In this article, you will be discovering a startup called Upflow which allows companies to manage their finances by helping them track the payment of their customer’s invoices and that is aiming to change the B2B payment model.
You will be meeting Alexandre Louisy who is the CEO and Co-founder of Upflow, launched in France by Efounders and in the US by Y Combinator. He will talk about his experience as an entrepreneur in the Tech industry with honesty, humility, and transparency.
Who are you? What is your background?
I am 35 years old, and I am an entrepreneur. I started at a school of engineering and then finished my studies with a master’s degree in finance. I then worked for 8 years before setting up my own company. Nevertheless, I knew from the beginning that I wanted to build my own company, I worked for 4 years in a bank where I did structure finance and 3 years in a telecom SME. My experiences were very distant from the world of technology, but they were two threads that led me to create Upflow.
Did the idea of setting up your company come before?
I really liked the idea of organisation, of managing people around an idea. The idea of creating my own company was very appealing to me. In the end, the idea of the company that comes out of the blue doesn’t really exist, all entrepreneurs have a lot of ideas that are good or bad but the execution of a company is way more complicated than the idea itself.
What is Upflow?
Upflow is a SAAS solution that allows companies to get paid better. The idea is to offer a technical solution that allows companies to monitor their accounts, understand the status of invoices awaiting payment, structure the dunning process, and help customers to pay more efficiently. In the B2B world, there are a lot of conflicts with payment methods that are still archaic, our goal is to make transfers more fluid.
In the short term, we want to make exchanges between B2B companies more fluid, and in the long term, we want to change the way companies transact with each other.
How did Upflow get incubated by eFounders? What is your current relationship with them?
We were incubated by eFounders, their model is to accompany companies from their launch and then leave them autonomous. We are now in the autonomous phase.
I first confirmed this entrepreneurial desire by working at Wifirst, where we sell managed WIFI, for 3 years. I opened the company in countries myself, I created my own tiny company inside the company.
It all started when for a very long time, I felt that I had to go for it, I had to take the plunge and create my own company. Even though didn’t know exactly where I was going, I quit my job and I needed a bit of time to throw myself into the adventure.
I started with this idea in the Fintech sector on the landing for small businesses. A company that has always fascinated me is called Kabbage, it’s a company that does financing for small companies on a much more dynamic transactional basis than banks. So, I spent 6 months trying to understand and analyse the sectors by getting closer to “TheFamily” where we worked on a project that never saw the light of day. However, it made me understand that the market was extremely complicated, especially when the company was very small, nobody knew me. I realised from talking to contractors that people have a bigger problem than the money footprint, but that the small boxes are borrowing money because they have a hard time getting paid. That’s where I found my subject.
I had already found that problem before, in my old company. Yet, when I interviewed different entrepreneurs, financial directors, business managers, I realised that everyone had this problem. So, I created my company into something much simpler: a simpler way to help businesses get paid by their clients.
This is the little seed of Upflow at the start. I met one of the founders of eFounders during a conference on startups. After having a coffee with him, he introduced me to several companies for which they were looking for CEOs. I particularly liked one company that was working on invoicing methods, and we converged our two projects together, which resulted in Upflow. That’s how we got started with eFounders, what reassured me at the time was that thanks to eFounders I had experts all around me, people with SaaS experiences and networks.
So that is how two years ago we started the adventure with Upflow.
Does Upflow now look like what you imagined?
I don’t know if I was imagining something. I knew it would be hard, even so, I think it’s one hundred times harder than I thought it would be.
Also, in TechCrunch and Maddyness entrepreneurship, you only hear about the good news, never about startups going bankrupt. Positive storytelling is a necessary criterion because if you want to succeed in launching a business you have to be optimistic and motivated. Show that everything is going well in order to build trust.
What are the problems you went through with Upflow?
The hardest things are mistakes with the team, when you make the wrong decisions and when you have to take responsibilities for your own choices.
Recently during the Covid-19 pandemic, we did a big product change to switch to the US, we didn’t expect this situation from a macro point of view.
You have to take responsibility for your choices, and it’s hard to find a balance, everything always goes very fast. When just one person leaves, everything changes in a small company. In addition, there is a personal attachment to the project, and you must have the ability to make the right choices.
Shifting the product: how to question oneself?
You have to do it in our hyper-growth models, or you are often confronted with it. You have to grow fast. These are decisions of humility, you have to admit your mistakes, you have to know how to question yourself.
One of the most fascinating things with Upflow, is that we made a mistake on our distribution, the Go-To-Marget (GTM) and it took us a long time to realise it. It’s not a question of not making mistakes but of being able to correct them quickly.
It’s difficult to find a cruising speed, I’m always telling myself that it has to go faster.
Upflow had now entered into a rhythm of hyper-growth to create a big company. Hyper-growth is not obligatory, they are different strategies, you just have to know how to manage the situation you are getting into.
What are the elements that make you the proudest?
What makes me the proudest is to look at the evolution of the team and the company itself. This is something that drives me a lot, it has a big effect on the way we work. We like to do things well, to see people grow, to motivate, to sell our useful product to our clients.
