Telling the future is difficult. And even more in banking right now, with so many innovations happening. New fintech startups (like you?) claim to disrupt the industry every day. By collaborating with a big bank you can improve your chances of success. And that makes those banks more ready for the future. But in which areas can we make the biggest changes?
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.
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.
- Only be on the channels where your customers are
- Don’t spread yourself too thin. Start only with the most important channel(s). You can always take over more later.
- 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?
The digital revolution has happened. And now it’s banking’s turn. Fintech are here and banks can lose up to 60% of their retail profits in the next decade. But will they? And why would they? What is going to happen in banking and fintech?
About a week ago I attended MoneyFintech-seminar and got to listen to the brightest minds of fintech and banking. Here are the four big things that are hot now and in the future of fintech and banking.
When talking about banking and fintech, regulations are a topic you just cannot ignore. The hot potatoes of the industry: PSD2, open banking, and many others are wreaking havoc in banking.
PSD2, open banking – new regulations level they playing field for fintechs
One key goal of the new regulations is to level the playing field between fintechs and banks. It means more opportunities for more new fintechs. And that means new opportunities, new companies, new jobs and so on. The industry has been booming and the new regulations don’t seem to make it any slower, the opposite.
Source: Kevin Poe, CGI
Consumers don’t feel connected to their banks and half of consumers are already ready to try 3rd party service providers. While consumers still prefer their current bank to provide new services it is greatly declining. All this is great news for fintechs but not so good for banks. Banks can no longer just sit on their asses and wait to see what happens.
It’s up to banks to decide the role of fintechs in the ecosystem
An interesting point in the speeches was that in the end, it is up to the old masters of the industry, banks, to decide what kind of role fintechs will take. Will banks refuse to change with the industry and let fintechs take over? Will they re-invent themselves and fight back? Or maybe the most beneficial for all: will they learn to collaborate with the other players in the ecosystem?
Not everyone can nor should do everything. Instead of wasting time on trying to win everyone on every battleground, banks should collaborate with the ones that would give complementary value to your offering.
“Fintech will bring lots of opportunities for everyone. But it is true only IF collaboration happens.” -Annukka Paloheimo
Like Lars Markull said: “PSD2 is not THE solution for banks, but something that pushes them to the right directions.” It forces them to act instead of just watching passively in their ivory towers till they have become completely obsolete.
The regulations are changing and fintechs have the opportunity of a lifetime. But the biggest winners will be the customers. They are the ones who will have all new kinds of financial products, their old services will be much simpler, and for every product and service they have been forced to get from one provider, now they will have an excess of options. And as we know, options is never bad for the customers. But for banks and fintechs it means fiery competition.
“Thanks to fintechs and technology houses customers are aware of their options, that there even are options. That has shifted the power from the banks to the customers. Now customers are in the driver’s seat.” – Kirsi Larkiala
The winners will be the ones who serve the customers the best. The ones who don’t just focus on the customer but what the customer is focusing on. If you can bring something great to the things matter most to the customers, that’s the recipe for success. Or like Jarle Holm put it: “If it’s going to increase your customer’s equity, it’s going to grow your equity.” And the key to that is to stop thinking about customers as customers and start thinking about them as humans.
Illogical, obsessed with social relationships, i.e. your customers
The biggest winners will be the companies that understand what customers essentially are – humans. Beings who think they are rational, but in reality are far from it. Beings to whom social relationships are more important than almost anything else. That’s why customers’ losing the feeling of personal connection to their banks is such a big deal. And that’s why the companies who also serve the social relationship needs of their customers will succeed. Companies need to understand how their customers make their decisions (not as rationally as you’d think), and how to build strong relationships with their customers. And to think about their future customers already today. For example by 2025 millennials will make 75% of the workforce. The ones who will start building relationships with them then are way too late.
The future is not ‘ready’. It needs to be innovated together with the whole ecosystem.” – Kirsi Larkiala
In fintech, one as often mentioned topic as the new regulations is collaboration. In fact, 82% of financial institutions expect to work with startups in 3-5 years.
1 in 2 banks expects to partner with fintechs later than in two years, which is pretty slow (even too slow?). They see the benefits, but at the same time they have a huge responsibility. Banks spend on regulation and compliance 321Bn (inc fines). Having customers’ trust is more important than pretty much any other industry. And if something happens because of the 3rd party, the bank’s partner, that trust is lost. The customers see that the bank is responsible of their partners. But regardless banks know they can’t not collaborate with startups. Why? They need the innovations & to learn.
