In today’s day and age, the financial technology industry is flooded with young enthusiasts, many of whom are still in their early 20’s lacking the experience required to start a business. But are they really entrepreneurs or merely risk-taking dilettantes?
The term entrepreneur mostly refers to an individual, regardless of their age and experience, who has a vision for a new innovative idea to break into the market, whether it’s in the fintech sector or other fields or industries. Entrepreneurs, especially young ones often overestimate their skill set and their ability to venture into the market. It is this level of overconfidence that is often what leads to premature failures.
That is not to say that many entrepreneurs aren’t succeeding. In fact, many young entrepreneurs do achieve their goals. But many fail, even if their idea is revolutionary because there are certain measures to be taken when trying to bring this idea into life. There may be no rules, but should you not do a certain set of actions as someone just embarking on your start-up, things can very quickly go south before you even get out of the starting blocks.
Dr. Eddy Teow, CEO and founder of GCG Asia: Global ComTech Gossip has a lot of say about this. He should know, having been a young upstart once and encountering many aspiring entrepreneurs in his career. “Many young entrepreneurs live in a fantasy world. They think that they can venture into an industry in which they clearly do not have a strong understanding of,” he said. “There is nothing to be ashamed of if you are ambitious, and I am not saying that young entrepreneurs should not jump into the industry, but what I am stressing on is the importance of exploring the industry before jumping into it. Do your research, try to network and speak to others in the field, so you can learn from other’s mistakes,” he added.
We’ve seen the damage it can do to the spirits and confidence in young entrepreneurs when things do not go their way. That is why our team here at GCG Asia surveyed fintech business leaders and compiled their responses for ideas for how to get a head start on your entrepreneurial journey. So here’s a few tips on what to avoid when starting a new fintech business.
Don’t RushThings, Take it Easy.
It sounds simple, but really it isn’t that simple especially if you’re young and ambitious. In fact this should be the first step for a successful start to any business. Just breathe, take a step back, and realise that what you want will not come quickly. Everything takes time and effort. Though you might be tempted to barrel ahead, for every step you take, you must ensure that time and resources are met to reach set goals and the desired level of quality you and your team want to achieve. Planning and forethought are essential.
Don’t Skip the Regulations
As we all know, the financial technology sector is heavily dependent on regulations that are constantly changing and evolving. The internet for example, has only been around for 20 years, and people are still learning about it. Current debates on regulatory frameworks in fintech are also constantly changing. It’s crucial to keep abreast with current developments on this within your context as it is important to comply with such regulations and to also work with authorities if necessary measures need to be taken.
Your business should be transparent with the authorities on consumer protection and have the necessary legal processes to comply with legislation. There are always opportunities to work with cybersecurity firms and law firms to ensure that your business is running accordingly to avoid any sort of future hassle that could heavily affect your business. GCG Asia founder Dr. Eddy Teow says this is a very important aspect to take note of and to face head-on. “Perhaps the most challenging aspect of venturing into the financial technology industry is to comply with regulations, and to enhance cybersecurity,” he said.
Don’t Ignore the Technical Challenges
Many fintech startups are extremely buggy and messy. You see, an idea is one thing, but bringing a digital service or product to life is a whole other thing. You will face technical difficulties, but do not underestimate the amount of time and work it will take to resolve these issues. Especially if your product or tech is a super ambitious one. We all want to make the impossible possible, but you should also consider what could be possible in a technical sense. Devote ample resources towards this area by getting the best talent and the best minds you can to help you.
Make sure you address any technical issues that you could potentially encounter during the execution phase. It is always better to plan ahead so you could be more prepared, but challenges are very unexpected, and you might not see it coming sometimes! And if it ever happens to you, don’t sweep it under the rug. You must address it, and not hide your head in the sand.
Know Your Audience & Client
This an important one, many have fallen into this trap. It is such a common mistake many entrepreneurs fall into, luckily we are here to help you address it. Know your client! Know your audience! You can’t just expect them to like your idea just because you think it’s great. Your idea must be based on other people’s legitimate needs, to fill a gap in the market in a way that ensures a satisfactory experience for your client and audience.
That is why you must strategise pursuing the right client and the right audience. There must be a mutual understanding between you and your clients. It’s all about finding the right niche and to have a clear understanding of who your target audience is.
Aim for a Positive User Experience
Perhaps this is regarded as the most important thing to pursue. It is not all about making money. There is nothing wrong with wanting to make money, but you can’t have a successful business with your customers having a negative user experience. It is super important to generate a positive user experience in order for your business to grow. Take customer feedback seriously and do not let harsh criticism and negative feedback get to you. User feedback is extremely important for the success of your business, and for you to get to know your client and audience better.
As GCG Asia researcher based in Singapore Carmen Chan explains, “Customer experience is considered the most important success factor in any business, but most importantly in the fintech industry as technology is meant to make things easier and more efficient, always aim for improvement even if the product and service is already in good shape, always try to think of new ways to improve the user experience to reduce the roadblocks consumers may face when using your product or services”.
Your next “Big Thing” is Probably your next “Big Failure”
You see, if you think your idea is great, don’t let it take over your head, have some common sense, many of us could get distracted from reality by thinking of extremely unrealistic goals. There must be a balance between “big tech” and perceived “big practice”.
The element of risk involved in transforming revolutionary ideas into reality is extremely high. Take for example writing a new application in a different language that is not being used in the market today. Do you see the risk involved here? Even if this new language could help you reach what your intended audience, you must consider the risks involved in drastically going against conventional rules. That is not to say that you can or should always conform, but just understand the risks that are involved if you wish to do so.
Don’t Forget, You are Only Human After All and So is Your Team
Impactful digital products and services can never succeed without the right team in place to help you achieve your goals. Remember that you are dealing with humans that need to be nurtured. Be kind and understand their passions and flaws. Try to designate the right task to the right person, do not overwhelm them with work that they should not be doing, or else be prepared to face a drop in productivity and morale.
Remember that your business is your responsibility at the end of the day. You must identify new growth opportunities and understand the fierce competition for talents you face in the fintech industry. Building the right team that truly identifies with your vision and are on the same page as you is the necessary step to keep your business on the right track.