In this episode of In Conversation With…Ben Hutton, Managing Director, xDesign talks to Colin Hewitt, Founder and CEO of Float, a cash forecasting app that helps businesses with financial planning.
Ben and Colin talk about helping businesses move away from financial planning with spreadsheets (which are out of date as soon as you finish them), having a single source of truth for financial planning and empowering accountants to help build stronger businesses strategies.
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Colin, thanks for coming along and taking the time out of your day. Can you tell me a bit about Float?
Sure, we help businesses make better decisions with their financial planning. We look at forecasting and budgeting software that helps you plan scenarios and it hooks into your accounting software so you’ve got a lot less data input to do as well.
So, is it competing with traditional spreadsheets and the backs of cigarette packets?
Yeah, all of the above. I used to run an agency myself back in the day and I was doing the financial planning in a spreadsheet and it was pretty painful. Basically, we started using another piece of software called FreeAgent, which we thought was great at the time but then it didn’t talk to our spreadsheet and we wondered why we had to do all of the data entry twice.
So basically, that was the genesis of the idea - we had to move away from spreadsheets and make this much more automated.
What made you move from running an agency to building a product. From game keep to poacher, if you will.
Hah. A couple of things. We were a small agency of about four or five people and we were looking at how we were going to grow it. We were pitching a lot for £10k, £12k or even £20k websites and we were doing one of those every month, by the time you turn around content and testing. The way you scale this is by doing much more of that size of job or by much more significant level jobs.
We looked at what was available and the sense of competition didn’t sit very well so we started building web applications, which I really enjoyed. My background is software development and I really love UI and user experience and that kind of stuff so I really enjoyed building apps.
We always had it in mind that we would build our own when we had the proper budget and take it to the next stage. I’m sure you’re familiar with people who come to you and say, we want an app, but on day one they say, we have no more money but can you still fix X,Y and Z?
So, we were in that position multiple times and I thought it would be great to do our own thing and never have to pitch again. But then, ironically, I realised that when you don’t have any revenue you have to pitch investors and you do that at a 10 x higher rate than we were pitching previously.
So it was a number of factors but it was also at a certain time when a lot of startups were getting going and, for me building a software product was a better path than an agency.
We’re not going to get away without talking about Covid-19. Against the backdrop of the pandemic have you seen more people take up Float?
Yeah, absolutely, there's been a huge surge in demand and a lot of that has come through the accounting channel. We typically work with businesses directly and accountancy is a partner channel. Accountants use Float as an advisory tool to help the businesses they work with and that’s very much where the accountancy profession seems to be going.
That’s probably been the biggest one, seeing businesses going to their accountants and saying ‘help, what are we going to do, what runway have we got? I think [Covid-19 has] pushed a lot of businesses to think about getting cash flow in a much more real time set up that they can rely on. If you do it in a spreadsheet it’s out of date as soon as you’ve done it and you have a lot of different data sources.
I think businesses have had so much on that they’ve gone back to the back of the fag packet approach or relying on the spreadsheet. Unfortunately a lot of businesses are going bust or cutting back on spend wherever they can so we’ve seen a drop off in the direct sales and a rise in the partner channel. The rise in the partner channel has made up for the drop off in the direct channel.