Taking the pain out of payment
Fintech startup Work Smarter is making it easier for the self-employed to get paid
Sebastian Kühn and Anika Riley: the Work Smarter founders’ model can be applied across multiple sectors.
Anika Riley and Sebastian Kühn worked together in an events startup in Berlin before moving to Dublin in 2017 to study for an MSc in entrepreneurship at Trinity College. The pair, who are part of the college’s LaunchBox accelerator for student early stage and startup businesses, are the co-founders of Work Smarter, which tackles the problem of late payments to sub-suppliers, freelancers and the self-employed. The founders are starting with the construction industry but their model can be applied across multiple sectors.
Riley studied politics at the University of California, Santa Cruz, before discovering she had the entrepreneurial bug while Kühn is a computer scientist with eight years’ experience as a web developer. Work Smarter was founded at the beginning of this year and the idea for the business came from Kühn whose father has been a self-employed supplier to the building industry for more than 30 years.
“Growing up, Sebastian remembers clearly how much his father loved his job, but the administrative part of the business was a real burden especially when customers didn’t pay on time,” Riley says. “Late, or even worse, non-payment for jobs brought him to the brink of bankruptcy on multiple occasions and there was little he could do to prevent it. Sebastian saw his father’s constant struggle with cash flow and has always wanted change the way business is done and to end the insecurity self-employed people are exposed to.”
Work Smarter is tackling the payments problem with what Riley describes as “a unique, milestone-based escrow system that cuts out third parties and executes payments in real time.” (An escrow is a financial arrangement whereby an independent observer, such as a solicitor, holds and regulates the payment of funds between two parties.)
“To use our system a supplier will click together a contract via our verified templates,” Riley adds. “Our software converts these ordinary digital contracts into smart contracts. These contracts can hold money so a supplier’s client can send payment directly to them rather than to a middleman. Once a project milestone is reached, the client simply releases the escrowed funds with the press of a button ensuring prompt payment and preventing project delays. We integrate cash flow into the project management so that people don’t need to resort to payment reminders, debt collectors or legal support later on. We are a preventive solution helping the self-employed and their clients communicate their expectations clearly, write up contracts more easily and manage payments in a secure and efficient way.”
Riley says Work Smarter is bringing escrow into the 21st century and points out that traditional escrow services that require funds to be channelled via a middleman are time consuming and expensive. “With our solution the contract itself holds the payment for the project and when the contract is executed, the money is transferred in under a minute with no legal hoops to jump through,” she says.
Work Smarter will be sold as a B2B software solution and scaled globally once it has a foothold in Ireland. The company will earn its income by charging a commission on the transferred funds.
The founders have spent roughly €30,000 of their savings to start the business with a top-up of approximately €7,000 from LaunchBox. They will showcase their minimum viable product at the end of August, their first client is due to come on board in the autumn and the full product launch will follow in early 2019.
“Late payment is one of the biggest risks for the self-employed in all sectors,” Riley says. “In 2016 some 96 per cent of all self-employed bankruptcies recorded in the EU involved late payments and late payments affect about 80 per cent of freelancers. Self-employment should not come at the cost of financial security and we want to establish Work Smarter as the means by which freelancers can enjoy peace of mind and focus on doing the work they love.”