In 2019, 48 fintech unicorns around the world had a market value share worth over $187 billion. As of February 2020, there were over 20,000 fintech startups worldwide. By 2022, the global fintech market is expected to cross the $309 billion mark, growing at an annual rate of 24.8% from 2018 statistics.
So what do all these numbers tell us? Fintech is BIG!
Being one of the fastest-growing industries in the world, fintech has tentacles into everything from banking, insurance, and engineering to manufacturing, healthcare, and agriculture. It’s not hard to understand why the growth rate keeps skyrocketing.
For new startups, the prospect of diving into the $26.5 trillion global financial markets might be exciting, but given the sheer number of startups out there striving to either get their feet off the ground or maintain their positions at certain levels – how does a fintech startup survive the competition? In this article, we put together 9 growth hacking ideas for Fintech startups looking to get ahead in 2020 whether you are a new business or seeking new ways to move your existing business forward. Keep calm and dive in:
Deliver real value and find a market
The definition of value is simple: your product or service solves a real problem(s). More importantly, the solutions you are trying to provide must have an already existing market(s) or possible markets that can be developed. The fastest way to failure is to start a business around products no one wants to buy or try to sell bubbles to the market. No one says it better than Seth Godin; “Don’t find customers for your product, find products for your customers.”
Operate a profitable business model
The core of every successful startup is a profitable business model. Depending on your product offerings and mode of operations, choose a business model that is simple yet profitable to operate and reflect. One popular model among startups is the Freemium business model which involves offering users a free version of the product while charging a premium for additional services such as advanced features or access.
Other successful business models for fintech startups include Subscription (monthly or yearly), On-Demand, Reseller, Marketplace, and Hybrids business models among others.
Leverage on existing technologies
There are lots of technological tools and software out there which startups can immediately leverage to move their business forward. In most cases, it is usually cheaper to attach your boat to a moving ship rather than trying to build your ship right away. These tools can be as small as finding an email marketing platform or as huge as integrating complex systems APIs.
Today, white-labelling takes this even further, allowing entrepreneurs to build entire businesses around existing products or services developed by white-label software companies such as FinCode. All you need to do is integrate these products into your system, configure them to suit your value propositions, customize and label them, then bring your brand to the market.
Create an efficient Brand Strategy
Branding is critical for fintech startups because it gives you an identity in an industry where new businesses pop up now and then. Branding is not just about your company logo, it is the work culture around the organization, the company’s personality, business story, the drive that brings employees to work every day, and what attracts loyal customers.
Many startups have failed due to a lack of branding, yet others have over-branded and run down their business. Building a brand takes time and money, which is why many startups scratch it out of the book – but that is simply hiding your head in the sand. Instead, only channel resources into branding faucets that positively affect your business image without having to break the bank.
Get your finances right
Financing is the life-juice of any startup. Simply put, if the money instead flows right, the system shuts down. The hardest part of running a fintech startup is keeping money flowing into the business either in the form of fundings or profits. Scaling and profitability remain the long-term goals of any startup, which is why entrepreneurs must pay attention to their business finances.
Never enter the game without a clear finance strategy spelling out where fundraising comes into play and where profits take over. Don’t forget to create contingency plans for ‘what if?’ situations, bearing in mind that 7 out of 10 startups go out of business due to a lack of funds. Most importantly, optimize your spendings by ensuring every dollar counts. An efficient finance strategy maps a way for you through the jungles of business survival to the paradise of success.
Hire the best you can find
We cannot emphasize enough the importance of hiring the best people out there. It takes one brilliant software engineer to find that bug that has stalled the launching of a product, the same way it takes one smart marketing manager to get the product in front of the right audience.
People play critical roles in the incubation, take-off, stability, expansion, and peak stages of your business – don’t take this lightly. Hire people who not only provide great value for your business today but are willing to improve themselves and develop dependable capacities for future roles.
Design and run engaging marketing campaigns
For fintech startups, marketing is everything from creating valuable content and getting social to pushing the envelope where necessary. It is important to understand that marketing strategies differ from fintech to fintech depending on what they sell and who is buying.
Finding the correct marketing channels and techniques for your business is necessary for saving time and resources doing what does not work. However, for whatever marketing mix you employ, the focus remains on capturing target markets’ attention, spurring them into profitable actions, and retaining them for as long as possible.
Don’t be afraid of trying the untried – and failing
It takes bravery to step out of the crowd and try the orthodox, but if there’s light at the end of the tunnel, then why not? Many times, the fear of failure paralyzes startup entrepreneurs from getting ahead, which is perfectly understandable – orthodox methods are huge risks. However, the only way to know whether something works or not is by trying. And if you’ve tried a door 99 times without success, perhaps changing the lock or trying a different door might let you out of the room.
This does not mean you should take a free fall when trying out new processes and systems. Always weigh the benefits of taking an untried action against the cost, calculate the risks then go for it if it’s worth it.
Maintain business flexibility
Samsung is an excellent example of a business with great flexibility which the company achieves with its open-mind philosophy. Maintaining flexible business systems and ideologies helps you quickly adapt to changes that are rampant in the fintech industry. While it is important to have core business philosophies or values that never waivers, every other aspect of your startup should be modelled for rapid adaptation to industrial and technological changes.
Albert Einstein’s statement, “Nothing happens unless something moves”, applies more than ever to start a fintech business. Given the fast-paced nature of the fintech industry, no one succeeds by creating plans and shelving them.
Taking real, growth-bound actions is the only way to set your business apart from the 90% likely to fail. And by taking advantage of top-notch fintech products developed by SpotBanc, you put your startup on the solid path of becoming a financial powerhouse.