Imagining a new way of working for small business owners, with Hannah Dawson
Hannah Dawson, Founder and CEO of Futrli, the business execution platform, explains the thinking behind her mission to use technology to help small business owners succeed.
What got you started on your entrepreneurial journey?
I bought a pub in Devon when I was 26 and Futrli was born from the pain of running that business. It’s a pain which has been endemic of lots of small businesses pain and it’s the feeling of being terrified about cash flow and wondering if you’ve got enough money in the bank. I didn’t account for VAT properly in my first quarter at the pub and had to find £40K from somewhere, whilst having a one year old child. The systems in place back then were desktop accounting software that your accountant would’ve sold to you and if you didn’t know what you were doing, you were on your own.
I only saw my accountant once a year and so, when I left the pub to set up a software company (which was terrible by the way) one of the better things I did was that I started using Xero.
I was one of Xero’s early adopters - this was 6-7 years ago - but I was still experiencing the same pain of having to export information out of my accounting package, to put it into spreadsheets. I was always running on a time lag and making decisions was hard, so I looked at their add-on marketplace, as they had about 60 add-ons at the time. I tried everything to do with forecasting and reporting and none of them worked. In my opinion, they didn’t work because they had been designed by accountants. They weren’t operational, they were very historically focused and had not been designed with a business as the end user in mind. So, I took a very big jump and persuaded my husband that it was a great idea for me to build something that would solve the problems of all the small businesses out there, which is what we did when we launched Futrli in 2014 and we quickly realised accountants actually liked what we were doing too.
As we were bootstrapped back then, it was easier to be able to target accountants with a small sales team and thus the product we have today was born and evolved into facilitating advisory conversations that accountants would have with their small business clients.
What was your vision back then and how has it changed?
I think when you start out you have a lot of enthusiasm but also a lot of naivety about how your software might be adopted. Back then dashboards, forecasting and BI tools were the only way I could envisage engaging with a small business. Now, with the new platform we’re launching, it’s a very different approach to engaging with a small business.
The last four years has really given insight over the fact that, first of all, 50% of small businesses are still failing by year 5, despite all of the tech in the marketplace.
Also, when you’re selling to small businesses, you’re not selling to enterprises and there’s no procurement process, you’re selling to people - human beings with an idea and a small team. You’re also selling to people who are time and resource poor and don’t have teams of analysts to help their finance function. There are many fantastic BI tools available to small businesses, but if you don’t know what to look for and don’t have people who know how to use the tools, the problem still remains and they’re completely useless.
At Futrli we’ve reimagined a completely new user experience and a new way for small businesses to work. It’s bold, it’s fresh and it has user experience (UX) at its core. We’ve really invested heavily in the UX, to ensure that the three big pain points a small business goes through are solved and served really well:
We’re using bleeding edge technology to ensure that we can surface the most important things that a small business needs to know, every day, in a highly consumable newsfeed.
We’ve all got Facebook, Instagram etc, so we know that that’s how people consume information today, until they’re all caught up. That’s exactly what we’re doing with small businesses, so that when they’ve got our system, the platform reads the data - whether it’s financial or non-financial - and prioritises the most important thing a business owner needs to know today and its severity rating. It effectively becomes a really smart to-do list. They can check off and delve into the details if they need to. They can also push actions back out of the platform if they need to, so that the workflow is really considered, which again is helpful if they’re resource and time poor.
We know many of our accountancy partners haven't got the bandwidth to speak to all of their clients all the time, so many of their clients go without regular support, not through want of trying, but just because they can’t proactively service 100% of their portfolio all the time. Our platform now gives Accountants an opportunity to value-add, to ensure that their small business clients are getting really up to date information. Because of our Slack and Gmail integrations, it also means that, if a small business needs help, they can contact their advisor there and then and get the help that they need.
What has been your experience of hiring exceptional people?
Through Notion Capital and in particular through Maddy Cross (who is amazing) and at the Notion 2018 Retreat we realised that, for the next phase of our evolution, we needed an exceptional CTO to steer our engineering team. We realised they needed to have already walked the miles we were about to walk and that we needed to hire for the business experience of the next 2-4 years of our journey. With Maddy’s support, we were able to hire Doug Johnson as our CTO and he’s just such a dude, he’s great. He’s only been with us for a short while, but already there are far reaching effects as to how people are managed, how processes are put in place and how we are scaling our internal operations. The seniority of his role ensures that all of these moving pieces are being pulled together. He’s also making me better as a CEO, which is both humbling and brilliant and he really has been amazing and game changing.
How important are the people on the journey with you?
Well I couldn’t do it without them, could I?
My senior leadership team are phenomenal, I have the privilege of working with my best friend, Helen Cockle, who is our COO and who has come through this journey with me. Helen started off as a sales rep and she still holds the record for most sales against her name (which she’s very proud of) and then moved into a CRO role. Then, as an automatic extension because she’s so amazing with the team, she now has marketing, customer success and sales reporting into her and she really drives the operational helm of our business. If you think of Helen as being grounded in the now and me looking into the future strategically, it makes for a fantastic double act.
Hanna Smith, our Chief of People, is also a game changer. We’re working towards things such as ‘Sunday Times Best Places to Work’ and she’s won that before, as well as other awards in her previous roles. I knew, when we got to fifty people, that if I didn't get someone to look after our people and if it was left to me, the wheels would fall off, and she’s been phenomenal in bringing in the Futrli way of doing things.
