CEO of Nerdwallet, Tim Chen, Speaking to VC in San Francisco
Even though Home Depot moved on from its slogan of “Less Talking, More Doing” I’ve been thinking about that statement in the context of FinTech. There are so many conferences and places to network, it’s easy to spend too much time listening to experts versus doing the hard work of growing a business.
Reinforcing this, Level 39’s Head of Ecosystem Development, made this point at SIBOS last week in Singapore (see tweet).
It’s not that events are a waste of time – it’s just critical to focus on what you do at them, i.e. focus on learning and giving back to partners and others.
As CoreVC‘s Kathleen Utech said, events like Money 20/20 are valuable in part for one-on-one conversations you set up, so make sure you plan them.
Buzz vs. Buzzkill
While there’s still a lot of buzz associated with financial services tech startups, with the latest news being the planned IPO for Square, a successful Los Angeles-based private investor in FinTech told me, “I’m sure a good percentage of startups with huge private valuations will never seen a liquidity event.”
We agreed that well-known startups are suspect, especially in some categories, e.g. robo advisors and online lenders. I’m bullish on the big names in the startup space, such as Prosper, but wonder about the second and third tier.
I recently sat down with Ron Suber of Prosper the other day and talked about innovation. I think the BillGuard deal was a very smart move. Prior to meeting him, I’d read the Stanford GSB Case Study on Prosper. It’s striking to see the similarities between today’s fascination with FinTech and the earlier euphoria over E-Loan in the period during the last dot-com boom.
I recommend the case study to see the difference between a good idea and execution, and the key role of regulators. Another important lesson is that VC’s are not the final answer: It’s up to you as the entrepreneur to make smart decisions.
Being Smart: Investing vs. Paying the Price Later
I saw Bill McKnight, Head of Product and Technology at RealtyMogul the other day. It was interesting to see the energy of the office, which was quite different from offices of places like Prosper, which have more of a tech company environment.
The office atmosphere reflected the high percentage of employees who come from a real estate finance background, resulting in a mix between a tech company and a traditional lender.
Bill spoke to me about the importance of moving fast, yet being smart about investments in engineering to avoid “technical debt” later.
Transparency: Metrics that Matter
Another player in the real estate space within FinTech is Patch of Land. I met the CEO, Jason Fritton and CMO, AdaPia d’Errico, on a recent trip to Los Angeles. A somewhat earlier-stage startup than RealtyMogul, I was struck by the strengths of the team in terms of client and market focus.
I’ve also been impressed by Patch of Land’s ability to build a community through its social media efforts. Would be winners in FinTech would be smart to look at how AdaPia’s team uses SM to bolster growth.
Here’s some comparative metrics for Patch of Land (on top) vs. Lending Club. It’s clear from the SM metrics that the objectives are different, with one being more of a broadcast model vs. means for community engagement, but the figures are striking.
Tim Chen, CEO of NerdWallet spoke to a packed house of about three hundred members of the SF FinTech Meetup at its offices in San Francisco recently.
Personally, I was impressed by Tim’s modesty as he spoke of growing NerdWallet from tough early days when it made very little money. He won the crowd over with his timeline showing user growth matched by the SEO work to grow reach (building links and creating content).
Talking to others in the world of FinTech is useful, since I think each and every interaction with others can be a learning opportunity, but beware attending too many conferences on FinTech, when you could be building something.