Founding WIRED 2014's Winner, with Mutaz Qubbaj, Founder @ Squirrel

Mutaz Qubbaj is Founder @ Squirrel, a financial wellbeing platform that allows employees to regain control of their financial lives. Mutual has celebrated much recent success with Squirrel having been named winner of WIRED 2014 and Pitch @ The Palace. Mutaz is also an expert on all things accelerator having been an alum at Barclays Techstars London with Squirrel, which you may remember from our interview with Greg Rogers, where Greg named Squirrel the next company to disrupt an industry. Prior to Squirrel, Mutaz has had a financial career that includes an LBS Masters in Finance and more than a decade at Morgan Stanley, Credit Suisse and PIMCO as a trader, strategist and marketer. In Today's Episode You Will Learn: How Mutaz made his movement from banking to being a startup founder? Was it difficult for Mutaz to leave the security of banking for the risky journey of entrepreneurship? What would Mutaz advise anyone looking to make the jump into the world of entrepreneurship? How did joining Techstars, help Squirrel as a company and Mutaz as a Founder? What is the Barclays Techstars process like? How can Founders decide which accelerator is right for them? What red flags should founders look for when investigating accelerators? How much equity do traditional accelerators take? What tips does Mutaz have to get the most out of the accelerator experience? How do individuals know when to give up the day job and become an entrepreneur? Items Mentioned in Todays Show: Mutaz's Fave Book: Exponential Organisations: Why New Organisations Are 10 Times Cheaper, Faster and Better Than Yours by Salim Ismail and Michael Malone Mutaz's Fave Reading Material: TechCrunch As always you can follow Harry, The Twenty Minute VC and Squirrel on Twitter here!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  It's Friday and that can only mean one thing here at the 20 Minute VC. It's time to bring out a fantastic founder and interview them. So I'm delighted to interview Mutaz Qubbaj today, founder at Squirrel, a financial wellbeing platform that allows employees to regain control of their financial lives. Mutaz has celebrated much recent success with Squirrel, having been named winner of Wired 2014 and Pitch at the Palace. Mutaz is also an expert on all things accelerator, having been an alum at Techstars London, which you may remember from our interview with Greg Rogers, where Greg named Squirrel the next company to disrupt an industry.

• 0:40Harry Stebbings?

  And prior to Squirrel, Mutaz has had a financial career that includes an LBS Masters in Finance and more than a decade at Morgan Stanley, Credit Suisse and Pimco as a trader, strategist and marketer. But before we dive into today's incredible episode with Mutaz, do you know what gets me more than anything? It's when you find a product and you see that one version has significantly less than a more expensive version. Well, that just isn't the case with HiringScreen, as all plans include unlimited users, a full analytics dashboard and dedicated customer support from the delightful Richard and Luke. It's a truly incredible experience and I highly recommend you check them out at www.hiringscreen.com.

• 1:23Harry Stebbings?

  But ladies and gentlemen, without further ado, here is Mutaz Qubbaj, founder at Squirrel.

• 1:34Speaker 01

  You have now arrived at your destination.

• 1:37Harry Stebbings?

  Well, Mutaz, welcome to the 20 Minute VC and this special episode of Founders Friday. I'm so excited to have you on the show.

• 1:44Speaker 02

  Thank you very much for having me on the show, Harry. Thank you for the opportunity to get the word about Squirrel out there and just very much looking forward to the next 20 minutes.

• 1:53Harry Stebbings?

  And I'd love to hear a little about you and Squirrel and for any of our listeners who don't know what Squirrel is, maybe give a little background.

• 2:01Speaker 02

  Absolutely great, so just to dive into my background. I'm an MIT grad, I got to go through their Electrical Engineering and Computer Science Program. So at my core, I'm a tech geek. But I managed to dive right into investment banking right after graduating in 2000. Was a trader, salesperson, builder of businesses, lecturer. Was published as a strategist at Credit Suisse, Morgan Stanley and PIMCO. Until I realised I wanted to do something that much more fulfilling with my life. Not to discredit any of those past experiences, but I think Squirrel is it. And just to dive into Squirrel itself. So Squirrel at its core, or in a nutshell, which we tend to use a lot over here. It's a financial wellbeing platform.

