Came across a post on LinkedIn indicating that many Fintech companies aspire to be Tech Service Providers (TSPs) and are transitioning towards a B2B SaaS model. The reasons cited were:
🔹 The Funding Winter
🔹 Strict RBI Regulations Impacting the Fintechs
🔹 Cut-throat competition impacting the volumes
🔹 Lower/Irregular margins in the B2C model
🔹 B2C becoming risky as bigger players are either entering or consolidating
🔹 Rise of Super Apps
Having closely followed, observed, and interacted with 15 B2C Fintech Founders/Co-Founders in the last 30 months, here are some takeaways:
🔸 Good sellers to investors but they lack an understanding of the demand of their customers, leading to poor perception of their TG.
🔸 Forced to undergo multiple product changes (based on market feedback) and then try to find a cash cow which turns out to be a lending instrument(tried and trusted) in most cases instead of their Hero Feature.
🔸 Seek explosive growth, often driven by funding or investor pressure.
🔸 Willing to spend a bomb on Ads for revenue generation, and want ROAS to be 2X, 3X, and 5X like its unitary method of Mathematics thus unrealistically expecting from the Growth Team and unsettling them.
Also, interacted with the Head of Marketing of a BNPL player for whom acquisition was never a problem(kudos to him for rightly identifying the user-acquisition medium), they had never spent a Rupee on acquisition rather every month they were adding users in 5 digits, they were sourcing all the users by default from one of the leading e-Commerce player(if you follow the top players, you will get both the name of the e-Commerce company and the #BNPL player)
Regardless of being a B2C or B2B Fintech player, it’s crucial to address these fundamental questions:
a) Every user loves free/cashbacks/discounts. If your Product looses customer or not able to acquire new customers after the offer period is over, then you don’t have a product at all. Now, the critical question, Should you launch the product with or without offer?
b) Who is our target audience? What will be the confirmed pessimistic sales volume? Who will buy my product?(never get carried away by the Market Size)
Reflecting on my experience with #MarkStrat, a simulation game, companies that invested in research consistently succeeded. However, in the #Fintech sector, spending on:
🔹 Product Research (occurs)
🔹 Market Research (negligible compared to overall Marketing spend) is often lacking, relying instead on the opinions or convictions of the founding team or a group of friends to begin with, if at all they do, its mostly a questionnaire.
Very rarely seen #Fintechs hiring a proper #MarketingResearch professional, investing in Consumer Research whole-heartedly and not out of compulsion.
There are Professionals who had done PhD in Market Research but we don’t use them.
Other industries do have strong Market Research Teams.