Peter Briffett On Disrupting 400 Years Of Banking And Financial Services In 24 Months

Peter Briffett is the cofounder and CEO of Wagestream which is a financial services firm that allows employees to stream their earned wages into their accounts through an instant app. Between lines of credit, equity, and debt, the company has raised $79 million with investors such as Balderton Capital, Northzone, QED investors, London Co-Investment Fund, Village Global, Firestartr, and Latitude to name a few.

In this episode you will learn:

• The capital and credit facilities Wagestream has raised
• How much room there is to grow for income streaming services 
• Company perks versus just delivering what workers want most
• Peter’s top advice for others considering entrepreneurship

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For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Peter Briffett:

Connect with Peter Briffett:

• Linkedin
• Crunchbase
• Twitter

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a founder who has done it multiple times with success, with failure. I think that we are going to be able to touch on every single one of those lessons learned and stories that he had to encounter during his own entrepreneurial journey. So without further ado, I would like to welcome our guest today. Peter Briffett, welcome to the show.

Peter Briffett: Hey. How are you doing?

Alejandro: Originally born in Hong Kong, but you did jump quite a bit from country to country, so tell us about this.

Peter Briffett: I did, indeed. I was born in Hong Kong and then lived in Kenya for a while. This was all during my school days. Then, lived in Singapore. Then I found the rainy island that we call England. I think that my parents just kept trying to leave me, and I kept following them around, but they jumped around quite a bit. They were hippies that loved traveling. It was a good upbringing, actually. You end up seeing a lot of places and experiencing a lot of things. I’m not sure that helped me have a lot of business failures or successes, but it certainly was an interesting childhood.

Alejandro: Do you think that may have had influence because I have interviewed quite a few founders, as well, that had an upbringing where they were traveling quite a bit growing up. That influenced them in the way that they were able to deal with uncertainty, changes, and adapting. How would you say it has influenced you, as well?

Peter Briffett: I think it very much does. New schools, new environments, and new countries probably makes you quite resilient to change. In fact, I quite enjoy change and get quite excited about mayhem and chaos, which is probably a good trait for someone that is starting a business to be able to do.

Alejandro: So, as you were saying, you got back to England to study for University, and then after that– 

Peter Briffett: It kept raining. I never stopped raining.

[Laughter]

Alejandro: I hear you, and obviously, very grey there, but this was the segue to getting into tech. So tell us about this.

Peter Briffett: Yeah. Definitely. When I finished University, I went over to the U.S. for a summer deal to sell books door-to-door in a couple of states in the U.S., which is another story. My first proper job was working – this is in the mid-‘90s, so I’m certainly getting older, but it was selling modems for a company called USRobotics, which I thought was the best name of any company ever, so I had to apply for the job. Also, they were paying a lot more than anyone else. I joined the company in the mid-‘90s, and if anyone was involved in any type of tech company in the mid-‘90s, anything attached to a computer was selling like hotcakes. You really had to have a very bad business model not to be able to make a lot of money in the mid-‘90s when everyone was buying PCs for the first time, and they were all going into homes. Bill Gate’s vision was being realized across the globe, so we were selling modems. These were in the days when 24.4 speed was big. When we went to 56.6, those were the heaty days – big upgrades.

[Laughter]

Alejandro: Amazing. And there you met your boss, which played a critical role for you because you moved with him to Hays, which was the next business where you were an employee, but also your segue into starting your own things. Is that right?

