Fintech startups should prioritise building trust over breakneck speed, according to Hayden Smith, co-founder of the Australian share investing app Pearler.
In an interview with The Business Of, a podcast by UNSW Business School, Smith argues for a more “patient and careful” approach. He emphasizes the importance of keeping a cool head, since “failing fast” can erode customer confidence in a field where financial security is paramount.
Be patient. Don’t quit your day job. You need to go all in on a start-up once you are the prohibiting factor in its growth. In the early days, it’s not going to be the fact for many companies that you’re the problem,
Clear communication around beta launches and other product experiments can help avoid perceptions of unreliability – but in the business of money, there is always a risk. “We release betas to our customers, and we tell them, ‘This is half-finished, tell us what you think’, and then we’ll abandon some and we’ll keep working on some. But you have to be really careful where you do that,” says Mr Smith, whose company looks after $1 billion of Australians’ money.
“You don’t know where the confidence signals will disappear. If someone’s trying to buy something and you give them a different way to buy it, and it doesn’t work, if you don’t explain it right, it makes them think, ‘Is this thing broken? Is this thing poorly managed? Is it a bad team? Am I going to lose my money?’”
Mr Smith told host Dr Juliet Bourke, a Professor of Practice in the School of Management and Governance at UNSW Business School, that transparency can help mitigate those risks. “We don’t have a massive legal team, we have no PR team, we barely have a marketing team. If we make a mistake, we email our customers and tell them what happened. If we’re doing something new, we let them know,” he says.
Mr Smith told host Dr Juliet Bourke, a Professor of Practice in the School of Management and Governance at UNSW Business School, that transparency can help mitigate those risks. “We don’t have a massive legal team, we have no PR team, we barely have a marketing team. If we make a mistake, we email our customers and tell them what happened. If we’re doing something new, we let them know,” he says. Mr Smith also challenges the notion that founders need to go “all in” on an idea to get it off the ground. Pearler was founded in 2018 but has only been in the market for two years, having initially focused on generating awareness and leveraging media exposure.
“Be patient. Don’t quit your day job. You need to go all in on a start-up once you are the prohibiting factor in its growth. In the early days, it’s not going to be the fact for many companies that you’re the problem,” he says. “I worked full-time to pay the rent. I don’t think I got a salary until three years into the company. If I went all in, like 40 or 50 hours a week, I would have run out of money and burnt out. Doing that full-time job, earning that money, helped me also pay for some things in Pearler, whilst we couldn’t move faster. That was so important.”
The Business Of host Dr Juliet Bourke – a global consultant and academic at UNSW Business School – added: “There is both great risk and great reward in the world of finance and tech, and Hayden gives a unique insight into the business of managing other people’s money on the frontiers of entrepreneurship.”
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