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Season 1, Ep. 5

17 March 2022

Chip - The super app for savings and investments. Simon Rabin, Founder & CEO.

This is a very special episode with Simon Rabin, the founder of Chip, a savings account that brings their users the best interest rates and helps with automatic investing


The process Chip took in starting a fintech, the partnerships they had to build early on and the manual tasks Simon had to take behind the scenes to offer the service to early adopters

How Simon and Chip built the trust of their early users because that was instrumental to growing their user base to over 400,000 as of today

How Chip attracted their first group of users onto the platform through content creation

Transcription -

Sina Sadrzadeh 0:10 Welcome back to another episode of Inside The TeqDen, hosted by Sina Sadrzadeh and powered by Scalar North Capital. The podcast is all about the good, the bad, and the ugly of entrepreneurship from individuals going through their journeys today. This is episode number five. And we want you guys to hear firsthand from the experiences of today's rising entrepreneurs as to what entrepreneurship really means in every sense of the word. And this is a very special episode with Simon robbing the founder of chip a savings account that brings their users the best interest rates and helps with automatic investing. It's a real game changer in the industry. And it's an app that I've actually had on my phone for quite a while now. And so we covered the process chip took in starting a FinTech, the partnerships they had to build very early on and the manual tasks Simon had to take behind the scenes to offer the service to early adopters. And then move on to how Simon and chip built the trust. So important the early stages. So the early users because that was instrumental to growing their user base to now over 400,000 users as of today, really, really impressive. And lastly, how chip attracted their first group of users onto the platform through content creation and other strategies that Simon shares on the episode. It was a fantastic episode. I love recording assignment. I really hope that you guys enjoy this episode. Before we jump in with Simon, please do leave a five star review on Apple podcast if you haven't already. If you're not an apple, if you're on Spotify, please leave a five star review on that as well. The support so far has been absolutely fantastic. So thank you so much. And I can't wait to see where this podcast can go with your support. If you haven't already checked out episode number 123. And four, they're all amazing episodes, I highly recommend that you check them out. They span so many different industries. But they're all incredibly valuable. That's it for me. Thank you again for clicking on the podcast, and I hope you enjoy the episode. Hey, Simon, how are you?

Simon Rabin 1:57 I'm very good. How you doing?

Sina Sadrzadeh 1:59 Yeah, very, very good. It's excellent to have you on the Podcast, episode number five. I call a talk about your story I've been I've heard so much about CHIP heard so much about you. So I really can't wait to jump in to this episode for sure. Like it's yeah, it's a company I've known a lot about for a long time grown massively in the last few years. So yeah, massively excited to have you on.

Simon Rabin 2:19 Absolutely. It's great to be here too. And it's been a hell of a roller coaster. So I

Sina Sadrzadeh 2:24 think it will be great for me to know and like, the whole audience is kind of like when the chip starts and how did it start at the beginning. So

Simon Rabin 2:31 back in 2017, I sold my last business was an international calling and roaming app, and I convinced some of the angel investors in that actually some of the backers of tech den to make a seed investment in my new FinTech idea. And I, I just knew at the time that there was a lot of traction, a lot of work being done on on, like challenger banks, Monzo. And, and revolute had just launched like a year or two before at the time. And I saw that there just wasn't really much being done in the saving space, it was everything seemed to be orientated around spending, right. So I kind of had this idea was gonna do something within within saving. It wasn't very well articulated. But luckily they they backed me, they had confidence in me. And it kind of gave me a bit of time and money to explore, we built the first version of the app actually was an automated chat bot, that basically connected your bank and save money for you automatically, was pretty basic, basic stuff. But yeah, it got us started. And it was really focused on helping customers to save up for things that beginning. So I remember from the market research we did early off that, you know, the the most common bit of feedback we had is, it's really hard to have that discipline to put the money away and to know exactly how much you can afford to put away and so on. So we wrote an algorithm bit of AI, that analyze your transactions, look, look to your expenditure, income and outgoings and kind of every couple of days calculated suitable amount of money that you could afford to save, and then swept that money across into your chip account. Your chip account at the time actually was was an E money wallet. Which Yeah, it doesn't basically was like a prepaid card without the card. Doesn't doesn't sound very, very safe. Obviously. Now, you know, we're FSCS protected banking, and we have sort of real real banking savings accounts. But yeah, that's what it was. And that's how we started off.