Peter Briffett: Yeah, definitely. I stayed in hardware sales, which is typically network and sales, for the next two to three years, and my boss was moving, and I used to go with him to set up the sales function. Then, after that, I decided it was time to start my own business. This is in the late ‘90s. We had just seen the emergence of these new biometric hardware products like fingerprint readers on a keyboard, facial recognition systems, RS scanners. They were all coming out of algorithmic firms in the U.S. We thought, “This is awesome. We’ll go and get global distribution for these products.” We went to California, signed up with most of the big biometric firms that we had the right to distribute their products into Europe. We went back to Europe and thought, “Wow! This is awesome. We’re going to make millions. Everyone is going to want a fingerprint reader. Everyone is going to want RS security for their homes. We started phoning up companies, and everyone was like, “What! Fingerprint reader? Yeah, come and see us. Come and see us!” This went on for about three months. We went to see the Bank of England; we went to the government; we went to the airports. It was amazing. No one bought anything. No one actually wanted to buy them. They just wanted to look at them. It was just too early. It was one of those things where – I think we hadn’t done any market research into what people actually wanted. We just thought this was the coolest thing we had ever seen, and everyone would want it. It turns out that those things aren’t connected. It did give me a lesson that maybe if I had called the companies first and asked, “Do you require any biometric hardware?” it might have saved me a lot of time, effort, and money, but we live and learn.

Alejandro: Absolutely. As they say, you either succeed, or you learn, and in this case, you definitely learned.

Peter Briffett: Yes! That’s right.

Alejandro: Absolutely. So from this experience, what was your takeaway?

Peter Briffett: The takeaway is that, obviously, try and do some research and understand what the customer actually wants before you go into things. Also, understand that just because something is cool and amazing doesn’t mean enterprises want to buy it. People are actually enterprises by virtue of being large organizations and are generally risk-averse. So, to poke and probe a fingerprint reader, they don’t actually want one or to get it through would be very difficult, so it’s understanding what the buyer wants and if there’s actually a market for it. It turns out, 20-years on, there’s a huge market for biometrics, but it’s all integrated into hardware products. It’s not sold as separate items. But nevertheless, those were some of the key learnings. It did make me think after we started to understand hardware, in general, if it was manufactured in Europe was really a problem. That was because China was emerging as a real force in global trade, so anything we shipped into European retailers was being undercut for price and quality in a lot of cases by China. My next idea, I thought, “I can’t beat the Chinese with hardware, but I can beat them with one product. They can’t ever manufacture on their own or in their country, which was champagne. So I realized that they couldn’t grow grapes. You could only grow grapes between 30 and 50-degrees latitude, and that doesn’t allow China to grow grapes. I thought, “This is the best idea ever.” All China is emerging; the middle class is emerging; they’ve going to want France; they’ve going to want champagne. I will be the supplier to China of champagne. So I went over to the champagne houses outside of Paris. Ended up being a stock – got an early shop-ship to the UK, and went out to China with “Look. I’m going to start selling champagne to the Chinese but realized all the champagne houses were already out there with proper distribution channels making a lot of money. So, there wasn’t any space for a broker like me. The good news was that my house was full of champagne for a while. So, I had a lot of friends for that period.

Alejandro: I want to ask you, here, Peter, because this was the second rodeo and the second time that the outcome was not the one that you had anticipated. How was this for you because I’m sure that it was not an easy time in your journey?

