While there seems to be a new fintech startup every day, some of the industry’s expert have been studying and analyzing the market for years now. Which means their opinions matter.
Bank Innovation spoke to a number of thought leaders in financial technology and asked them for advice for future fintech entrepreneurs. Here are the eight tips they offered to those starry-eyed entrepreneurs trying to find great success and glory in financial technology:
- Don’t Challenge the Traditional Banking System. Chris Skinner, the industry seer, thinks that, with all the regulatory issues and barriers of entry, a startup won’t succeed unless they “have a billion dollars.” “Startups should create services around that [core banking system] that remove the friction, where people don’t like dealing with banks,” he said.
- Create Affiliate Services. Skinner cited two buzzy startups — Square and Simple — as examples of fintech startups that aren’t directly targeting the conventional banking system. “Take a look at Square: it didn’t attack banking directly, but attacked the friction around banking. Same with Simple,which attacked the difficulties of finance with user interface. It wasn’t trying to replace banking — that would be too difficult to do.”
- Focus on your Team. Matteo Rizzi, managing director of SBT Ventures, emphasized the importance of a solid team, saying, “make sure the team is strong, resilient, and with relevant connections in the industry.”
- Mix Your Talent Pool. The best staffers probably won’t come from the financial services industry, said Arjan Schutte, founder and partner at Core VC. Schutte. “I don’t think financial services is just about being a smart guy, there’s an incredible amount of complexity and nuance about how specific systems work,” he said. “You should be pulling [talent] from different sectors. Your team can’t just be filled with tech guys, because that way you won’t be reinventing anything.”