Posted by & filed under Accelerator, Banking, Corporations, Fintech, Innovation, Startups.

Collaboration. Collaboration. And collaboration. Be it global warming, science, the economy, collaboration is the word that keeps popping up more and more, especially during the past couple of years. With globalization, we have become so connected that collaboration is pretty much part of our DNA. And the need for collaboration is only increasing. And so are the possibilities.

Companies don’t just see other companies as competitors or suppliers/customers anymore. They are sizing them up to see if they should work together instead of trying to beat each other. That’s even more so in fintech.

Over the past couple of years, the narrative in fintech has changed from fierce competition and trying to one-up everyone else to collaboration. It’s no longer the established players, banks, trying to smother the new entrants, startups, or the startups trying to throw the old masters out the game. Now it’s about the two working together to create something neither could do alone.

Why corporations should work with startups

For corporations, working with startups can give them access to whole new kind of innovation power. While corporations have resources, a huge amount of industry knowledge and plenty of smart people working for them, they are rarely called innovation powerhouses – words often associated with startups.

There are many reasons why corporations can’t be as agile and innovative as startups are. While corporations can learn from startups (and they should!), getting new innovations from startups makes a lot of sense. That way they can get innovations from many startups. And they can get it much faster than by doing it by themselves. Quantity and quality without using much of their own resources.

Collaborating makes sense especially in areas that the corporation doesn’t have knowledge of in-house, for example in AI. Instead of spending resources of acquiring the needed knowledge and then starting to think what could be done with it, they can access the best AI innovations straight from startups.

By working with startups corporation are also bound to learn from them. They will get exposed to the ways startups work, and why they can be so agile and innovative. And those learnings can lead to organization wide changes.

Also, when corporations work with startups it is inevitable that some of the ’startup coolness’ will rub on on them. That’s good for customers, attracting new talents and getting new innovative startups to approach the corporation. It’s a win, win, and win!

 

Collaborating can be beneficial for both startups and corporations

 

Why startups should work with corporations

One of the big differences between startups and corporations is that corporations have a known name, brand value, behind them. They are a known and trusted player in the market while startups are nobodies. No one knows what they do, what they can do, or even if the whole thing is just a scam. Especially in banking gaining the customers’ trust is a very important but difficult issue. After working with a big name in their industry, like a known bank in fintech, startups are immediately on a different level. If that well-trusted corporation trusts them, also the customers think they must be legit and be able to execute what they promise.

Fintech startups also face the problem that they need data, lots of it to be able to make their solution work in real life. And they need users, people to test their solution. And the more the merrier. In such trust-sensitive industry as banking, getting those is far from easy, impossible even.

For lots of startups working in just one market is a luxury they can’t afford. Unless they are in a very market-specific business or work in a huge market like China or the US, aiming to be global is a must. But going global isn’t always (if ever!) so easy. In a new market, everything is different. The competitive environment, laws and regulations, even the customers’ needs among many many other things. There might be amazingly potential new markets, but if there is no entry point, they are often just passed to the ’no’-pile. But with a local partner, preferably with one that already has a great presence in the market, they can get just the knowledge and access to the market they need.

 

Collaboration between startups and banks can make many impossible things possible.

 

One great example of such a partner for startups is YES BANK, one of our partners in the Global Fintech Accelerator.

India & YES BANK

For fintech startups right now India is a very interesting market. And by interesting, I mean hot; hotter than hot even! In India there is a huge need for new fintech solutions. And even more importantly: people are eager to use them. In fact, the fintech adoption rate is on top of the world with 52%, only second to China and growing. The environment in India for fintech startups is also very supportive: investments are booming and the government is being very proactive in supporting fintechs. In short, India is THE place to be for fintechs. But accessing that massive potential is another thing. Foreign startups need an entry point, a partner to help them gain access to the market, the right knowledge and the tools needed. One good example of such is the YES Fintech accelerator by our Global Fintech Accelerator partner YES BANK.

YES BANK is the fifth biggest private sector bank in India – you can say they know the Indian market. And in the YES BANK accelerator startups get access to that knowledge. Startups also get access to their 200+ APIs and their 2 million + retail and 15 000+ corporate customers – just what it is needed to test and validate the startups’ solution.

In their first cohort as well, YES Fintech had two international startups – soCash (Singapore) and Paykey (Israel). The overall cohort ended up with an offtake of 90% wherein 9 out of 10 solutions were taken up by YES BANK.

The accelerator program also provides access to the top 20 global fintech markets, offer mentoring and coaching and much more. Just the knowledge and tools needed to conquer the Indian fintech market and in general, get the startups on a whole new level. You can read more about the accelerator here.

The real winners = customers

While corporations and startups will benefit greatly from collaboration, the real winners will be the customers. No matter what happens and who ’wins’ or ’loses’, customers will get more options and better solutions. And as there are plenty of options, in fact, more and more of them as the world is moving increasingly towards supporting competition (e.g. PSD2 in Europe), the customers can just pick and choose. The winners of the future will be the providers who answer the needs of the customers the best. Needless to say, it has never been a better time to be a banking customer!

 

Read more about YES FINTECH accelerator  and more about our Global Fintech Accelerator.

 

Posted by & filed under Accelerator, Banking, Fintech.

Investments in fintech are breaking their own records over and over again. New solutions are coming left and right, and the consumers are switching to them faster and faster. Fintech is booming and there seems to be no end to it.

In the center of the boom is Asia, especially China and India. While China still leads in consumer adoption rate of fintech solutions and investments, India isn’t far off. And according to predictions India will soon go past China and become the leading country in fintech. It’s exciting times for fintech and for India, and even more exciting opportunity for startups. But why is India such a hot place in fintech? And why should startups all over the world put India to the top of their priority list?

 

Market size & fintech adoption rate

First of all, India is a huge market. Just the sheer size of the country itself is humongous with 1,3 billion people and counting. But what makes it interesting for fintech is that its population is the most underbanked or unbanked in the world. At least for now.