Sina Sadrzadeh 4:35 So the premise the premise at the beginning, I guess, like and it carries on to now is that it's quite difficult for people to put away money, the discipline aspect that you mentioned, and you guys were there to kind of like help people provide a nudge but also to help help them save money for for sort of larger expenditures, save money for other things. That was the sort of premise

Simon Rabin 4:53 Right, exactly. And as we as we basically put the product in front of more customers. That was The reason why people were starting to use to use us and that was the the excitement around the product. That was how we marketed it. And then as that journey went on, we started to kind of discover identify, like different cohorts of customers that were motivated and using it for different reasons. And then it became a bit more returns base that actually, not only can you help people save money and put money away, but like, how do you help them grow that money? How do you help them like build wealth for their future? How do you help them improve their financial situation through those savings, rather than just, let's say like saving a few 100 pounds, and then and then withdrawing it again. And that that got us to where we are now, which is building the best savings account in the world. The vision is to bring customers in, let us connect to your bank account. And then you should have seamless access to the best cash savings, the best investment funds, crypto, alternative assets, we're looking at private equity at the moment, we're looking at a whole range of different asset classes that you should be able to save into and all seamlessly from from one app.

Sina Sadrzadeh 6:06 That's very, very cool. I think what I what I would love to know is some some people that are listening might be thinking this as well, when it comes to sort of when you started out creating a FinTech in the space it was it was still kind of early doors, I suppose. Because you know, monster revenue,

Simon Rabin 6:20 or fintech? Like it was just it was you know, these guys, Mondo revolute, were doing a doing a prepaid card or you know, I do I tell you a funny story actually about a too funny story about revolute. Right, so, my previous business Roma, one of the biggest challenges we had was international calling. But in order for the product to really be the best it could be, the customer had to have our SIM card. And the idea is that customers go away and would use use our SIM card and you could like attach your mobile number to the SIM card, and so on. And basically, the biggest challenge we had was distributing that SIM card to customers in different countries and different languages, giving them the instructions to insert that into that phone. For example, we found like you can post people's SIM cards when they didn't have like the pin thing to lock the SIM card drawer. And it basically like the physical distribution was was a real challenge. And I kind of had that my mind anyway, I met must have been 2015, I met this other company called we swap over if you've heard of them, which is it's basically a prepaid card, fundamentally the same proposition as as revolute, initially, so you could deposit onto the card and you could exchange currencies at the best rate and use the card to spend abroad and all the rest of it. And I know they were not necessarily struggling, but they're also having, you know, challenges with the physical distribution and getting, you know, mass adoption. And then I remember kind of revolute turned up. And I saw revolute, very, very, very early days, I think it was at one of those TechCrunch conferences are something and I saw Niccolo pitching it and I just roll my eyes got them got a chance. Yeah, it'd be impossible for them to distribute that card. Cuz you've got to put the physical card into people's hands, you've got the postage, you've got all the logistics, or, you know, we swapped, we're already doing it, it clearly wasn't working particularly well for we swap, I kind of dismissed them as now. It's too complicated to congregate, and they're never going to get any traction. So I suppose that there's the first entrepreneurial lesson, just because you've seen something it just gives you've seen, let's say, one person or one organization fail at something, and then necessarily right off of the other or don't, maybe don't underestimate the power of kind of incremental differences or improvements that will really recollect the you know, the difference, but

Sina Sadrzadeh 8:48 I guess like at the beginning, because that that word, FinTech wasn't really there, the ecosystem was so early and it didn't really exist. But you know, the banks and other financial incumbents had so much power. Well, you as a very early sort of Challenger, I suppose within this within this space. How did you kind of build a FinTech at that point in time? I know probably now it's become a bit easier, but I'm thinking back in the day like no one really had a grasp of how to build a fencer