• 2:43Speaker 02

  What that means is that we're trying to get people to become better with their money. We're trying to give people a platform that empowers them to take control of their financial lives. And we do that by partnering with employers to give their employees ways to save, budget and manage their bills directly from their payroll. It's in direct response to what we'd seen happening in the payday loan as well as the overdraft markets where people who are financially vulnerable feel like they don't have enough choices to hand that they can tap into and they end up resorting to what you see as predatory extortionate credit in those markets. And that credit tends to make matters worse. And you see the payday loan markets going to close to four billion pounds in total,

• 3:25Speaker 02

  the overdraft markets going to eight billion pounds. And once you see the Church of England coming out saying they want to compete the largest payday lender out of business and couple that with payday loans being sold to people at, you know, close to 6,000% APR using puppets. There was something to be done and that's where Squirrel steps in.

• 3:45Harry Stebbings?

  Absolutely. And you said there that you obviously passed career as a banker. Was it difficult to leave the life of security for the riskier life of an entrepreneur?

• 3:55Speaker 02

  I'd be lying to you if I said it wasn't. It's one of those things where after 13 years of looking at a steady pay cheque and basically sitting there and saying there's a structured and scripted route to success. Just...

• 4:10Speaker 02

  Taking that leap into the entrepreneurial life and saying, well, I have to embrace uncertainty. I have to embrace a potential failure. I have to embrace the fact that every area is a gray area. And all I'm trying to do is find elements of structure and coordinate some of that chaos and make it actually work for me. It's a different mindset altogether. And yeah, it was definitely, you could say, uncomfortable to begin with. But I guess it's been an amazing learning experience so far. And I'm excited about what the future holds for both myself and more so for Squirrel.

• 4:42Harry Stebbings?

  And what would you advise kind of working professionals who maybe have an idea and would love to start a business around it, but don't have that confidence yet? What would your advice to them be?

• 4:53Speaker 02

  I'd say immerse yourself in the entrepreneurial community. Just get into the mindset of talking about your idea. One of the scariest, I guess, hurdles I had to overcome very early on was just being very, very secretive about my ideas because there was that thought of everybody's going to want to take my idea and just implement it themselves. And once you hit that realization as a potential entrepreneur, that your idea is nothing while it's still a thought or while it's still on paper. And that you're going to actually be able to test your idea, test whether it has any merit, test whether there are better ideas out there, or test whether there are other ideas that can be combined with your idea to make it even that much more effective

• 5:38Speaker 02

  or sticky or sustainable as a potential business. That's that transformational point. You've got to embed yourself with the entrepreneurial community for that to happen. So from my standpoint, London's been an amazing haven of just entrepreneurial meetups, events, just different venues and forums that you can throw yourself into, whether they've been organized by the accelerators such as Techstars, Wyra, or whether they've been organized as meetups, as well as there are certain educational forums such as General Assembly as well as Three Beards that you can tap into to define the next, you know, the next set of people that you want to be part of your new community.

• 6:23Harry Stebbings?

  And I'm right in saying that you at Squirrel attended the Barclays Accelerator by Techstars?

• 6:28Speaker 02

  Yes, so we were one of 10 companies that were chosen out of close to 400 companies that applied during 2014. So we were part of that inaugural cohort and we went through. An amazingly fast-paced mentor-focused program for three months and um yes, it's it's it was a pivotal moment for Squirrel. Definitely a pivotal moment for Squirrel.

• 6:50Harry Stebbings?

  And how did it help you as a founder, starting out the company?

• 6:54Speaker 02

  So what the Barclays Techstars Accelerator provided, or the type of structure provided, was was pivotal in the fact that we see, we saw it as a transformational experience. It took us from a product, that product phase of Squirrel, to more of that vision phase of Squirrel, giving us a structure around which to build the Squirrel value proposition from the ground up. So just just to kick off, the program itself kicks off with what's known as mentor madness. You're thrown into one month of a hundred mentors asking you the same question over and over and over again. And the question is, why do you exist?