India’s smartphone user base is expected to grow rapidly from 150 million (in 2016) to 500 million users by 2020. With it the digital banking is also expected to have a rapid growth. (source).The un- and underbanked consumers will jump right past the old banking systems and go straight for the newest fintech innovations. And they are doing it fast.

The reluctance of trying new banking related solutions that many fintech markets struggle with is quite non-existing in India. In fact, their fintech adoption rate is on top of the world with 52%, only second to China and far ahead the rest of the world (source). And some predict it will soon grow to 80% and surpass China, and be far ahead of the global average (around 50%) (source).

Banking is one of the most trust-based industries. Getting people to change from their trusted bank to a new provider or to try a completely new service altogether is a huge struggle for fintechs. That is one of the key reasons fintech adoption rate is so low in many markets. The fact that Indian customer base is so welcoming is already a huge advantage for fintech startups that are active there.

Fintech adoption rate in the world. India is now second place, but predictions say it will rise to number 1 soon.

Figure: EY Fintech Adoption Index 2017

 

Fintech-minded government

In many, if not most markets, fintech startups struggle with innovation-stifling regulations and legacy systems. But the Indian government has decided to take a different approach.

The Indian government is actively pushing to support new fintech innovations and startups in many ways. For example, they have been discussing with the key players in fintech to understand the market better. Thus they are able to design a supportive and enabling regulatory environment.

As a result, India has many policy initiatives which provide a strong foundation for fintech in India. They are working hard to simplify the regulatory processes, do tax redemptions, patent reforms, and provide increased government funding. They have also created India Stack, a world-class technological framework and an amazing set of APIs, to help entrepreneurs and innovators to accelerate their solutions to a completely new level.

India’s government has also been a big part in making people so receptive of new fintech innovations. They have actively encouraged and educated the Indian consumers to use fintech solutions. Thah has been a huge help in getting new solutions the top of the mind of the Indian consumers. (Source)

India is clearly sending the message that fintech innovations are necessary and more than welcome.

 

Investments

In investors eyes, fintech is extremely hot now. And within fintech Asia, lead by India and China who attract the most investments, are the hottest of them all. Even when in 2016 fintech investments dropped globally 13%, in Asia fintech investments grew 12,5%. And that was led by India’s and China’s fintech investment success. (source) Fintech really is blooming in India.

Considering the market’s opportunity and the supportive environment for fintech innovations and the whole ecosystem, it is no wonder that investors find India attractive. More so as India offers the highest expected return on fintech investments. If investors are interested, startups should be too.

Fintech investments in India are going strong

 

Overall India ticks all the key boxes for startup success. India’s fintech scene is an investment magnet. India’s government is being very proactive in supporting the growth and adoption of new fintech innovations. And most importantly, the consumers are excited to use them. That’s check, check and check!

 

Getting access to the Indian fintech opportunity

While India has a huge potential for fintech startups, for startups far away, it might seem too distant. From understanding how the market works to the very basics of being a company in a foreign country can feel too big of a challenge.

An EY study found that one of the best business models to drive mass adoption of fintech solution is collaborating with businesses who already have an existing customer base in the market. Working together with a major player is a great way to get access to the market and get an understanding of the hows. For young startups, it can be especially fruitful to go to an accelerator organized by a major local player. Then they will get straight access to a big number of customers and the company’s great experience of the industry. And at the same time also get help accelerating their startup’s growth.

One good example of such is the YES Fintech accelerator by our Global Fintech Accelerator partner YES BANK.

YES BANK and YES FINTECH Accelerator

YES BANK is the fifth largest private sector bank in India with 2 million+ retail and 15 000+ corporate customers. They definitely know the Indian market by heart. And thus they can give startups just the knowledge they need to access to the huge Indian fintech opportunity. Through the YES Fintech accelerator startups will also get access to their huge customer base and their 200+ APIs. That means a straight route to the market, and getting an amazing set of tools to test and validate the startups’ solutions with real customer data.

The accelerator will also provide focused mentorship to accelerate the startups’ growth. And also give access to 1 million+ funding. Through the program and its ecosystem, partners, and cohort startups can also take their solutions to the top 20 global fintech markets.

Their previous program ended up with an offtake of 90% wherein 9 out of 10 solutions were taken up by YES BANK. That’s an incredible number! It speaks volumes of the startups and YES BANK’s startup-readiness. Overall, the YES Fintech accelerator is definitely a solid option for startups planning to conquer the Indian fintech market.

For fintech startups India gives huge opportunity. So big even that I’d like to call it the home of startup unicorns. While we still will have to see about that one, it has already become clear that for fintechs India is the place to be.

 

Read more and apply now to the YES FINTECH Accelerator. Applications will close on the 7th of October 2017.

Read more about what the Global Fintech Accelerator is about.

Posted by & filed under Corporations, Organizational learning, Startups.

Aiming to create an organization that is ready for constant change and learning? Or perhaps you are looking for ways to motivate your employees to think more creatively. Either way, startup collaboration is the best tool for creating an innovative corporate culture.

Why? Well, startups are famous for their agility and ability to execute ideas at a fast pace. These are the factors that big corporations often lack. By collaborating with startups and involving employees in the process, companies can start becoming more like startups; agile, innovative and great at executing those innovations. But how exactly does collaborating with startups enhance cultural change and learning?

To transform your organization, you need to transform your employees first. Afterall, they are your organization. And they are also the ones executing the ideas and innovations. It does not matter how great your products and ideas are, only execution matters. And execution is nothing without the effort of your employees. Your employees are the key to becoming more agile and innovative. And for employees to learn and change, the key is to get them doing.

To actually get your employees to learn from the startup’s you should get your employees involved in the collaboration as much as possible. This way they learn by doing. And the more employees you involve the greater the learnings and changes will be. A couple of employees can’t make big changes in your organization. But the more the entire corporation is involved, the greater are the learnings and changes achieved.

