The rise of the fintech field has caused change in the international financial market. Therefore, after such a change, highly successful global companies began to emerge. So, how to start a successful Fintech company?
1. Identify target market and problem source
For a Fintech idea to come to life, it must address a fundamental purpose, that is, a pain point of the customer it aims to solve. A company’s fintech industry strategies will not be very functional if the business cannot fulfill this simple but vital proposition.
The founder must conduct deep and comprehensive market research to determine two things:
- A problem or challenge for which technology can provide a solution.
- A fairly large customer base for which the new product will be particularly useful.
These two aspects will be the fundamental principles that drive product development and company growth. By solving a major pain point experienced by a large customer base, a fintech product can achieve sustainability in the market and carve out its own niche for the company.
Additionally, it is important to create a solid customer persona with a deep understanding of the target market and their needs. A better understanding of the target market can help Fintech startups continually adapt their products and offerings with improvements and upgrades.
2. Create a great product or service
A great concept is only valuable when it comes with an equally great execution. Even if the idea is solid and the market exists, if the product you’re introducing to the public doesn’t address the customer pain point it aims to solve, it’s a worthless effort.
A great product development process keeps the end user in mind. It focuses on how the user wants to solve a problem, how user interactions occur, and how the product can respond more intuitively to solve the customer pain point faster.
Besides focusing on functionality, a Fintech startup must also consider compatibility. Jurisdictions around the world support different regulatory frameworks for Fintech products and startups. Laws and regulations across different institutions can seriously impact the functionality a Fintech app offers.
Therefore, startups need to carefully choose where to launch their products and what functions to offer to users. Otherwise, the intended target market may end up with a severely degraded product that fails to meet expectations.
3. Get the right financing
According to data published by CB Insights, 47 percent of startup failures last year were caused by funding concerns. This figure is double the percentage of companies that failed for the same reason in 2021.
As economies around the world continue to contract and governments focus on austerity measures to maintain stability, it will become even more important for startups to secure the right financing partnerships to weather the storm.
Note that a variety of startup financing options are available. Choose financing based on your fintech startup’s growth stage, goals and business model. Venture capital and angel investors are two financing models that Fintech startups can use to secure financing.
venture capital
If your fintech brand is classified as an early-stage company with high growth potential, you can approach venture capital (VC) firms for funding.
Venture capital firms provide financing to early-stage, high-growth startups in exchange for equity or shareholding. This financing comes from pooled funds that venture capital firms are authorized to hold.
In addition to providing financing, venture capital firms often require a member of the firm to have a seat on the board of directors to provide high-level guidance on strategy and decision-making.
angel investors
Angel investors are another suitable source of financing for fintech startups. Like venture capitalists, angel investors can provide financing, advice and support to fintech brands looking to launch. However, unlike venture capital firms, which provide financing from pooled funds, angel investors assume risk individually; This means that if the initiative is successful, they will also receive all the profits.
Choosing the right funding source early can be the difference between success and failure for a startup. That’s why it’s so important for Fintech brands to carefully consider their options before making a decision.
Note: This article is for informational purposes only. It is not intended to provide investment advice. The management of financial activities depends on the personal initiative of individuals.
