KeithPhantom

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Aug 1, 2020
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Hi, my name is Keith, and I would like to introduce myself and describe my business plan. Currently, I am a junior in university majoring in Finance with plans of getting a certificate in Fintech. I would like to be an entrepreneur and I have seen the pros and the cons of taking this path, and I am decisively ready to take on this path. Since I was 16 and emigrated to the United States, I've been always interested in business and finance, especially the area of private equity and venture capital. In high school, because of the transition between countries, I did not have the best grades (only a 3.67 GPA) but, I could get a full-ride scholarship. Right now, I am making it up by keeping a 3.90 GPA up to now in university.

Since young, I never saw an opportunity for a person such like me to thrive in IB or regular trading, since I do not like the type of pressure and stress you live by pretty much guessing what is the market going to do, and also, never found interest on it. I focused on the growth of private companies and startups, with a secondary interest in banking and fintech. In the search of a market, I could provide my skills to, I happened to stumble with different ideas, but each with their own shortcomings: digital banking, SME financing, regular PE and VC, etc. Then, I happened to have an idea that solved a huge issue within the finance community: how do companies research and choose companies to invest in.

In PE and VC, there is something called the 100/10/(3)/1 rule, in which a hundred companies are researches, ten are chosen to be further researched, (three are proposed an investment deal), and one accepts the offer and becomes part of the portfolio. This can take a few years (usually the first ones at the start of a portfolio). My solution is to solve, or at least reduce the need for this part of the process by implementing something like Facebook for businesses looking for funding. I would like to market this to both businesses and PE/VC companies, creating a double stream of income in which the growth of one reflects as growth in the other one. Businesses can register themselves and pay a fee, they would need to have audited financial statements to be able to register (I am thinking in a way I can ease this for SMEs), these statements will be linked with a profile which investors can see the performance, but all of this from a program, instead of going out company by company, saving time and money in the process. Investors will also need to pay a fee for registering and making deals in this piece of software. I plan to bake in financial analysis software and importation to Excel for further/personalized processing, but the included software could be used to do a valuation successfully. Another way to earn some revenue can be to take a fee (cheap enough to be the better opportunity cost than just traditionally making the deal) for every transaction between investors and companies, such as a buyout or a stock sale.

If I can market this to SMEs as a better way to get funds than just going to the bank and hope they consider your business idea worthy of the risk, I could get enough businesses in my portfolio to be able to offer them to investors looking for new investments, and these investors can have an extra 2 to 3 years (usually used to do research) of profiting. Companies would have better exposure to investors and higher possibilities to be funded than the current method of getting investors. I can even have banks to have access to this software, and they could check the financial of a company and decide if the risk is worth it.

I hope you find this idea interesting and leave your comments below,

Keith.
 

KJess

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Joined
Aug 23, 2020
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This sounds like a great idea. One of the main problems I've seen with new startups is that they fail to talk to their potential customers and just create a product and hope it sells. Thankfully, there is a way to see if your product will sell and if it's needed!

The best thing you can do before creating the product is to talk with your potential customers. If you meet with businesses that would potentially use your product you can determine a few things...

1) Is this a product that businesses are looking for?
While startups have great ideas they usually fail to actually understand if this is a huge problem companies are looking to solve, or if it would just be nice to have. If companies aren't currently looking for your solution then it could quite easily fail to sell. The only way you can gauge if this is something companies are looking for is if you meet with businesses and see if you can't figure out if there are potential factors you aren't considering (budget, time, accessability, etc.) or if there are certain features that would really make your product stand out against competitors. Many startups fail because they overlook the issue of 'will my product actually sell'. No matter how great you think your product is, it certainly is missing out on a lot and you can only find out what you're missing out on if you talk to potential customers/clients.

2) Is there a specific segment of customers that would purchase your product?
There are many types of businesses with different sizes, budgets, goals, etc. By going out and talking to different businesses you can determine if there is a specific type of business you should be targeting. For example, maybe businesses that currently have fewer than 100 employees and have a revenue of >$1,000,000 anually don't want to take a risk with a new company and wouldn't buy. And companies that have 500+ employees and have an anual revenue of <$10,000,000 would also see your product as a risk since they are doing just fine without it. So you can then determine that your customer segment and the businesses you should be advertising/marketing to are those with 200-400 employees and make between $3,000,000 and $6,000,000 anually. Now you can gauge what those businesses want in a product, what the price for your product should be, and how to market so you can sell your product. You can eventually grow out of this segment once you've proven your product is great, but for the time being you should only focus on selling to that specific customer segment.

There is almost no way you can be successful with an idea like yours if you don't leave the office and actually go talk to customers. I'll say it again, YOU MUST TALK TO CUSTOMERS TO ENSURE YOUR PRODUCT WILL SELL. Do research, read books, and most importantly start talking to customers.

A great tool to use is the Business Model Canvas where you can clearly lay out all of your ideas and plans (hypotheses), and then use those hypotheses to guide your interviews with potential clients. Keep in mind that you shouldn't start building your product/service until you've talked to a fair amount of potential clients.

Lastly, you should not mention your idea to these potential clients early on. What you need to do is ask these potential clients/businesses about what they currently use to solve the problem you propose to fix. Ask them what they like/dislike about their current product, ask if they are actively searching for a new solution to their current problem, etc. You can learn more about this by researching how to properly interview potential customers (make sure it's a valid source)

Hope this helps, ask if you need any clarification or want to know anything else/expand on what I layed out!
 

KeithPhantom

Member
Joined
Aug 1, 2020
Messages
4
Points
3
Is this a product that businesses are looking for?
Just to reduce the professional cost, yes, plus adding some kind of limited AI will make it more competitive against quantitative analysis, even surpassing human reasoning if enough time is given.


Is there a specific segment of customers that would purchase your product?
Yes, IB, PE, VC, even angel investors. I would like to make this platform an open SaaS, where companies can improve over the basic code function by using applets or extensions. You pay for the code and access to the database, and you either use it stock (we'll be updating it to add new features and to get better analysis), or you can use your own strategy.
 

KJess

Member
Joined
Aug 23, 2020
Messages
4
Points
3
Sounds like you’re on the right track. It looks like all that’s left short term is talking to customers! Just make sure you don’t pitch your idea too much, the point of talking to customers early on is to determine what customers want in a product, so if you talk too much about your own product they will naturally gear their response to make you feel good about your idea even if it’s unintentional.

Good luck and stay flexible in your planning since there will likely be features your include/remove based off of the customer interviews!
 

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