In this episode of the Startup Savants podcast, hosts Ethan and Annaka speak with Juan Andrade, co-founder and CEO of Rebank, a digital platform that provides a single dashboard to manage and track bank accounts, expenditures, and payment transactions.
Juan holds an MBA — a mark of distinction that may paradoxically be a black spot in the venture capital community, he suggests. He’s also a startup denizen; his working career has covered only companies founded this century. Tune in to hear how Rebank became a Y Combinator company and so much more.
Tell us a little bit about how Rebank got started and the problem that you’re solving.
“We got started after I lived through the problem that we want to solve … we help companies control their spend. And at the core of that, it’s not about oversight, but it’s about giving a business no matter what size, the full visibility of what’s going on in their finances without all that accounting knowledge.”
What’s the actual product that fosters control of spending?
“Well, it’s a web app, right? So yeah, it is software. It’s like a subscription product that companies from the US and the UK are using today. And it all boils down to really two things, the ability to put all of your financial data in one place for you to observe in real time, without needing to do bookkeeping … And then for the bigger companies, the ability to manage your money movements from one place as well.”
What made you decide on starting a business?
“Yes. I was part way through a master’s. So like to describe what happened there, I have to sort of go back a few more years and say like, I knew I wanted to start a company, but I didn’t know what. And also I knew I wanted to start a company and I had sort of gaps in my knowledge. So at the time, I thought, ‘Hey, I’ll do an MBA. That’s going to help me with my finance skills.’ I now realize you don’t need an MBA to start a company, but that’s what I did.
So halfway through that, I basically hit a sort of fork in the road where the master’s was asking a lot more of me. My company was asking a lot more of me as well, and I just had to make a call. So the decision was sort of forced on me really. And yeah, it was the easiest decision to make. I don’t know why, but it just was. Yeah. So it wasn’t like I sort of designed the decision in the moment. … It all hit me, and I had to decide. I was like, ‘Well, yeah, let’s go for it. If not now, when?’”
Did you complete your Master’s?
“So I did finish the Master’s, but I think, yeah, the Bay Area doesn’t like MBAs. And let me give you sort of the MBA’s perspective as to why. Those two years, those 18 months, you basically fall under the false illusion that you understand capitalism and that you understand businesses and how they work inside and out, but it’s all theory. It’s so academic.”
The target market for Rebank is fairly well-defined: companies that are post-seed but pre-Series B – how did you arrive at such segmentation?
“This all started right at the beginning. One thing I made sure that we did was in early research and stuff is to talk to people that we thought would not be customers to understand why, it helped us sort of form like borders or edges around our target. So yeah, right now it’s 25 or more employees, Series A onwards, some complexity in their finances and that’s a detail. But yeah, we learned that by actively seeking companies that are way too big or way too small and understanding their finances.”
What lessons did you gather from talking to companies that would not be customers?
“We have a view of how finance evolves from when it’s one person to 30, and we use that knowledge to shape what we say on our website, what we build, but there’s always a bit of translation required. Customers aren’t very good at telling you what they really need. You know, there’s always some … tweaking.”
Do you have plans to expand that target market in the future?
“Yeah, of course. One mistake that we made was to not really define this very well. And we just said anyone really, it works for any founder or business. The way we want to expand it now is going up, up market where the complexity really is. So the challenge we have is we want to keep it relevant to founders because that’s where finances begin. But we’re building features that … bigger companies will pay more for and use more often. So yeah, we are moving up into that space.”
You’ve referred to the complex way in which various financial transactions are handled. What is it about this complexity that you find intriguing?
“I think it was an early insight that I’m not seeing the industry sort of accept. Like in B2B, fintech, in SMB finances, everyone is essentially building a faster bank, and there’s players in the US and the UK doing this in Europe. They’re following the same banking model, or they’re building a faster version of AmEx, right, with more reward points to entice you. These are the two basic models out there. And what I think is a very important insight is that they both have their sort of limit because every successful business will always have multiple tools. So we come in with a brand new model of like, we’re not trying to build something up, we’re trying to connect all your things. So there is inherent, yeah, if there’s nothing to connect, then we are not valuable. So that’s where the complexity kind of ties in. You know, the more things we need to connect for you, the more you’re going to spend time using us.”
What are the main reasons that a client may not sign up with Rebank?
“There are two obvious ones. One when they’re too small, so they’re not, they just need to use their bank for payroll. And they have one bank where every, all customer money feeds in, and that’s it, on the one hand. On the other hand, we don’t have, on the more complex side, we don’t have like the custom control that a business needs to tell, to say like, okay, Jimmy can only agree [on] an invoice up to ten grand. And then after that, it needs to go to John and so on. Right. So that’s sort of the edges of our usefulness. Those are the obvious ones. I think there’s always a third, which is just we’re on this journey of just trying to get good at describing what we do. It’s an evolution like, and we started off being mostly wrong about how we describe the value proposition, but yeah, we slowly get better.”
