Connect Spotlight: Comma
After joining our portfolio just over a year ago, Comma is well on its way to building a new and crucial part of the SME payments stack whilst solving the age old problem of manual bank payments.
In this Spotlight, Rory talks with founder and CEO, Tom Beckenham, about Comma’s journey towards revolutionising the payments system for small businesses, the challenges and learnings of ramping up quickly, and his not-too-distant vision of a world where we never have to manually enter payments again. We’re certainly all on board with that.
Great to have you here, Tom! We love what Comma has achieved so far. Can you take us back to the beginning? What is Comma’s origin story?
I’d call Comma my second major venture, born on the heels of my first venture, which was in ad tech. As Chief Operating Officer there, I ran finance teams across multiple regions and got exposed to the horror of billing and payments. Most of all, I became acutely aware of how large corporations had systems which small businesses didn’t — supplier portals, dynamic discounting, corporate banking. I felt there had to be a way to make this better for small businesses, while also updating some of these processes, which, let’s face it, are often more antiquated than the fax machine.
That’s a nice way of putting it! Tell us more about the customers you’re serving. What would you say is the biggest pain point Comma is solving?
Comma targets small businesses of one hundred employees or less. Our sweet spot is when that company is owned and operated by the person who has access to the company’s bank account — the single individual who can make payments. It could be a tech startup, a retail company, a manufacturing or construction business. When it’s just one owner, the whole payment process becomes quite painful. There’s stress around whether they’ve forgotten to do salaries, concern about whether they have enough cash in the bank to actually make payments, and effort actually allocating the time to go and do it — especially when they’re on the road a lot.
We get to market through two sets of partners. We work with accountants and bookkeepers, who often have a large range of SME clients. And we also partner with payroll and accounting systems, which embed Comma into their applications as “integrated bank payments”.
Smart. Can you tell me more about the core insights that make Comma an opinionated product?
One of Comma’s core insights is that onboarding is the hidden killer of payment technology. It takes a long time to set up, which has traditionally limited the market size as it tends to exclude companies of one hundred people or less. Helping small businesses get up and running instantly was very important to us.
The second core insight is that small businesses usually hate their banks but they won’t trust anything else. Automating existing bank accounts is a key part of the value proposition.
Fast forward to today, and you’ve got quite a few customers and partners. What makes them love Comma?
Comma is a product which has many moving parts, and getting to a point of customer love has been quite a journey. The main reason they love us is that we’re solving a long-standing pain. Customers believe — rightly — that payments should just happen in the background, without the need for extra manual steps or friction. Comma helps them do that, and they see how automated and easy the payment experience can be.
Speaking of product, how would you describe Comma’s product culture? And what has your approach been to finding product market fit?
Because Comma touches so many people — software partners, accountants, small businesses, who all interact with one another — the product culture has revolved around ensuring we talk to the right people in order to deeply solve the customer problems that will drive the company forward.
Externally, one of Comma’s challenges has been our go-to-market approach. Because there are so many small businesses, it’s almost like getting to consumers. We spend a lot of time thinking about network models, customer referrals, customer acquisition. But mainly, we spend a lot of time with our early customers to make sure every part of the process is smooth, and iterate based on their feedback.
Internally, product used to be a collaboration between multiple teams — sales, marketing, engineering, and myself, as founder. It still is, to some extent, but we’ve made our first proper product hires this year. The product team spends a good amount of time with the stakeholders in the business, and design is very involved from the beginning. We still have a collaborative culture, but we also like to take a step back sometimes. For instance, we just had a great product workshop with Laura (one of Connect’s product advisors), where we encouraged different parts of the business to think differently about how we solve certain problems.
So we’ve covered beginnings, customers, and product market fit. Now I’d love to hear about your vision. What do you have in mind for Comma in the next 5 or 10 years?
In a couple of years, businesses will look back and wonder why on Earth anybody was ever manually entering payments! Comma is going to be a key part of moving people from a manual banking system to an API-driven banking system.
Beyond that, we want to create an ecosystem around Comma, and it’s definitely within reach. Our path with integrated bank payments has opened us up to multiple use cases and verticals, to the point where we can eventually allow developers to create and use Comma in a variety of different ways, implementing payments quickly and easily into whatever application they like. I’m really excited to see what comes out of that.
In terms of customer value, there are so many things that surround payments — from financing and early payroll to credit cards and expenses. Comma will keep building on our core payment experience to deliver increasing value to our customers.
Let’s talk about your journey. What are you most proud of since founding Comma?
I’m really proud of the team we’ve assembled — especially their dedication and ability to produce a remarkable solution to a problem people have looked at for years and found too scary to tackle. In terms of technical infrastructure, we’ve created the Ferrari of B2B payments.
I’m also extremely proud of the partnerships we’ve managed to develop. This time last year, I never would have dreamed of doing business with some of our current partners — I would have assumed we’d be knocking on their door trying to connect with them, rather than the other way around. Having the world’s biggest financial software companies looking to embed our solution is testament to the level of technical progress we’ve made.
Two things very worthy of being proud of. What is the toughest decision you’ve had to make so far, or a mistake that has taught you the most?
Ah… we’ve had to make some extremely tough decisions over this last year, especially with the way that the market turned. I suppose there have been some lessons there as well.
One mistake we made as we were fundraising was ramping up too quickly, assuming we had found product market fit because we had really strong data points indicating we were there. Unfortunately, it was still quite early traction, and our hypothesis turned out to be very different from reality. That made me realise that while it’s important to take some gambles — otherwise you don’t get anywhere — you also have to balance that with a backup plan.
In our case, we had to pare our efforts back, which involved some redundancies. It felt like just as the company was going great, we suddenly had to put a dagger into our own stomach. That’s so hard to come back from. It affects your culture and you have knock-on effects that you don’t expect — especially challenging when we’re trying to grow, get more customers, prepare for next funding rounds, etc.
I learned that when things are going great, say they’re going great. But when things are not going great, do not — under any circumstance — say they’re going great. Be honest, because transparency and trust are the most important things you can build in a team. You might think people can’t take the truth, but they can.
I love your openness here Tom, it’s valuable for others to hear. We’re going to be a bit cheeky here, and ask you what you feel is the most valuable thing Connect has done for you so far?
As a smaller fund, the connection (no pun intended) you develop with your portfolio companies is really special. The level of attention you provide is extraordinary. I know you work with a lot of other companies, Rory, yet you know every single detail about Comma.
Then there’s the relationships you foster between the businesses in your portfolio. From the retreats to just being encouraged to spend time with other founders who are going through similar stuff at a similar time, it’s brilliant. I’ve even said to a couple of people — for anyone who has kids — that it’s like NCT for founders. We’re all going through having a baby at the same time.
Nice one! That’s always great to hear. Final question: we spoke about not being able to live without Comma. What is a software product you love and couldn’t live without?
I’ll tell you one which not many people know about: it’s a product called Pry, and it’s a financial modelling software. It’s unreal, and I will never go back to spreadsheets now that I’ve gotten into it. It was just acquired by Brex for nearly $100 million, and it is an amazing piece of engineering which we’ve found indispensable to our financial planning at Comma.
Love it. Thanks so much for your time and honesty, Tom. It’s been a pleasure chatting about Comma’s journey so far.
