“Canada is a leader in this marketplace and most of you have no clue about the awesome companies that exist in Canada.”
Those were strong words from Financeit co-founder Michael Garrity, who was the keynote speaker at Product Hunt’s first meetup of the year focusing on FinTech innovation in Canada. In a packed room that’s come to be expected of Product Hunt events, Product Hunt organizer Daryna Kulya hosted FinTech enthusiasts gathered at Pivotal Labs, who waited to hear from thought leaders on how to survive in the most regulated industry in the world.
While startups have been quietly innovating the FinTech industry for years — Garrity has been in the game for 15 years, including during the 2008 financial crisis — speaker and author William Mougayar said that it’s only now that banks are starting to feel the pushback from customers moving away from traditional services. “Startups don’t go head on with big companies. They go around, they go under, and then quietly before you know it the startup is a big company and then the banks start to feel it,” he said.
Garrity said that FinTech is extremely tough because companies have to stay constantly vigilant about regulations, admitting that legal advice is a constant reality for his companuy to this day. But when properly scaled, “You can leverage technology to make processes easier,” he said. “You can leverage technology to get where lots of financial institutions can’t get, you can be simple, fast, and easy, because you’re smart and you build quickly and you’re nimble.”
But FinTech startups need to take an important cue from big banks: establish trust, and emphasize the secure nature of everything that’s happening. It’s a lesson that Borrowell co-founder and COO Eva Wong, who was among one of three startups pitching their company, learned when Borrowell’s application process for loans was so fast customers didn’t trust that the platform was working properly. So the team ended up adding an extra 10-second ‘loading screen’ to give customers a better sense of the platform ‘working’. “The lesson for us is that more isn’t always more, and faster isn’t always better,” she said. “There is a huge element of trust and our customer isn’t necessarily people like us who are interested in product. It’s regular people.”
Conversely, Plooto founder Hamed Abbasi — whose company was among the CIX Top 20 last year — said that it’s also important not to get too caught up in every customer’s suggestion. “We kept building everything that people asked for, and we never paid a lot of attention to growing the business or building a sales plan or marketing platform,” Abbasi said. “We would just build, and that really affected the growth until our investors asked ‘What the hell are you doing?’”
My favorite segment of #ProductHuntTO, the panel discussion. Decades of #wisdom in 15 minutes! Thanks all!! pic.twitter.com/axFl9lbwyN
— Allan Neil (@allanneil) February 5, 2016
Mitchell Gillespie, head of product at Street Contxt that recently raised an $8 million Series A, said that early-stage startups need to focus on one of two things: either revenue or growth. “It’s extremely tough for startups that are already small and nimble and taking risks already, to try and do both at the same time. So get a line on that and execute as hard as you can,” he said.
As financial services companies regularly make moves to open up their technology to startups and partner directly with FinTech startups that are getting traction, the FinTech market is an attractive one for startups looking to cash in. But Garrity, whose got an equity financing round from Goldman Sachs and a $13 million Series A under his belt, warned that it’s not one to be taken lightly — and not one where you’ll often see the cliche story where a dorm room idea turns into a million dollar company.
“This industry is hard for a reason, it’s filled with regulatory challenges that will kill you unless you’re smart,” said Garrity. “This isn’t something you do in your basement. the implications of things you do and innovate are significant in the biggest, most regulated industry in the world.”
Photos courtesy Brian de Rivera Simon (@tarsipix)