Amsterdam based FinTech startup Tabster wants to change the way groups of people pay in bars and restaurants. The team launched their MVP end of 2015 and are now raising funding for further growth. We interviewed founders Sjoerd Rothweiler who together with Frans van Hoogstraten founded Tabster.
When and why did you start Tabster?
Frans and I were having a beer and like many others, couldn’t believe that there was no solution for the hassle around paying in bars and restaurants: requesting separate bills, computing your own share and making multiple small payments. We felt we could change this. We started researching in the evenings and weekends and as per end of 2014 we decided to quit our jobs.
You both had good jobs (managing the webshop of a telco provider and Vice President at ING). Was it hard for you to quit jobs?
Despite the promising chances we got from our employers and a couple of sleepless nights, the force of attraction was too strong. We also both knew our entrepreneurial spirit could not be stopped forever, so it was a matter of time anyway.
How did you find out what restaurant and bar owners wanted? How are they responding to your product?
We didn’t try to sell anything until they confirmed the added value we had in mind. So the first months we just simply asked if we could learn from the bar owners. This worked really well, both in learnings as in interest from bar owners. We knew that there were some big wins for bar owners, yet everything should work flawlessly with minimal changes to processes. Now we are at a level that the product sells itself and we already get requests from bar owners to install Tabster.
An important milestone for you was to close a deal with leading cash register manufacturer Eijsink. How did you do this? How important are such deals for payments startups?
Everybody in the area of payments, loyalty and data is aware of the fact that integration with the Point of Sale (POS) systems is the future. The integration makes purchase data and amount to be paid available on your smartphone real-time. Without POS integration, each payment would take a lot of time manually entering data. Yet only a few startups get the POS parties to cooperate and help them get access to the data needed. The rest has to wait for the cloud based era, doesn’t get to the next phase or decides to move on with a diluted proposition. So yes this was really important to us!
When we met Eijsink for the first time, there was an immediate connection as they are also interested in innovating their services. However at first we could not convince them to have us to integrate with their systems. Integration is not an easy job for them and they have a full development roadmap with other features to implement. However we kept believing in our proposition and invented a way to bypass all these necessary POS integrations. We came up with our own universal POS connection, by which we can get the data out of any POS register. That was also the last push to persuade Eijsink to invest in and partner with us.
Can you share your funding strategy: how did you raise money and what are your plans?
We raised the cash needed in different rounds. We started with an angel round (including an investment from ING) of EUR195k in the beginning of 2015 to develop a basic version of the app and to validate the proposition. In the summer we raised another EUR 195k out of the same Angel group (and Eijsink) to further develop and professionalize the App in order to pilot in a couple of bars and prepare for lift off. For funding the rollout in 2016, we chose to be on Leapfunder with another EUR 500k. We like the idea of having many investors that will also help you as ambassadors, for it is the perfect subject for small talks and can be spread quickly. We are also having discussions with larger Angel investors to reach a total of around EUR1mln.
You are in the same ING innovation studio as Moneytis, the money exchange startup we interviewed earlier. Are you learning from Moneytis and the other startups?
We learn a lot in the ING Innovation Studio and from the cross-fertilization between all the start-ups. We also work together with Payconiq and therefore are the first to offer the Uber way of paying in bars, also with IBAN.
Neither of the founders is a developer. How did you find developers?
Frans has studied Technische Natuurkunde in Delft and is an autodidact in IT and hardware development. He developed the first prototypes and manages the development side. Once we had initial funding, we used our network to find our two top developers, Bouke and Waleed.
In app development, do you use prototyping and testing tools? Any tips and tricks you can share?
Professional panel interviews have shown us that there is a strong demand for a solution for split-the-bill hassle. In all open interviews (not directing respondents into Tabster solutions), bill-sharing hassle was mentioned without exception as the nr 1 frustration in bars and restaurants. After that we worked with paper prototyping and Invision. The app designs were subsequently recognized as truly superior to other payment methods.
Now the question remains what is actual behavior (other than words), will people indeed use such an app to take away this frustration? In our case with not the easiest proposition, bringing a total new way of payment and of sharing your bill, this is a difficult question to answer. Actual behavior in our case depends on aspects that are interconnected and that can only be judged once they’re built. Such as: can we make this app easy enough to understand, easy enough to use and easy enough to onboard. We took a creative shortcut for validating our proposition by thoroughly analyzing similar concepts abroad.
My advice would also be, keep using your own intuition and guts. The start-up scene is becoming public domain and a lot of people tend to follow the herd and preach the same rules and books, while forgetting to use their own brains. If you want to stand out from the crowd, learn from others, but also dare to live by your own rules and maybe one day you will be the one to write a book.
What was the most difficult part of being in a startup?
Everybody has an opinion on what you are doing, but they do not have the information you have. Others also tend to forget the practical aspects that come with managing a business. You learn to respect these opinions, even though you do not always agree.
Did you launch regional (Amsterdam) with your app? Or did you go for the whole of The Netherlands straight away? Why?
We work with an organic city by city approach. We have seen too many examples of companies that so badly wanted to have users that they couldn’t resist the temptation of onboarding venues all over the country, yet with a much too low level of local concentration. Not many people will download an app that you can use just in one place. We try to be really clear that we start in Amsterdam, first in de Pijp and West. After Amsterdam first the other larger cities will follow. You cannot please everyone and therefore should be clear and manage expectations to prevent disappointment. In 2018 we aim to be available in 2500 bars and restaurants in the Netherlands.
What do you need most for further growth? Anything our readers can help you with?
Download the tabster app and come try it in one of the bars were you can use it. And check Tabster out in on Leapfunder. For the bar owners that are interested to hear more, we will be happy to give you a demo on Horecava at the Eijsink stand.