Simon Rabin 9:15 I had absolutely no idea but I had that kind of entrepreneurial drive just kind of that that ability to say right What is it we've got to do to make this work? Okay. Right, I needed like an account to put the money in. Right? Like I don't know anything about bank accounts, but I haven't get bank accounts you start like googling you discover there's this whole industry called like prepaid cards and E wallets and then you kind of learn a bit more about it and you understand that's how he Bey WORKS and NOT eBay or PayPal works and all these payment systems and you start to like, okay, find this, this is this company that does this, and this company does that and you go and meet them and you bet it's almost like a like a jigsaw. And that's actually I really enjoy that I've everything You do as an entrepreneur, I really enjoyed that part of it trying to like piece together, how you how you do these things? And yeah, just, you just got to do that. And you said, Okay, fine. So now I've got, like, these prepaid wallets that I can put people's money into, obviously, I've got to, like, move the money into them. So like, how do I do that? Like, I guess, direct debit, you know, let's go and have a look at like direct debit, and that's going to understand that a bit more, and then, you know, you've built up some knowledge and payment processing, step by step by step. I remember being I had, I had no idea about KYC and AML. So it's like, no, your customer laundering requirements are these things which are, you know, very strict, very, very cumbersome, that you have to, you know, know your customer get their identity, and all these things, I had no idea that existed. And I remember the the so the money company that we're working with, I think even after we'd serve signed the contract with them. So explain to me that now every single customer before they open an account, you have to you know, obtain their ID you have to get two hits on the either the electoral register and the credit file. What? How the fuck am I going to do that? And then you realize, right now, there's another whole thing I've got to do, and another whole cost, and now you've got to go and research KYC suppliers and on your piece it together, basically. But um, no, it wasn't, it wasn't FinTech as a whole. And I think if you're wide like that, if you've got, you've got that entrepreneurial discovery thing, then you're not really scared or concerned by the fact whether it's banking, or like food, or,

Sina Sadrzadeh 11:42 but it's with with sort of that space in the FinTech space, I feel like it would be more sort of like trying to find suppliers is it is a jigsaw as you mentioned before, because with other sort of businesses, startups, there's a lot of things you can kind of do yourself, or you can kind of build a very low tech version of it with this because the regulation is so sort of high with KYC, you can't build that yourself.

Simon Rabin 12:02 I'm gonna I'm gonna let you into a secret, right? This is a tech den exclusive. And I've never, I've never admitted this publicly. But just thinking, I know, Dario ahead of PR is probably going to be listening to this. And some point in the future tell me offered me this. But right back in the beginning, right, we, when we were developing that the API technology for to calculate people saves, the calculation we were using was pretty basic, right? It was a calculation, which just looked at the customer's balance, and kind of spat out a number. And that number was sometimes quite accurate and appropriate. And other times basically, it was spitting out numbers, which were pretty crazy and not, like appropriate amounts for the customer to save. So we, I created this process right back at the beginning, whereby, every night, we would run the calculations for like the saves that we're going to generate for people. And I would go through a list and I would just see like user ID 123. And say, like proposed save tomorrow would be like, you know, 23 pound 50. And it would say like, their their current account balance was, you know, 1000 pounds. And I've got a proof because that like look like a sensible number there go into the next one that would say like, you know, propose, save 48 pounds, current account balance, like 100 pounds, I bet all No, no, no, I don't edit the Save manually, I would go and edit the Save instead of 48 pound would make it like, you know, four pound 80 or something like that to make it more appropriate number, manual override. I used to do that all personally online every night before going to bed for the saves the next day. So yeah, you can do things manually and you can with expression fake it until you make it

Sina Sadrzadeh 13:48 Yeah, that's the that's the Wizard of Oz MVP. That one. Love sort of looks good on the front. And the back there is a lot of manual stuff going on. But yeah, I talked about sort of like the KYC stuff with the direct debit stuff like all this sort of those sort of things that infrastructure. You got to find suppliers, you got to like plug in, they got to plug into your into your into your sort of infrastructure for those

Simon Rabin 14:09 getting started in FinTech. Now, there's a lot more digital suppliers, a lot more like digitally native suppliers for those types of things. You know, a lot of API driven companies, but yeah, five, five years ago, so there really wasn't a lot more manual.