• 7:36Speaker 02

  Now, having, after being that I asked that question about ten, fifteen, twenty times, you have to drill into the core value of your proposition, the core benefit that you're trying to bring to the target market that you're trying to address. And with that question being repeated over and over, within a period of one month, you have an amazing feedback loop that starts helping you shape your value proposition in a way that I I've never been exposed to before. And we're talking to mentors from the tech ecosystem, we're talking to mentors from the investor ecosystem, we're talking to people who gone through that serial entrepreneurship role over and over and over again, where they've seen the factors, they've seen the elements of success, they've seen

• 8:18Speaker 02

  the different ways to increase that probability of success for each of the ventures that they've been a part of. So for us, it was a pivotal time in terms of taking what we had started out with, coming into the accelerator and turning it to something that was that much more polished, but that much more relevant and that much more sticky and that much more closer to succeeding um by the end of it.

• 8:39Harry Stebbings?

  And would you say that was the most valuable part of the Accelerate program for you, the mentorship?

• 8:44Speaker 02

  The mentorship is definitely a key part of the value of the accelerator program. The access to resources within both the Techstars ecosystem as well as the Barclays ecosystem, Barclays as a corporate, for a fintech startup that's still trying to get its, I guess, its hands dirty with their value proposition, those just trying to find the right hooks to make sure their idea sticks in a very relevant market. It's, that combination was phenomenal. The other parts that also, that Squirrel gained from significantly were the parts tied to just making sure that we found the right message for, to bring different stakeholders on board. And for us, it was tied to making sure that we found the right hooks or the right incentives

• 9:29Speaker 02

  or the right motivations that could bring people on to, just, just across the table from Squirrel and just say, we need to help you, how can we get involved? Whether it's in terms of providing insights, providing connections, or potentially even providing funds. So for us, there was a month's worth of just going through the messaging, going through the value proposition, breaking it down to its core elements to ensure that we had the right hooks for each of those stakeholders.

• 9:58Harry Stebbings?

  And there's a huge amount of accelerators around today. How can founders decide which one is right for them?

• 10:06Speaker 02

  So with regards to that, the choosing, the decision of choosing the right accelerator, founders have to have a clear, a very clear idea of what they're looking to get from these programs. Whether it's pushing traction, whether it's just improving the, the shape and the structure of their product, whether it's tapping into resources that they wouldn't have access to otherwise. The whole idea of going to an accelerator is you want to give your startup, you want to give your company an unfair advantage. You want to give your company that extra boost that accelerates it into, effectively into hyperspeed while everybody else is... You know, just everybody else is working at a slower pace.

• 10:49Speaker 02

  So what you're doing with the accelerator is trying to evaluate what resources can I have access to? What resources are going to be crucial to my business at this particular stage? Is it the network? Is it the, um, is it the access to funding? Is it the access to internal resources? And it's making a beeline towards the right people that need to, that can give you the answers to what those resources are. And more so getting them to commit as you're going through that acceptance process. Getting them to commit to be able to work with you through the different milestones across each of those business needs. That's one of the key.

• 11:24Harry Stebbings?

  Have you retained mentors from your days at Barclays with you now having left?

• 11:30Speaker 02

  Almost definitely. It's, it's one of those, uh, one of those key, uh, parts of those key benefits of being tapped into that community. So we have many mentors from the Techstars community, many mentors from Barclays as a corporate that are always there to provide additional insight, are always there to have that extra cup of coffee just to make sure that we're still on track with metrics that we continue to set with them on an ongoing basis. So the meetings are less frequent, yes, but, um, at the end of the day, they're, they're part of our connect, they're part of our network and they'll continue to be part of our network for the foreseeable future.

• 12:03Harry Stebbings?

  And are there any red flags for, that founders should maybe look for when investigating accelerators?

• 12:10Speaker 02

  Um, most definitely, as in, um, in terms of looking at accelerators, it's making sure that you get the right attention or you get the right, uh, uh, the best term for this is acceleration services out of the program. You, you don't want to go into a program where you're giving up some very valuable founder's equity without, um, ensuring that you're going to get the right support or you're going to get the right, um, structure from a program. So the red flags are, I guess, the best way to, to look for the red flags is talk to somebody who's come out of an accelerator program or the accelerator program that you're looking to tap into. Ask them about their experience, ask them about what type of support they got in terms of developing their product.

