Mar 19, 2020
Paving the Road to Internationalization
“There is no power for change greater than a community discovering what it cares about.” – Margaret J. Wheatley
Can you remember the day you opened your first bank account? Did you walk in with your parents and 20 CHF in your pocket or did you opt to go alone in a lapse of adult bravery and a hefty envelope of years worth of birthday money saved?
Regardless of the motive, if you’re like me, you’ll remember being a bit nervous and being washed over by formalities while walking in through the heavy bank doors. The physical space alone suggests high security and that something important goes on behind the glass. And in so, our experience is also inadvertently draped with a coat of mystery.
Even now, after over 15 years in the finance industry and having had access behind the scenes, I can’t help but feel a deep divide between client and bank. In many ways the mystery is intentional, the same way you expect your doctor to wear a white coat, you expect your bank to give off the impression of importance, value, and security.
However, it is unfortunately also a way to hide large fees behind complexity. The financial jargon that bankers like me speak makes it hard to connect with finance and often puts people off before they even get started. The result is that a lot of people mismanage their money – or don’t manage it at all – with severe consequences for their financial future.
Ultimately, we saw how difficult it was to get proper banking advice without being a millionaire and therein the digital financial advisor Selma was born: with the mission to give people the advice they need without all the hurdles they would face in traditional finance.
You might have already heard that you shouldn’t ask for money but rather ask for advice first which can then turn into money. Well, after some time trying to build a product around my own impressions and experiences of the needs in the finance industry, our team decided we were better off to apply that clever logic to the product itself. In our case, this meant asking potential users for feedback, to first build a community and later turn this community into customers. Focusing on our community allowed us to build a product around real-time community needs rather than a likely biased and not representative idea.
We started with the hypothesis that personal finance is a mystery for the majority of people and the customer experience could be massively improved from what people get at the classic brick and mortar banks. In formulating this hypothesis we realized that the person who would best connect to our product was more likely to be someone detached from the industry rather than an industry expert. We stopped asking all my banker-friends for first hand feedback and explicitly connected to people outside the financial industry to build our community. People that likely face the problem of not being able to connect to the current way that the industry speaks to them.
We started by researching companies in the field of advertising, marketing, design, technology, consulting and directly reached out to their employees through email or LinkedIn and invited them to get involved in shaping our product. Also, we started running ads on “outside the box” services like Reddit (which, interestingly, got us some negative feedback as well, as we were the first company advertising on Reddit in Switzerland and therefore spamming a previously ad-free service with our ads).
In the end, we had asked thousands of people what they don’t like about how personal finance is built, how it feels for them, and what would be important to them. This resulted in more than 300 instances of personal feedback – some of it several pages long and even including first mockups drawn by our potential customers. In sum, we had not only built extensive valuable research but also first excitement among people who were willing to contribute to our product.
Looking back, I think our approach worked so well because we personally invited people to exclusively test a product and be part of it. Where banks had created a curtain of mystery, we were inviting people in. Only after the direction was clear did we go to talk to industry experts who knew which skills we would need to launch the platform and to solve the rather technical financial algorithm and regulatory questions. Those are of course important too but might not be very close to our customers’ hearts and interests.
Although our initial approach was to build a product around my own experiences in finance and perceived needs, following an expert → product → mainstream flow, what ended up working best was starting in the mainstream and working our way back. We started by inviting people to take part, test, and continuously pushed for open and honest dialogue around the product and value proposition (https://open.selma.io). Thereby the customers have become an integral part of building our product. Everything we built is tested in our contributor community first, we co-design with clients at our “Wine & Design” events and the feedback and feature wishes that people share are an important part of our development prioritization.
All of this requires a high level of transparency, it has to be at the core of our product, and also our company. We share our product development roadmap with our clients so that they can comment on it openly. All the feedback, critique, feature requests, and information flowing in is always available to each employee at any time. That way, the entire company can act in a continuous exchange and an ongoing feedback loop with its customers and environment.
Having people involved and creating a community around our company and the product has also turned out to be a great growth driver for us – because personal connections create trust. Starting with our friends, their friends and then their friends, our clients kept inviting and recommending Selma to people in their network in a personal and trustworthy manner. Until now, almost every second client has found Selma based on a recommendation.
While we keep building the product based on our community we also strive for a community approach which can bring fun and warmth into a traditional cold marble industry. A great example for that are our community events in unconventional locations or the “Secret Santa” initiative that we currently organize among our clients where already more than 100 of our clients send each other a surprise Christmas gift.
My advice to anyone venturing into the startup game is to involve your network, share your ideas openly, and get feedback on your thoughts early on. There’s something to learn from every interaction. Asking questions can give you insights, lead to the next valuable contact (be it an employee, advisor, or investor), or like in our case – help to build excitement and a community around the product.
Focus on your customers first while taking the advice of industry experts with a grain of salt (unless they are your customers). By building a product that your customers love, are excited by and caters to their needs, together with enough perseverance on your side, the financial return and investors should organically follow. While doing so, don’t get lost in your own great ideas, be sure to challenge them / let them be challenged continuously. An honest exchange with your community of clients is a wonderful tool for that.
Patrik is the founder of Selma Finance, banker, financial analyst, and improv theater player. Before founding Selma he had a 10+ year career in the Swiss wealth management industry as a portfolio manager, financial analyst, product manager, and client advisor for wealthy clients. He holds a BSc in Banking and Finance from FHNW an MSc in Economics, Language and Culture from Copenhagen Business School (CBS) and is a CFA charterholder.
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