Sina Sadrzadeh 14:24 So I think will be great is well, yeah, given that you were so early on. And you know, the big banks were there and the big banks and the big sort of other companies, financial companies have been around for some of them for hundreds of years, right? They've been around for ages. So it's like as as a company that's moved into this new thing called fintech. How did you kind of like build the trust of people to actually trust a new thing such as yourself? That was

Simon Rabin 14:50 something that really concerned me at the beginning. I remember listening to a number of podcasts or like watching some seminars or like streaming things with equivalent companies in the US around like, how do you build trust in financial services? And I was kind of looking for the silver bullet? And the answer is, you know, there isn't a silver bullet, it's a combination of things. It's like social validation from peers, good design actually can be really impactful and making people feel confident in the product. Good and real time customer service as well, like really important in this industry. And then, you know, on the banking side, it was it was FSCS, right, like I was in financial services compensation scheme. That basically means, you know, your money savers when it's in a savings account, and I remember discussing with one of our early investors, you know, how can we build a savings product without it being FSCS? Protected? Surely no one would use it. And I soon realized that you basically it was, it was next to impossible for a company with I think about 150k in funding at the time to get F FSCS. Authorization. So we had to go down this E money route. But I was quite surprised appeared being honest initially how, how we kind of overcame that. And actually, the FSCS wasn't as much of an issue as we thought. But I suppose yeah, you had you had that off with with the other things, you know, design customer service. Community, I guess you can, you know, the community factor as well, like the authenticity factor can do a lot, right. So in FinTech. So, you know, the bank is this big, faceless corporation, in a big block building, that you kind of trust, because it's a big thing, but fintechs, you know, they can't compete on that basis. But what they can do is to show you is that practical things you can show on the website, you can see the team, you can be part of this community, you can join, you know, this, this, you know, webinar, you can get like a feel for what's going on behind the scenes, you can see that it's like real people. And that, that probably goes a lot further than people think in building trust.

Sina Sadrzadeh 16:58 Simon highlights very, very well the importance, the element of trust in in, you know, building a FinTech, attracting people to actually use the platform, especially when you are, you know, holding people's money. They didn't have FSCS approval, but they built trust through other ways that, you know, Simon mentioned before, and so wants to build on that wants to see, yes, he could build trust with people that came with the platform. But how did he actually attract people in the very early stages? How did he attract this first group of users on a platform to actually interact with it? And so we talked about that now.

Simon Rabin 17:29 Your first customers, I think, right back at the beginning. So Well, interestingly, the first marketing hire I made was a was a content intern, which might sound like a strange, strange hire. What this person did this lady Annie, she just started writing content. So she put content on our website, which kind of doubled up as PR and press and wrote a few things for like, third party blogs. If I'm trying to actually think back, I think we put out a press release or two. Yeah, I think I think we just did a lot of like, basically like Blogger, network outreach, press releases. And then we actually hired a cert. So another great story for you. We I put out an ad on work in startups for a growth hacker. So at that time, it was quite like, it was trendy that marketers recording such growth hackers, that was that that was the thing, and less so now. I know. I don't know. I think I think we moved on from that now. Yeah. Yeah, that now it's like, like now basically, you can be we haven't gross department, right? They have like chief growth officer. But then it was like, everyone was a growth hacker, right? It was all about being hacky. And doing it. And the sky. Basically, I got this email from, from an agency saying the word growth hacking agency, and we work with early stage startups and dead zone and I ignored it. And they sent me another email. I just ignored it. And I think the third email, I just wrote back a bit snappy to this to this guy like, no, sorry, we're not interested in using an agency like, go away. We'd rather we'd rather employ someone direct. And the sky Alex emailed me back and he said, there's no you know, I really think you're overlooking an opportunity here. What we do as an agency is we work like in an integrated way with our, with our clients, and we put someone in house. Let me come and meet you and talk to you about okay, fine, you know what, nothing to lose. This guy came time to the offices, the co working space, we were working. Alex Latham, who kind of spoiler alert is now my co founder and is chip cmo and has been with us for four and a half, almost five years and basically But what he admitted when he got to the meeting is he was just Alex Latham, looking for a job in in marketing. But he basically created this website. This is great. This whole agency called pineapple punk, which was a growth hacking agency. And this was his way of like getting in and demonstrating his his skill set in growth hacking and customer acquisition. And yeah, I thought it was a brilliant approach. I really kind of liked the attitude of it. To Alex Kay, Alex came in joined the business for a few days week and yet started doing hacky things like that. I think Reddit was quite big for us actually, the beginning, lower count what kind of stuff read it so Rebecca, the beginning of sites and some potential sketchy stuff, like used to be like Facebook scraping scrape emails and things? Don't tell me what to tell everyone. I said that. Maybe? Why don't you could do that? Yeah, you can't, you can't do that stuff. So there's lots of that kind of thing that was read it, we had all sorts of great, like multiple Reddit accounts, right. And then we'd like create threads and Reddit and subreddits and comment on them and so on. Same with like the money saving expert forum, we did things like that, we also had a really, really strong like referral mechanism. So the beginning you could earn 1% Extra on your savings, every person you referred up to 5%. Which did obviously open us up to people kind of like gaming it but actually what in doing that you create, you create conversation around your product writes and like people on Reddit and and money saving expert forum and so on, you know, various like, like, frugality blogs and things are interested in those types of promotions and kind of get you a bit of just get you into like people's headspace. Yeah, frankly, doing stuff. Also we do. Rent doesn't really mean like physical stuff. Not not so much in chip, but in previous businesses, out of business school, uni Butler, which was a, like a deals and discount service for university students. And I dressed up as a butler, and stood outside the gates of university signing people up to the app. So yeah, all sorts of awkward things, you have to do the beginning. I remember once someone once told me that it's very true, like at the beginning, do things that don't scale? Right? You just you have to do things that, you know, it's almost literally kind of knocking door to door right and going like, please use my app.

