In the world of finance and financial technology, established companies are starting to look at the rearview mirror at fast-approaching startups, wondering just true the phrase “objects in the mirror may be closer than they appear” might be. What is causing this acceleration in fintech startup traction? What should the incumbents be nervous about? And, more importantly, what should they do about it?
Alex Rampell, a16z General Partner and former fintech entrepreneur as the CEO and co-founder of TrialPay, joins a16z partner Frank Chen to discuss the changing fintech landscape from both the viewpoint of the startup and the viewpoint of established companies.
From the perspective of the hungry and fast fintech startup, they discuss lessons learned from:
– Startups such as Health IQ, which are trying to win the most profitable customers from “one size fits all” incumbents
– Startups such as Branch, which are generating new data sources so they can price customers that bigger companies can’t
– Startups such as EarnIn, which are changing behavior such that previously unprofitable customers become profitable
So what’s the poor incumbent to do? Don’t worry, Alex has concrete advice for the execs in the hot seat, including:
– Segment your own customers better and address each segment with a sub-brand (like Avon did by buying Tiffany * Co. in the late 1970s).
– Partner with startups by giving them your “turn down traffic”
– Invest in and buy startups—but at the right time and the right prices, which Alex reveals in his lightning round of advice