Joan Burkovic runs lean. He wears the scars of bootstrapping on his face, with shadowed eyes that seem to be tattooed in red. His cheeks are sucked in tight around his jaw, a product of a budget diet consisting mostly of pasta. The scrawny native of Northern France, and his technical co-Founder, Robin Dauzon, have gone all in on their startnup, Bankin’. The ambitious pair are tackling the goliath of the French banking industry, navigating the mazes of bureaucracy with nothing but macbooks and willpower. They are the leaders in a race to build the mint.com of France.
I first met Joan when I stopped through Le Camping, Paris’ hottest incubator. The space was in a corner of the famous Palais Brongniart, the old French Stock Exchange, as if in some salute to the IPO’s ahead. It was “mix night,” and he stood up to speak.
Joan and Robin met at ESSEC — one of Europe’s top business schools — in Chinese class. Operating on microbudgets is nothing new for them; the two supported most of their own way through school. “We never failed to find nasty surprises at the end of the month,” said Robin. “We didn’t know where all the money went.”
They set out to fix their cash problem by creating an application that would allow users to manage many different bank accounts at once, create budgets, and send alerts about various fees, overdrafts, and overspending indicators. It was called Perspecteev, and they threw all 8000 euros of their combined savings behind it. They had never worked at a bank, and Robin didn’t have experience with their IT systems.
Everyone told them that their idea would never work. French banks are a bureaucratic maze that Magellan himself might fail to navigate; mentors doubted they’d ever be given access to the account information. Even if that barrier was jumped, nobody believed that users would enter their banking passwords into the app.
Indeed, these were daunting problems, and the first hurdle took more than 9 months of research and negotiations to overcome. The banking networks are a dizzying maze of different systems, protocols, and languages, which vary from company to company and even from one department to another. The only way to access everything they’d need was through a central organization made up of a consortium of banks. They manage a single standardized API, or connection protocol, so that all the different banks can talk to each other through their own web services.
It’s actually relatively easy to gain access to it…that is, if one shows up with enough money. The banks asked for an initial connection fee of $150,000, plus a monthly fee of 5-10 cents per user.
Finding funding at this stage was out of the question, according to Joan. “The venture capitalists here don’t do their job very well” he says. “They don’t like to take risks, and you won’t get a dime until you have lots of users.” Instead, the pair negotiated a trial period of 50 users. That’s a tiny number in the internet world, but it allowed them to build out the application and run a small beta with friends. As they built, negotiations slogged on for 5 months.
It wasn’t an easy time for the company. Joan and Robin were living off less than a thousand euros a month, a combination of their savings and a little help from their parents. In addition to supporting themselves, they both withdrew 500 euros a month to float David, their second developer, who was getting no outside help.
True to their entrepreneurial form, Robin and David built a third party ebay application, called Ebay Sniper to keep the company’s head above water. The simple app placed last-second bids on items that had remained within a users budget. It developed a small following, bringing about 1000 euros a month to the company.
In the meantime, the team did absolutely everything it could to keep costs down. They worked out of their school facilities and Le Camping to avoid paying rent. They couldn’t afford to get new computers, but a few friends lent Robin and David Macbook pros so they could keep developing.
As the team worked 16 hour days, their efforts began to pay off. Their app, whose named they changed to Bankin’, hit number 9 in the French appstore and they topped 100,000 uses. Reviews for their product were overwhelming positive, but users got frustrated as the app came in and out. “It’s been really hard to keep a stable connection,” recounted Robin. “These banks are changing things all the time. The other day, Credit Agricolte ran an upgrade that broke their own system, and even they couldn’t access it. There’s nothing we can do but scramble to figure out how to get back in, but it takes a while.”
Last December, the team reached a watershed. “We had $4000 left in the bank, and our costs were soaring as the user base grew.” To make up the shortfall, Joan, Robin, and David, each took out a 20,000 euro personal loan to inject into the company.
I looked at Joan with wide eyes when he told me that. “You’re my hero, dude,” I told him. He giggled. “It’s not that hard when you don’t have a choice,” he replied.
The team is in London as I write this, trying to raise their first round. They are looking for $400,000 first round, though they say they’ll need to raise an additional 1.5 million to scale over the next two years.
I have little doubt they will succeed. These guys would have raised a million in silicon valley 6 months ago. As their user-base continues to grow, they’ll develop powerful leverage to bring in capital.
Besides, they won’t give up. They can’t afford it.