hire over and above the level, I need now, so they can build the team they want to hire.
It makes sense because if someone is looking to join a business, at any stage, they look at the people who are there already. If they see more experienced people rather than juniors, they tend to be more likely to join.
Liad: Sure, imagine this. This person is a bartender working for a large pub chain on a zero-hour contract. They don’t know how much money are they going to earn each week! Their income is very volatile, but their expenses are very stable. They have to pay their rent, bills groceries and everything else.
Liad: The goal of Wollit is to try and solve a problem but to do so in a very ethical, sustainable, friendly, and safe way. Today, a customer applies, and we put them through a very quick, painless credit check. We’ll sync with their bank account using Open Banking, which is an EU mandated scheme in conjunction with the large banks. It’s secure, fully regulated and it works very well.
We’ll analyse their previous income and we’ll see on average how much they earned over the past few months and we then give them an average income in the form of a “Wollit Income Promise”. So as an example, let’s say we analyse your income and we saw last month you earnt £2,000, a month before £1,500, up and down, up and down.
We will come out with an average let’s say it’s £1,750 and we’ll calculate how much you’ll take home each month come what may. Each and every month we will make sure you have access to that amount of money. When you earn below, we’ll top it up. When you earn above it, you’ll pay us back. Everything happens automatically, and everything’s based exactly on your financial and personal circumstances.
This product is unique for many reasons, but one of the biggest is that this is a completely interest-free product. Instead, people will pay a fixed fee of £9.99 a month, and it doesn’t matter if that they borrow £50 or £500, all they’ll pay is that fixed fee.
If they took a payday loan, for example, and if you don’t pay it back on day 30, you’d be hit with various fees and charges, painful! Wollit is super flexible and it’s based on your exact financial circumstances. If you don’t earn above your Income Promise for two months, three months or longer there’s no problem. You can pay back when it’s most suitable for you when you’re earning more than normal.
We’re trying to bring a flexible and bespoke solution that’s interest-free in a market that needs it most!
Liad: Sure. There are millions of people in the UK who have this problem.
On one hand, you have people who are self-employed who have no idea how much money they might earn in a month. On the other hand, you have people who work on zero-hour contracts who work for a large company who employs them and gives them different hours every week.
We decided that our initial target market is the zero-hour contract markets. It’s densely populated and full of people who are likely younger, city-based, and likely very progressive when it comes to technology. They’re also more likely to use the product and trust, embrace and share the technology.
Our initial plan is to go to market with people who work in industries like retail, hospitality, social care, etc and then share with their friends and colleagues.
We’re also working in partnership with other platforms and employers whose staff have this problem. They understand that employees who have volatile incomes are more likely to leave as they feel less loyalty. They can also be less productive.
Liad: Absolutely, we take on the risk for the company but we are still doing things very strategically. For us, there is risk and lots of compliance issues that we have to contend with. It’s about the phased rollout, making sure the product is suitable for the customer and that it’s helpful and safe. In tandem with that, we need to make sure that the customer base can, ultimately, pay us back and that we’re not going to get burned by making decisions which ultimately cost us money.
Liad: A lot of stress! But seriously, launch the first product and create new business development partnerships. We want to create a team of 20 and nail the ins and outs of the product making sure the data models and risk models are working really well. Hopefully, by the end of the year, we’ll be able to announce a larger round of funding to be able to scale this in the UK and markets abroad.
Liad: We believe everyone deserves financial wellbeing! And thus far, we feel a large section of the U.K. population have been ignored. They don’t have the products they need, and they don’t have the support they need. Life for them can be really tough. We want to make things better.
The ultimate goal for us is to bring financial wellbeing to those who don’t have it.
We also want to help in terms of education and financial management and financial training, the goal being that no one should wake up in the morning stressed out their brains about money just because they haven’t got access to the products which can reduce that for them. The blue-sky thinking is very, very big and we feel it’s a very compelling mission to work towards. What really what gets us out of bed in the morning is that we’re not looking to just build a big business for the sake of it. We’re looking to really bring a tangible consumer benefit to people’s lives.
From a lot of founders I’ve recently interviewed, I think the next 7-year cycle will be around benefiting the people who really need it, and more focused around financial well-being for people who really need it most.
Liad: I completely agree. When I decided to do something in Fintech, I wanted to solve a problem that is compelling to me as an entrepreneur and actually useful for the user.
Does anybody really need a new Robo advisor or share trading platform?
Hopefully, this new cycle begins to look down deeper into society for real pressing problems. And I think the investors who backed Wollit think the same thing and want to solve real problems.
Liad: Raising first round and pre-product is super hard because it can be very risky for the investors and everyone else involved.
Entrepreneurs’ pre-product need to find and engage potential investors with an amazing product idea or technological leap that compels them to take on that early stage risk. I wouldn’t recommend trying to raise institutional money for a pre-launch product if you don’t have a significant-tech advantage or some other kind of unfair advantage when it came to market. For first time entrepreneurs, I think it can be really hard. The goal is to try and bring something to market as quickly and as cheaply as you can before you have to begin the investment process.
The other thing I’ve learned in the past is that investors are “for life, not just for Christmas”, tread carefully about who you allow in because you’re going to be with them for good or for bad for many, many years.
Start-ups are risky and they are volatile, so you want to make sure the calibre and the characteristics of the investors who you work with. That they will stay with you. Rough and for smooth, for good and for bad, because invariably you’re going to hit challenges along the way.
In terms of Wollit, I’ve been quite close to a few VC’s who found this start-up very interesting for a while and I’ve kept them abreast as we have begun to develop. And then when we began to do our funding round itself, it wasn’t like these are just cold calls out of the blue, so it was more like a long-term relationship heating up again
You should begin discussions with investors, just keeping them abreast of your plans and your progress as early as possible. When you do come to start the round itself, you get seen as someone who’s been there for the long haul. You’re not someone who’s just turned up out of nowhere.