Peter Briffett: Well, luckily, I had champagne to weather me through the bad days. But, kidding aside, I didn’t really learn the lessons of the first startup. The biometric, by the way, is called Identology. I wager you could never find a better name for a biometrics company than Identology. But it was really only after the second one that I really realized, “I probably need to investigate things before I jump in with both feet. Not every business I do is going to work, and not every idea I have is actually a good idea.” I guess when you’re thinking about starting something, you always think to yourself that everything you think is amazing, and “Why can’t anyone else understand it. They’re, obviously, not clever enough to understand this.” Whereas the reality is most people are right – it was a silly idea. I realized you probably have to think these things through a bit before you do that. After the champagne business rejection, I found a guy that was running a company, and I went back to see him in London. He was working at the BBC, and he had created a visual database that any media and anyone dealing with a large part in the media – this was 2005. If you were in certain job roles in the creative industries, you started to have to deal with a huge amount of digital media. He had come up with a visual database where you could throw any media format in, into a video, a font, or whatever it was, and organize it, manage it, and process it. I turned up there, and he had on the wall, award after award after award from Apple. I was like, “There’s something here, definitely, and this is really interesting.” I ended up working there. There weren’t many people there; there were only about 10 or 15. We realized quickly that we deployed the crossing the chasm there in which is: just absolutely target a market and try to dominate in that particular sector. So, we targeted professional photographers who had a real need for some sort of organizational tool. We changed that whole business marketing sales to target professional photographers, and the product started being evolved to speak to professional photographers. We built this amazing visual database for pros. We tried to sell it to Yahoo to Jerry. He wasn’t interested. He bought Flickr. On that same trip, we drove up to Redmond, and we spoke to Microsoft, who were looking for a tool for their new Adobe Creative Suite. They ended up buying us, in the end, after about 18 months. It was great. There were 35 people, and everyone went to Redmond, and everyone was relocated over to Seattle. It was quite a young company with young people. I was still youngish then, and it was an amazing time.

Alejandro: It’s interesting because after the champagne experience with your last company, it took a little bit of time for you to go at it again, which is with your most recent one, Wagestream. You were able to take roles in companies that help you understand how to master execution. You were just talking about iView Media, how you guys sold that to Microsoft. Then, for example, LivingSocial and taking that from 1 to 100 people in the UK. How did you go about doing that?

Peter Briffett: I think we learned the lessons of startup, even though you always think your product or your idea or your solution is different, there are certain rules in order to make things happen and execute. It’s all down to execution, and anyone that has started numerous businesses will tell you the same that it’s about real razor focus; it’s about moving quickly, but also having a clear strategy and understanding what’s going to work and how to deploy the assets you’ve got. The main thing when you start something is, get to market as quickly as possible, make sure you’re iterating as often as you can, but have a really clear strategy about where you’re taking that quickly. It’s very easy in the early days to get some initial traction, and it’s understanding if that’s going to have any longevity and if that’s going to be a market that’s going to expand for you. Moving fast with razor focus at the beginning is really important. Any startup founder, if they’ve got a great idea or a great concept, will always get a lot of inbound interests, a lot of different types of distractions, and a lot of people saying, “Oh, you should do this; you should do that. Have you thought about this?” You’ve really got to focus on something initially in the market in order to make it work.

Alejandro: Absolutely. Then after seeing this incredible fast growth, you did a couple more stents, one at YPlan, which got acquired, and then Anatwine, which also got acquired. That was your segue into your latest company. So tell us about how you came up with the idea of Wagestream and what you did to bring it to life?

Peter Briffett: When I was at LivingSocial, I was running Europe for them. They would base the headquarters in D.C. So I got to know quite a few investors over in D.C. After LivingSocial, I went on to do other things. One particular investor who I got on very well with called me. This was at the end of 2017, and he said, “I’ve just seen something. You should have a look at this. This is an amazing concept.” The concept was could you allow an employee to have access to the money they’ve earned, but it’s not being paid to them as they go through a pay cycle, and if you could do that, would you be able to give them liquidity to the point where they wouldn’t have to go into debt between pay cycles; they wouldn’t have to pay overdrafts, they wouldn’t ever have to get something like a payday loan. I thought, “What an amazing idea.” In Europe, where people are paid monthly, there’s a huge amount of people that suffer from only getting paid every 30 days in 30-day chunks. If we had the technology that allowed the company or us to release funds to them as they earn them – it’s only their earnings; it’s not credit of any description. Then, surely that’s a better world for people who live in it, and surely that will help a lot of people, but do suffer at the end of a pay cycle by not having any money, not being able to get to work, not being able to take care of unplanned expenses, and sometimes having to go into horrible forms of debt. I thought that was an amazing concept. The investor introduced me to Portman, who is my co-founder and the brains behind the whole business. He flew over. This is in January 2018. We met for the first time and got on like a house on fire. We believed in the business completely, and we thought it was something that we could both get behind. We saw the social impact of it and the fact that if you can change the way the world gets paid, this is an amazing thing that could help a huge amount of people if we were well behind it. We ended up in the first part of 2018 going to raise money from this investor who introduced us to other investors, and we started it, and from then until today, it’s been a whirlwind.