“Innovative companies seeking aggressive growth are the future of Finland and Europe.” – Eeva Grannenfelt
Working with startups to get innovations
There are many reasons corporations aren’t the kind of innovation powerhouses startups are. One of those is the fear of failure or losing their reputation by putting out something that is not ’perfect’. That is why the startup-like use of MVPs might sound absolutely horrifying. And they do have a point. Like Pekka Puustinen from insurer Ilmarinen said, corporations have a whole different kind of reputation to keep than startups. Putting out ‘almost ready’ products is not as easy for big corporations like it is for startups. ”Porsche can’t put out a car that almost works”, he said.
As banks have their constraints they go for startups for innovations. And it makes sense. Startups are innovation powerhouses without the constraints they have. They don’t have such a big reputation to upkeep, and they are the masters of using failing as an innovation tool. Eeva Grannenfelt even said large companies have outsourced the R&D partly to growth companies. Startups definitely can be a tool for banks to meet the new expectations of their customers and do so without risking their reputation.
Working with startups to learn
But none of the above means the banks can just sit around. While startups can be an amazing way to find the much-needed innovations, they themselves need to change for the future. While Porche can’t necessarily put out ‘almost ready’ cars, there are multiple ways more ‘startup like’ approach would work wonders for corporations. That’s why they should learn from startups. Learn to be faster, agiler, more innovative. And even fail. Like Topi Järvinen said: “Failing isn’t necessarily bad. You can learn a lot from it and thus do better the next time.” Failing (the right way) is an essential part of innovating and by no means automatically means PR disasters.
Based on the talks banks gave that’s exactly what they are looking for. Most of them talked about how they need to reinvent themselves and learn from the startups. That’s why banks should use accelerators and startups just for innovations, but as something to change their entire organization. The ideal situation would be getting innovations from outside the house (startups) but also being able to innovate in-house. And at the same time be more agile, fast, more startup-like and less stiff like corporations usually are.
Source: Topi Järvinen, Nestholma
China: the promised land of fintech
An old Chinese professor of mine joked that in China copyright actually means the right to copy. China definitely has been an excellent copier of all innovations big and small. But now China has gotten far from that: they have changed from copycats to copy tigers. In China, fintech is booming.
China is a great breeding ground for fintech. The country is going through rapid urbanization, they have regulations that support the growth of inland fintech innovations, a massive and underserved SME market, rapidly growing of e-commerce and also explosive growth in online and mobile penetration (read more here). Technology is changing so rapidly that they are skipping many of the unnecessary steps like landlines, dial-up internet and so on, and going straight to mobile payments innovations like that. And the people are more than willing to do so. For example, 40% of Chinese consumers have adopted mobile payments, which is massive. China truly is the perfect breeding ground for fintech innovations.
“Fintech in China is delivering the promise of fintech – making changes of unimaginable size” – Ronit Ghose
China is coming and the West better listen
China’s policy has been to forbid Western services like Google, Facebook, Youtube, and many more to have their own versions instead. There are multiple reasons why, one of them being giving the business opportunities to Chinese companies. The Chinese not only copied the service but also evolved them further (e.g. mobile wallet in their social media services like WeChat). Before you could just think ”oh well, the Chinese have their own versions, so?” and move on with your day (unless, of course, the Chinese market was important to your business). But now that is not possible anymore.
The Chinese consumers are the fastest growing segment in the world. Now there are 300 million Chinese consumers and by 2022 there will be 600 million. And it’s not just the massive amount of them, but also their great purchasing power. McKinsey estimates that by 2022 the upper middle class will account for even 54% of urban households.
Source: McKinsey & company
In short, there is an ever growing amount of wealthy Chinese who want to spend. And they don’t just want to spend it all at home. They want to travel and spend it on foreign (premium) goods.
Source: Johan Andrén, Handelsbanken
It may sound like the Chinese are taking over the world (and maybe they are), but in our current interconnected world, all that spending is going to mean more jobs all over the world. And that’s great (if you are not an avid tinfoil wearer ;))! But that also means the so-called Chinese versions of everything are now also relevant here. Or they should be. Like Ronit Ghose said: “When the mass of wealthy Chinese tourists come, Western companies have to accept Chinese payment methods or they get nothing.” On the streets of my home city Helsinki, there are more and more signs in Chinese. Talking about the Chinese payment methods the shops now accept, wishing happy Chinese new year and so on. The Chinese are coming and you should be ready.
