The Digital Wallet and Personal Finance
Personal finance has been a hobby of mine since high school. When I hear founders solving for problems in this area, I’m always interested. Today a founder shared some interesting insights that got me thinking. One of the biggest challenges I’ve seen is that most tools to help people manage their finances are outside the normal consumer flow. If you want to save for a big purchase or just stick to a budget, it can be difficult. Part of the challenge is that these tools are usually independent apps that the user utilizes after a transaction has occurred.
Digital wallets on smartphones are gaining traction. I believe that in the not-so-distant future, we will no longer carry a wallet in our purse or back pocket. Everything—driver’s license, credit cards, etc.—will be in our digital wallet. The digital wallet will be how we make purchases, and it will become the center of gravity for consumer purchases. When that happens, we’ll see the next evolution of personal finance tools, because they’ll be built into the consumer’s purchasing flow. They’ll be able to affect the buying decision before it’s completed. This could lead to sustained behavior change, which many of us desperately need if we’re to improve our financial situation.
I’m not sure when the digital wallet will be adopted by the masses, but when it is, it could have a big impact on consumer spending habits.
Don’t Forget the Why
A friend asked me to sit in on a chat with a founder. At the end of it, my friend asked if I thought the founder was right or wrong about the problem and his plan to solve it. I told him I had no idea.
I tend to be more interested in how someone arrived at a conclusion than the conclusion itself. Why they want to do things a certain way is more interesting to me than what they want to do. I shared this with my friend and told him that I think (at least based on this short conversation) that the founder has a solid thought process. He could be right or wrong initially. But his thought process will likely lead to eventually figuring things out and being successful.
Having a strong opinion is a great founder trait, but why you have that opinion is more important. As your share your vision and how you plan to execute it, consider sharing the why too.
Asset Land Grab
I listened as an investor described what he’s seeing in the world of investing: a “land grab for high-quality assets.” He’s been an investor for years, so I was curious to hear his definition of high quality, which turned out to be a rapid growth rate that can be sustained. He doesn’t think a specific number defines rapid growth; rather, grown is relative to others in the sector or business model. As for the meaning of sustained, he wants to see a path to maintaining the growth rate for at least three years.
His perspective is interesting. I’m not sure I agree with all of it, but I respect it. Sustained growth is great, but combining it with profitability is even better, in my book. I’m not saying that a company has to be profitable to be great, but sustained rapid growth and profitability is an amazing combination that’s difficult to achieve. The companies that have it are the ones I view as being in a league of their own.
That’s Not What I Wanted to Hear!
I was asking a founder what he’s been up to. He gave me an update on the last few months, including something that’s not going well. His conversations with potential customers aren’t yielding the results he expected.
As we dug in, I realized a few things. He’s being told that his solution is lacking. It isn’t solving the problem well enough, so potential customers aren’t committing to trying it. Getting told that his baby is ugly is frustrating him. He’s not taking rejection well at all.
I reminded him that regardless of what prospects tell him—yes or no—the why is what’s most important. If multiple prospects turn into customers for the same reason, he’s likely hit on something and should lean into it. If multiple prospects tell him no for the same reason, his solution is missing the mark, and he should figure out how to address their concerns in the solution.
Bad feedback is part of the entrepreneurial journey. How you perceive it, though, is within your control and can be the difference between success and failure. Next time you don’t hear what you want, try to understand what it will take to get prospects to a yes.
Today I joined an intro meeting only to realize that I already know the other person. We’re not close but have been in the same circles for over a decade. Catching up, we realized that our work overlaps, so we can help each other. Here’s what I was thinking as I left the meeting:
- The world is smaller than I think.
- You never know where life will take you or others.
- Relationships matter a lot, even if they aren’t super deep.
- Being nice is easy, feels goods, and can pay dividends many years later.
I’m glad we finally got to know each other after all these years, and I’m looking forward to working with him.
