Three pillars for launching a successful fintech product
Launching a successful fintech product (or any product, for that matter) requires leaders to solve three challenging problems. No wonder the author of The Innovator’s Dilemma, Clayton Christensen, estimated that about 95% of products, regardless of the budget invested to bring them to market, never produce an ROI.
The first problem a company must solve is product-market fit. Does your target customer desire the product you are offering badly enough to overcome their purchase anxieties and the powerful inertia of their current habits? Solving for product-market fit is challenging all on its own, and is made infinitely more difficult because entrepreneurs underestimate the difficultly of achieving product-market fit, hastily making assumptions about their customers and mistaking reassuring feedback from friends, colleagues, and even investors as true market validation.
Though it is difficult to achieve product-market fit, the process for doing so is straightforward.
First, identify a target customer base and study them closely. How do they behave? What progress are they trying to make? What is holding them back? To assure themselves customer research is not necessary, entrepreneurs often repeat the “faster horses” quote from Henry Ford: “If I had asked people what they wanted, they would have said faster horses”. First, there is no evidence Ford ever said this and second, even if he did, asking customers for a solution to their problems is not the same as asking them about their problems. The former is likely a dead-end, where the latter can produce sheer gold. Once you understand your target customer, identify a ‘hair-on-fire’ problem that is not already solved by a product on the market. Finally, devise a creative solution that solves for the problem, while also addressing the target customer’s social and emotional needs. Strategy frameworks, innovation workshopping, and competitive analysis can all be used to produce needed insights throughout the process.
Even after a product achieves product-market fit, it may still fail for one of two other reasons: poor product design and low-quality construction.
For fintech products, this means a poor user experience (UX) and subpar software engineering. In order of difficultly, many entrepreneurs assume that software engineering is the most difficult and pressing challenge to solve, followed by product design and, if they are even aware of the challenge, product-market fit. In fact, that order is exactly reversed. Product-market fit (and the marketing needed to generate visibility) is the hardest challenge, followed by product design and, finally, product construction.
While product-market fit is the most difficult challenge to solve, many fintech products do overcome this hurdle only to have their adoption (and revenue) held back by poor usability. In some cases, a product may be launched through a ‘concierge model’, where a company over-invests in manual customer service to validate product-market fit. While the concierge model is an excellent way to launch a product, it is difficult to design a self-service user experience that outperforms the customer service a human can provide.
Fortunately, the process to solve for usability is even more straightforward than the one to solve for product-market fit.
First, objectively assess the product through usability testing and a heuristic evaluation. Usability testing is done by observing your target customers (both current and prospective) attempting to use your product. A heuristic evaluation is conducted by an expert UX designer using the ten (10) usability heuristics defined by the Nielsen-Norman Group. Second, produce a new set of UX designs that solves for the problems identified during the first step. Finally, validate the new UX designs through validation testing, whereby UX designers observe end users attempting to use the new designs to complete tasks.
To learn more about how Praxent solved the usability challenge for an insuretech startup, resulting in $3.5M in venture funding, please read the MyHealthMath case study. To speak with an expert about solutions for product-market fit, product usability, or product construction, click here to book a meeting.
Praxent is a fintech design, engineering and implementation partner with over 20 years of experience. Specialized in fintech, banking, wealth management, lending and insurance, the team has strong expertise in user-experience design, security and compliance, technical strategy, agile project management, implementations and core banking systems.
As a UX/UI design partner, Praxent conduct research that results in working prototypes, so you know exactly how to design an exceptional experience at every stage of your customer journey.
If you’re interested in partnering with Praxent to deliver world class customer experience design, robust integrations and thorough implementations with a focus on client service; schedule a call with us here. Or email [email protected].