Organizations are made of people. And thus also organizational changes start from the employees.

 

In this post, I will present the four cultural benefits that partnering with startups can bring with the example case of Ann.

 

So, let’s begin with Ann

Ann is an employee at a big global corporation. For five years she has been part of the human resource department. She really enjoys working for her company. Working at a global player gives you the opportunity to work in game-changing projects, which really excites her. At the same time, those projects take time to happen: new ideas need the approval of many people, and changes require many meetings. Ideas are sometimes also called off when other, more urgent tasks appear.

Ann’s company is getting more involved with startups, and she has been asked to mentor a startup. One of her tasks now is to make sure the corporation and the startup partner, so that her department becomes more efficient. She had been involved with startups a bit before when her company organized a hackathon, but she never saw a long-term difference after that.

Next, you will find what Ann experienced after working with the startup. This also includes the four benefits startup collaboration has on the company culture.

 

1.Openness to renewal

The first meeting with the startup was already an eye-opener. The startups came with a proposal already in mind, but after a quick discussion, it was clear that it would not work inside Ann’s corporation. Ann thought that this was the end of the partnership. To her surprise, one of the entrepreneurs came up with a brilliant idea. After a brief discussion, they decided that Ann would discuss with some colleagues and get back to the entrepreneurs. They proposed to meet the next week.

Ann was a bit skeptical of whether she would be able to get answers by next week. Ann was aware how slowly the execution of some ideas took place in the company. But she was even more skeptical that the entrepreneurs could do all the things they promised.

While consulting a few colleagues, Ann discovered that most people were quick to dismiss her and the collaboration. Many people offered to discuss with her only after a few weeks! In contrast, whenever she had a question for the entrepreneurs, she got a response in a matter of minutes, and with a different attitude. Instead of formal structures, startups were open to any sort of idea sharing. If she wanted to make this partnership work, she needed to make sure her colleagues were more responsive and open to change. And for that to happen, she needed to be open to renewal herself.

In order for innovation to happen, employees must be adaptable and open to discussion. Yet, corporations generally have rigid structures. As a result employees revert to default behavior and start rejecting big changes. Nobody sees the incentive to develop ideas if the implementation is restricted by the structure.

To solve this issue, some organizations have organized official channels for startup collaboration. This is also what Ann’s corporation did. Startup collaboration creates the impression of proactivity and openness. It encourages employees to adopt a similar mindset. This further fosters business renewal as well as innovation.

 

2.Navigating uncertainty

Three meetings and countless discussions later, Ann and the entrepreneurs had talked with most of the departments involved. They all understood that, if the collaboration worked, the corporation would benefit greatly. However, several of them had concerns over whether what the startup was proposing would really work.

On the next meeting, she decided to tell the startups what was delaying the collaboration so much. One or the entrepreneurs asked “What if we run a small pilot with some customers, to show how people really use the product? And if they don’t use it the way we expect, we will redesign it so that they do”. They identified all the risks that people had mentioned and designed a pilot that would give the more information about those risks.

Ann could not take the uncertainty out of innovation, but the startup showed her how to deal with it, by talking to customers, testing and learning.

Most people working in corporations tend to focus on tasks with high certainty. But as you might know, innovation is uncertain by definition. Fearing to take risks is the all time enemy of innovation. This is why developing new products is often seen as challenging.

Startups are the opposite of corporations. They are famous for the ability to develop and produce products under uncertainty. Startups favor experimentation over elaborate planning, customer feedback over intuition and iterative design over traditional development. By collaborating with startups corporation employees are encouraged to work in a similar manner. This allows them to become accustomed to working in uncertain environments.

By working together with startups the employees get new ideas to their work.

 

3.Understanding the need for quicker execution

Everything looked good after the meeting with the startups. It looked like her corporation would soon be collaborating with them, and both of them would have happy customers. That probably made the fall worse: once the project started looking real, it seemed like there were more and more decision-makers that had to be involved. In addition, several departments had to give clearance, which required more and more analysis.

When she told the entrepreneurs that the agreement could take a few more months, she could see that they were not happy with it. She didn’t even know if they would last that long, without a source of income.

Ann had also noticed how fast and well startups executed their new ideas. “How would you guys solve this, if this were your company?”, she asked. “Good question! We would probably look for something doable, something that we can get a shot at right now, and leave the rest of the complex stuff for later.”.

That was it! She could use this way of working too! Ann figured out that if she cut out some parts of the pilot, she would not need a clearance from the other departments since it would be an internal project with a relatively low budget. This would also make the bigger project later on much easier. Otherwise, the project might die at the idea stage. While ideas are good, but the execution is the only thing that matters.

As described, entrepreneurs are faster at executing than corporations. Speed is essential for startups. Why? Well, without speed there is inevitable failure. The fast eat the slow. When startups decide on a course of action they don’t wait. They don’t rethink or hesitate. They put the plan into action the moment the plan reaches consensus in a meeting.

In contrast, the strict structures and formal processes of corporations restrict this behavior. Decisions move slowly. Ideas go through a path of managers, board rooms, decision-makers, analysts, researchers, legals, marketing…

Success is no longer about being big or small. It’s about speed, pivoting and rapid scaling. When corporate employees are exposed to the faster pace of startups, they will learn to value the fast speed and further mimic this behavior. They will also be willing to make more agile plans that get results immediately.

 

4. Focus on risk optimization, not only minimization

With her new plan of having an early pilot first, everything seemed set. There was only one step left: the final approval by Sarah, the head of her department. Sarah had seemed confident with the collaboration so far, but now it seemed like she was less comfortable with the situation.

“Is there any problem?”, asked Anna. “Well”, Sarah answered, “I’m just thinking if this is the best for the department. At the end of the day, we’re the ones promoting this project, and if it goes wrong… well, it’s not good”. Anna realized that her department was taking a risk, and investing time in something that might not have any effect in their quarterly targets.