Also, of course, the great moment of adrenaline I shall never forget is the first paying client of Upflow. And more recently, when I was chosen by the American incubator, Y Combinator (YC).
Throughout the tools in the Finetech sector, how does Upflow integrate/ stand out on the market?
Upflow is a product aimed at B2B. In the B2C world, there’s a whole set of tools but in the B2B world we are waiting for it to evolve and the tools to change.
In B2C companies there is often an ERP that controls the company’s operations, an invoicing tool, a payment gateway (where the customers pay you), etc.
However, in the B2B world, there is a huge gap between the invoice and the time the customer pays you. We are trying to fill this hole, we are not replacing tools, but a kind of layer that connects to the invoicing in order to communicate internally, structure the follow-up steps and allow customers to pay faster and better. We are an additional layer, and we are not replacing existing tools. Today we are connected with the biggest market-leading tools, on invoicing and or accounting when both are mixed together like QuickBooks.
In order to make our tool work, we need invoices information, customer contact information, payment information. This is why we have some integration topics with Salesforce because there is a customer part, we are interested in.
We are at the interface of many solutions, and the question is how to integrate it.
Recently I read a very interesting article on All products aren’t created equal: Empty and filled products, by Folk that describe how products are empty at the beginning, and how to “fill them with information” to get it started.
Upflow makes the step of filling the product very short, it’s a big challenge. We want to make this product experience extremely simple.
Also, with Upflow, we help people to get paid by using the DSO measurement indicator. This indicator measures how long does it take you to get paid. The question we are always working on is how you improve your DSO and how to communicate through the DSO and prove it.
What is your international deployment plan?
There is going to be a big product shift that takes us to the US (we have to go through the market size, product, go to market). The mid-market is much bigger in the US than in Europe.
We met with Y Combinator (who give you three months of coaching) after applying online we had a 10 minutes interview where we had to convince them to take us on. They finance 150 thousand dollars and take 7% of the US market.
Are there big cultural differences between Europe and the US?
When we arrived in the US market as French entrepreneurs, we received a huge slap in the face. There are a lot of differences because ambitions are ten times greater in the US. In France, we have this feeling of jealousy and competition whereas in the US there is a culture of failure which is much more accepted. It’s something that’s implanted in the American culture but there’s no such thing in France.
In the US, investments are easier to get, people are more inclined to test different products.
What is the image of French on the US market?
The requirement for the quality of the service is more demanding than in France but not because we are French. There are no specific subjects about French, it’s up to you to adapt to their culture.
At the end of the three months with Y Combinator, we presented our project to them despite the Covid-19, and we came back to France. We are adapting and selling our product to the US from France whilst there is still the pandemic
In 3 years when we will look at the product in the US, we will know that the pandemic has helped us on many things and allowed us to refocus on our essentials. However, you always have to be optimistic, you have to know how to adapt, to be fast.
Y Combinator helped us a lot because I have a problem with the speed of execution. When we arrived at our first appointment with Y Combinator we asked a question, and they answered us by saying that we knew the answer. What we need to do is to focus on this new product line in the US and to call our clients and tell them it’s over and the product has changed. We took this answer into our pride, but they explained that our current positioning would not work on the long term.
We had this discussion in November 2019 and in March 2020 we put this plan into action. The ability to make complicated decisions is the secret of a company that works. As an entrepreneur, you are always learning.
How does the R&D and tech work at Upflow?
It was very hard at the beginning, we didn’t know anything, but we talked to people who did. Efounders helped us by keeping that legitimacy. You are kind of de-risking the project with eFounders.
The fact that I met my co-founder who was specialised in B2C before has made us put in place a B2B product but a B2C strategy.
It is strange that the B2B and B2C markets are so different in France. For example, when you want to reimburse a friend, you use Lydia from your phone, and you get paid back in two clicks. Yet, to pay back a company you have to go through a whole process, you first need to wait then receive a cheque in an envelope, then put in onto a bank account. That’s Upflow’s ambition. We want to change this payment process; this is the product we sell at the moment whilst thinking about other solutions with added value for us.
How do you drive the tech pole at Upflow?
There are 13 of us at Upflow, half of them are on the tech business. The main problem is the distribution where we spend a lot of time with a lot of investments in order to scale.
We currently process about one hundred thousand invoices per month, that’s a lot of flow and of data to management. When our customers buy our product, you need to import all your history for us to measure your improvement. This is a process we want to make in a seamless way, but we must be very careful with the data. If there is any discrepancy, people would not use our product.
At Upflow we have a continuous deployment process for the product. We ship to production multiple times a week. It is very important on the business side for our customers to see constant updates.
Also, designers and product managers are very important in this Saas business. The quality and clarity of the product pay off. We know our product is good when big companies sign off a contract with us just after a 20 minutes conversation on the phone.
Which tools do you use at Upflow?
Sales Automation: SalesLoft
Knowledge phase: Notion
Could you recommend any books?
The Lean Startup, by Eric Ries
The Hard Thing About Hard Things, by Ben Horowitz
The Art of the Start, by Guy Kawasaki
Reinventing Organisations, by Frederic Laloux