• 12:54Speaker 02

  In terms of access to investors, in terms of pushing traction, getting, having the right people come to potentially be clients for you. So you're at a crucial stage in your startup where each of those elements, as well as talent acquisition is another important one that I forgot to mention. Just you want to make sure that startups that have come out of an accelerator have had access to each of those four elements. And in terms of red flags, it's just any startup coming out of those accelerators saying that they didn't get the right amount of attention. Or they felt that certain things fell short, or that the accelerator was more of a co-working space, which you can get out of an incubator, which is just, hey, effectively I've given up equity for rent, which isn't exactly the, the best situation to be in as a startup.

• 13:39Harry Stebbings?

  And how much equity is traditional for these accelerators to take a range, would you say, is it five to 20 or is it more than that?

• 13:48Speaker 02

  No, it's between six to 10.

• 13:49Harry Stebbings?

  Six to 10.

• 13:50Speaker 02

  Yep.

• 13:51Harry Stebbings?

  And what was Techstars?

• 13:53Speaker 02

  Uh, so Techstars is 26%.

• 13:55Harry Stebbings?

  Okay. And what do you think founders may be?

• 14:00Speaker 02

  By the way, just to go back on the equity side, the thing about, say, an accelerator, the right accelerator getting involved in, at the founder's equity level is that the amount of alignment you get, um, through the people that run the accelerator, through the acceleration services, as effectively a co-founder to your business, rather than just you being a portfolio company where they've put the investment in there and they're just letting you do what you can, letting you do what you want without their support, is that, um, you actually have a very aligned and supportive entity that's going to help boost your probability of success. And that is key. That is key for any startup looking to evaluate an accelerator.

• 14:40Speaker 02

  How is this co-founder that's coming on, onto my cap table, going to help me increase the probability of my success and increase the probability of me seeing through my vision?

• 14:49Harry Stebbings?

  And do you have any tips for founders in terms of how to get the most out of them, whether it be, you know, stay late, meet mentors in the weekends, go to demo days every day of the week? What would you suggest to get the most out of it?

• 15:03Speaker 02

  So in terms of getting the most out of it, it's, um, it's just making that beeline to the resources that you've already profiled at the beginning of the accelerator. It comes back to doing your homework before looking, before saying yes to an accelerator proposition. It's saying, what do I need out of the accelerator and being very clear with the organizers of the accelerator, the people who run the accelerator about setting specific milestones that you can come back to every month, every couple of weeks with an accelerator. You have a period of three months over which you're seeing an acceleration of your business to the tune of between one and a half to two years in some cases.

• 15:42Speaker 02

  It's up to you as a founder to say, I'm going to try to extract as much value as I possibly can. And that's going to be key for, for any founder looking at accelerators. Making a beeline to those resources, making sure that you tap into those resources in the most effective way possible, but more so setting key performance indicators that you can monitor with people who run the accelerator to ensure that you're getting the value that you want out of the program.

• 16:09Harry Stebbings?

  And you clearly did brilliantly well in getting the value out of the program as you recently won the Pitch at the Palace with Squirrel and the Wired 2014 competition. Massive congratulations for that, by the way.

• 16:21Speaker 02

  Thank you very much.

• 16:22Harry Stebbings?

  And with this immense success, I presume you've taken external funding?

• 16:25Speaker 02

  Yes, yes, we have and it's been, I guess you could say the accelerator program as well as those wins and more recently the, the fintech, making it onto the fintech 50 list, which profiled as one of the 50 hottest financial tech companies in Europe. As well as a recent trip with Boris Johnson out to the US has added more exposure to Squirrel. So for us, that's definitely helped with getting us on the radar screen of a number of angel investors as well as a number of funds. So the process has been, I guess it's a full-time job within your full-time job.

• 16:59Harry Stebbings?

  Absolutely, fundraising never stops.

• 17:01Speaker 02

  Oh, never stops, there's that mantra of always be raising. It's always easier when you have people excited about what you're doing because we're effectively trying to build something amazing at Squirrel. So to date, we've actually raised upwards of 1.1 million pounds.

• 17:16Harry Stebbings?

  Okay.

• 17:16Speaker 02

  Through a combination of.

• 17:19Speaker 02

  Angels funds, as well as more recently, uh, receiving a Innovate UK Smart Fund, uh, grant. So for us, it's been a, it's been a very process in terms of getting in front of the rights, the right potential stakeholders, whether it's the Innovate UK team, whether it's a number of the angels that we started building relations, relationships with through the Techstars program, as well as certain funds at the seed level who've expressed interest in wanting to play a part in the squirrel journey.

