Find your inner unicorn
Through the first-hand experience of growing two unicorns and three centaurs, the team at Cubed has navigated the challenges, pivots and pitfalls of growth and come out on the other side, successfully. Here are 9 common things to watch out for which can derail a business with huge potential – and if managed effectively, can lay a path for great success.
Customers – create a cult of customer. Too often, customers count in the early days and as you grow, you habituate and take those early customers for granted. A new generation of leadership joins to scale your business and the early, loyal customers are dismissed as too small or not strategic. Your customers don’t see it that way. Every customer counts, every customer has the potential to advocate for you and bring you more customers - or harm your reputation. Customers must come first, always.
It is all about value, get it right and demonstrate that value over time. Adapt, learn and improve with your customers to keep on delivering those things that matter to them and they will stay with you, buy more and advocate on your behalf.
Product – without product, there is no business. Once you have found product/market fit, listen to customers. True, product and engineering teams like to tinker and invent but the bulk of your roadmap should be defined by listening to customers – incorporating requests for change and their broader feedback for new features or new categories all together. The intelligence comes from a roadmap that optimises for differentiation, customer needs and regulatory compliance. Where capacity in the product and engineering organisation is capped, reduce geographic coverage and focus. This may slow down growth but you will find your sweet spot, flood it, and win.
People & Culture – avoid psychos, empire builders, upward managers and narcissists. Sounds obvious - right? You need people who want to build something with you, committed to the cause, will listen and adapt and see change as an opportunity, not a threat. Culture is created through action, not powerpoint; the virtues of modern leadership and leadership potential need to be intrinsic to the people you hire. It takes only one virus to cause a pandemic. Screen, screen, screen and settle for nothing other than unicorns. Be slow to hire and fast to fire.
Market & Competition – this might sound counterintuitive but ignore the competition. Discover what you are great at then execute. Growing a fintech to unicorn status is primarily about the ability to execute, cohesively as a team and decisively. So if your competitors do something similar to you, win through execution while respectfully observing their progress. But never let their success or developments become your template – you get distracted, lose your niche and end up tripping over yourself. Find your niche, execute (which includes the all-important pivots) and ignore everyone else.
Focus – apply the rule of one. Choose one thing, do it brilliantly, don’t get distracted with other ideas until your flywheel is running at 100mph. Then pick one more thing to do – create a start up within a scale up. But be highly selective, be clear on where you have the right to play and right to win and don’t go off on tangents. Seed to Unicorn wins through excellent execution, not a portfolio of great ideas that are hard to pull off and distract the company from the day job.
Finance & Performance Management – a critical control function, providing checks and balances between departments. The CFO should be the arbitrator and, however unpopular to those departments wishing to splash cash or pay large commissions, smart money management will take you a long way. That said, Finance teams need to have industry knowledge, they should not direct the strategies of other departments and should not hold up decisions – but they should provide rational, knowledge-based, considered challenge and be empowered to stop outlandish investment decisions. They need to know the product, know the market and know the industry otherwise their value-add is significantly restricted and limited to benchmarks in a spreadsheet with zero context - what happened in their previous company or how peer groups may appear through publicly available numbers, may not be relevant to the reality.
A CFO that insists on printing in black and white rather than colour is of no use. But a CFO that stops a deal from being signed because it is loss making, or who forecasts that the target segment will undergo structural changes in 12-18 months and so drives a change in strategy – they are worth their salt. A CFO should be neither Jedi nor Sith – they are the balance in the force.
Pricing – the era of ‘grow at all cost’ seems to have come to an end and people saw this coming in late 2021. With higher interest rates, money will be harder to come by in the near term and valuations will be much lower. This means that you have to do more with less. Unit economics become more important than ever before. This means that different pricing models need to be experimented with to optimise for profitable revenue.
It is worth looking at versioning for different segments. Versioning also keeps the messaging simpler to the market to assist with marketing and sales teams. The pricing strategy (and proposition design) becomes more important during times of economic uncertainty.
In the end, it comes back to value. Sell on value, not on price. Deliver high value to customers in line with their business strategy and that will protect the unit economics, make sure you retain those customers and open up the long term expansion and loyalty of each segment.
Partnerships – no one knows what to do with modern partner ecosystem functions. Depending on your stage it could be an executive position - Chief Ecosystem Officer - or through the Chief Revenue or Growth Officer. At every stage it needs the CEO’s headline focus as a way to win and deliver sustainable growth.
Beyond reselling, ecosystem-led propositions, technology developments and strategic referral alliances can secure millions of dollars of hard and soft investment once unicorn status is in sight and unlock opportunities in the market. The potential is there, right from seed stage.
Partnerships run through the fabric of the organisation and every fintech company operates through an advanced multi layered ecosystem - you need to make it work to drive success for you, your customers and your partners and that needs to be someone’s job and a priority of the CEO.
Operating Model and Org Design – unicorns are like lungs. During good times, you take a big inhalation of breath and the company expands. When things get tough, you breathe out and the company gets smaller. The critical part is to understand the essential needs from various functions and organise accordingly...and know what to cut back to, when times get tough. For global unicorns, having central functions is the most efficient way to scale as you become more immune to rises and falls in the economy. Local presence, of course, is critical but functions such as engineering, product, partnerships, customer success, revops, finance, marketing (etc) should all be centralised. A fintech unicorn is not like HSBC or Google with very mature, localised needs. A fintech unicorn needs to maintain the philosophy of being bootstrapped while fighting for its path to profitability and an exit. Efficiency is king.
This is not an exhaustive list but some of the more common problems we see. The team at Cubed has navigated through these errors and helped course correct fintechs to achieve unicorn and centaur status.
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Email: contact@cubed.team