Lessons from Australia's fastest-growing tech company

Nick Frandsen is one half of the Kiwi duo who helped propel Afterpay into a $14 billion venture – one of the southern hemisphere's biggest modern tech success stories.

Nick is also the Co-Founder and Managing Partner of Dovetail, a product development agency with a track record for turning ideas into commercially-successful digital products used by millions of people.

We chatted with Nick about what led him to start Dovetail, and how Afterpay partnered with Dovetail to build the fastest-growing public company in Australian history. He also gave us some valuable strategies for growth for early-stage startups.

The early story

Nick was an entrepreneur from an early age, starting his first tech company in his final year of an Economics and Computer Science degree. “You learn something from being thrown in the trenches of a startup,” says Nick.

After building his first company successfully, Nick and his other co-founder eventually sold it and started thinking about the next big thing that would occupy them: Dovetail.

Dovetail and Afterpay

Dovetail’s main claim to fame is the product development it has done for Afterpay, which has helped Afterpay grow into a global payments leader.

The partnership began after Nick chatted with one of the founding employees of Afterpay, who also happened to be someone he had studied at uni with.

As a result, Afterpay outsourced Dovetail’s services because they wanted partners who were talented in the technical realm (Afterpay’s founders are not technical). As a result, Dovetail launched a world-class mobile product in a short timeframe, enabling Afterpay to enter the market quickly.

Astoundingly, within 48 hours of its soft launch, the Afterpay mobile app was ranked no. 1 on the Australian Apple AppStore.

As Afterpay continued to rapidly gain traction, Dovetail redesigned its website so that it could handle the increased volume of traffic, enabling Afterpay to scale even further. Afterpay is now even a shopping destination in itself!

The web and mobile products that Dovetail designs, builds and maintains for Afterpay now serve over 7 million customers every month in four international markets. “It’s been a really fun journey,” says Nick.

Afterpay’s road to success

According to Nick, the reason for Afterpay’s rapid growth is that it acquired its customers through indirect marketing. Afterpay would interact with large merchants, which in turn meant that they indirectly interacted with that merchant’s customers.

The reason Afterpay was able to successfully penetrate international markets was its strong value proposition: interest-free payments for the customer, paid to the merchant through four installments. It’s a versatile value proposition that works at all levels of scale, explains Nick.

Furthermore, Afterpay solidified its credibility by creating a recognisable logo from day one that remained consistent throughout its growth.

Nick’s advice for early-stage startups

• Find good advisors with relevant industry experience to your type of business (and preferably in your location). Advisors will help you avoid some early mistakes, and they may even be able to connect you to other types of advisors later down the track.
• Start selling your product early on if you can, especially if you are growing quickly. This will enable you to validate yourself and receive honest feedback from paying customers.
• Hire good people who align with your business, especially in the early days. These will be the people who will form the basis of your company’s culture.
• Don’t underestimate sales and marketing, and make sure you’re doing it early. You want to be able to sell and market your product well from the beginning so that you can give your business all chances of success!

Hear more of the story

This conversation was moderated by Cheryl Mack, Stone & Chalk’s National Head of Community, and you can watch the full discussion on our YouTube channel

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