Alejandro: That’s amazing. With your past experiences, you got the exposure to the importance of team and people. How did you go about assembling that team?

Peter Briffett: Well, luckily, yes. When I was at LivingSocial, I probably increased it about 600 salespeople. The five people that still liked me came to work at Wagestream, and we started quickly with just acquisition. Portman built the product quickly. We’ve got another developer on board, Carl, who is amazing. They built it quickly, and the thing was, “Let’s get this in the market. Let’s get customers using it. Let’s get this to work so that we can prove that it is something that people want. We did that quickly. Within weeks, we had a working model of the product. We were demoing it. Can you imagine that I’m going to go to a company and say, “Your staff can get paid whenever they like.” It’s like selling gold. We thought there would be a queue of CEOs outside the door with pens ready to sign contracts. But that queue never appeared. We actually had to go out and get some. It wasn’t as easy as I thought, actually, to sell it into companies when it’s a completely new idea and a new innovation. So we ended up, classically, signing – we were in Waterloo at the time – we ended up signing the Pizza Restaurant below our office because one of the sales guys bought about 40 pizzas from them in the course of 48 hours, and they had to sign something in the end – they were so guilty. We ended up signing them. Then, as a result, got them live and then went on to start signing more of the hospitality brands, and then started to form partnerships as well with companies we thought would be a distribution path for us.

Alejandro: What ended up being the business model for the people that are listening to really get it.

Peter Briffett: The business model evolved from where it was. This whole thing is, we call it income streaming. You call it earning wage access. But the business model is: contract with the business, access their data at the workplace so I can tell in real-time every single employee how much they’re earning. Access their workflow management system and also have a link to their payroll. We roll out any work that could download the app, and it shows them in real-time how much they’re earning. They’re able to access their earnings, and the model is as they go through a pay cycle, and they want to access their earnings, we’ll fund that. Wagestream funds that and the account in the company’s name into their account. It goes into their account in like four seconds, and they’re able to take care of unplanned expenses. When they next get paid, we recover the money at payday. It seems like a lightweight model. We don’t do filing systems, and we don’t do payroll systems, but we link to both of those, and we get this dataset, which shows me in real-time how much you, as an employee of that company, are earning. So I can show you how much you’re earning. I can also show you how much you are going to earn based on your salary, how many shifts you’ve got in the rotor. What we’ve evolved the product to now is, the product also has open banking, so we can ask the employee, “We linked to your bank account. We can see your outgoings.” So you end up with these two datasets. The workplace data and the open-banking data. Those two combined are completely unique. I don’t think anyone has linked those before, and what it’s allowed us to do is understand that actually, we can provide some absolutely unique financial services from employer to employee that aren’t available anywhere else to that employee, and a bank would never be able to make available. The whole concept for us now is, “Wait a minute. Can’t we get the employer to be the provider of financial services to the employee as opposed to a bank, which will always try to monetize financial services? If, with fintech technology, we can get the employer to be the provisioner of those financial services, and the first one now is obviously, earn wage access, can you actuate earnings? It means that you changed the incentive structure of 400 years of banking because an employer doesn’t want to make money from providing a financial service. They want better attention rates; they want more productive staff; they want happier staff. So they look at things that are inclusive, that reduce financial stress, and that help staff in the way that a bank will never help an individual if that makes sense. What we’re at the forefront of is this emerging trend in workplace banking, which will mean banks don’t necessarily have to be the providers’ financial services anymore because the employer and the employee together actually is a closed unit, and it’s far more effective if the employers provide it to their staff.