“But it could have a much bigger impact later on”, Anna pointed out. “It’s a controlled risk, and even if it fails, little failures can add up to big success”. Sarah nodded quietly for a few seconds. “You’re right Anna, and you’ve actually spelled out the risks and opportunities very clearly. We should take these opportunities much more often. For the next quarter, let’s make sure we include some metrics related to this project, and even give ourselves some room for innovation”.

Corporations typically focus on performance and KPIs, which encourages employees to become risk-averse. But if radical innovation is on your company agenda, you should give people the possibility of being flexible.

Instead, the focus should be on the acceptance and management of both risks and execution. Successful startups go quickly from failure to failure. They then continuously adapt and iterate what they have learned from customers. Similarly, employees working in startup environments are more willing to work with risks, as opposed to avoiding them.

Risk is an essential part of innovation. Instead of avoiding risk corporations should manage it.

In short:

As shown with the case of Ann, allowing employees to work in the startup environment improves innovation levels and standards. Working with startups makes employees more likely to identify potential improvements.

Working with startups creates a culture of constant change and learning.

Employees learn to become ready for the unknown future. They view the organization through new, different lenses and beyond the plans. They learn to become prepared for the unplanned success.

 

Read more about renewing organizations with the help of startups:

 

Download the Nestholma whitepaper

Corporations need to renew themselves. One of the best ways to do it is by working with startups. This white paper explores the benefits on branding, innovation and learning. It also reviews alternatives and best practices on collaboration.

 

 

Posted by & filed under Fintech, Interview, Investing, Startups.

”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.”
 

Related post: What’s hot in fintech: new regulations, customer focus, collaboration & China

 

Posted by & filed under Entrepreneurship, Startups, Team.

To create something new and innovative you need to also be ready to fail and fail the right way. Failing has become such an essential part of the startup world that there is even a day for it.

So, contrary to the popular belief failing isn’t necessarily bad, it might be even good and necessary. But there are also the failures that should be avoided. The common mistakes that cause the whole startup to break down. Here are 5 of the common ones.

 

  1. Bad validation

Not all problems are worth solving. Some startups think they have the best idea ever. But they forget that is not enough: someone also has to want to buy it, or preferably: need to buy it. It is always easier to sell and get successful with products that solve a critical problem instead of ones that just ”could be fun”.

Still, many startups get so caught up in their brilliant solution that they forget that to get money from it someone needs to see it so valuable that they are willing to pay for it. Often those startups are also the ones that say everyone are their potential customers. If that’s you, stop now and think. The only thing everyone absolutely needs is air. Good luck capitalizing that.

Do you really solve a problem and is the problem critical enough for people to want to pay for your solution? Emphasis on the word ’pay’. Lots of people want free stuff, but that doesn’t put food on the table. Here’s a post that can help you out with validating.

 

 

  1. People need to know your product exists to be able to want it

Your product or service might really be amazing, and not just on paper. You have validated and found that you really do solve a real problem, and problem people are willing to pay to get solved. But that’s not enough.

There are still startups who think that as long as their product/service is good the customers will come automatically. Sometimes that is true: companies get new customers through referrals from their old customers. But you still need to get those first customers. They won’t find your product nor service if it’s hidden in your garage… You need to talk to people. Though of course, sales and marketing are not going to save you if your product is bad. But at the same time, it’s easy to sell a good product.

So, unlike many seem to believe, people won’t run to you if they don’t know about you. Most likely they don’t even know you exist! You need to tell them and you need to explain it simply enough.

 

  1. …and you need to tell them about it clearly enough

Sometimes this is the most difficult part. You know what you are doing, but your customers and investors don’t. And unless you are a coder and your customers are coders, using industry jargon is going to do more harm than good. You need to use the kind of language your customers use and what investors understand.

Don’t talk about how amazing the “UX” of your product is. Talk about the things your customers really care about, and do it in a language they understand and would use themselves. The way of speaking of for example a parent and a coder are very different…

And it’s the same thing for investors. Considering the amount of jargon startups want to use in their pitches, they must think investors are geniuses. How else would they know everything about every industry? Well, I have news for you: they don’t. When the investors don’t understand what you are saying, they automatically stop listening. And jargon usually does exactly that. And then you are wasting both of your time.

So, forget jargon and explain things as simply as possible. Pretty much like you were pitching to a child (no, you are not offending their intelligence by doing that ;)). In fact, if a child can understand you pitch, your pitch is probably going to be really good!

 

Great team ensures you will have great execution of your idea

 

  1. Wrong kind of team

As it has been said over and over again, it’s not the idea, but the execution. And successful execution is all dependent on the team. Jari talked earlier a bit about the importance of team on here, and how important it is to build your team well. But it is not just about having the necessary skills in your team, but how your team works as a whole.

It is surprising how often internal conflicts destroy the whole business. In those cases, the focus goes to drama and not building your success. Or it might be that your situation has changed and for example, the CEO you had at the beginning stages might not be the best person now. You need to hire well and know when changes in the team are needed.

Hire with care, nurture your team and the team environment and adjust when needed.

 

  1. Failing to fail early enough

At the beginning of this post, I pretty much called startups the masters of failing. I should have probably said the successful startups are masters of failing. There are still startups who do everything they can to avoid failing. While not giving up is good, you need to know when to say “this isn’t going to work”. Then you can pivot and start working on something that will work.

The earlier you realize the that the less time and money you are going to spend building something that is not going to work. Thus startups should remember that failing isn’t alway the end of the world, but something they can use to become a much better business.

And there you have it: 5 common mistakes startups make and destroy all their hard work. Remember these and you won’t be one of them! ;)

 

You might also be interested in: How to pitch to an investor to get funding?

 

Posted by & filed under Accelerator, Banking, innovating, Product development.

