”Many startups think they will change the world. But that can make them sidetracked and fail. They should focus on their core instead.”
Johan Lundberg is the founding partner and CEO of the Swedish venture capital firm NFT Ventures – the largest and most active fintech investor in Europe. I got the chance to talk with him a bit about fintech and if he was able to give one advice to fintech startups, what would that be.
Going global is overrated
According to Johan, one of the biggest misconceptions among startups is that you need to go global as soon as possible, especially in the smaller countries like in the Nordics. The local market just isn’t seen big enough to succeed. There is also great external push to becoming a global player; just take a look at the news and you will see how important exporting and supporting companies’ globalization activities are. But according to Johan, that is not the case with fintech.
”In fintech there really aren’t any banking services that have gone global. Regulations, banking systems etc. – all of those are different in different countries. And that makes fintech very domestically oriented industry. Going global is difficult. And at the same time, there is no need. Even a relatively small country like Finland is big enough for fintech companies. Just take for example a look at the volume of all kinds of banking related transactions – there is enough volume,” he says.
Stop trying to change the world – or at least make sure your core is gold first
More than focusing on globalization, Johan hopes startups would focus more on their core business.
”Many startups think they will change the world. It is great and all, but they get easily distracted because of that. The most important thing to remember is to focus on the core business. Getting sidetracked can easily make you forget what really matters and be the end of your business.”
It is common for startups to aim to be “The Next Big Thing”. To get there many startups focus on growing as fast as possible. But as a result, they end up doing many things okay. To be the next big thing your core needs to be amazing, not okay. Okay just isn’t enough.
As for the future, Johan believes fintech is going to go through even more big transformation. But he doesn’t see that there would be as radical innovations like the blockchain coming any time soon. He believes that the building blocks of that transformation are already there. For him fintech is a hot industry and is only getting hotter.
“There will be more money in the financial sector than now in the future but very differently distributed. Changes are coming and that is exactly why fintech is so interesting.”