Are you in the early stages of building a new fintech startup? Do you have a great idea but little sense of how to turn it into a profitable, scalable business?
You’ve come to the right place. Experts like Steve Streit, a serial entrepreneur and investor whose fintech investments include Scratchpay, Solana and Finix, have years of experience creating powerful fintech brands that break through the noise. They understand what it takes to create the next big thing in this industry, and the mistakes first-time entrepreneurs often make along the way. Consider hiring branding services for startups to help you create a strong brand that sets you apart from your competitors.
Let’s take a look at the seven key, early steps you should take as you work to build your fintech startup. This isn’t the only guide you’ll need on your journey, but it’s a useful resource to keep you on track throughout the process.
Table of Contents
1. First, Understand Your Market and the Problem You’re Trying to Solve
This is good advice for any founder, fintech or otherwise. If you don’t understand your market or clearly lay out the problem you’re trying to solve within that market, your idea is not likely to get very far.
How should you go about understanding your market? Research, research, research, informed with your team’s real-world experience building similar solutions (if any).
Your research might include focus groups, surveys, or data-rich reports prepared by third parties. Accumulating these resources will take some time and cost money, but it’s worth the investment if it secures a profitable future for your new company.
2. Stress-Test Your Idea Early and Often
Information-gathering doesn’t stop with your final focus group or survey. As you begin building your solution in the real world, you must stress-test its assumptions early and often.
You can do this internally, through close coordination with subject-matter experts on your time. However, to be really effective, this strategy should also involve input from outsiders not involved in the creation or funding of the enterprise. This way, you’re more likely to gain unbiased perspectives and uncover problems that your like-minded group of founders and investors might miss.
3. Develop a Longer-Range Fundraising Plan
Your company’s business plan — a road map for which you can find on the Small Business Administration’s website — should include a detailed fundraising plan. This should spell out the chronology of your fundraising rounds with a focus on the amounts you’ll need, for what, and when.
Your fundraising plan should also anticipate the type of funding you’ll need. For example, your first “round” might be founder-provided capital, maybe with help from family and friends. Later rounds might include angel investments, bank loans, debt sales, early-stage venture investments, private equity investments, and possibly an initial public offering. The specifics of the plan will change, but it helps to have a long-range vision early on.
4. Bulk Up Your Product Team First and Hit the Ground Running
Use your early funding to build an experienced, ambitious product team capable of developing a minimum viable product (MVP) quickly. Spend less time on self-promotion or other non-core areas of the business; those can wait until you’re closer to exiting “stealth mode.” Remember, if you don’t have a workable product, your solution is nothing but vaporware.
5. Open Up a Waitlist (But Not Too Early)
Fintech founders love waitlists because they create a sense of scarcity (and high demand) around their products. This might be true, but it’s not the main reason to create a waitlist.
The more important justifications are to gauge interest in your solution before it’s released and to build a group of early adopters willing to test out your product ahead of a wider release. Both are incredibly valuable for pre-revenue fintech startups.
6. Roll Out Your MVP When It’s Ready (But Pay Attention to the “V”)
Your waitlist gets to try out your minimum viable product first — but hopefully not too early. When working toward your MVP, remember that the most important letter is the “V.” Your product has to work for it to gain traction in the market, and first impressions matter. A disastrous launch could set back your plans or even lead to the failure of your startup.
7. Gather Feedback and Iterate Fast
Once your MVP is live, it’s time to gather more data. This time, you’re looking for real-world feedback from your early adopters. You must use this information to update your product, and you must do it quickly, especially if it seems that serious bugs need to be worked out before the solution can find a wider audience. Repeat this cycle as often as necessary to get it right.
Build a Better Fintech Startup
As an entrepreneur, you know all too well that there are no guarantees in business. Even the best ideas, supported by the most careful planning, may fail to gain traction in the market through no fault of the founder. In fact, most businesses fail before reaching their fifth birthdays — so don’t feel bad if your first (or second, or third) idea doesn’t take off.
Just don’t let the odds stop you from trying in the first place. For every great fintech idea that didn’t quite make it through the startup death valley curve, another did. And some are widely known (and loved) today.
It really is possible to make a difference in this industry. Using this road map infused with insights from experts like Steve Streit and others, you’ll have a better chance at doing so than if you chose to fly by the seat of your pants.