• 17:48Harry Stebbings?

  And I'd love to jump into a sixty second quickfire round now.

• 17:52Speaker 02

  Okay, great.

• 17:53Harry Stebbings?

  So your favorite book and why?

• 17:56Speaker 02

  Um, it'd have to be Exponential Organizations by, um, Salim Ismail and Mark Malone. It just, it's, um, got a number of great focal points about, a number of great ways about how to build your business, how to scale it and just dismissing the status quo and making sure that everybody in your team is aligned to hit that hockey stick moment.

• 18:17Harry Stebbings?

  The most surprising aspect of being a founder?

• 18:20Speaker 02

  Um, having to, I guess, fully embrace uncertainty and just say that this is my new life and, um, I no longer need that paycheck because I'm doing something amazingly fulfilling that will see its own returns, whether it's in terms of fulfillment as well as monetary, as well as monetary.

• 18:37Harry Stebbings?

  Is that your favorite part about being an entrepreneur, doing something you're truly passionate about?

• 18:42Speaker 02

  Honestly, yes. As in, uh, for me, it's, it's, it's being able to wake up every single morning and say, I'm as excited today, if not more, about what I'm trying to do for the people that I'm trying to solve this problem for every single day.

• 18:55Harry Stebbings?

  And is that when you know that you should be an entrepreneur and you should leave your job, when it envelops you with passion?

• 19:01Speaker 02

  Most definitely. And then the other one is if your past job goes from becoming a job to a series of tasks and you can't align your brand of happiness with the happiness that is tied to major success within your current role, just, just start taking a look at the entrepreneurial side, embed yourself in that entrepreneurial community and just sink your teeth into it, the, the payoff for doing something that you're passionate about on a daily basis and, you know, just waking up at one or two o'clock in the morning and saying, yes, I'd rather sit down and write a one to two page email to everybody I work with because I just got excited about how I can make my value proposition better. It's um, it's it's an amazing experience and I I tell everybody get involved but it's you've

• 19:44Speaker 02

  got to find the right thing to be passionate about.

• 19:47Harry Stebbings?

  Absolutely. And then your favourite newsletter or blog?

• 19:51Speaker 02

  I typically read TechRunch all the time. It's it's just a good way to keep up um with recent developments in the market, recent funding, recent fundings within the market, recent trends. So it's just my way of keeping tapped into the pulse of what's going on and I guess what I should keep my eye out for.

• 20:08Harry Stebbings?

  When I say successful founder, who's the first person that comes to your mind?

• 20:12Speaker 02

  Um, it's got to be a combination of Elon Musk and Richard Branson. So it's a it's a nice toss up between the two.

• 20:18Harry Stebbings?

  Okay. And then finally, the next five years for you and Squirrel?

• 20:23Speaker 02

  Um, just going global with Squirrel, it's it's I I want to, as in, with the type of attention we've gotten across the globe, whether it's um from across the Atlantic and the US, across Asia, also through some investors we have out there, in the Middle East, as well as emerging markets, we're looking to make people better with their money. There is a need for what we're building and when we're seeing people embrace that need. So so in terms of where we want to be with Squirrel, we we have a vision where we want to help as many people across the globe be better with their money. We want to help as many people become or attain what we've termed financial freedom. And in terms of myself, I I want to spearhead seeing that vision through to success and it's it's um it's

• 21:05Speaker 02

  opportunities like these that I'm thankful for, Harry, to to get the word out there.

• 21:09Harry Stebbings?

  Mutaz, it's been an absolute pleasure having you on the show.

• 21:12Speaker 02

  Thank you for the opportunity, Harry, and it has been a great twenty minutes and it's definitely lived up to my expectations.

• 21:18Harry Stebbings?

  Wow, what a fantastic episode with Mutaz. And as always, all the resources can be found on the blog at www dot the twenty minute vc dot com. But before we leave, don't forget to check out HiringScreen at www dot hiringscreen dot com, the fastest and smartest way to get the most relevant candidates for your job. And just for you, the twenty minute VC listeners, my dear friend Richard has put on a special package and go and check it out. And I can't wait to hear what you think of today's episode. And we all look so forward to seeing you in the next episode.