Yeah. And then and then on doing Yeah. And then actually, you know what, like, in some ways that that's much easier, it's when you get to the stage right now. And it's like, okay, you know, how are we going to? How are we going to fuel our customer growth? Okay, you look at this, this, this would probably only get us another 1000 customers a month, it's not worth doing, you hear that it kind of it becomes a round, right? You've got to look at like scalable, scalable techniques.

Sina Sadrzadeh 22:58 So like, how did you kind of go from those a sort of groups? And you might have already answered it, but to I mean, what is it now you have like over like, 500,000 users on 1000 registered users? Yeah. So how did you get from that early stage to what it is? Now you talk about how the sort of growth strategies changed. Yeah. And the sort of biggest wins view?

Simon Rabin 23:15 Again, you know, a, be honest, it's not certainly hasn't been for us, like this beautiful hockey stick curve that you read about, you know, in the in the textbook that, like, you just start growing, and suddenly it grows exponentially and up through the roof. Like, it hasn't been like that at all. You know, you get lots of like, growth spouts and then it kind of levels off. And there was even time where we were actually like losing customers. I think throughout the I think that's right, like the majority of 2018. I think our customer numbers like remained entirely flat. Basically, you know, it. There are lots of challenges along the way. So the first thing I'd say is Don't Don't be disheartened. You know, you read the stories of kind of the explosive growth. And don't be disheartened if you're, if your company or startups not quite going like that, you know, that's not real life. You know, it's very, very rare those things happen. You got to keep hustling and fighting and pushing. And sometimes it does feel like you're, you're pushing a boulder up a hill. But what I will say is, is there are like moments or inflection points, we reached there, and suddenly, you're at the top of a hill and you've got this big, you know, downward Hill for your boulder to go flying down the side and it does, it does happen you kind of catch momentum.

Sina Sadrzadeh 24:36 Can you can you think of any moments where a mistake did happen either for yourself or your team? Where that it did sort of like plummet down the user base?

Simon Rabin 24:44 Yeah, so I mean, 2018 to kind of summarize the story. So as I said, initially, we're focused on helping people save, we identified that our customers want to do better returns on their savings. The idea we came up with, which in hindsight, wasn't a great idea was that we gonna allow some of our customers to lend money to other customers who basically like a peer to peer network with their savings with liquid, like lend their money to customers who were overdrawn. Because we came to our attention that a lot of our customers were using their overdraft and the banks, which are quite expensive, and so on, and we kind of had this brilliant idea to match the two sides. And it's

