Co-Founder of GoCardless & Nested - Matt Robinson

Let’s go back. How did you decide to start a company?

I’ve always loved businesses, building things and solving problems since I was a kid. I find often, lots of entreptreneurs you talk to, you’ll find something in their history with a little entrepreneurial spark, whether it was starting a small business at school, selling card or whatever coming up with creative ways to make money. After university, I worked at McKinsey. I was lucky enough to realized that I could learn something along the way that might help me build a bigger and better business.

Whilst there I knew I wanted to go and start something I found some amazing people I wanted to start something with, and for me, that was key. We were more in love with the idea of starting and building something great than with solving a specific problem at the outset.

Building a startup is an incredible journey, but you should think twice before jumping in. Most startups fail, and even successful ones often rely on luck. From a financial perspective, a corporate job may offer a more stable outcome, so don’t start a business just for the money, do it because you’re truly driven by passion and the desire to learn.

How did you meet your co-founders?

I met Hiroki at McKinsey, which is one of the advantages of working or studying in talent hubs. Funny enough, our first conversation was at a welcome dinner, where we had an argument about whether you actually need co-founders to start a business. 

What was the answer there?

He won that argument but it's the only one since. I again I think it really depends on the business you're building, but for me you definitely want co-founders. When I think about the stuff I care about in life: fun, learning, and impact. I’ve had some amazing co-founders in the businesses I built. I’ve had the most fun working with them. All the terrible things that happened felt a lot less bad when I had them around.

I’ve learned the most from them and with them. And I’ve had the greatest impact when we were working together. They're just an accelerant for being successful. YC has a great rule on this: Two or three co-founders are great, but one good co-founder is better than two bad ones. If it's not going to stick together, it's not going to work. You shouldn’t try and force it.

How would you advise people to find co-founders?

That’s a tough question! I’m contrarian on a lot of things so you should be careful about it when you listen, but hopefully it’s like an interesting data point. I really dislike networking. I hate going to an event with 200 people and chatting to them for 30 seconds each. I just find that really superficial and not very meaningful or valuable. What I love is leaning into real relationships. For me, it was just unfathomable that I would go and meet someone I'd never worked with before and then start working with them in such a deep way. for other people that's worked incredibly well. And again it really depends on you, how you operate, where you get your energy from, and how you work.

I took some simple rules: I look for people I trust, people I like, and people I respect or rate. There's a deliberate order there because there's nothing more dangerous than someone who's really smart but you can't trust. And I just looked at my network and I went through all the people I knew going, “who do know that I deeply trust and respect?” I like that it leads you to a very short list. I had like three people.

I said, “great! I’m just going to go spend more time with these people, talk to find out whether or not, if the timing is right, and make something happen.” Both times, that worked out fantastically well for me. But again that's an approach, other people have different approaches.

A lot of people are either choosing one idea and they are not flexible at all, and on the other side, what we call “pivot hell” that people are changing the idea all the time. So how do you know which one to go for?

You don’t. It’s really tough! It’s almost impossible to know upfront. It’s kind of an irrational endeavor. You believe that with less resource in every sense–less money, less people, less credibility, less experience, less everything! You're going to go and beat all these businesses you know at something particular so it's kind of irrational from the get-go. To expect an answer that this is clearly going to be right is very, very difficult.

The way I would think about it is, to do something where you're incredibly well-placed to do it. If you can't think of a good reason why you should be doing it, and others and others can't, then that's a bad signal and it’s going to be exponentially harder for you to be successful in that thing. You want to have what we call “Product Market Fit” or “Insight Market fit”. “What's a market that we're really excited about and find really interesting that we think we're really knowledgeable about?” You want to see a problem or have an insight that you really do believe there's real value in.

Ultimately, when you’re building a business, you're trying to create economic value. The amount of value you can capture is a derivative of the amount of value you create. That will come down to the core insight of what your building and the market you're in.

Then to your point of “how do you know?” You do all the work, right? You should be analytical or take the approach you take to get to really good answers. But ultimately, out of all the ideas, there’s a feeling in your stomach or somewhere where you’re like “I've got to do this.” I heard someone say this a while back and I thought it's such a cliche thing I couldn’t believe they said, but they were right!

Which is, “the time to start a business is when you can't not start a business.” You've got this idea that you just can't get out of your system. You write it down, you step away and do other things, but you keep coming back to it. There's a psychological beauty to that as well like once you know that you've got to do it, you can't leave that thing alone. Then if it doesn't work out it's like “Well, I had to do it!” It wasn't even a choice. So you know, it was never an option.

What were the first three months like at GoCardless?

We didn’t know what the hell we were doing.  if you took the things that you should do in order to build a business and be successful, we probably did the absolute opposite. We had so much fun though, which should be clear, and that's really important.

One of the things we did in the first few months–for some unknown reason–decided we needed more manpower. So, we went back to Oxford for a week, interviewed a ton of interns, and hired an army of eight interns to work with us over the summer. They were all exceptional, and it turns out we were pretty good at hiring because they’ve all gone on to do amazing things. But we suddenly found ourselves spending all our time managing interns instead of actually building the business.

