Entrepreneurship lessons from Céline Lazorthes, founder of Fintech Leetchi and Mangopay
Meet Céline Lazorthes: Engineer, graduate of one of France’s top business schools HEC. She started her first company when she was still a student, ten years ago. In 2015, her startup Leetchi was acquired by French bank Crédit Mutuel in a €50 million deal. This wasn’t a small achievement for the company and its founder: Wired magazine had called Leetchi one of Europe’s top startups, and the acquisition was in fact France’s first FinTech exits.
But let’s go back to the roots of the story: Lazorthes stopped by STATION F to meet our residents and tell them the story of how she started Leetchi.
“I had no money, no network, no co-founder. But I had a lot of hope” Céline Lazorthes
Back in 2007, Lazorthes was a student at HEC (a Masters Degree she did after her engineering school). She took on the difficult task of organizing the “integration weekend” — a business school tradition of gathering all students around weekend activities so that they can meet each other and party together.
“I had to gather the money from my fellow students and friends and it was a nightmare: some had only cash, some had checks. At the time there wasn’t any website to collect money from your friends.” she told us.
The seed of her startup idea was planted. When she graduated in 2008, the financial crisis was booming and it was close to impossible to get a job. Lazorthes opted for entrepreneurship: “In the middle of the financial crisis, with no money, no network, no one who wanted to become my co-founder, I thought: hey, you don’t know anything but maybe you can try.”
She applied for a subsidy by French investment bank B.P.I and got €20k that enabled her to build her MVP. She took care of the product side and the front-end dev and a freelance friend of hers helped with the backend: “It was a lot of work product-wide: at the time the whole concept of money pot didn’t exist!” Lazorthes recalls.
In just a few months the private beta was ready. Lazorthes showed it to her fellow HEC alumni and her friends. “The design was really shitty. I just wanted some of my friends to see it!” Lazorthes confesses.
“You absolutely need to show something to your potential users. If you ask them: How do you imagine your ideal product, they can’t tell you. You have to show them a beta and gather feedback.”
At that point, Lazorthes had jumped on the entrepreneurship bandwagon and wouldn’t get off.
“Entrepreneurship was a means to express myself, not a goal. I was convinced by the concept of the money pot. The business model was pretty obvious. But I have to admit: I had no idea that Leetchi would become what it is today!”
How Céline Lazorthes raised her Seed funding via text
“I raised money by accident.” told us Lazorthes.
When Leetchi’s co-founder raised her Seed round, Leetchi didn’t even exist yet. Lazorthes didn’t want to create an actual company before she was absolutely sure that there was a business potential.
A friend of Lazorthes’ showed the MVP she sent him to one of his investors, Oleg Tscheltzoff, without telling her. For those who don’t know — that is, including Lazorthes at that time! — Oleg Tscheltzoff is a very active business angel who co-founded Fotolia (acquired by Adobe for $800million).
Soon-to-become-Leetchi caught his attention and he reached out to the founder. Lazorthes recalls: “I received an email from a guy I didn’t know, telling me he wanted to give me money. I almost thought it was a scam!”
They ended up chatting, but Lazorthes told him that she already had funding, the €20k subsidy, and that her company didn’t even exist. After he insisted, Lazorthes asked her friend: “Who is this Tscheltzoff guy?” The answer convinced her to consider getting funded.
Oleg Tscheltzoff was ready to invest a part of a round — Lazorthes then asked him to introduce her to Xavier Niel (yes, that guy!) as she knew they often co-invested. Tscheltzoff advised her to send him an executive summary.
“I wanted to do something more original: I created a screencast with my voice over saying “Hey Xavier I created a moneypot for Oleg’s birthday”, etc. It looked terrible!” recalls Lazorthes. And she didn’t hear anything back for two weeks.
Two weeks later, she joined the HEC incubation program’s getaway weekend away in the countryside. The minute she stepped inside the train and the doors closed behind her, she received a phone call from Tscheltzoff: “I’m with Xavier we want to speak about your product.”
“It was a disaster: I had no reception, I was standing on the seats screaming in my phone. No one in the wagon believed that I was on the phone with Xavier Niel!” tells Lazorthes.
