The what, why and how.
Note —
Before we begin, there is something I should share.
This is an experiment, and I would be building this business in full public view — regardless of how things turn out. What does that mean? It means that I would be posting daily (or at least every alternate day) updates on what we are doing, and how is that working out for us — right here on medium. As much data as I can publicly disclose. Whether things work out well or not, I would be baring it all.
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Let’s have some fun, shall we?
My Quora bio for the topic “Entrepreneurship” is “Want to be an entrepreneur. Be willing to learn on the job”.
That is something I firmly believe in. That is how I learnt most of what I know and do today. I practice what I preach.
There is some more backstory here, but maybe we will go through it all some other time. For now, let us just skip through all that and jump to the point.
Yesterday we decided to start something in fin-tech. One of us was supposed to do some basic research that would have helped us narrow things down to possibly identify what could we work on. Unfortunately, he folds worse than a cheap suit. Lucky for him, it wasn’t Oliver Queen he was dealing with.
“You have failed this city.” — God, I can’t even think that in a normal voice.
So, let us see. We will try picking up a business segment today, decide on the plan of action etc.
Here goes nothing.
There are five things that we needed to identify first. We had already established the business segment as fintech (don’t ask me why fintech just yet), and the geography as India.
#1. The sector : Fin-tech
#2. Geography : India (to begin with)
#3. Product : <yet to be determined>
#4. Target audience : <yet to be determined>
#5. Marketing approach : <yet to be determined>
So, let us start with the product. What is it that would the business do. What is the problem that we’ll try solving. We started looking at some of the things that could be interesting, challenging and meaningful — both personally, as well as for our consumers.
SOME OF THE THINGS WE COULD DO.
#1. PEER TO PEER MONEY TRANSFER
Pros:
- Good space to be in
- Highly lucrative
- Has possibilities of quite a lot of innovation
- Runs on the foundation of convenience — a great value-prop
Cons:
- Relatively crowded now. Paytm, Citrus, Mobikwik etc. are already there. With Bhim, the govt has also entered the space. And for a while now I have been waiting for Whatsapp to foray in this domain. The real game will begin when and if that happens.
- Product development would be a long cycle
- Needs strategic alliances
- High CAC
**Verdict : May not be the best thing for us to get into.**
#2. CROSS — BORDER PAYMENTS
Pros:
- Scope for a lot of innovation. Traditionally this space has been dominated by Banks and players like Western Union. The problem is that they are all too slow, and often expensive as well
- The remittance market is a $600 billion dollar one. #Cha-ching
Cons:
- Product development — complex, long, tedious.
**Verdict : May not be the best thing for us to get into.**
#3. PAYMENT PROCESSING
Think Square. The space is exciting, and with the huge mesh of unorganised sundry businesses and business owners, the potential is huge.
But the space hasn’t seen much of an innovation since Square. We have mswipe and other companies in India, who are just trying to replicate what Square did in the US.
We’re very European-focused we are in totally different markets compared to Square…we are quite a different company
— Jacob de Geer, CEO — iZettle
Yeah right!
Not to mention, product development would be a nightmare, take quite a longer route and then there is the huge network of businesses that will need to tap into.
Also. I am a firm believer in taking this offline. If you can allow processing of payments offline — using smartphones, then you are cooking. And that really opens up the space. But that product would be even more complicated.
**Verdict : Not the best thing.**
#4. CLOUD BASED LENDING
Match investors to small and medium businesses, and you are cooking. You’re creating opportunities for businesses that had to rely on a single line of credit — from banks. Space is huge, has quite some promise, and there can be multiple variants.
For startups, you can use the same ideology for startup funding as well — at least at angel and seed stage. It doesn’t matter how much can you afford to invest, if you have wanted to back a startup, you can now do that.
For education, it could be a great tool for education loans. I have come across a few institutions that offer education loans (both secured and non-secured) to students pursuing higher education from a select-list of schools. Why a selected list only? The people backing these loans were alums of those schools. Maybe their way of giving back to the community. It is interesting, has novelty and a good approach.
