Six lessons on how to start a startup from a successful fintech

Everyone loves a startup story. Whether you’re looking for tips on how to start a startup of your own, or just love startup business success stories, keep reading to learn about building a startup from scratch and how Paytron, an Australian fintech, was founded.

Project Alfred started using Paytron in 2021, and it’s completely changed how we service our outsourced bookkeeping clients. We were thrilled to sit down with Paytron co-founders Francois Henrion and Jaco Veldsman to learn how they created a seriously slick payments, workflow and global cash management system for businesses and their accountants.

With Paytron you can pay local and foreign vendors, schedule payroll payments securely without needing ABA bank files, setup flexible approval workflows, get global bank accounts and automate all your bookkeeping from a single, easy-to-use cloud platform. Paytron lets you and your accountants work as a team by providing the workflows and transparency to make large volume payments a breeze. No more searching through hundreds of emails, checking spreadsheets, logging into multiple bank accounts, or forgetting to pay important invoices or staff. Paytron does the heavy lifting, so you don't have to.

Francois and Jaco generously shared their experience launching Paytron, plus some really practical startup business tips for success for people who want to learn how to start a fintech – or how to start a startup in any industry!

In true startup style, Paytron began in a coffee shop in Sydney

It’s early 2020. Francois Henrion and Jaco Veldsman, two South African expats who’ve built impressive resumes in the financial services sector, are introduced by a mutual connection. They hit it off immediately, their friend excused himself after 15 minutes sensing his work there was done, and by the end of their first meeting, they’d shook hands and decided to do something together.

Eighteen months later, Paytron is a startup story worthy of taking note of; they’re helping Australian businesses operate globally and are truly levelling the playing field for businesses of all sizes, where through the use of technology they are giving them the efficiencies, tools and customer services usually reserved for corporations with seriously deep pockets. So what can be learned from a startup story like Paytron’s for those who want to learn how to start a fintech? In short, a lot. Let’s break it down:

Lesson #1. A real problem + a passion to solve it = a great place to start

Francois and Jaco spent four months running a trading desk for another company while exploring options for their own venture. They’d been used to dealing with very sophisticated treasury management technology used by big hedge funds and big financial institutions (who also had the human resources to absorb the arduous day-to-day tasks), and seeing what the average business had to deal with in their banking activities shocked them.

These pain points provided the seeds of the idea that they launched with and what has developed into the app Paytron is today. As Francois explains:

“There were fintechs that had significantly improved the payment experience, fintechs that built very competitive foreign exchange products, fintechs that digitised manual data capturing, fintechs that revolutionised the bookkeeping and payroll experience, but nobody ever built the end to end customer value proposition. So when we saw that end to end problem statement we said, ‘Why don’t we just string all of this together?’”

He acknowledges that the evolution of technology over the last few years made it possible to efficiently orchestrate a significant amount of complexity in the background in order for the customer to have a truly pleasant and simple experience.

Lesson #2. Keep emotions out of investment (aka don’t lean on family and friends to fund your startup)

Building a startup from scratch is no small feat, especially when it comes to getting funding. In Paytron’s case, the scale of their venture led Jaco and Francois to seek seed funding. They initially tapped their network and raised angel money, and made the decision not to ask friends and family for funding. They did this to ensure that they only took money from those that understood the financial risk and did not invest emotionally. The thought of losing someone else’s money is daunting enough that they didn't want to add the pressure of personal connection to it as well.

So how do you actually get seed funding? Francois and Jaco’s network and experience in digital investment banking and trading have undeniably been foundational in their success both in building their product and in attracting investment. They also credit having a strong minimum viable product (MVP), which means they weren’t just coming to investors with a random idea.  This approach demonstrated they had some skin in the game and were backing their own vision.

They then set out to sell their vision to venture capitalists. Between their banking-world cred and angel investors lending weight to their capacity as founders to sell their story and raise money, they were lucky to attract the attention of both foreign and domestic investors at the right time. As Francois points out:

“In the past, if you were raising big money you often had to go abroad, but the Australian investment landscape has progressed much faster than other economies out there in the last few years. The way venture capital investors work is that they’re very thematic. They look at a particular space that’s attractive and then set out to find the team that can deliver the thematic opportunity. At the time we started Paytron, the payment space was (and still is) very attractive, but it won’t be forever. It’s all about timing.”

Lesson # 3. Get your product out to market ASAP

One of the challenges of being a fintech founder is knowing you need to get your product out to market as soon as you possibly can, and not waiting until it’s perfect (which would of course mean that you’d hold on to it forever). The key here is that you cannot build a perfect product without extensive customer feedback.

As a quasi banking platform, the MVP for Paytron had to meet a high benchmark before it could go to investors. The openness and culture of the Australian fintech community were invaluable for Jaco and Francois in the early days of building their app.

Paytron started out in Stone & Chalk, an innovation hub for fintechs located in Sydney, Australia, which meant they were surrounded by businesses who volunteered to be early adopters and provide much needed feedback on the product. From a technology perspective, the collaborative environment also contributed to a complete pivot in the tech stack they were planning to use.

Jacos’ advice for similar tech startups in the early stages of the process is to get your product in front of your clients and iterate as fast as you possibly can. This helps keep your focus on understanding exactly what customers are doing in the process that you’re trying to create a product for, and working out their pain points. This leads us to the next lesson…

Lesson # 4. Understand your customer personas and the pain points you solve for them

One of the biggest challenges Paytron faced in their earlier days was getting their sales pitch right in order to sell their value proposition to who they thought was their target market,  so not only did they deal with an evolving product, but they were learning exactly who their target customer base was.