Collaboration. That’s a buzzword that you can not avoid hearing nowadays. But it’s a buzzword that talks about a real need: collaboration between startups and banks. That’s what is needed in banking, both for the banks’ and startups’ sake, but especially for the sake of the customers. But to be successful, collaboration has to be done right.

We at Nestholma engage banks and startups to collaborate. We have done 20 startup accelerator programs so far with companies such as Nokia, BT, Microsoft, Telecom Italia… During the last couple of years, we’ve been working closely with Nordea bank and have run three accelerator programs with them so far. It has been a great learning experience for them….

…but also for us. Here is what else we and our partners have learned about how to get the results you want from collaborating with startups

 

Have the best startups to work with

You achieve the best results when you have the best startups to work with. Now that is quite obvious. But finding the high-quality startups is a problem. A big problem. And an even bigger problem is attracting them to work with you.  

 

Innovations are global

Most likely the best innovations don’t come from the startups closest to you. And this is for the most local and regional banks a huge issue. How to attract the best startups and their innovations from other places to Helsinki or even to Milan.

 

How to work with startups in practice

Once you have managed to lure a startup or startups to start working with them how to do that in practice. Are your processes, your people, and your company culture ready to work with them?

As one bank executive said, ”it takes only one bank to kill a startup”! Banks and startups are like two different creatures. And almost nothing is easier than for an unprepared bank to smother the startup with its processes and ways of working.

 

Work close enough with the startups

Our customer experience tells that the proximity is one of the key things. You really need to work with the startups, not just take quick peeks at what they are doing. Like taking a look at a lion won’t make you one, just looking at startups won’t help you much. And to get your organization to learn, you need to get as many people as possible involved. That is how you will re-energize your people and get them to learn, to learn how to become agile fast accepting failure and capable of pivoting when needed.

When you have enough people who know how to do that, your whole organization has learned and become agiler, startup like. That is why it is so important to really work together with the startups, get involved and have enough of your people involved.

Those are the things we have learned to be key in working with startups successfully. I don’t claim it is easy, but that’s why we created the Global Fintech Accelerator. To tackle these 3 challenges: to get the best startups, access innovations globally, to work with them but not killing them we have designed Global Fintech Accelerator. It is the perfect solution for preparing for the future.

Startup accelerator program for non-competing banks

 

What is it?

It is a program for non-competing banks. To join forces with other banks, to enjoy benefits of global presence and brand but still to have your own local program for new products. Maximal learning and branding benefits.

 

Access to the most disruptive innovators in the industry, globally. Better and stronger startups.

By combining the brands of the 5 banks we’ll be able to attract far more startups than any one single bank could do. From all over the world. They’ll apply to the locations they want and you decide which startups you want.

 

Learning, sharing the common needs and solving them together 

Banks share many similar or completely same challenges. Thus it makes sense for non-competing banks to collaborate. Trying to reinvent the wheel while others are wrestling the same challenges is a complete waste of time. That is why banks learning from other banks is also a key part of the Global Fintech Accelerator.

 

Share, learn, be more competitive. And help the startups to get better and stronger.

 

There will be 50+ bank approved startups graduating from the program. Capable of solving problems that you might have and what the PSD2 might bring. 10-15 is already a huge number,  but it is only the beginning. You’ll also benefit when the other participating banks make their startups better.

It’s about sharing the learnings in a structured way without any unnecessary hassle. We know what fits for your needs, and how to make it all bump-free.

Global Fintech Accelerator in short:

  • Join forces with the other banks
  • Share the pool of the startups & innovations
  • Learning and sharing from the other banks
  • Test your processes, assumptions, business models in a safe environment to be ready for the PDS2 ERA.

Collaboration with startups has become a must now. But a lot of collaboration, if not even most don’t bring the results banks and corporations want. That’s because collaboration isn’t done right.

That’s why we have worked hard with our partners to find out what exactly causes the hiccups. And we used all the knowledge and experience we have gotten from working with startups and big corporations and facilitating the collaboration of the two. Global Fintech Accelerator is the result of all that. It is what is needed to bring banks to the 21st century.

If you would like to get into the Global Fintech Accelerator or hear more about it, feel free to contact me at [email protected] or +358 40 3433352.

 

Related post: Nordea fintech accelerator successful

 

Posted by & filed under Entrepreneurship, Startups, Team.

Having the right kind of team is one of the key features of a successful startup. Even more important than your idea (read this if that comes as a surprise). There were search engines before Google, social networks before Facebook and so on and so forth. We all know that. What made Facebook and Google be the successful ones was that they executed the idea better. That’s why sentences like ”Execution is king”, ” Ideas are good, but only execution matters” are heard all over the startup world.

Now think about it: what is the difference between good and bad execution? I.e. who are 100% responsible for making your brilliant idea into reality? Your team. It blows my mind when startup founders just hire their childhood best friends, cousins, someone they know who happens to need a job. Noble – yes. Useful – if you’re lucky…

Hiring someone you don’t know means spending hours and hours trying to get people to apply. And then spending much more time on looking through the applications, interviewing and still you can never know what kind of people they really end up being. You just have to take a leap of faith. Or you can just hire someone you know, or at least someone you trust knows. Easy, simple, done. So, hiring someone you know is understandable and even makes sense. But that’s where many startups go wrong. Here are what to look out for.

 

Danger point 1 – just hiring someone you know without thinking what they can really bring to your team – skills, experience, their network…

The problem is hiring someone just because you know them. That’s what many do and then notice the person doesn’t have the skills they need. Then you face the dilemma: should you fire your childhood friend to be able to hire someone your startup really needs or just stay quiet and not destroy your relationship with him or her. Startups just don’t have the money the keep hangarounds in their team. And sooner or later you will have to sack him/her or risk failing. Thus it is better to hire sensible right away.

Each and every member of your team needs to have the skills and/or experience you need in your team. And of course, fit into your group dynamics.

 

Danger point 2 – hiring someone who doesn’t match your team and/or way of working.