Alejandro: Got it. For this, you guys have raised quite a bit of money, too. So, how much capital have you guys raised to date?

Peter Briffett: Just over 40 million now. We’ve gone through our B round. We got some great seed funding from QED and also from Fair by Design, which bought into our social impact charities, Joseph Rowntree, Barry Caprio over here, and with them, we formed a social charter that said every product we build, every profit we make has to go into funding to help the poverty premium, which is trying to help lower-income workers get out of issues with debt and poverty. We have a real social mission around that. We feel that paying people every 30 days is very unhelpful; whereas, allowing people to access their own does prevent a lot of bad debt forming in someone’s life. But moving on, we’re seeing that actually there are a lot of other things we can do. We can allow people to save directly after every shift. We can give people access to financial education. We can almost now predict their financial future by knowing their outgoings, knowing their capacity to earn, and then you can produce a financial-fit-bit type model, which can show someone in real-time, not just what their financial picture is today, but what it’s going to be in two or three weeks’ time. That’s very powerful information to put into someone’s hands, which means they make different decisions about their finances.

Alejandro: Have you raised any debt on top of that?

Peter Briffett: Yeah, we have. We’ve got a 25 million line for [23:47], and that’s enabled us to fund a lot of these transfers because, at the end day, we’re funding the transfers. We’ve got a license to move money so that we can move money in the company’s name. If you work at [24:01] or David Lloyd Gyms, when you’re an employer of those firms, and you want some of your wages, you can access them, and it comes into your account in their name, which is really important, obviously. So they know where the money source is from even though Wavestream has funded that. The reason we fund it is because most companies in Europe moved to monthly pay because of cost savings. Also, they want to keep cash flow, and cash flow is really important to a business, as we all know. It wasn’t going to be obvious that they funded it, so we have to fund it, so we have the capital; we have the credit facility to fund that. But the reason we can keep our costs so low, and the charge to the employee, which is £1.75. The reason we can keep that so low is that every time an employer pays their staff, we would cover the money they’ve transferred or that we’ve given them between pay cycles. And because employer pay cycles are at all different days and times of the month, we can pull from that facility and rotate it five or six times in a month. So it keeps our costs lower.

Read more: Patrick Burns On Raising $50 Million To Enable In Real Estate More Than $3.5 Billion In Transaction Volume

Alejandro: Here, for you as an entrepreneur, you’ve done tech, you’ve done consumer goods, now you’re doing fintech. When you’re doing fintech, it’s heavily regulated. Would you say it was a steep learning curve for you?

Peter Briffett: Yeah, it is heavily regulated. We don’t loan or provide any form of credit, so we don’t have to be regulated. We do a lot of work with the FCA, and we are regulated to move money. We have a license to move money. But, actually, we’re a regulated-light business, which is good. Because we don’t loan or provide credit, we don’t need that regulation. Hence, we’ve launched in Spain, the Netherlands, and now in the U.S., and none of those need to be regulated entities because we are only giving people access to the money that the company owes them.

Alejandro: Very nice. Imagine, Peter, that you go to sleep tonight, and you wake up in a world in five years where the vision of Wagestream is fully realized. What does that world look like?

Peter Briffett: It means the employer is the bank. Our mission is to provide fair financial services, and after 400 years of banking, banks have been unable to provide fair financial services to people. The only way to do it is to get the employer to do it. If I wake up in five years’ time, 1) hopefully, there is a vaccine, 2) everyone has access to their earnings, but also, everyone is able to provision amazing financial services from their employer. And employers will see this as the biggest benefit ever because since companies began, the biggest benefit a company gives their own employees is pay. You can have free food, fruit bowls, Yoga classes, and nice offices, but if you didn’t pay people, you probably wouldn’t have a lot of employees hang around. Pay is the most important benefit making that more flexible, more real, more meaningful. It has an emotion. It makes people happier with the employer; it gives people empowerment. If you could increase and provide other financial services on top to help people, to help your staff, then there’s definitely an emotive bond there. I think in less than five years’ time, most employees, certainly in shift-working industries, will have access to their own. It’s happening pretty quickly, not just from us but from multiple other types.

