Start-ups should focus on the business product, not the money
Financial technology is the buzzword in Asia right now – from Hong Kong to Tokyo, Singapore to Australia, start-ups are looking to grow new businesses, financial institutions are looking for innovative ideas and governments are hoping the marriage between the two spurs new business.
Fintech investment in Asia-Pacific is on the rise. Last year’s record investment in China – pushed by a wave of “blockbuster deals” including US$4.5 billion raised by Alibaba Group Holding’s finance affiliate – was more than three times the US$2.97 billion logged in 2015, according to an Accenture statement that cited analysis of CB Insights data.
But while fundraising is important, the founders – the management teams – of start-ups shouldn’t focus only on the money. The primary focus should be the product. This is a version of ‘build it and they will come’: build a good product and the money will flow.
History teaches of technology bubbles where start-ups have come and gone in a flash because the focus wasn’t on a product but rather a quick buck
Accenture has been running the FinTech Innovation Lab Asia-Pacific in Hong Kong for four years – indeed we call for applicants to this year’s Lab at the end of the month – and during this time we have helped nurture fintech start-ups.
Most journalists ask: “How much funding have they raised?”
But the more important question is “what product have they developed?” This is what management should concentrate on. It seems self-evident, but history teaches of technology bubbles where start-ups have come and gone in a flash because the focus wasn’t on a product but rather a quick buck.
Increasingly, the criticism we hear from venture capitalists and large financial institutions looking to invest in or partner with start-ups is that there is an abundance of good technology, but not necessarily good applicability. If the product doesn’t have a tangible use for customers, or isn’t easily applicable to existing technology in companies, it may be a genius idea that never gets implemented.
In our Lab, we have mentored companies who have kept their eye on developing a product that is useful to customers and realistically implementable.