Some startups have the opposite problem. They get so charmed about someone’s skills or experience and don’t care about how that person will fit into their team. Those are the teams that will spend their days ripping each others hair out.

Now, you don’t have to be best friends with everyone, but too many startups fail because they spend their time fighting each other instead of working. A cohesive team is not only more pleasant to work in, but cohesive teams also get better results. That is why it is equally important to make sure the new hire also fits into your team.

Also, make sure your company’s working style fits with the person you will hire. For example, if that person would prefer to have steady working hours but your startup needs lots of flexibility. Or you would want employees to work at your office, but that person would prefer to work remotely, you might have to reconsider.

Again, think before you hire and you will save yourself from many headaches.

Team fighting instead of getting things done

 

Danger point 3 – team full of similar people

If your startup has 3 members who all are introverted coders who only want to code, no matter how amazing they are at coding, your startup won’t get far. Yes, your code will be brilliant, but that’s it. Let me repeat: THAT’S IT. Even if your business idea was to be a coding subcontractor, you would still need other kinds of people in your team. You need diversity and diversity in all areas.

 

Have the right skills in your team

You need a diverse group of skills, complementary skills that make executing your brilliant business idea possible. You all might be coders, but someone also needs to know how to sell, pitch, do marketing, accounting…. When you only have coders who are interested in coding, you end up with brilliant code. But like I said, that’s going to be it. That’s what they call hobbies. If you want to make money you need more than that.

I overheard a mentoring session in a hackathon of such team. The whole session was spent by the mentor asking who would use their product/idea and the team answering ”but the code is sooooo pretty, anyone. It’s just so so soooo pretty.” They were completely unaware that someone would actually need to also buy it, i.e. someone has to want the product. And that they were not even selling code, but something to make people’s lives better. The whole idea of ”thinking from your customers’ perspective” was completely alien to them. The team also spend the first minute (!) of their pitch explaining how they are uncomfortable pitching/selling, how bad they are at this, this and that…. Let’s just say it didn’t go too well.

You need the dreamers, the organizers, the doers, the specialists, the whole package that gets the work done. Think about it: if you all are dreams, all you get is dreams. If all of you are natural organizers all you end up doing is organizing each other and not doing the work.

The best results require different minds

You need people who have the diverse skills and working styles needed to make your idea into reality (and success!). But you also need diversity in experiences, in the minds you have in your teams. You need diversity of all kinds. Of skills, personalities, life experiences, cultures, genders, what have you. Studies say that by having more diverse minds working on a problem they are going to look at it more thoroughly. That is how you will take all the necessary things better into consideration and how you will create more innovative ideas.

So, while it is important to make sure your team is cohesive, you should avoid the trap of only hiring people who are similar to you. When you work with people who are different from you (from a different culture, education, sex, etc.), you will have to put more effort into working together, solving misunderstandings and so on. But also your results will be so much better. So so much better.

TL;DR: Make sure:

  1. you have all the needed skills and personalities in your team.
  2. your team dynamics work
  3. you have enough of different kinds of minds working together. That’s how you will reach the best results.

 

A post you might also find interesting: You need more than mentoring hookups

 

Posted by & filed under Accelerator, Entrepreneurship, Startups.

Sooner or later on your entrepreneurial journey, you will face the question whether you should go for an accelerator. And if, for which one.

Accelerators can really help you accelerate your growth (hence the name). But only if you find the right accelerator for you. And if you are ready for it. Just going with the most famous one or the one closest to you can do you more harm than good. The accelerator needs to fit your startup’s needs.

Here are a couple of things to take into consideration when looking for The One for you, or if you really should even go for one.

1. How committed are you?

If I had to choose just one word to describe accelerators it would be intense, both in good and bad.

During the accelerator, you are going to work hard, probably harder than ever before. Everything is accelerated. And what’s everything? Well, that depends on the accelerator (and you!). But things like learning, making right and wrong decisions, changing routes accordingly, reaching customers, pivoting, maybe even more than just once. In essence: a lot of things will happen and all of it will happen at the same time. Though only if you are there and putting in the effort. Accelerators accelerate, they don’t do the work for you. And intense results require intense work.

So, you need to figure out what is your commitment level, if you are ready for all that. Will you be able to put in your 100% and more during the months of the program? Or would something less intense work better for you instead?

Accelerator = hard work

 

Think about your life realistically.

Are you just testing the waters if your idea has any potential and want to still continue in your day job just in case? Then an accelerator that requires fewer hours might be the best option for you. Or do you have a baby coming, sickly parents to take care of, pet, hobby, anything that prevents you from giving your all during the accelerator?  Most likely you also need to relocate for the accelerator (unless you are super super majorly lucky and the best accelerator for your startup is right next door). Is that possible? Yes, some things may be worked out, but those kind of compromises always show.

For some accelerators, it is even a requirement to work full-time on your startup. That’s because they know how big of an effect it is going to have on your results. And not only does it show that you are committed it also proves you truly believe in your idea. If you don’t believe in your own idea enough to work on it full time, why should they?

So, think about your day to day life and be realistic about how committed you can and will be. If you put your mind into you will find the accelerator that is going to help you the most. AND can actually work with your life, even if it means joining an accelerator a bit later in your startup journey.

 

2. What kind of network do you want to build?

Accelerators are great at helping you grow your networks and be known where you need to be. But only if you choose an accelerator that makes it possible. Not all networks are made equal. If you go to an accelerator where you can grow a good-sized network, but of the wrong kind of contacts or in the wrong market, does it matter? No. You won’t really get anything out of it. At least when compared to if that network was filled with contacts that were actually relevant to your business.

Let’s say you are a fintech startup and big banks are your potential customers. Then a fintech accelerator that is done in collaboration with bank(s) is probably your best bet. But if you are a biotech startup, going to a bank accelerator will not the best choice for you. No matter how close it is to your home or how great the people behind accelerator are. Accelerator is great for you only if it helps achieve your goals.