They ended up negotiating the deal via… text messages.
Lazorthes then closed her round with a VC fund — it was much easier given Oleg and Xavier were already on board.
For those who wonder what are the main things big investors like Oleg Tscheltzoff, Xavier Niel, and VC funds ask when considering investing, here is Lazorthes’ answer:
“The main questions investors ask are: how big is the market (which I still don’t know 10 years after, I just know it’s huge) and how strong you are to face it. Building a startup is tough, you need to be able to face it all the way through.”
Leetchi’s evolution was 100% based on customers’ feedback
Leetchi now counts 8 millions customers worldwide. Of course, there were a lot of milestones to get there.
After Lazorthes got her funding round, first thing she did was hire a CTO and a product manager. Then for 6 months, she worked hard to make her product legal: at the time, it was very difficult for startups to manage financial transactions.
“When I went to banks, they told me “Ah, you want to build a bank. Maybe we have an internship for you” recalls Lazorthes.
Then it was time to find a name for the product. Thankfully, Lazorthes’ head of masters degree Julien Levy was a writer for the Mercator (the marketing bible) and helped a lot picking names and copywriting.
“The first code name was ‘Kling’ for the noise coins make when you shake them. But my mother couldn’t pronounce it! It’s never a good sign. If you want to be a global company you need to find a name that’s short, catchy, can be pronounced in many different languages. We actually found Leetchi at dinner with some of my friends!”
The next big milestone was when the first customer that Lazorthes didn’t know personally used Leetchi. “I almost cried, she recalls. At that point, we knew we could build the trust that would bring millions of people to use our product.”
As Leetchi’s customer base grew, the product evolved at the same time. Product decisions were, and still are, strongly based on customer feedback.
“We were sponges for customers’ feedback. And by the way, most of the ideas don’t come from me, they come from the team!”
It is listening to other people’s issues that got Lazorthes and her new business partner Romain Mazeries to build Mango Pay, a B2B payment company. When they were struggling to get a bank license, they were asking a lot of questions to companies to understand how they process payments, how they deal with fraud, etc.
“It got me to think that companies could need the technology behind Leetchi but without the “money pot” concept and the marketing around Leetchi.” That is how Mangopay was born.
Culture Management : build an asshole-free company
Leetchi is a company well-known for its particular culture management. First, there is no HR service. And Céline Lazorthes still spends a lot of time coaching her employees on how to hire.
Here are Lazorthes’ tips on hiring the best people in your startup.
- First, you have to hire the first 5 key people yourself. Then they will hire the next 25.
- Don’t hire someone based on his knowledge but based on his behavior. You can teach knowledge, you can’t change a personality. The best example for that is how Lazorthes recruited her CTO, Laure Némée: Leetchi was built in C Sharp at the time and Laure was a Java developer and had no knowledge in Dotnet technologies whatsoever. Everyone told Lazorthes she was crazy to hire her but she was convinced she had the best personality and will to learn. “The first 3 months were a bit of a nightmare, customers were complaining. But now she’s been a CTO for 8 years, she’s the smartest person I know.” Lazorthes says.
- You need to have a good feeling about every single person you hire. If you have any doubt, it might not be a good fit. “I never say no to a recruitment, I express doubts”, told us Lazorthes. “Of course we have made mistakes, but it’s part of the learning process.”
- For each hire, at least 3 to 5 team members have to see them. But at the same time: you need to have a fast process for recruitment.
Leetchi is now an 80-person company, and counting. “I’m proud to say I have a team of good people”, says Lazorthes.
Lazorthes is now a business angel and has invested in 15 companies in the last 2 years, which include Frichti, le Slip français, and Talent. Want to have this great entrepreneur on your board? Lazorthes explains: “I’m looking for smart people. I want to feel what I was when I started my company: sparkling eyes and an ability to fight for your business. Being an entrepreneur can bring a lot of happiness but it’s often very hard.”
You can reach out to her on Twitter at: @CelineLZ
Want to learn other stories about great startup founders?
- Learn more about the product-driven company WeTransfer
- Watch a video of Leila Janah, social entrepreneur
- Hear the crazy story of how Zenly got Benchmark in their board