When we developed our vision statement, we set the bar high. As high as it could go, because we genuinely want to ensure financial institutions of ALL SIZES can leverage their internal data for decision making.
Then along comes reality, forcing us to consider the size of a financial institution and exactly how small is too small to be a viable Gestalt customer. We’re trying a new approach that would enable us to stay true to our vision. The jury is still out, but it’s a great example of what we’ve been up to and the perfect subject for this month’s update
Getting Creative with a Cohort
Let’s start with a little background.
At defi SOLUTIONS, our vision was to create a big “boy” originations system and make it available to the masses. In fact, we wanted customers to have more features than systems costing millions. Early on we test launched with extra small lenders by giving them a powerful system, but with less features and a more out-of-the-box setup. Still, some lenders couldn’t afford the minimum. We had to decide how small is too small and who we would say no to.
Fast forward to Gestalt, and we’re having to decide how small is too small once again despite our vision statement that reads:
“To revolutionize data warehousing for financial services –ensuring financial institutions of ALL sizes can leverage their internal data for decision making.”
Before many of our staff meetings, we actually recite our vision statement, and every time, the word ALL standouts like a sore thumb. And every time, we question whether or not ALL is possible.
We looked at the facts of the situation.
Fact 1:
While our vision is providing a solution that can be utilized for financial institutions of all sizes, we have a clearly defined ideal customer profile. It’s a mid-size financial institution that absolutely knows the importance of their data, wants their data, and understands how incredibly time consuming and expensive data is toget and maintain.
Fact 2:
Our ideal customer can also afford to hire the minimum 2-4 people it takes to start this project, and savvy enough to know that if they could do the entire project(including tech spend) for the cost of 1 person, those dollars could be spent using data versus organizing it.
Fact 3:
Some financial institutions couldn’t even dream of being able to hire 2-4people, so the thought of spending for the cost of 1 person is impossible. However, they still need their data to drive smart decisions, and they still need to manually pull things together, even if they don’t have the budget.
Fact 4:
Our dream to help financial institutions of all sizes doesn’t match up the reality that it takes X hours to onboard a new customer, X hours to provide support every year, and X amount of dollars in maintenance expenses for even the smallest of customers.
Spelling out the facts was important, but it didn’t lead us to a solution. Fortunately, for us and financial institutions that could use Gestalt, something else lead us to an idea.
A win-win scenario was at hand.
It just so happens that we participated in a cohort that was offered by a venture firm.They invest in fintechs that cater to credit unions. Their vision is to invest in the right products, but the reality is they aren’t able to put big dollars in early-stage companies.
The solution was to create a cohort where they could invest a small amount in five companies and share the time they spent with us. They held group meetings with allfive companies. Mentor calls included all five of us. Credit union visits involved all five of us.
Having experienced the benefits of a cohort first-hand, we saw the potential for our situation. We would choose five, small financial institutions to participate in ourcohort.
They would get:
- Shared costs, split five ways, making it affordable for ANY size financial institution.
- A system the big boys / girls would only have access to.
- The opportunity to learn from us and the other cohort participants.
We would get:
- Economies of scale, implementing five customers at the same time with certain commonalities.
- An opportunity to learn if our vision of helping financial institutions of ALL sizes could be achieved.
The million-dollar question: Did it work?
We first offered the cohort to smaller CA lenders at a conference. Then, we tried again at Venture Tech with credit unions. Finally, we partnered with an LMS company to offer the cohort directly to their customers.
On our third try, we finally got some interest and had a good turnout for an initial informational webinar. Final results are still TBD. Even with that, we were disappointed overall in the uptake, since we knew what a great opportunity it was.
So, we’re back where we started, questioning whether or not our vision is unrealistic. It’s a tricky situation and only one part of the battle. If you’ve seen any other creative ideas that have worked, please let us know! We’re not ready to give up yet.
In the meantime, if you or someone you know wants their data because they know valuable it is and understands the time and costs in getting and maintaining it, we’d loveto talk – no matter your size.
“So, we’re back where we started, questioning whether or not our vision is unrealistic.”