 

So think: What is your industry? Are you a B2B or B2C startup. Where is your target market located? Who are the people, the influencers you need to reach? Can the accelerator give you direct contacts to your customers? Accelerators will not only help you create networks with your alumni but also with the key people in the industry, customers, investors, advisors and much more. That is why it is important to find the accelerator that matches your goals.

Ask yourself: which accelerator can connect you to the people and create the networks you need?

 

3. Your preferences & musts?

Every startup has different needs. After you have figured out your realistic level of commitment and what kind of networks you want to build, there are still many many things to consider. Things that are specific to your startup. Some of the key ones include:

Accelerator’s style:

What type of accelerator are you looking for? Do you want more hands on approach where you get help specifically for your startup? Or would you rather just hear tips from the ones who have already done it?

There are as many kinds of accelerators as there are accelerators. There really isn’t an official definition of an accelerator. That’s why the spectrum of different accelerators is also quite wide. When we talk about accelerators we mean intensive, time-limited coaching and business development programs that offer investments. Some accelerators offer investments, some don’t. Some accelerators emphasize building networks, some coaching, and more hands-on workshops. Figure out what would be most helpful for you.

Mentors & mentoring:

Different accelerators have different kind of people as their mentors. They even mean different things with the word mentor. Are the mentors they have relevant to you? Knowledgeable of your industry, issues you struggle with, do they have knowledge from your customers’ side?

And what does the accelerator mean by mentoring? Is the big name mentor going to give a lecture and a short Q&A or will he or she sit down with you to work on your startup? How important it is for you to have that one-on-one time with the mentors? What do you really want mentoring to be like?

After accelerator:

Do you want to get help from them also after the accelerator program itself ends? If you do it might be better to go to one that invests in the startups in its programs. That is because they probably want to make sure their investment is doing well and are much keener on helping you, their investment, also after the program. Or would you rather just get the learnings during the accelerator and not be bothered with keeping in touch with it? Also, what does it really mean get help after the accelerator ends? How much effort is the accelerator willing to put into helping you after the program?

Funding:

Do you need funding and how much? How much of your equity are you willing to give away? Do your numbers match with the accelerator’s? When thinking about the investment from the accelerator, you need to consider the overall package: for example, the coaching and other support in addition to the invested money.

Though remember that you should never do it just for the funding! It is not going to take you far, far from it. Though I am sure you are one of the smart ones and the thought didn’t even cross your mind ;)

 

4. Are you coachable?

I.e. are you ready to learn, accept others’ advice and in general, know you cannot know everything needed in this world. In short: your attitude.

If you already know everything, attending an accelerator might not be for you. I mean, accelerators are for learning, why would you go to one if you already know it all? You’re just going to waste your own and the accelerator people’s time. Though of course, if you do it to build a network then accelerator might still be worth your time (but are you worth the accelerator’s time, that’s a different story…).

 

Being coachable is also the very same thing investors are looking for. Nobody likes the know-it-alls that only want money, especially not investors.

TL;DR Do your research. Think what are your needs and what you can give, and apply to the the accelerator(s) that matches those. And remember: there is no one ‘best accelerator in the world’. It is different for everyone!

What are the ‘musts’ you are looking for in an accelerator? Share in the comments, we’d love to hear!

 

Related post: How to build the next startup unicorn?

 

Posted by & filed under Customers, Entrepreneurship, Marketing, Social Media, Startups.

They say social media is amazing for companies, especially startups. A must even. But in your experience, it’s just a waste of time. Usually, the reason is that you post the wrong kinds of posts, but also that you are on the completely wrong channels.

Here is a lesson that could not be simpler and even more obvious. But a lesson I want to share because, in practice, it seems to be nothing but obvious. Startups know they should be on social media, but they waste a lot of their time on wrong things. And surprise surprise they don’t get the results they want. It is about what they post, but many if not most startups get an even more basic step completely wrong. They don’t use the right social media channels, the channels that would really bring in the results. Meaning no matter how amazing posts you are putting out none of it matters if your customers don’t see them.

Only the channels where your customers are matter

What startups usually do is that after deciding they need to be in social media, they think which channels are hot and start creating accounts. The end result is they will have too many accounts and they don’t have time to do them well enough. And most likely they are wasting their precious time on channels that will bring them no results no matter how well they do on them.

The only channels that matter are the channels that bring you results. And usually, that means the channels your customers use. Like everything your startup does, also marketing and social media should all start from your customers. Let’s say you have a fashion brand and your customers are females in their 20s. Then Instagram is probably your best bet, probably also Facebook. Linkedin? Not so much. But if your customers are professional males in their 50s or 60s Linkedin (or nowadays also Facebook) is just the thing. And then Instagram, probably a complete waste of time.

So, creating great content is the number 1 thing that will make or break it whether you will get something out of your social media efforts. But if you are doing it all on wrong channels your effort is 100% waste of time.

How to find the right channels for your startups

Like I said earlier: be where your customers (and other important stakeholders) are. The best-case scenario would be that you know what those are for a fact. If you don’t, you need to start making educated guesses and change accordingly when you get more information. Also, just ask. You are talking to your customers and potential customers anyway, so why not ask about where they are active.

If you have no idea, you can start from thinking about your customers’ demographics. The Internet is full of information about who uses what social media channels. Then you can start using facts like your customers’ gender, age, income level, interests etc. help you make an educated guess. Here is one website to help you out.

 

Social media demographics age

 

These are just some of the most popular channels. …which is why it makes no sense for startups to try to be on all possible channels.

Demographic factors usually help you a lot, but don’t be blinded by them. Let’s say your target group is photographers, male and 35+ years old. Then just by looking at demographic factors alone, you wouldn’t go for Instagram. But that would be a grave mistake! What is Instagram? A photo sharing app. It’s filled with people interested in photography and pro photographers.

