Headed by young Irish entrepreneur and former Googler Peter Johnston, Lystable is a London-headquartered enterprise technology start-up that is aiming to transform the way big businesses interact with and manage their freelance workforce.
Lystable was one of the first UK graduates of Techstars, was a finalist in this year’s TechCrunch Disrupt Startup Battlefield and recently announced completion of its second round of seed funding within one year, taking them to $3.5m, with an increased stake from Peter Thiel’s Valar Ventures and new investment from San Francisco-based VC Fund Toba Capital.
It has been only a year since the company was founded and in the last six months alone it has secured contracts with Google, The Economist Group, the London School of Economics and Farfetch, among others.
‘We designed this product for the end user, not just the person signing the cheque’
– PETER JOHNSTON, LYSTABLE
Lystable was created in response to the rapid growth of the freelance economy, and it allows large enterprises to create their own network of talent.
The market is ripe for this kind of solution, with new statistics out from Ardent Partners showing that 95pc of organisations view contingent workforce as vital to day-to-day operations and 35pc of today’s total workforce are comprised of non-employee workers, including temps, freelancers and independent contractors.
“We are a cloud-based platform that allows companies to onboard, manage, communicate and pay their large numbers of freelancers and vendors. Super simple,” says Johnston.
As Johnston explains it, the workplace has fundamentally changed. Organisations are moving towards a more fluid way of working, putting freelancers and vendors at the core of what they do. Companies like Airbnb and Uber, in the post-Google age, have more freelancers, contractors and vendors working for them than they do full-time employees.
“In order to facilitate this changing way of working, we are one of the first combined freelancer management and vendor management platforms,” Johnston explains.
“In reality, the size of the market is hard to gauge, given the massive shifts in how work is changing, but specifically the VMS/FMS market is estimated at $50bn, dominated by much older software companies.”
University of Ulster graduate Johnston was working as a designer at Google when he came up with the idea for Lystable.
“For years I’d worked in creative departments, including M&C Saatchi where we would be using hundreds of freelancers and vendors per month to complete work, but we were wasting time and money on commissioning them because we had no simple solution to manage that process.
“I set up Lystable on my own, with the support of friends and family, and I am still the sole founder today. I hired my first two senior members of the team in March 2015, around four months after founding the company.
Lystable’s enterprise platform allows companies to manage their contingent workforce, so all of their freelancers, contractors or vendors. It helps them onboard, manage, communicate with and pay them, all from one platform.
“This means the technology covers the end-to-end transaction from onboarding and e-signing contracts, to managing them through resource tracking and storing feedback, to having your own IM with your freelancers and vendors, and finally paying them in up to 120 countries and tracking your invoices with them,” Johnston explains. “All the while, integrating with existing enterprise platforms, including everything from project management platforms to payment solutions.
‘We want to make being ‘lysted’ the universal way that people work together’
– PETER JOHNSTON, LYSTABLE
“A lot of SaaS products are still way behind in design terms. We designed this product for the end user, not just the person signing the cheque.
“We want to make being ‘lysted’ the universal way that people work together, by serving both of our customers, from the giant corporations managing their freelancers and vendors, to providing an amazing experience for these freelancers and vendors managing their clients.”
Vision to scale
As Johnston explains it, the vision is to scale the company up rapidly as Lystable becomes the de facto resource for freelancers and companies onboarding contractors.
“Just over a year ago I joined the Techstars programme as a single founder without a team or product. I raised an initial $500,ooo investment from angel investors Mark Evans, Richard Fearn and some Google executives, which allowed me to hire a team, build out a product and secure some early trial clients.
“Since then, we’ve since raised a further $2.8m from a number of awesome investors who believe in our vision. They include the founder of PayPal, Peter Thiel and his New York VC fund, Valar Venture; Toba Capital, a VC fund based in San Francisco, as well as Spring Partners, Playfair Capital and Backed VC, all London-based VC firms.
“Over recent months, our client list and traction has exploded, including securing a number of enterprise level clients on the platform, this varies from tech giants like Google and Facebook, to ‘magic circle’ law firms, to fashion companies and even VC firms using the platform to manage their talent networks between their portfolio companies.
“Next year our main aim is super simple: to scale this with more team members to deploy to more clients quicker, while improving the product along the way. We have no plans for another fundraise until it is needed.”
The key is to focus
Asked what the No 1 challenge he faced when getting Lystable started was, Johnston replied: “Focus. I think it’s the same challenge a lot of start-ups face. Knowing what problem you should tackle and what client is really meant for you at the seed stage of our company. It’s easy to get carried away with the clients who identify with the problem you are solving, but this isnt enough. They need to be right for you at the stage your company is at.
“For example, we spoke early on with one of the world’s biggest pharmaceutical companies, who said my initial TechStars pitch spoke directly to the problem they had been trying to solve all year. This did not mean they were the right client for us: they were too big, too unique a use case. Too much red tape and too long a sales cycle. This sort of thing distracted us in the beginning.
‘Finding the right team members that have the same passion for the company as you do is hard’
– PETER JOHNSTON, LYSTABLE
“I think we have done a good job so far of focusing on the clients that are right for our business and, more importantly, that will influence our product roadmap in the right way.
“Another challenge is talent. Particularly as we are starting to scale. Finding the right team members that have the same passion for the company as you do is hard, and those hires can make or break your company early on given the limited roadmap you have.
Dublin has the potential to be the next thing to Silicon Valley
Johnston explained that his first real exposure to the Irish start-up scene was last September when he spent time with his sister who works at Google in Dublin.
“She took me to a number of events and there was great energy.
“With the obvious benefits of setting up shop in Dublin, I think it has the potential to be the next thing to Silicon Valley.
“The giants like Google and LinkedIn are already there fostering a huge ecosystem of talent. And the new kids on the block like Airbnb and Stripe all have offices there too. We ourselves have hired two sales people from LinkedIn and IBM who were based in Dublin and made the move to London.
“Longer term, as we look to make our business more efficient and take advantage of the talent pool in Dublin, we will definitely set up shop there.”
However, something is missing in Dublin: a focal point. “I think the only thing missing from Dublin is their version of Menlo Park. They have the airport connections, the industry giants around them, the tax benefits, but just not the VC community.
“So my advice would be to not let the fact that most of the money comes from the Valley stop them. I’d get out there as much as possible and experience the serendipity first hand.
“Then look at ways of setting up in Dublin and taking advantage of the elements available to them.”