Some funny stories at the time. We rented a small house for them, but it only had six bedrooms. We didn’t tell them that until they arrived. We were working out of our flat, with about 10 or 11 of us packed into the house every day. Eventually, the landlord figured out we were running some kind of business out there which was in breach of our tenancy. He said, "Hey! You’re in really big trouble. You’re obviously running a business here.

You got all these people and there are laptops everywhere!" I tried to play it off, saying, "What are you talking about? We just really like mass multiplayer online games. We’re like gaming all day." We obviously looked nerdy enough that that could plausibly be true.

We were building a startup blind. We had never seen a startup, so we didn’t even know what one should look like. Naivity is a beautiful strength. We had this vision of Nirvana about the Silicon Valley companies based on what we had read, and while there was probably some dissonance between a real startup and our imagination. But what we did get right is we were ambitious and we prioritized the thing that we felt mattered at that time.

Should you raise money early? 

It really depends on the path you want for your business. One of the first things founders should do is ask themselves: What are we trying to achieve? What do we care about, and what’s the right path to get there? There’s a big difference between the VC-backed path, where you're aiming for massive outcomes, and the bootstrapped path, where you maintain control and grow more independently. It’s important to be honest with yourself early on about which route you want to take and why.

There’s a great book called Rich or King, which explains a fundamental tradeoff in building a company. You can choose to be a King, which means maintaining control, avoiding outside investment, and keeping full ownership. Alternatively, you can choose to be Rich by building something bigger. This requires raising capital, bringing in investors, co-founders, and top-tier employees, at the cost of giving up some control.

The assumption is most people think you can just do both, but you can't. The very fact that we have so few Jeff Bezos’es and Mark Zuckerberg’s that managed to be Rich and King. They're the exceptions to prove the rule. You have to think, ‘how big is the ambition here?,’ before you decide what path to go down.

Back then, it was incredibly difficult for young founders, especially technical founders, to raise money, particularly in Europe. The like modal or median VC would still ask you for a five-year business plan. I called it the Catch 22 Business Plan. Because if you put something in front of them that was credible, then they would tell you it wasn't ambitious enough. And if you put something in front of them that was ambitious, they tell you it wasn’t credible. ‘What am I supposed to do? Just tell me what's the investable and I'll give that to you!’ 

Your biggest and most precious resource in this life is your time. That’s all any of us ultimately has. Before taking money from investors, you really need to know that you’re in this for the long haul. Part of that is, I've always felt an obligation that if I’m taking someone's money, then I need to deliver on that. I need to show loyalty and really work my ass off to do the things I told them I would. Once you take money, you are committed to doing this thing for a long period of time if it goes well. You know, 14 years later GoCardless it's still going.  

What mistakes did you make in the first fundraising that you’ve done, and how did you change your approach over the years?

All of them. Yeah, there’s many but I'll start with a couple of meta ones. The first one is probably just not understanding how VC worked as an industry. Understand the Venture math and power law of return. Once you understand that, you realize VC isn’t always a rational business. 

I’d see incredibly smart people with great, well-structured businesses struggling to get funding. Meanwhile, I saw founders who seemed chaotic, making wild claims, yet they were the ones securing investment. The reason? If a business seems like it will grow steadily but lacks breakout potential, it’s unlikely to attract VC interest. On the other hand, a founder with an unpredictable but potentially massive idea is far more investable, because if they do succeed, the potential return is huge.

It's not about understanding it you can trick yourself into looking like the thing they're looking for. It's actually more making sure that there is alignment between what they're looking for from the business and what you're looking for from the business. Because if not, you're just storing out problems for the future.

Another counterintuitive lesson, which I’ve seen many founders struggle with, is how many founders worry about leaving money on the table, so they aim for the maximum amount at the highest possible valuation. They start with a high number, thinking they can negotiate a more competitive round from there.

I’ve made this mistake. We had various rounds where with that fear, we started too high and then went to market, and consequently not generating a competitive dynamic. And then kind of having to go around with our tail between our legs telling people actually we're raising a little bit less valuation.

Start lower than what you think you can achieve. This creates excitement, builds a competitive dynamic, and allows you to push the valuation up. If you start too high and keep dropping, you’ll eventually land on just one investor, meaning no competition. If you start lower and attract multiple investors, you create competition and drive a better outcome. Investors want to be part of something exciting, not something that looks like it's struggling to gain traction.

When did you start investing, and how do you identify good teams or ideas?

I started investing more seriously about six years ago. One big reason I got into investing was that, while the startup ecosystem had improved, there still weren’t many angel investors who were truly useful to founders. I wanted to be the angel investor I had wished for when I was starting out. I think differently from many people on this, I believe assessing founders is much tougher than most realize. Many investors assume their job is to find the "best possible founder," but the challenge is that there are so many different founder archetypes.

At some point, you can usually recognize the archetype you fit into yourself. There’s the technical genius, the product visionary, the hard-charging operator, the savvy commercial expert, the industry specialist, or even the customer with the problem. The difficulty is that excelling in one archetype often means being weak in another. A while back, we saw this issue in venture investment, everyone was backing the same profile: white, male, Oxbridge or red-brick university, ex-McKinsey, Bain, or Goldman.