The Early-Stage Specialized Generalist
A friend shared an interesting realization with me today. He had a generalist approach early in his career. He wasn’t someone who grew up saying I want to be an X when I grow up. He wasn’t sure exactly what he wanted to do, so he learned about a lot of things. He knew a lot about a lot of things but wasn’t an expert on anything. He wishes he’d known earlier what he knows now. He wishes he’d picked something and gone deep into it earlier. Eventually, he went deep and became a domain expert, and it’s served him extremely well.
Early-stage founders are operational generalists by necessity. Resources are too scant to do everything, so founder(s) fill a lot of gaps. They do sales, marketing, HR—whatever is needed. As revenue (or investor capital) increases, they begin to be able to afford help. Until then, they’re the glue holding everything together.
Founders need to be able to do multiple things in the business, but the great ones know their space cold. They have domain knowledge too. They’ve learned so much about a problem and market that they’re qualified to solve the problem better than others are. They often have a unique insight that will make their solution superior.
If you’re a founder or considering becoming one, take the time to learn your space and your potential customers well so you can make early strategic decisions that set you up for long-term success. Also be ready to jump into areas that you know nothing about. Learning new things on the fly will be key to surviving those early days when you’re wearing multiple hats.
Make It Clear Where You Need Help
Had a great chat with a friend today. He reflected on his entrepreneurial path and said something that stuck with me: he had the support of advisors and investors in the early part of his journey, but he may not have been as clear as he could have been about how they could help him or in what areas he needed help.
A lot of founders make this mistake. I’m one of them. I didn’t take the time to process everything that was happening to understand where I was failing. I didn’t ask my team members for feedback, either. When I connected with people who were in a position to help me, I didn’t make the most of those opportunities because I didn’t have a clear ask. Since I couldn’t articulate how they could help me, they didn’t. It was a big miss.
Building a company is hard, and founders can’t do it alone. They need help. Everyone understands that. But it’s not apparent to outsiders how they can be helpful. They must be told.
If you’re a founder, consider taking time to periodically think about what kind of help you need. Then tell other people. Those conversations will make it much more likely you’ll get exactly what you need.
Helping Founders Have an Impact
Today I listened to a successful founder share his vision for doing good through entrepreneurship. He’s been an entrepreneur for almost twenty years and has exited his company. Now he wants to help early founders make a positive impact on society through their companies. His strategy for doing this is great, and I think it will be valuable to early founders.
Purpose matters a lot to this founder. It’s a big part of what made him successful. I can’t wait to see the positive impact he has on other founders and, in turn, the impact they have on society!
You Have to Lose to Win
I listened to an early-stage founder, John, describe how he wanted to emulate a successful founder, Bob. John excitedly recapped Bob’s journey. John was planning to follow a similar path to success with his young company. But I noticed that John’s recap began where things had begun to go well for Bob. I know Bob’s story well. He endured years of painful failure. As I listened to John, I realized he didn’t know the full story. He’d only heard the happy parts.
I told John about Bob’s failures. He was surprised. He’d thought that an entrepreneurial journey that was only up and to the right—a string of successes—was conceivable.
Most successful people have failed miserably, but they kept at it. Failure is usually an important part of accomplishing anything great. What you learn from failure often creates the foundation needed for success. Put another way, you often must lose to win.
If you’re looking to do something great, prepare yourself for failure. Instead of letting it get you down, look at it as an education that took you one step closer to success.
Which Is Better, Many Specialized Tools or a Few That Multitask?
I use many digital tools every day. There’s a specific tool for everything I need to do. I don’t complain because it’s better than doing tasks manually.
I had a chat with a founder that got me thinking about something. Is it better to create solutions that help people use a variety of tools effectively or to help them consolidate by using one tool that does the job of many tools? This founder thinks it’s not a good idea to ask people to change tools: the friction would be too high because people don’t like change. It’s better, in his opinion, to help them make the most of their current tools.
As I’ve thought about this more, I’ve decided that the right answer for me boils down to time. What will allow me to do more with the time I have? Most things I do daily don’t need to be perfect; I just need to complete them. The path that leads to more productivity is the one I’ll go down.