Sina Sadrzadeh 25:22 not about ideas, not about it, it's been this

Simon Rabin 25:27 is a shit idea. Right? It really is, because it's incredibly complex, right? If you think about what you've got to do, you've got to match you're gonna perfect matching of like two sides of this marketplace, you've got to like qualify your borrowers that are the, you know, appropriate credit risk, you've got to be at that place the money from from your lenders, you've got to like diversify it, or your allow for withdrawals, liquidity, and I mean, it was it was an absolute nightmare. And if I think if I remember correctly, we had, we had many, many, many more borrowers than no, sorry, we, we had many, many more lenders, so people wanted the return on their money, but the borrower was that we were getting through like, basically had terrible credit scores or you know, represented much higher credit risk, and then we would have been comfortable and placing your customers money with the whole thing was a mess. Anyway, the the lesson from that is we spent the best part of a year pursuing that it's regulated activities. So we had to go and get authorized for it. We had to we had to build technology for it, we had operational process, we have marketing for it, and we completely took our eye off the ball. In terms of in terms of growing our customer base, we're actually like serving our core customers need was the you know that the product or more buggy and and we basically just completely took off off the ball in pursuit of this kind of silver bullet magic solution. The Silver Bullet turned out to just not to exist. Meanwhile, we've kind of wasted a year, and our customer base has actually diminished because we hadn't really given them the say, like care and attention that we should have.

Sina Sadrzadeh 27:08 Wow, that's such an interesting story. And I think, yeah, a lot can be said about though, like taking your eye off the ball. So like, you see this one thing, and it's kind of very shiny. But then when you get a bit closer, your customers actually want that. Yeah, exactly. And it just doesn't really work in reality. So it is yeah, massively massive story. So we're gonna have to wrap up there, it was so valuable talking to you I loved I loved hearing about your story, Chip, what is next for CHIP, by the way, what was sort of like next gen, we

Simon Rabin 27:33 are on a mission to build the best savings account in the world. So for us, it's about giving customers like seamless access to the best FSCS protected cash savings. But then alongside access to investment funds, crypto returns, private equity coming along the way as well. We're looking at a couple a couple of other like advanced asset classes. And my vision for it really is you should be able to connect chip to any bank account. And then just like seamlessly be able to move your money out of your out of your day to day bank account into into any sort of savings or passive investment vehicle that you want and do that super, super easily. As easy as it is to, you know, order a takeaway order a taxi or something like that.

Sina Sadrzadeh 28:21 Wow, that's amazing. I can't wait to see that sounds incredible. Simon, how can people stay in touch with you and your journey? And Chip, obviously, yeah,

Simon Rabin 28:29 so So first and foremost, if you haven't done so already, right, download chip, go to the App Store, go to Google Play download chip, sign up, it takes about 26 to 27 seconds to create an account. And start saving right now we've got the UK is market leading easy access rate of 0.7%. Not very exciting, but it's on average 10 times better than what you're earning at your bank. And we've also got a range of really interesting investment funds inside the app if you fancy taking on a bit more risk. Where you know, your capital is at risk. And you can you can potentially own better returns. And then if you're interested in following me, which you probably shouldn't be because I'm not that interesting person. But you can you can find me on LinkedIn, Simon Raven, and a fun chip on LinkedIn and on our website to get chip.uk

Sina Sadrzadeh 29:23 Fantastic. Thank you so much again, Simon, for coming on the podcast. It's such a pleasure. And I'm sure Speak soon. Thanks so much.

Simon Rabin 29:29 Thanks a lot. Great to be here.

Sina Sadrzadeh 29:32 Thanks so much for listening to this episode of Inside The TeqDen. So number five, it was such a pleasure recording with Simon. I really hope that you enjoyed it as well. If you did, please be sure to leave a five star review on Apple Podcasts as it helps us out so much. Share with your friends, follow us on LinkedIn, there's so many different ways you can support the podcast because we are very, very, very, very early on in our journey and we would love to you know grow to reach as many people as possible so because we got a lot of value, and we'd love to reach as many people as possible. So thank you again for listening and I'll catch you in the next episode.

Transcribed by https://otter.ai


You can find out more about Simon Rabin here: https://www.linkedin.com/in/simonrabin/

You can find out more about Chip here: https://www.getchip.uk/

You can find out more about TeqDen here: https://teqden.com/

You can find out more about Scalar North Capital here: https://www.scalarnorthcapital.co.uk/

You can find out more about Sina Sadrzadeh here: https://www.linkedin.com/in/sinasadrzadeh/

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