In the last 6 years, our top discussions have hovered on tools, tech, and partnerships that make it easier/faster/cheaper to launch innovative financial products or programs. Infrastructure providers, vendors, accelerators, and ‘banking stack’ partners deliver an ecosystem for founders, early stage startups, and innovation teams to tap into and get into market quickly.

With fintech apps abundantly available, consumers and businesses demand rigor when it comes to differentiation and ‘digital’ wallet share. Instead of trying to be the next Chime, CashApp, Revolut, or Venmo — what does your platform truly deliver among the competition? User experience, credit model, rewards, interest earned, no-cost, or a combination of other benefits can help customers choose your app over others.

For program builders, how do you get to ‘Step 0’ (i.e. decide on a starting point) with a compelling value proposition? Let’s dive into strategy and key decisions to be made before choosing bank partners or building a set of features.

PRODUCT + TARGET CUSTOMER—> MVP

Before thinking about user onboarding or design, formulate the initial product offering and its intended audience. Don’t fall into the trap of building a program and then finding your ideal customer. Some important questions to consider:

• What is a well-known issue (or gap) that needs a solution?

  • Why doesn’t a solution already exist? This could be due to business model (e.g. minimal revenue vs. cost), level of risk/fraud/losses is too high (i.e. not possible from a compliance/regulatory perspective), nominal total addressable market (TAM), or lack of technical infrastructure;

• What are current (or past) attempts to offer a solution?

  • What company launched a similar product for the same target customer? Perform your own assessment on how successful the company/product was.

  • If the product launched was different but still focused on the same user type, how did it perform? Look for learnings that may apply to a different solution.

• Has technology (or a framework) recently emerged for a new solution to be successful?

• Has user behavior changed to support adoption of new offering?

Responses to these questions have different weights towards an overall decision. A compelling product with a narrow potential market or high scope of risk will fall apart quickly. Taking advantage of new technology to address a long-term issue may be better approach for early adoption.

Early success is placed on tight-knit communities (such as immigrants, content creators, SMBs, gamers, etc.) that lack custom financial services platforms. Instead of launching programs with a broad audience, a segmented starting focus is made towards age, income level, credit standing, demographic, or other characteristics. Teams who already established a trusted relationship with a specific group can connect with these communities to uncover pain points and potential solutions to offer. Gaining user feedback through surveys and interviews is critical. Talking to other founders with similar product experience can also be helpful in determining what may or may not work.

In the midst of defining a target user profile and solutions that address a pressing need, now comes evaluating the approach to product (the ‘HOW’). Based on the behavior you’re planning to enable (e.g. budgeting, saving, borrowing, etc.), there comes time for a decision on product & features. Every program typically has an ‘anchor’ account (checking, savings, crypto wallet, loan) with add-ons (card, account & routing number, access to payments rails). The availability of these core products and features are now commonplace.

In responding with a differentiated approach, founders must dig past function to emotion and total benefit. What appeal does my solution have? Examples can include a blend of the following:

• ‘One-stop shop’;

• Saves time (in paying monthly bills, performing tax reporting, sending remittances, etc.);

• Builds or improves a user’s credit history;

• Earns higher rewards on deposit balances or spending activity;

The MVP (or minimum viable product) will come from this targeted study of user type, pain points, and potential solutions. Create a document that captures your initial customer profile, product, user journey, and acquisition strategy. Establishing this clear vision and approach gets a team to Step 0.

AVOIDING PITFALLS IN BUILDING THE MVP

The path towards MVP is winding and unpredictable. Here are common missteps to look out for:

• Miscalculating the market size or characteristics of your target user;

• Lack of product choice (slow to decide what to lead with);

• Poor gauge of unit economics (i.e. identifying a break-even properly based on user activity and growth strategy);

• Not starting marketing efforts (a landing page and branding can go a long way for future engagement);

• Hiring too early (focus should be on user research and minimal prototyping);

The first three points are the most critical. Spending a few more weeks to solidify user case studies, feedback sessions, and market reviews goes a long way towards a robust MVP with a strong business model. This will also minimize the risk of spending resources on building a solution that goes nowhere.

FINAL TAKEAWAY

There’s a balance to be made between moving fast and being confident in your MVP approach. Don’t expect to be 100% correct with your first solution — however, waiting too long may not be beneficial either. 60- 90 days should be enough time to gather quality data & feedback in terms of deciding on an MVP. Get concrete with a product and give yourself some room to make adjustments with features & delivery. Not having a solution to offer means failing to start, and giving the competition a chance to gain traction.

Ultimately, success comes down to establishing a sense of trust early on with users. The foundation comes from customers believing your company and product is customized specifically for them. Your solution meets most (if not all) their pressing financial needs. Having this trust leads to higher user engagement (e.g. balances, spend activity, transactions) and a chance to deepen relationships with secondary products and features.

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