…or should I say Asia is coming instead? China definitely is ahead, but other countries like India are catching up fast. You should keep your eyes peeled.
Antti Kosunen ended his portion with the following quote, and it seems like the perfect quote to end this post: “If the rate of change outside your organization exceeds the rate of change inside, the end is near.” – Jack Welch
Guest post by Kasper Souren of B2B Pay.
MICE – is the industry acronym for huge conferences and trade fairs. Travel, Auto, IT conferences attract hundreds of thousands of participants and industry leaders. But are you ready to get the most out of them?
There is nothing like getting out of the building to get a buzz going: get the team excited about the fantastic life of a startup, build on that sales strategy and getting out there and talking to potential customers and partners. MICE (Meeting, Incentives, Conferences and Exhibitions) events are a must for a startup as you will get a lot more customer feedback and partners in 1-2 days that would have normally taken you months. People are there to do business, and you need a strategy to make it happen for you.
We recently attended the ITB conference in Berlin. The ITB conference is the largest and most important Travel conference in the world. Our aim was simple: We believe travel agencies are a good customer segment for us, so let’s get out there and sign up as many as possible. We will be closing deals with about 10 with another 20-30 potentials. This is a great outcome as that’s 5 times more that what we had previously, but if we knew what we know now we would have been able to close more deals and with 1/10th the effort.
Now it is time to plan your approach. In this blog, I assume you are going as a foot soldier with your army tagging along instead of having a booth. I also assume you and your team will be splitting its time between pre-booked meetings and freestyle meet & greets.
1) Plan meetings in advance:
The pros at these events organize meeting months in advance. We definitely noticed a huge difference in the response between people we just chatted up on the spot compared to the people we had contacted before the event.
- Talk to partners and friends that will also be attending and try to build a referral book. With it, network your value proposition and see if you find any synergy.
- Identify – from the attendee list – your core customers and book meetings with each with the correct team members assigned
- Add everyone that you have a meeting booked with on LinkedIn.
- Have a list of names ready and of course, arrive early.
- Try to set up meetings with the best-ranked decision maker in the firm.
- Book meeting with 30-minute slots: 15 minutes for the actual meeting and 15 for moving around the conference.
2) When walking around and talking to owners:
You are going to spend a lot of time walking around and approaching people who don’t know you at their booths. We did a lot of this as we didn’t do enough of step 1 :) Here is what you need to remember.
- Always go in twos. I don’t know why but they tend to listen to you more and spend more time with you. It’s easy to dismiss one person.
- Be polite and ask if they have time. If they don’t ask for an appointment or walk away. There are hundreds of people out there, don’t waste time on one.
- Understand what “mental mode” they are in. if they just want to sell they won’t be interested in you and it’s better if you walk away rather than pushing them. You need them to be responsive.
- Change your story. Some of the best results I got was when I asked them about their product, build a rapport, then after 5-10 minutes, they asked me what I did. And when I told them about our startup and they went “ahh, that sounds awesome, can I have a card as I am interested in this service”.
- Collect cards. If they are busy, tell them you will drop them an email, and remind them in the email that you met them in person.
- Always ask to talk to a supervisor, 4 out of 5 times they will go get them.
3) During the face to face:
- Do not waste people’s time: pitch in a few minutes and gauge the level of interest. Ideally, let them talk more than yourself.
- Do not waste your time. When the time comes, make sure you are on your way with a sincere request to your lead.
- Take notes; what every client said and your reactions as well. If you don’t have the time, use the voice recorder on your phone.
- Brochures are a waste of time, people get a 100 and most of them end in the bin.
4) Keep yourself fit, healthy and motivated during the event:
It’s exhausting. Make sure you are mentally and physically up for it.
- Take a break every 2 hours to meet the team and exchange notes and get some general feedback.
- Try tackling a series of booths as a team: each person taking sequential booths of similar business types and do some instant note comparison.
- Get food. There could be long lines. If you’d like a beer, have it and relax.
- Have snacks ready.
- Keep the team motivated: a bottle of good wine for whoever gets the most cards.