These founders kept getting funded because they resembled the people making the investment decisions. When investors only look for one specific archetype, such as the highly analytical operator, they miss out on the product visionaries or other types of founders who could build transformative companies. You can see this phenomenon in the industry. Some of the biggest businesses in Europe and globally had founders who struggled to raise early funding because they didn’t "look" or behave the way investors expected.

So, I find assessing founders incredibly difficult and approach it with a lot of caution. Instead of focusing on whether someone fits a generic ideal, I try to evaluate founder-market fit. Are they the right person for this specific market? Do they have the necessary instincts for the opportunity? Before even assessing how strong their skill set is, I consider whether they have the right skill set for the challenge at hand. Then, after working with them for a while, you start to get a real feel for whether they’re someone you truly want to back.

If you could give your younger self advice on starting a company, what would it be? 

You become the average of the people you surround yourself with. If you work with amazing people, you can achieve amazing things. One of the biggest lessons is that life is not a zero-sum game. So many people treat life as if for them to win, someone else has to lose. I hate that mindset. All my experience in building businesses has shown the opposite, if I can find a way for others to win, I can probably win too, and maybe even win bigger.

This applies to negotiations with customers, partnerships, hiring, and working with people. It also makes life way more fun than constantly trying to eliminate competition.

Another risky but important lesson is that we started a business at a very young age, and that worked out well for us. And that was great because it only gets harder over time as responsibilities and commitments grow. I’m cautious about giving this advice because, for many people, starting a business doesn’t always lead to success. However, if you truly want to start something, be aware that it generally gets harder the longer you wait. So if you’re serious about it, there’s an asymmetric risk in not doing it. That’s why I believe in starting as early as possible.

Another lesson I learned later, and one I would tell my younger self, is about asymmetric upside and downside. I always try to expose myself to opportunities with asymmetric upside, where the potential reward far outweighs the risk, and avoid situations with asymmetric downside.

For example, I don’t skydive. Sure, it’s great most of the time, but if something goes wrong, the downside is catastrophic, so I don’t need that in my life. On the other hand, with investing, if I put money into a startup and it fails, I lose 1x my money. But if it succeeds, I could make 10x, 100x, or even 1,000x. That’s why I’m happy to take asymmetric upside opportunities all day long while avoiding asymmetric downside risks. 

Everyone talks about how to assess startups and founders for funding. My question is from the other side, how should startups assess investors to ensure a good founder-investor match, especially in early-stage investment?

That’s a really important area. The first thing is alignment, what you want to achieve should match what the investor wants to achieve. Even if two people share the same values and approach, misaligned goals can create problems. As Charlie Munger said, "Show me the incentive, and I’ll show you the outcome." That’s the first thing I’d focus on.

The second thing is trust. First, find someone you trust. Second, find someone you like, you’ll be working with them for a long time, and if they drain your energy, that’s going to be a major issue. Third, find someone you respect, someone who brings real value to the endeavor.

Audience Member: Matt, you mentioned initially that a good filter when deciding what to build is understanding why you're the best person to build that thing at that given moment. However, when you first started with GoCardless, you didn’t really know what you were doing, and it was your first time in that market. How did you justify that?

Actually, it was inadvertently true. Funny story, we met Max Levchin, who founded PayPal, when we were starting GoCardless. His main piece of advice was not to do it, which is interesting when a titan of payment startups tells you not to, but you, knowing nothing, think you probably should. It turns out that, in this case, we were right, and Max Levchin was wrong. But even a broken clock is right twice a day.

The reason we were actually the right people for the job was that we were the only ones looking at the industry from a product-first perspective. We were trying to build a significantly better product, whereas everyone else was focused on commercial terms, how to capture value. We focused on how to create value. We didn’t realize it at the time, but that made us right. It allowed us to build a far superior product to anyone else in the industry. Eventually, we learned how to sell it, and that led us to become the number one in the industry.

It would have been even better if we had been deliberate about it, if we had entered the market saying, "Everyone else is approaching this in one way, but we are coming at it from this perspective, and that's why we're going to win." We didn’t. We got very lucky.  

Audience Member: I’m starting my own B2B business. My plan is to approach potential customers, sign contracts, receive pre-revenue payments, use that money to set up my manufacturing facility, and then fulfill the contracts later. What would you advise I consider when proposing this type of deal to my customers?

If you can make that work, it’s fantastic. A lot of people overlook the importance of cash flow, businesses survive based on the cash they generate. What you’re describing aligns everything well.

One general insight to consider, it depends on your industry, so take this with some caution, is that early customers are like icebergs. The revenue they pay you is just the part above water, but the real value lies beneath. That includes credibility for attracting more customers, product feedback, and helping you refine your roadmap.

Your approach sounds somewhat transactional, which can work, but you might also think about building a more holistic relationship with customers. There could be more long-term value beyond just securing upfront payments. Giving a little more now could result in much greater returns in the long run.

Of course, without knowing all the details, it’s hard to give precise advice, so apologies if this isn’t entirely relevant!