Alejandro: Where do you see your segment going as a whole?

Peter Briffett: Everyone is going to go different directions like everything does. I think that right now, if you look at the landscape, there’s only 0.03% of firms in the UK that actually provide an income streaming solution to their staff. But we know from analyst’s reports, 25% to 30% are looking at it right now. You’re seeing right now an early majority market start to adopt income streaming. We’ve got large UK businesses now rolling this out to their staff. That will only increase because the feedback we’re getting from employers is amazing. It’s an amazing benefit to give. It’s going to happen everywhere. It’s certainly not a mass-market solution yet, but it’s emerging into that early adopting market. We’ve gone through then innovative, so we’re excited about that. Where we’re going with it is, [28:46] is just one product an employer can give their staff a financial product. There are a lot of other things an employer could do to help their staff budget, save, make money out of money they’ve got, all these types of stuff. We’re exploring all those types of new product sets at the moment. And because we sit between the employer and the employee in terms of flow of funds and the net pay moves through us to the employer, employee, there are a lot of great things we can do to help.

Alejandro: For the people that are listening to give them a sense on the size of the business because I’m seeing here on the employee count, just in the last 12 months alone, you guys have grown the employee count by 42%, so I’m wondering if there is anything you can share around the size of the business, number of employees, or anything?

Peter Briffett: Yeah, sure. There are 80 of us now. We always had this dream of making it really small – 17 people, but unfortunately, you need more people; you need more really good people. We’ve grown the business. There are hundreds of millions of pounds worth of payroll that are now flowing through Wagestream tech. It’s definitely growing a lot. As you get into large enterprises, it jumps up. We work across sectors here with hospitality, retail, healthcare, and facilities. We’ve expanded it into other territories as well. We’re doing it. Others are doing it. Everyone will have it. Earn-wage access is everywhere, and it’s a good thing. It’s something that certainly once people have it, they never want to give that up, and no one ever wants to go back to a monthly pay cycle because that’s just not fun for anyone. 

Alejandro: Absolutely. One of the questions that I typically ask the guests that come on the show is – in your case, what an incredible journey going from company to company. It’s an amazing journey. If you had the opportunity of going back in time and having a sit-down with your younger self, that younger self that was coming out of University or thinking about launching a business when you were in the USRobotics Company, your first job, what would be that one piece of business advice that you would give to your younger self before launching a business and why knowing what you know now?

Peter Briffett: Never start a champagne business. Never start a biometrics business. But most importantly, I think I should have started on my own earlier. I think that’s really important. I think the lessons you learn as an entrepreneur with your own business is just lessons you learn for life. Whether it’s a great experience – it’s never going to be not stressful, but even if it fails, those lessons are defining in your life. As everyone always says: it’s not the right time now; I can wait. But if you feel you’re made for entrepreneurial life, start as soon as possible because the lessons you learn as an entrepreneur cannot be learned working for someone else. 

Alejandro: I hear you. Obviously, without a doubt, the outcome is important because that’s what you end up celebrating, but I think that people forget how you need to embrace the journey, and it’s all about the journey.

Peter Briffett: Correct. It is, and however good or bad they go, I don’t think anyone really wants to go back and not have those experiences because whatever you learn and one that didn’t work, you probably make it right in the other one. 

Alejandro: Absolutely, So, Peter, for the folks that are listening, what is the best way for them to reach out and say hi?

Peter Briffett: LinkedIn always. If you’re a huge company that has a huge workforce that needs earned wage access, I’ll give you my personal phone number.

Alejandro: I love it. Well, thank you for being on the DealMakers show, Peter.

Peter Briffett: No worries. Great to speak to you.

 

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