Breaking down the 4 main hurdles for FinTech companies

March 22, 2017. Stefan Willebrand.

FinTech startups looking for a breakthrough in today’s marketplace are facing a few key hurdles that I am trying to address, and offer solutions to, in this article.

Having founded, operated and sold a few FinTech companies during the last few years I have faced most of the issues that come up along the way including technical, financial, legal, operational and sales related issues.

I founded my first company in 1998 where I published stock market research online through a web based service and became a writer of some premier periodicals in Sweden. I then built automated algorithmic trading systems and set up my US-based hedge fund in 2001 before opening a prop trading operation in Sweden in 2003.

In 2005 I founded and built the company that is currently called ayondo and is scheduled for a listing on the Singapore Stock Exchange during the first half of 2017 at a valuation of $158 million.

During 2010 I sold most of my stake in ayondo and founded Bricknode to develop a horizontal financial platform to work as a “Windows for finance” in order to support any future financial services that I wanted to build. Since then Bricknode has invested over $3 million of income from customers and over $2 million through our own investments into building the platform. In 2010 I also founded Willebrand Invest (publ) where we invest in FinTech companies and can help entrepreneurs to realize their dreams within the financial technology industry.

In 2011 I built the first financial service as a vertical on the Bricknode platform in order to offer peer-to-peer lending for consumers and companies through a company group that is now called LendyTech with 30,000 customers generating more than $3 million in revenues and more than $1 million in profits.

The lending software is offered by the company called Lendysoft who is a partner to Bricknode.

So, through this journey I can truly say that I have faced most issues that a FinTech entrepreneur will have to deal with and the key challenges, in my humble opinion, are the following.

  1. Time to market due to lack of a technical core platform
  2. Lack of access to customers and early adopters to verify the product
  3. Access to financing
  4. Access to support and education

Each time I wanted to build a new service I was faced with building a new core from scratch with the regular stuff like user management, accounts, transactions and then connecting add-on services like market access, credit lookup services, quote providers…and the list goes on.

With Bricknode Financial Systems (BFS) as the core a FinTech company can get access to a number of partners as illustrated by the image below and the standard objects needed to quickly build the user facing application by utilizing our open API.

A recent example of this is Pensiono, a pension innovator in Sweden, who is using BFS to launch a whole new insurance company, Svenska Fribrevsbolaget, with a very short time to market.

BFS is offered as a SaaS product where you only pay for what you use, simply navigate to the website and sign up with your credit card and you have the complete toolkit to build your next FinTech application starting at $60 per month!

Now what?

Well, once you have built your beta version, or your first full version for that matter, you need a way to try this on customers. With Bricknode you can publish your application in the Bricknode Marketplace or ask to be introduced to a few Bricknode customers that could try your application and submit feedback to you. This way you can structure a limited live test of your service and communicate directly with a select number of your prospective customers.

The third hurdle is financing, depending on your service you need staying power, or a HUGE amount of staying power!

If you have the resources the best way is to put your money where your mouth is and fund the company yourself initially. This way you show investors that you are assuming the most risk yourself and that you truly are putting both your finances and your standard of living on the line for this dream of yours.

If you don’t have enough resources you need to look for some initial funding or partner up with someone who can help you with this. I funded my first trading operation with $1,500 from my father, had a job during the day and worked nights on my own operation before I got accepted to a government program for people that wanted to start their own companies and got a minimum salary sponsored by the government for the first 6 months.

To help entrepreneurs through this step I am using my investment company, Willebrand Invest, who can make some seed investments and together with my loan platform Kreditborsen.com (Loan Exchange) we can also offer partial loan financing.

Bricknode also has a FinTech sponsorship program where you can get access to the whole platform in a sponsored way.

Finally, a new FinTech company usually needs support and education along the way and Bricknode has a huge Knowledgebase with information of how the financial marketplace works on the inside. If you get accepted into the sponsorship program you will also enjoy free admission into the educational events offered by Bricknode and free support with your use of the platform and its API.

To summarize, me and my teams have spent the last 7 years developing a platform and support system for bringing better financial services to the market for you and I to use and we are just now offering this publicly.

Consider where you are with regards to the four hurdles and I hope you get in touch with us if you have some crazy ideas!

/Stefan Willebrand