- Try to get the most important meeting in the morning. Everyone is exhausted by late afternoon.
- Assign somebody with the task of organizing this whole thing. It is much harder to make this happen without someone taking the lead on proper preparation.
- Conferences are big. Allocate time to a section. Most important in the morning as you will get tired and less convincing as the day goes on.
- Clear message and questions: make sure you have a clear message and 2-3 key questions to get the information you are looking for.
- Ideally, you will do some practice within the team to get your questions and pitch correctly.
- Use some of the not so important chats in the conferences as testing for your pitch and questions strategy.
- Your phone will ring. So, put it on silent, please.
- Have business cards! Ideally a card with your own name for each of your team members.
- Folders are good, for sure. The more the better.
- Know who not to talk to. We have experienced for example, that certain cultures do not like impromptu meetings at all, or at least require a person with a certain level of cultural familiarity.
- It is best to avoid more than 2 people per meeting.
- Dress up. Especially if you’re at a conference with a mixed business/consumer audience, it’ll be much easier to get people’s attention if you dress properly.
- Remember where you parked your car. It is a silly exercise to realize that because of the excitement of entering a conference for the first time, you run around like a crazy monkey for 30 minutes looking for a black car in a sea of black cars. Fortunately, since then Google has added a feature for this in Maps.
After the event, you need to follow up. Ideally, you have a CRM ready to handle the many emails you are going to send and receive.
Whatever business you’re building, there are always great events to go to and test your assumptions. The above should give you a good head start with this. And if you manage to build up your business thanks to the above and you’re in need for a good international payment solution we’ll be happy to help with that!
Other posts you might be interested in: Should you be afraid to talk about your idea?
You’re an entrepreneurial individual, and you have an absolutely brilliant idea. Should you talk to others about it? And how much should you tell? Of course you should! At the moment, your business idea is only in your head. And everything makes sense there. You need to cross-check with reality. It’s going to be hard… but also necessary.
I know what you’re thinking — many people ask it in our workshops — “what if somebody steals my idea”? But… really, is that a risk at all?
In the early stages of your startup, people are not likely to understand your business idea at all.
Sure, they’ll get a general vague idea. And they’ll tell you they understand. Because they’re nice (or IF they’re nice). But they’ll be missing the big picture. And why is that?
- Firstly, you’re probably hiding most of the information. There is so much you take for granted. So many assumptions. All the know-how that you need to make sense of the idea. All those things that seem so obvious to you, that you have problems articulating. Talking to others, you will find out what your assumptions are. Tweet about it!
- Secondly, you probably don’t have such a clear idea as you think. You’re probably quick to imagine details of your solution. But that doesn’t mean that you know about your business, that means you can imagine very fast. Others won’t. It’s a good sign if others they believe in your startup idea half as much as you do! Tweet about it!
- Finally, they’re not going to drop everything to pursue your idea. Everybody’s doing something, be it our job, starting our own company, etc.. If somebody is so inspired by your business idea, you might be better off getting them to be a co-founder before they get busy with something else. People don’t have the time, the understanding or the skill set to steal your startup idea! Tweet about this!
Think about it: if after talking with you for a couple of minutes, somebody can steal your idea and beat you, you don’t really have such a great idea. Tweet about this! As Mark Cuban said, ideas are overrated, it’s the execution that counts.
This doesn’t mean that you should be that annoying guy that keeps constantly blabbing about their business. That won’t get you anywhere. The person talking can only learn from him or herself (and they rarely do).
So, how should we talk to people?
The whole purpose of talking to a lot of people is to get to listen to a lot of people. Tweet about this!
Entrepreneurs have the tendency to explain their business, to try to prove how smart they are. By doing that, they defeating the purpose of the conversation. Instead, try to really understand the person in front of you. How do they feel the problem that you’re solving? Do they know people who have that pain? How do they currently deal with that? What experience do they have? What ideas do they have?
You’ll soon also run into the question:
Who should you talk to (or rather listen to)?
I personally think you should listen to many. Take any chance to get more understanding about anything related to your business. And worst case scenario, you’ll be training your skills in asking questions. Don’t look for confirmation of your own ideas: you’ll only end up tricking yourself. Instead, ask questions and understand how the person in front of you thinks. You’ll be surprised how much information you get. Tweet about this!