One of your stated goals is to make it possible for startups to operate without a CFO – do you think that early-stage startup finances are simple enough to be replaced completely by software and banking?
“So the sort of unsatisfying answer there is that generally, we underestimate what is going to be possible beyond two years. And if you think back to 10 years ago, how basic tools were, what we thought was beneficial or value add. It’s so much easier to build products now that we can add more on top of things and more quickly. So there’s that part because we will just be able to automate more and you know, it’s unsatisfying because it’s like saying ‘because AI.’
Now to be more specific. What we see is that the first hurdle that happens, like moving finances from like a non-finance person to a finance person, is just frustration. And that this person gets sort of inundated with admin. And when you look at like the key three, four things that they have to do, there are already solutions out there that automate this for you in their sort of segregated way. And no one’s bringing it together yet.”
At what stage should a startup recruit an actual experienced CFO?
“The first thing you have to do there, as soon as you can afford it, is getting like a bookkeeper, which maybe in the US is like a CPA, right? Just someone external just to do the basic stuff. The CFO, I mean, some companies wait until they’re 50 employees, some companies do it around 20, 30. I suppose, let’s sort of define what a CFO is supposed to help with first. And the key thing that a CFO brings to the table is an appreciation for control … because it’s the only function where your work is externally audited, and it’s held to such a high regard. There is an element of control being necessary and justification of any sort of expense. So like, you usually have a very optimistic founder, let’s do all the things. You’ve got like a CTO founder, maybe that’s like, okay, but how? You know, feasibility. And then you’ve got the CFO, which is like, yeah, you’re not going to spend that money until you justify what it’s going to give us back. So those conversations can happen without a CFO … Like you can have that CFO mindset before you have a CFO.”
Is it finance team and then CFO, or is it CFO and then finance team?
“Oh, I think it’s … finance team and then CFO … generally when you’re hiring in startups, it needs to be the person that has done the thing already and is going to do it where you know, where you are. So a CFO coming in early will want a team around them, and they’ll want some controls in place and some systems in place.”
What marketing strategies does Rebank employ?
“We started that thinking video’s important … like we’re 150 videos in, and we’ve learned a ton, but I couldn’t say that we’re TikTok famous. And that’s slightly disappointing, but I guess TikTok doesn’t really care about financial advice in the same way they care about memes … what value does it bring? We … don’t know. Where we are now, what we’ve realized after 150 videos is that … TikTok is like your search engine and your place to experiment. So we can throw three videos in a day very quickly and see what the interest is with each one. And then from that build some content, an article maybe, or even like a post on another platform. So that’s the stage that we’re at now. It started off with like, Hey we give advice to founders every day. Let’s see if we can give that advice to a broader audience. Let’s see if they care. But now it’s evolved into almost like fitting into our broader content strategy.”
Do you think you’ve identified the right branding for your social media communications?
“No … it’s hard. The brand personality is some version of me and Simon, my co-founder. And the way I would describe that is sort of the opposite of what you would expect a financial institution to be like. Very relaxed, kind of matter of fact, bordering on sort of nonchalant. But when you have to hand that over to someone, to a community manager there’s a little bit of a translation thing there. But yeah, me and my community manager are talking like every week about how we tweak messaging and the tone. But yeah, that to me is always an ongoing thing. You know, there are some times where he posts something, I’m like, Jesus, Frank, it’s like, you were reading my mind. And other times I’m like that, no, please never do that again. So yeah, it’s always like that.”
So you don’t have any marketing specialists – how does that impact your sales team? Do they have to do a lot of cold calling?
“Because the experimentation that … we do has been across all channels that we can, that we think will make sense, and we’ve narrowed it down to content and community. So those two channels really create leads for us that we then speak with. So we’re not, it’s never a cold approach. We have tried it, and it’s really uncomfortable. People saying like, ‘I never asked for this,’ or like, ‘Please stop emailing me.’ I hated it every time someone suggested it. So yeah, we don’t do any of that.”
Rebank was eventually accepted by Y Combinator after an initial rejection – can you tell us your thoughts and your feelings when you learnt of that rejection?
“Yeah, it was the thing that very, very clearly separated our time in the US because everything before then was like a Rocky montage: wake up in the morning, go to the park, go for a run, get healthy, practice, practice, practice … we were in the pub with some other founders, and we got the ‘no,’ and we woke up the next day a bit hungover. And we … thought of running to the park. And we were just like, ‘What’s the point?’ So we were completely deflated … I remember it was a very quiet flight back … on the way there, chatting, planning, coordination, all these calls and whatever. On the way back … we were very muted. Very sort of withdrawn. But … luckily we were just like, ‘Okay, let’s just keep going. Let’s see what we can do.’ We very quickly bounced back once we got back. But yeah, it was very, it’s like a gut punch, you know?”
