What I learned from three Fintech startups
Most of your success will be a combination of privilege, manifest in who you know, and blind luck. A friend recently asked me to think of the biggest thing I learned from rapidly building three successful fintech products, and that first sentence is it. But I picked one other thing I learned from each startup I worked with. Here they are:
1. Right beats fast
“We’re at the intersection of x and y. Nobody has figured this out yet, but I know what people want.”
You’ve heard some version of this before, yeah? So have I. We’ve all worked with douchebags. Here’s the thing though: point 3.
But before you skip ahead, let’s say it loud and clear: being first to market makes you a scapegoat, a guinea pig and a pack-horse. Your customers also don’t care which product was first, only which product is the best for them.
God bless the pioneers, they make it all possible – but the second-wave innovators always win. Let other people make the mistakes, unless you want to be one of them, which is cool too. But build for your customers. Not your shareholders.
Ok, now read point 3. But read 2 first.
2. Reward your market makers
As part of a team building a bitcoin exchange and related products, I learned the term “market maker”. It sounds better than “early adopter”. It also means something different.
Market makers shape the future environment for your product. In our business these people were taking bets on the future price of bitcoin. Inadvertently – and sometimes deliberately – they were setting the pace for the entire market. So we lowered their fees to zero.
How can you incentivise your market makers to help establish the environment in which your product will succeed? Deceptively simple.
3. You don’t know what you’re doing
Sorry, but you can’t predict the future. We don’t know anything, which is why we invented science. You need to science the shit out of your product (with apologies to Andy Weir).
Yes, yes, you have lots of good ideas. Well done. But they’re worthless until they’ve been tested. What’s the least you can do to get something testable as soon as possible?
Write down everything you want your product to do…. go on… Ok. Now pick just one. Build it fast. Test it hard. Break it. Learn from it. Be honest.
It’s difficult not to be an asshole, especially in financial services, but goddammit, you have to try.
Ok, this is already longer than it should be and we both have better things to do.
EDIT: The three fintech companies I (mostly) worked with are 22seven, BitX (now called Luno), and Curve.
Originally published in Medium, 5 November 2015.