The B2B Fintech Math Problem
By Brian Bauer
B2B sales cycles are long. Nowhere is this truer than in financial services where sales usually take several months and sometimes even years to close and implement. As with anything, you can find a rare exception, but this is generally the rule in the industry.
Driven by rapidly shifting customer expectations and competition, the financial services industry is undergoing a major digital transformation. To expose the Fintech math problem, one has to look toward new ventures that are starting up and attempting to drive new products, services, and innovation into the industry in response to that demand. This is where a significant part of the problem exists – between concept testing and the commercialization of new products.
Seed stage startups in any industry are lucky to have 6-12 months runway ahead of them. When it comes to B2B Fintechs that are attempting to break into financial services, the sales cycles are usually at least as long as their runway. There is not much room in that equation for startups to iterate on their solutions or value proposition as they attempt to build and go-to-market. The result is that many potentially impactful solutions never see their first customer because the startup runs out of cash before the solution is validated.
As founders move through the process of concept testing, market validation, and product development, it is critical to connect to potential customers, which doesn’t happen in a vacuum. Founders must connect to the market and that requires access, something some founders lack as many hail from outside the financial services industry.
Simply put, long sales cycles combined with difficulty accessing partners, plus the limited runway of angel or seed-stage companies cause the B2B Fintech math problem.
How We Solve It
The Venture Center’s Fintech accelerators are hyper-focused on go-to-market. During the 12-week program, founders are immersed in the financial services industry and gain access to top decision-makers, key leaders, and influencers to shorten the product development process. During the 2019 program, founders gained access to 60 financial institutions that participated onsite at The Venture Center. Whether a company is concept testing, pursuing a proof of concept, or looking to speed their go-to-market, The Venture Center’s Fintech Accelerators can help companies get there faster. Our next accelerator is will run from June 1, 2020 to August 19, 2020. The application period is open until March 6 – so if you’re a company looking to speed your go-to-market, apply at www.venturecenter.co/fisfintech.