| Fair point dang. OK: To expand. FinTech startups seem particularly prone to some form of the “the bits of a business I can observe from the outside are obviously shit, so all I have to do is re-create better versions of those & the customers will flock to me in droves & I can take over the world” fallacy. Be as positive as you like, but any proposal that doesn’t at least nod to the wider issues is going to make me instantly suspicious that the founders don’t actually understand the banking system as is, or the reasons why it’s structured that way. Here’s a small list of issues that I’d like to see covered in at least some fashion in a FinTech proposal, but are often glossed over or completely omitted. I’m sure others could think of more. * Banking is heavily regulated whilst at the same time being the target of some of the most persistent and talented fraudsters on the planet. (Paypal burnt through, what, a $billion or so in fraud whilst trying to establish themselves?) You want to be a global banking solution? You’d better have a damn good idea how you’re going to deal with fraud. * Did I mention that banking is heavily regulated? Your product brief had better demonstrate how you fit within the existing regulations. Failure to understand this will be terminal for your company (Where by terminal I mean: the execs risk going to prison and / or large fines. The SEC does not mess about.) Move fast and break things is not a valid strategy when ordinary people’s money is at stake. * US FinTech startups are particularly prone to thinking that the rest of the world has a banking system as broken as the US one. Nothing wrong with trying to fix the US system but if you say you want a billion customers? You’re going to have to take a decent chunk out of the world’s population, which in many cases already has a perfectly decent banking system: Fast same day payments, very low fee international transfers, no-load payments in foreign countries, the works. Don’t think that the rest of the world works like the US. * Every transaction is two sided - banks are middlemen - so your wonderful product had better appeal to both sides if it’s going to be successful. It’s pretty much doomed to fail if it only benefits one party in a transaction. If your plan is full of details about how wonderful your product is for people making purchases but very light on anything that would appeal to vendors (or vice versa) then I’m going to think that you don’t understand what makes payment systems successful. * Banking is as much about reputation and credit management as it is about the boring details of money transfer. What allows me to buy things at a distance without cash is that my bank stands behind me and tells the vendor that my credit is good. If your bank is going to do that for me, then they have to have the standing to do that with the vendors I wish to purchase from. Can your FinTech payment system product do this? If not, it’s going to fail. etc etc. |