We now have a core set of values and have defined how we want our people to manage and be managed. It’s been a really inclusive process and we’re really proud of the team we have today, whether that’s office managers, support teams, or engineers, it’s a supportive and diverse environment, which is something I’m hugely proud of. And of course, being across five different locations brings challenges, so we need to make sure they feel included in everything as well. We don't always get it right, but we do try to learn from every piece of feedback that we get.
What have been some of your biggest challenges - personal and company related?
On the personal side of things, it’s been balancing work and family. I have three kids who are 12, 13 and nearly 17 and they’ve also been on this journey with me for a really long time. Unfortunately sometimes the business has to come first and that’s hard when you have to make that choice because, without the business, we might not have a roof over our heads. My husband is unbelievable, he picks up the slack and does everything with the kids, homework and the whole lot, because my focus has to be here, and we’re building something for our future. Sleep is the biggest problem, genuinely it is. I’ve started doing my mindfulness and it seems to be working, I’ve been doing it before bed, so touch wood it continues to work, as sleep has been a real challenge. I go through big bouts of insomnia, which can make you feel like you’re going a bit mental for a while and then you just crash.
From a professional perspective, the two biggest challenges are funding rounds and getting the best advice. Pre the board I have now, I had a board with no software as a service (SaaS) experience, they were fantastic business leaders in their own right, but in bricks and mortar businesses. SaaS is a funny old beast, it’s difficult to explain MRR (monthly recurring revenue) and the fact that you’re going to have to spend a tonne of money to begin with to acquire the customers and if, as we are, you’re selling a license to a small business for £29 per month, it takes a lot of those licences to recoup the acquisition spend. So that’s a challenge. Every week something rears its head but having an amazing team behind you, reflecting and just learning from experience means there will always be a positive side to it and something you can learn from it. I know that may sound like a cliche, but genuinely it’s everyday.
Building a big business must take its toll on the founders, how do you cope?
Exercise. I always used to hate reading those articles that would tell you to get up at 5am and have wheatgrass etc, so i'm not as bad as that, but I do know that my mental health degrades if I don't exercise. It really is a direct correlation for me, so I’m really lucky that my husband built our house with a gym in it, so it's very easy for me to fall out of bed and go down to the gym, where I can do circuits and weight training. And of course I have the odd glass of wine in the evening because, well, who doesn't.
What’s surprised you the most about your journey and what have you learned?
It never stops surprising me. If you want to build a category leading business, which is what we’re doing here, there have to be some sacrifices and a tonne of hard work. I think you have to accept very early on that you never know what next week is going to bring, because you’re always venturing into the unknown. So don't do it if you are not able to cope with change at a fast pace, because you have to be able to move fast.
One of our Futrli values is to ‘get on the rocketship’, and it is a rocketship. Some people want to work on a cruise liner and that’s fine, but if so this is not going to be the place for you. Tech startups and scaleups are not going to be for people who want to work in that kind of environment. One of the biggest learnings I’ve had is that you have to support your people on the way and make sure you invest in leadership training. Sometimes it can feel like ‘oh do we really need to do this, it’s so obvious how to manage people’ but actually it’s not and everybody’s different, so we’ve really invested in leadership coaching and training. We’ve got mentoring programmes that are going on, I'm starting to mentor young tech founders, as we’re part of the tech nation scale up programme this year, so I've got my first founder that I’m mentoring. It's one of those things that, when it's a really hard day, I take a deep breath, do my mindfulness and remember that this is my choice, no one asked me to do it.
Who inspires you?
I am a total fangirl of Stuart Butterfield at Slack, if I ever meet him I’ll be so excited, I’ll probably rugby tackle him to the ground. I think what he's done there and how he's done it is amazing and it’s the early days I love reading about, the whole thing is phenomenal. So it’s him, for sure, from a professional perspective and I try to emulate him as much as I can.
Helen also inspires me. She’s my best friend and it’s a privilege to be able to build this business with her and I know that we make each other better.
If you could go back to when you were first starting out, what would you say to younger self?
If I could go back, we’d be much wealthier than we are now, because I’d not have made any mistakes. But, do you know what, I wouldn’t change anything because this is a great ride and we’re doing it the right way.
But I would say: don’t deviate, just keep going; try and get more sleep; do mindfulness earlier; and never not exercise.
When you do have time off you should turn your phone off, turn your slack off, turn you email off and enjoy your family. I think there are too many times when I’ve sacrificed true family time, as I’ve been distracted, but you’ve got to remind yourself that it’s going to be ok and that other people have got this. I think I was a bit of a control freak at the beginning, but feel much more comfortable in letting go now, because of my team, but it’s taken me a long time to get there.
And what advice would you give an entrepreneur considering taking VC funding?
I would say know your numbers. I know we have planning software but you have to go into your business understanding the best case and the worst case, what your unit economics are going to be and how you’re actually going to take this to market. And I would also say to really read books and articles on the VC process. Going into conversations with the likes of Jos White, from Notion Capital, I was quite fortunate that I’d had some preliminary conversations. But I read books, I read books on term sheets, I read up on everything that I could and armed myself with knowledge. As a founder, it’s not just about selling your software, it’s about making sure you’re funded, making sure you know what the next 12 months look like, making sure you’re not going to run out of cash. Arm yourself with knowledge and know your numbers. And if you’re not sure, there’s a fantastic software that can help you…