Paytron extracts efficiencies out of payment processes in order to give that time and money savings back not only to the immediate user, but also to the end user. For example, not only do the accountants and bookkeepers benefit from using Paytron, but their clients benefit as well. Jaco adds:

“That’s why we love working with clients such as Project Alfred. Project Alfred cares more about delivering value for their customers, than they care about hoarding manual work to inflate their service fees. Liam and the team continuously seek out technology to save their clients money and to make their lives better. This is our ideal customer, tech savvy partners that ultimately just want to improve the customer experience.”

The challenge is that business owners often don’t realise their business is experiencing inefficiencies (or that they’re avoidable/reducible). The reason for this is that people are inherently bad at attributing sunken costs, such as salaries, into the multiple often manual tasks being performed. For example, most business owners don’t immediately recognise that paying invoices, with all the associated steps, has a processing cost , which could be more effectively spent elsewhere through redirecting that valuable time to revenue generating or other cost saving activities. This is why it is extremely important to select your accountant and bookkeeper very carefully. Make sure that they provide you with a holistic service offering and that they understand the implicit and explicit costs of your company.

Selling their value proposition means Jaco and Francois have perfected being able to explain Paytron’s value to a whole host of different customer personas (“A marketing nightmare!” says Francois.).

For businesses like Project Alfred that deal with domestic payments, Paytron really helps connect the dots between us and our clients and makes that communication channel super efficient and a really exceptional process. For other users, the foreign exchange (FX) component of Paytron is its key selling point, and their new website taps into these differences. Their new website specifically targets different customer personas, with landing pages targeting the user, e.g. businesses, importers, accountants, outsourced bookkeepers, payroll providers, etc.

Understanding customer pain points isn’t just about selling; it also helps you create the product that your user needs, rather than the product idea you initially came up with.

Lesson # 5. You need a diverse skill set to start a business… and then you need to make smart hires and get your culture right

A great idea is going to get you nowhere – you’ve got to execute on it, and that’s exactly what Jaco and Francois did. As founders, that means they’ve had lots of hats to wear along the way (and still wear many hats today). You need a pretty diverse set of skills to start a business no matter the industry. While it’s true that you can hire people to do the work you can’t do yourself, there are limits.

“You only have enough money to get you to the next funding round. With every round of funding your team can grow and you can start handing down the functions you have been taking care of since the start. But on day 1 the journey started with just the two of us,” Francois points out. “As the founders, you need to have 80% of the skills required to get you through a few funding rounds. From day 1 Jaco and I were responsible for, and have significant experience in, strategy, planning, high performance team building and management, technology, legal, operations, accounting, tax, risk, financial products, regulations, etc.”

Paytron’s first hire was to fill the biggest gap in their skill set that would get their product to market fastest. For them this meant hiring a designer; having that role in-house early on really helped them iterate faster. It’s certainly possible to build a good culture with a remote team, but for Paytron it was important for them to hire locally (and be in the same office when possible). They’re also conscious of avoiding the silos that are typical of traditional financial institutions, and recommend creating easily accessible knowledge bases (they use Confluence and OneDrive).

Lesson # 6. Show up every day and keep your eyes on the bigger picture

There’s no typical day in the life of a fintech founder. Eighteen months in, Francois and Jaco are busy strategising, future-proofing the business, building advisory and influencer networks, managing investor relationships, guiding team members, interacting with clients and working out what to prioritise from a client and geographical expansion perspective.

Paytron places a huge emphasis on seeking user feedback to inform their strategy, and this effort is reflected in the functionality of the features that they bring out in their app, but keeping these conversations going is also a huge time investment.

It can be hard to not get lost in the trenches, as Jaco explains, “You’re bouncing around between different things and the discipline is to try and delegate as much as you can while  remaining disciplined around strategy, planning, competitive analysis and looking at the bigger picture.”

As founders, Francois and Jaco believe one of their most-used skills is keeping level-headed amongst all the emotional rollercoasters of building a startup and turning it into a scale-up.

Francois recommends that startup founders take the time to get the full picture before they make decisions, and warns not to assume you’re the best decision maker, just because you started the company. Especially as your business grows, it’s important to stay involved in all the peripheral stuff that’s going on, from lunches to water-cooler chats, because then when someone comes to you with an issue, you can piece together all the additional information you’ve had to see the bigger story before you make a decision.

They feel strongly that Paytron’s success to date is largely due to it being co-founded and run jointly, as they believe a startup’s probability of survival increases materially when you, as a co-founder, have an equal that has your back, has complementary skill sets and provides the opportunity to reach fairly accurate conclusions much quicker, be it opportunities or challenges.

So what’s Paytron’s formula for success? Francois and Jaco agree it’s 20% skill, 10% luck, and the rest of it is consistently showing up and making sure you add value to move forward a little bit every single day.

There’s lots to learn from startup business success stories like Paytron’s, but sometimes you need some extra help, and that’s where your network comes into play

Being a founder, especially if you’re doing it alone, is a lot easier when you have other people to bounce your ideas off. As growth-focussed accountants, we work with new and established businesses to achieve their strategic goals as an extension of their team.

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