Now a different thing is how many people you should listen to. You should only pay attention to some. If the person in front of you is your customer, then you should definitely listen to them. If they know your customer, you should listen to them a bit less (and go to the original source instead). You should end up speaking your customer’s language fluently.
And if they’re not at all your customer, you shouldn’t care too much about their opinions. Tweet about this!
They might give you some insights, or some pointers to interesting stuff. But their opinion is no better informed than yours (and often worse). Even if they’re friends or family. Especially if they are. The fact that they’re related to you doesn’t make them an expert on your startup. It only means that they care about you, which is likely to bias their answer in one way or another. Even if you listen to many, you should follow the advice of very few. Make sure you always check for yourself and go to the source: your customers. Tweet about this!
In short: listen to many, pay attention to some, follow the advice of very few. Tweet about this!
Dr. Daniel Collado-Ruiz, @ErCollao
Do you like the content? Do you disagree? Are you interested in hearing more about other related stuff? Drop us a line in the comments or on twitter, and let’s chat!
You might also be interested in: How to pitch to investors to get funding?
If you’ve dealt with both, you know that startups and big companies behave very differently. You can hear all sort of stories, from people moving from a corporate job to a startup, to entrepreneurs trying to deal with their corporate customers, to the same corporations trying to make business with startups.
What’s considered best practice in startups or in corporations is dramatically different… sometimes contradictory! And all those best practices make sense if you understand the context in which each one of them operates. In this post I try to make sense of the biggest differences between the two:
They are normally on a quest to solve some big problem from their customers. Something is good if it increases that impact — and turns it into a good business. They make quick prototypes or MVPs to show it to customers, to decide about changes.
To beat competition, they need to focus on productivity. They need to be efficient: get the best impact with the least resources. They work with budgets to understand how the company spends. They might calculate the Return on Investment to decide about changes.
They develop the minimum version of their product —focusing on the core — and show it to customers (a few of them, the early adopters) as soon as it’s possible — sometimes before. Based on customer feedback, they take the next steps.
Investing at the beginning of the product development project makes better products. They normally invest resources in market studies to understand demographics and big market niches. They develop requirements to coordinate big teams.
Everything is uncertain around them, the only way to find out and decide is to test. Data in consulted, but intuition and gut feeling play a big role in decision making. Decisions are kept small and validated with customers.
In big companies, there is much at stake. In-house experts exist and are consulted for decisions. Many people are involved in the decisions. Effects are measured and tracked, and the decision process is as rational as possible.
The most precious resource for startups is time. They have limited runway — the time until they run out of resources — and they have to be quick to figure out a good business model. The shorter the iteration the better: they focus on speed rather than fine tuning.
Predictability and control are seen as positive. Coordinating is difficult, because of the size of the company. Changes might impact many people, who might have their own agendas. It’s important to limit the uncertainty in decisions and changes, and because of that, they take a long time.
|Way of working||GET-IT-DONE
Startups have small teams that are not very hierarchical. People tend to be a jack-of-all-trades with some specialisation. Everybody learns a bit about everything since there are no in-house experts. The way of doing things is mostly defined ad-hoc.
People and departments have clear roles and responsibilities. Most of the activities have clear processes that have been optimised. This creates clarity and uniformity in the quality, but can also create bureaucracy. Everyday tasks work well and are predictable.
Communication is mostly clear, short and simple — both inside and towards the outside. New ideas are shared with the outside as much and as quickly as possible, to get feedback. Communication to customers is focused and bold, to validate assumptions.
Communication is very carefully planned. Towards the outside, there is often a specialised department supervising it. Product information is normally kept secret, to keep competitors away. Internal communication is written with generalist terms so that it applies to all stakeholders, and sometimes has an internal political agenda.
“Fail fast” has become almost a mantra among entrepreneurs. They normally pivot their business model several times, so it’s good to test assumptions, and to have them fail as soon as possible. They take risks and learn from the experience. This makes them more likely to succeed at radical innovation.
There is so much at stake for them, that they can’t allow themselves to fail. Plans are made to minimise the chances of any mistake hitting the market. Employees have areas of expertise, in which they’re expected to have the right answers. Risk are detected and managed. This makes them good at incremental innovation, but generally not at radical innovation.
Of course, this doesn’t apply to all startups or to all corporations. Each company is different! But in our experience organizing corporate accelerator programs with Nestholma, we have seen a lot of them behave like this.
What’s your experience? Leave us a comment below!