Also, remember not to focus only on the buyer, the one who actually makes the decision of buying. Think about the people who have an influence on that buying decision. A clear example is toys. An adult is the one who pays for the toys, but it’s kids who say ”I want that!!! Buy it!”. Then you should be active where the kids are, and of course, not completely neglect the parents either. Or if you are selling something to the government or bigger organizations. The decision makers are important, but so are the assistants who actually scour through the options and present them to the decision maker.

Be realistic about your resources and what even is possible

Think of your resources and what makes sense. Even if your customers use ’all’ social media channels, you probably shouldn’t be in all of them. Unless your startup is strongly tied to social media, you just won’t have time. That’s coming both from personal experience and seeing what happens with startups. It’s better to focus on the most useful channel(s) and do them well than to do poorly on many channels. Doing social media well does require time and effort, so don’t spread yourself too thin.

Another thing to consider is what even is possible for you. For example, let’s say your customers use a lot of Instagram and quite a lot of Twitter. Instagram would then be an obvious choice. But for some companies, it might be harder to create good content on that platform. If you have a fashion brand, it is easy to take good photos that create value, something that makes people want to follow you. If you do IT consulting, not so. Then it is a safer bet to focus on the number 2, Twitter. Though of course, if you can actually figure out how to do Instagram super well, you will reach your customers where they are AND where your competition isn’t.

In short:

  1. Only be on the channels where your customers are
  2. Don’t spread yourself too thin. Start only with the most important channel(s). You can always take over more later.
  3. Create value. Just pushing your products and services will not work.

And that’s it for today! Do you have any learning about choosing the right channels? What worked, what didnät?

 

You might also be interested in: How to talk to your customers and build better products?

 

Posted by & filed under Customer development, Entrepreneurship, innovating, Product development, Startups.

How to be a successful entrepreneur? How to create the next Airbnb/Uber/Dropbox/startup unicorn? Hands up, who hasn’t googled something like that even once? Or at least clicked once on those millions and millions of articles about creating the ‘next big thing’.

But if that’s what you are asking you won’t succeed. Might sound harsh but it’s true. Hey, I do understand; who wouldn’t want to be the founder of the next SpaceX. But the thing is that if you just want to have a successful startup for the sake of having a successful startup, you are focusing one the wrong things. You are focusing on the fame, money or whatever fancy thing you are imagining, not on what can get you there. And that is having a startup that is actually worth it.

All successful startups give people something they are dying to get. They are solving a problem, a crucial need people have. The more people your startup can help, the more desperate they are to get that problem solved, and the better you solve it the bigger your success will be.

So, how do you create a successful startup then?

Didn’t I just tell you to stop thinking about it!?!? …juuust kidding. In all seriousness:

 

Have an idea (well, duh)

Often what happens is that the founder(s) sees a need. That something could be done better and figure out a solution for it. They start thinking ”why is it like this. Why can’t it be like that.” Boom: an idea is born! (in a very very simplified form).

 

Validate that idea

Ideas are an essential part of founding a startup. But we all have ideas and only a few of us are successful entrepreneurs because of them. That’s because not all brilliant ideas really are brilliant. You need to validate your idea. Is it something that would make only your life better? Is it crucial enough and for enough people? Or just ’nice to have’?

Is the need big & crucial enough?

I.e. are people actually willing to pay for you solution and are they enough of them. If they want your solution but not to pay for it (=the need isn’t crucial enough for them), you won’t make any money and your business will die. Or if only a few want your solution (=the need isn’t big enough), you won’t make enough money and again: your business will die.

 

”But everyone needs my solution…”

 

Stop you fool!

 

If that’s what you think, stop! Stop, sit down and think again. You might still be able to save your startup.

Unless you have found a way to capitalize air, there is nothing everyone needs. ”Everyone” is the easy answer many go for, and the answer that will ruin their all chances of success. When you think that everyone will be your customers, you try to please everyone. And that doesn’t work. You will end up doing compromise after compromise and then your solution fits no-one. Or you just don’t even try and create a solution that only solves your problem and nobody else’s.

Bad validation is one of the most common reasons startups fail. They get so blinded by their ’brilliant solution that everyone in this world will buy’ that they forget to check the facts. Don’t be like them. Validate, and do it properly. Here’s an excellent post from Startupgrind to help you with that.

The best case is when your product is not just a ’nice to have’, but a must to have.

 

Execute it awesomely

”Ideas don’t matter, only execution does.” – pretty much every successful entrepreneur.

No matter how brilliant your idea is, the idea that is executed the best will win. After all brilliant idea is just an idea, still a long way from becoming reality. And rarely there are any truly unique ideas (there have been search engines before Google, social networks before Facebook and so on). We now ’google’ things because Google had the best execution of the idea, same with Facebook and many many other businesses.

No-one will see the brilliance of your idea if the reality of it just screams bad execution.

And a key thing to remember is that execution is 100% up to your team. It’s about their skills, experience, connections, everything. Many entrepreneurs just hire their relatives, friends, old acquaintances who need a job. That’s very noble of them but only works if they have the qualities needed to make that brilliant idea into reality. And if you ever dream of getting investments, you better have the kind of team that gets them. After all, investors usually look at the team even more than the idea itself. More about that here.

Learn from the unicorns – real-life examples

Let’s look at Airbnb. The economy was (and unfortunately is) tough, and many were looking for extra income. They also had empty space in their homes. Unused rooms, or whole apartments due to traveling. At the same time, people wanted to travel but not spend that much money on their accommodation. There was a demand and then there was a solution: Airbnb.

Or Uber. Again tough times. People need an extra income and they have an idle car. At the same time, others need convenient transportation, like taxis but without the price tag. Again: big need many really want to get solved.

In short: they had a great idea, an idea crucial for many and they knew how to execute it well. And now Airbnb is worth 31 billion dollars. Uber 62,5 billion dollars (as of March & April of 2017).

 

Related post: Startup mistakes to avoid