Problems Faced by Fintech Startups in a Two-sided Marketplace

The potential of fintech startups to upend established financial services and offer superior alternatives is truly amazing. They can also open up new markets and opportunities.

Starting a fintech company can be an exciting venture, but it also comes with its own set of unique challenges. As the Head of Product of a fintech startup in a two-sided marketplace that offers customers a new payment option, I personally witnessed the challenges associated with developing a fintech business.

Finding B2B clients first in order to test an idea

It can be difficult to find B2B customers to test a fintech startup's concept. This is particularly valid when a brand-new or even unreleased product.

Consider conducting market research to find potential customers. After locating potential customers, you can start pitching your idea and getting feedback. The product can then be improved using this feedback, making it more appealing to potential customers.

Networking: Contacting potential customers through personal connections is a way to achieve this. Going to industry conferences and events can give you the chance to meet potential customers and learn more about their needs and pain points.

Social Media: Utilising social media and other online platforms to connect with potential customers is another strategy. This can involve joining pertinent LinkedIn groups for your industry or contacting companies in a specific sector or area with targeted ads on Facebook and Google.

Cold emailing: Cold emailing can be a useful tool for a fintech startup to find B2B clients. For this approach to work, you must research potential clients and personalise your emails. You should demonstrate a genuine interest in the client's business and how their product or service can address their pain points.

Keep in mind that it may take multiple attempts to get a response from potential clients. But, by tailoring the email message and targeting the right audience, you can generate leads and find B2B clients to test their ideas with.

Partnerships: It is also important to consider partnering with other businesses or organisations that serve the same target market. For example, a fintech startup focused on providing lending solutions to small businesses could partner with a small business advocacy group to gain access to potential clients and build brand awareness.

Users are blind to the many payment options available at checkout

With so many payment options available to consumers today, users can easily become overwhelmed or "blind" to the available options, leading to reduced conversion rates and lost sales for the fintech startup.

To overcome this challenge, you must consider advertising your product much earlier in the user journey. An effective way of doing this is by creating a comprehensive content marketing strategy that not only generates awareness and interest in of your product but also establishes your brand as a thought leader in the industry.

This can involve creating blog posts, infographics, and other types of content that educates users on the benefits and features of your product. To get the most out of our budget, we built good relationships with our partners and distributed content through them, benefiting both businesses.

Fintech startups often use targeted advertising to reach their audience at different stages of the user journey, such as when they are researching solutions to their problems or evaluating different payment options. By taking a proactive approach to educating users and building brand awareness, you can increase the likelihood that users will choose your payment option at checkout.

People don’t yet recognise they have a problem

Being a pioneer in solving a new problem can be both an advantage and a disadvantage. On the one hand, it allows you to explore uncharted territory and be the first to discover new solutions. On the other hand, it can be difficult to get others to recognise the importance of the problem until a solution has been found. This can make it harder to attract funding, gain support, or get others to join in the effort. However, by staying focused on the big picture and communicating the potential impact of solving this problem, pioneers can inspire others to join in the effort and help bring about real change. In the end, it is often the pioneers who make the biggest difference in the world.

Putting a spotlight on a painful problem that people don't yet recognise as a problem requires a combination of education, social proof, and targeted marketing. By creating compelling content, showcasing success stories, and using strategic marketing campaigns, fintech startups can generate interest in and adoption of their solutions.

I hope this helps! Enjoy the ride and keep experimenting.