This random picture from made my day — hilarious (I think, anyway)!

Swinging Cats & Cricket Bats: Fintech Startups, MVPs and Growth

You can’t swing a cat without hitting a fintech startup in London right now. It’s unsurprising as Venture capital investment in London fintech has rocketed from £24m in the whole of 2010 to £312m in the first six months of this year alone. Over the last 10 years London has attracted 1000 international tech investment projects — which is not only more than any city, but more than any other country in Europe. Go London!

Startup on blockchain? Here’s a cool million seed round. Off you go. The world has gone mad for blockchain. What’s next?

Whilst fintech might be red hot, the principles of building startups in this space are the same as others. Just there’s the added complexity of significant regulation. However, if you crack it there could be a market of people wanting a nicer, shiner less “errrrggk” feeling financial service: the highest rate of fintech adoption is those earning over £50,000 aged between 25 and 45.

Wait! Stop right there! I’ve had the privilege of working with numerous startups, many of which are fintech. Entrepreneurs take a tea break and pause…

Building and growing a fintech startup isn’t going to be easy. Normal validation and Lean methodologies still apply in the same way as they do in other markets. Yes, you’ve read Lean Startup and many other 21st century “get rich quick” equivalents, but did you fully hear the message? Truth is there aren’t shortcuts for most, unless you hit on a black swan (or create one!). But that’s the top 1% of tech startups and you can’t plan to be one, so just ignore that possibility.

Financial services is, of course, rapidly disrupting into a melee. And sure it’s fun to take a run at a single service line of a slow moving incumbent. However, this industry more than many, has significant barriers for you to overcome. For B2C startups there exists a certain indifferent mistrust to anything financial institutional-y; whilst for B2B or infrastructure endeavours the traditional players are just waking up that they now have an exponential number of competitors, rather than just a handful. Selling anything to them will take a lot of time and even more patience, as well as a lot of help.

However, if you know these things, and have a credible route to overcome (or work outside of) them, then you have a decent chance of swinging the Fintech bat and hitting a six (or at least a four) in the present environment. That is, IF you execute like a wizard.

Remember two things for me: you need validation and you need customers. The sooner the better. There are no tricks to this, just graft. Trial, error. Rinse & repeat. Find that beachhead audience. An idea is not enough. Execution is everything and “growth” comes from a never ending process of discovery and experimentation.

Some hints on questions to validate now to de-risk yourself and your project. You have evidence and data that gives you:

  1. A bunch of use cases that are understood — the “why” people would use your thing and that it’s really a problem worth solving. Hint time & money saving don’t count in isolation
  2. You kind of know your beachhead audience
  3. You know how you can reach them, or a decent sized subset of them
  4. You understand the technical and regulatory risks around what you want to do

Now, go explore an MVP with emphasis on minimum. Write down assumptions you’re designing the MVP (what is an MVP?) to test. Treat this version of your product as throw-away. It shouldn’t be perfect, it’s the start of a journey. Meaning you’ll rebuild based on real user data & feedback once the product itself (note: this is different to the idea) is validated. Hell, it might not even be the same product after (see: pivot)

When doing this, be weary of falling into this trap that I see a lot:

START by having an idea->build tech->”oh crap” ->marketing scramble ->product scramble->product rebuild (what you should have built originally->Money crisis ->kill/continue->marketing->*yaaaay, maybe customers!* I should know, I did this myself many years ago. It was painful.

Should be more like this:

START by having an idea ->research->mini experiments to validate assumptions ->review & revise plan with real data->build MVP product ->marketing->*customers* ->incremental product iterations->growth approaches->if successful at this stage the world will open up!

As building tech is the most expensive part of a digital product, it should only be undertook when there is clear evidence that you’re building the right thing, for the right people, at the right time.

Please note though, that validation isn’t procrastination, always bias towards action; but action in the right order. At the early stage you’re looking for gold dust, hopefully you’ll find some nuggets of real insight.

This said, don’t expect larger investment organisations to be responsive — they see a lot of pitches. If you’re early, unvalidated or don’t have customers the best you can hope for is “come back when you have those things.” And, they’re right. Try communities, incubators and accelerators instead if you need help and access to networks.

Here’s some watch-outs for early to mid stage startups:

  • Ideas aren’t worth anything. Execute like a wizard
  • Don’t do it on your own. The team is everything. Likewise, Startup experience in the team is everything
  • Just because you spent money on it doesn’t mean it has value
  • Act — do stuff, don’t plan
  • Know what you don’t know and when in doubt, find out
  • If building tech: always have a tech co-founder that gets the vision. These skills aren’t a resource, they’re your business
  • ‘Growth’ isn’t magic. It’s a process; follow it to find insight and do more of what works, less of what doesn’t. Fuel what you do next with data.
  • Cutting corners is ok as long as you know you’re doing it as well as why (& how it impacts your risk)
  • Stealth is pointless. It’s never too early to go talk to people and start “marketing” your idea

Just remember you’re not alone: the startup community are a pretty helpful bunch. Find some people or communities with knowledge of your market & possibly (but maybe not) domain expertise in the general area of your startup. Most would likely be happy to have a coffee and chat.

Now, hustle on. You’ve read enough. Times-a-ticking. Go build something incredible.

Best of luck.


Adam is on a mission to build better startups with data-driven product development and growth marketing; using Lean, UX and Digital Marketing strategies, tactics and tools. He’s worked with 30 so far. Always on the hunt for unicorns…

Like this article? You could have saved a year by reading this one from 2014! ;)

A better edited version of this article was originally published in The Startup Mag — your monthly dose of startup innovation and insight.