One of the biggest challenges of striking out on your own is keeping your accounts in order – the last thing you need is a letter from the taxman when you’re getting your dream off the ground. But how can you focus on book keeping when the clock is ticking on your startup? Through building the accounting app Coconut, which aims to make more time for ‘doing’, Sam O’Connor has pressure-tested some business truths. RSNG caught up with him to ask how he did it…
RSNG What’s the best productivity hack you’ve ever used? SAM O’CONNOR, ENTREPRENEUR ‘I’ve found it’s really important to put aside two hours every day for your Top Goal. It’s easy for priorities to get lost in everyday tasks like emails or meetings. But if you identify the one thing that’s most important to the business, and set aside two hours in your calendar to focus on it, you’ll always make progress.’
RSNG What strategies have you used to lead in a fast-growing company? SC ‘What I’ve learned is that the CEO’s job is to hire the best people you can and keep them happy, set them in the right direction and then make sure you don’t run out of money. If you do these three things very well, the rest takes care of itself.’
Start by finding a co-founder – convincing someone to join an idea-stage business really clarifies things
RSNG What’s the biggest lesson you’ve learnt from one of your employees? SC ‘One of the big things I’ve learned is the importance of structuring time where the team can let their hair down. It’s really easy to get caught up in working non-stop, and if the founders are doing this, the culture permeates through the business. But if the team has down-time, everyone gets to know each other and has shared memories, which makes working together so much more fun.’
RSNG Got any advice for a reader with a big idea but no infrastructure or people around them? SC ‘Start by finding a co-founder. The process of trying to convince someone else to join an idea stage business really helps to clarify things. It’s also important to find someone who has complementary skills to you and then have clearly defined roles. Adam, my Co-founder, and I were originally accountants but we have very different skills and interests. Adam looks after the product and creating something that customers love. I look after growing the business. We’ve worked together for 10 years now and we really enjoy it.’
RSNG Where did you get the idea for Coconut? SC ‘We started out as accountants at PwC and corporate life wasn’t for us, so we left to start a fintech business. After we sold that business, we became freelancers but ran up against common challenges like managing expenses, getting clients to pay and sorting out our tax returns. We found that traditional products like bank accounts and cloud accounting didn’t give us the visibility we needed over our finances and tax, so we set out to create something that suits the mobile and fast-paced nature of work today.’
‘Coconut uses payments data to automate bookkeeping. It tells you automatically which expenses are tax deductible, giving tailored guidance about the tax rules. Coconut also tells you how much tax you owe and fills out your tax return as you go. It’s the product we wanted when we were freelance.’
There’s a massive shift towards self-employment and entrepreneurship around the world
RSNG Do you have any tips for dealing with uncertainty, given that’s what startups are about, and is also what a lot of your customers deal with day to day? SC ‘I think sometimes it’s easy to get caught up the detail of what’s going on every day. Especially when you get knock backs or things don’t quite go according to plan. It’s really important to have a vision that you can fall back on in those moments. For us, we knew that more and more people are working for themselves, and that bookkeeping and accounting will be automated. And of course we can make this happen. When you’re working towards a vision that’s totally clear and difficult to dispute, the tough patches are easier to get through.’
RSNG Are we seeing a revolution in the way that people work and set up their own businesses? SC ‘There’s a massive shift towards self-employment and entrepreneurship in the UK, and around the world. There are 5 million self-employed people and owner managed businesses in the UK alone. It feels like the creativity that’s been suppressed by corporate life is bursting out and encouraging people towards entrepreneurship. It’s never been easier because technology is there so you can work from anywhere and find work easily. And people are much more comfortable with what it represents these days, so I think we’re going to see many more people working for themselves or starting businesses. I’m very excited by what’s happening.’
RSNG What has been the biggest challenge for you along the way? SC ‘Coming from a corporate job via a business that sold to banks and accounting firms, we didn’t know a lot about how to create a strong brand. We were a bit nervous at the start and wanted to present a super-polished appearance. But as soon as we started being ourselves and talking openly about where we were as a business, and what we wanted to achieve, people really connected. I think people are tired of really polished brands and want to join the company, and the team, on the journey to creating an awesome product.’
RSNG Why are the traditional banking and accounting companies not able to provide good solutions for the new work landscape? SC ‘Accounting packages were built before smartphones and they rely on lots of different apps to make them work well. And banks really don’t know how to work with our customers – they offer very basic, expensive bank accounts without much to differentiate them. By combining these banking and accounting together, the whole problem of systems talking to each other goes away and we can automate everything in real-time with zero data entry.’
‘It means we can tell you instantly what’s tax deductible, give you a real-time forecast of your tax and fill out your tax return as you go. We want Coconut to be the heart of your business with everything you need in one simple product.’
RSNG What was the breakthrough moment when you realised it could be a success? SC ‘Early on we wanted to capture interest and have a way of talking to customers who were interested in what we’re doing. We setup a Facebook group called Coconut Bite which started slowly. But we quickly saw the passion that our community members have for solving this problem by how engaged they were in the group. This was a really exciting thing to tap into something really profound. It’s still a crucial channel for us to communicate with our early customers and get feedback.’
WHAT NEXT? For more on how to build a strong team, read RSNG’s guide to The Science Behind Teamwork.
Follow the author @mattfitnessray