After the Y Combinator rebuff, what did you change?
“At that stage, there were no pivots, it was more about showing decent traction. We happened to write an application that was unique for the time with what we were doing. There was new regulation in financial services and we were one of the first startups to be like, regulated with this new thing … So it was unique, and it probably peaked their interest, but we just didn’t have enough sort of points on the board. So that’s what we focused on. You know, we finished getting our licenses, we got some, what I’d loosely call customers at the beginning, just like begging people to just create an account and yeah, with that, it was enough for the second interview.”
What was the difference between the first YC application and the second application in 2019 when you were accepted?
“Well, on the practical side, we updated one of the partners. Every month we’d send a quick update and you know, I’m now used to it, but like sending an email and someone just ghosting you is pretty common as a founder because you’re always trying to get things done that are sort of a little bit crazy or like you’re asking always for a little bit too much … We’re like, look, let’s just update them. And they, at least, I’m sure they’ll read it. And we did some, like we made sure we could build as much as we could and so on. So all of that practical stuff was working so that when we got there, we were like, okay, this is what you told us. And this is what we’ve done.
And from the research that I’d done about the partners and what YC likes, I just knew, I mean, it’s obvious now, but like, I just felt that would show them that we were really serious about this. But of course, when you go into a meeting the second time around, you’re just a bit more comfortable … the first time around Simon almost fainted … we’d practiced our like spiel for hours and hours every single day … It’s like a 10 minute interview. They just fire questions at you. And it seems kind of aggressive or like mean, but actually they’re just trying to get, really quickly decide if you’re a yes or no.
So we had a whole spiel and Simon said something like, okay, so the reason we’re better is, there’s three reasons. There’s A, and then he paused, and he paused for a little bit too long. And I looked over and his face was bright red. His neck was red. And I did the wrong thing. The thing I should have done is been like, Hey, Simon, did you mean this to help him continue? And the partners noticed that, they really look at how does the team work together. Are these people that actually like, know each other and understand each other? And yeah, that could have been one of the reasons we didn’t get in on top of traction.”
What are some of those questions you were asked?
“YC is very focused on the problem and the user and then traction really. But what they say is they look at the team, at that stage, the team — have they done anything impressive? Have they worked together for a long time? — the market, and then the actual traction, the product. The questions, I don’t know exactly the questions, but there was one founder of a big company that basically was like, I mean, judging from what I could tell, didn’t really understand how this would’ve fit into his company. So he was asking questions like, ‘Oh yeah, but doesn’t the CFO just have this?’ And you know, at the time I wouldn’t really have been able to answer that well, but I would’ve said something like, well, yeah, but we’re better because of this or this, but you know, that’s not good enough. The other question is like, what problem do you solve? And that is a surprisingly difficult question to answer succinctly, because in your mind you solve everything, you know? And like you do all the things, but actually like, your customer really only cares about one thing that you solve.”
What was the major benefit to working with YC?
“The capital side, demo day is like the highest leverage that you can have as a founder on investors. And that’s how they design it. Right. They throw a thousand plus investors at you. You only have two minutes, but that’s all you need really … [investors] call it the ‘YC valuation’ or something … the good ones will always raise at like double the valuation that a typical company at that stage should. Obviously that’s great for founders.”
What’s next for Rebank?
“Well, we are about to launch a brand new updated version of our product for the people that think about this a lot. It means synchronizing into your accounting tool. It means paying invoices just by uploading them into Rebank. And it’s all handled, whether it’s a global bill payment or something domestic. So you don’t have to use multiple tools. So yeah, we’re doing that towards the end of this month and yeah, we’re really excited about it. It’s been a lot of hard work from the product team and on us as well, the marketing side to make people aware of that. So yeah. Really looking forward to that happening and being done.”
What is your number one piece of advice for aspiring entrepreneurs?
“Sleep more … sleep a lot. And actually there’s another one … which is that you shouldn’t have a work life balance. I think the times where I’ve achieved the most are also the times where I’ve sacrificed the most. And you know, I mean sacrifices in like not spending time with family, friends, not developing relationships, romantic or not … You look back and you’re like, ‘Ah, that sucked.’ Like I’ve really sort of fallen behind my friends on certain parts, but as long as you can manage that period as long as it’s not like 10 years, as long as it’s like in bursts, I actually think that’s really better than, I don’t know, aspiring for some like balance where you’re doing everything. You know, you are the great dad. You’re the great friend and a great boss.”
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