**Verdict : Interesting, but I am not 100% sold.**
#5. ACCOUNTING SYSTEM
**Verdict : No**
Yes. I am not even going to go into the details here. Just a No. Tried thinking of one few years back. Too complicated a process. Not to mention the fact that unless you can integrate real time and rich transactional details from banks, cards etc, there isn’t much value that you are adding.
#6. TAKING INVESTMENTS ONLINE
This — I like. Personal investments — be it for capital gain, or as a measure to reduce your tax liability. Why do I like it? More than the capital gain, people see ‘investment’ as a way to increase their take-home income, reducing their tax liability as much as possible. Be it your house rent allowance or any other item, as long as it helps you save some tax, you have heard of it.
Pros:
- Instant connect!
Cons:
- Too many players
**Verdict : We have a winner. Will need to do it better than others, but can be worked out.**
#7. TRADING
Something I have been quite interested in.
The whole process of trading in the financial markets is complex, tedious, mind numbing and mystical. Arming your average joe with the tools to make things simple would be something fun and extremely satisfying to do. Can have a gamification approach to things. This has always excited me.
**Verdict : The right thing to do. Not the right stage to get into it, though. So, with a heavy heart — No!**
AUDIENCE→✓… PRODUCT →✓ (ALMOST)
Since we have the space identified, we can zero down on the audience. Your average working class population.
To begin with, the low hanging fruits. People working in metros, with large businesses and organisations.
So what should the product be?
- Ideally it should be the platform that helps them with all their tax planning and investments
- It should be able to do it all in a completely painless way
- The information and process flow should be in such a way that does not end up overwhelming the customer
Nutmeg does something similar — albeit with a different intention. Slightly.
Will we require licenses, permissions etc?
Yes. Tons of them. But we don’t want to get into that right now. So for the time being, we will be working within the parameters that eliminates the necessity to have those licenses.
NEXT STEPS?
- MVP, of course
- Building a community — one that is engaged and connected to the system
- <
_still in the works_>
WAIT. WHAT ABOUT FUNDING?
Funding? For what? We don’t have jack-shit right now. All we have are these words, and it did not take me long to write even that. We will think of funding once we have an engaged community who can testify to the claim that we ARE adding value to their lives. Till then, let’s not waste our time chasing dollars. Let’s chase our audience instead. ;-)
MVP? WE ARE BUILDING A PRODUCT?
No. We are going to start with something that will lead to the product at the end of the current course. This is just phase 1 of the overall journey.
What will be our current product?
Ssshhh… That’s a secret for now. ;-)
So what will the current thing look like?
Just informational. We would be giving relevant and contextual information to our target audience; and gradually start building different pieces of the product.
How will we do that? We will keep on updating our journey here — every single day.
Let’s have another look at our list now.
#1. The sector : Fin-tech
#2. Geography : India (to begin with)
#3. Product : Bang for your buck!(Maximising returns for your investments / Intent-based investments)_Starting with investments done with the intent of maximising income and reducing tax liability_Good god that's complicated. We will simplify it later.
#4. Target audience :(1) 22-27 year olds. Looking for tax saving(2) 27-35 yr olds. Looking for long term investments + intent based savings (a holiday, a car, a house, pre-planning for kids' education)(3) 35+ yr olds. Long term gain. Maximising wealth.
#5. Marketing approach :(1) Start with facebook - the community will be built there(2) Focus on just segment 1 of the target audience for the time being.(3) Create and curate meaningful content relevant to their goal(4) In addition to building a sizeable following on facebook, (a) Build a strong email list (b) Drive pre-registrations for product launch.(5) No facebook ads for the first 2 weeks. However, both ads as well as organic content would be served to a custom base only - the content tailored on those metrics.(6) We will pick up one more social media platform - probably Twitter. Instagram/pinterest don't seem relevant. (Will need to dive deeper before dismissing instagram entirely)
Looks like we are all set. This should be fun, I hope.
That’s it for today. See you tomorrow.
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