[Editor’s note: This is a guest post from Stephen Sheinbaum, founder of Merchant Cash and Capital. Merchant Cash and Capital is a silver sponsor and will be in attendance at LendIt USA 2015 on April 13-15. In this post, he gives four steps to a great customer-focused platform.]
Very often in the entertainment business, you’ll hear a show or a movie described as a “critical” success but not a “commercial” success. We all know what that means: The people who did the highbrow review loved it, but not the people who were its intended audience. While those of us who are in the alternative finance industry might enjoy being deemed a critical success, we certainly don’t want that honor without being a commercial success. We have to create our products with a laser-like focus on our intended audience, our customers.
But what does that mean? In a nutshell, you don’t want your platform to be the Windows 8 of its generation.
When Microsoft unveiled Windows 8 in October 2012, the company positioned it as being a major improvement in terms of performance and user interface. Tech-types did give it a thumbs up for speed and security but users–well, they were left feeling as if they were all thumbs. Microsoft spent the next year making the UI of Windows 9 what it should have been in the first place, intuitive.
So how do you make sure this doesn’t happen to your platform? You need to do four things:
- Survey the competitive landscape
- Talk to consumers about what they really want
- Partner with the best technology
- Hire ruthless testers and listen to their critiques
- THE LANDSCAPE: What is it that your platform is going to do that you think isn’t already being done? If it is already being done, how will you improve on its existing features and functionality? Making something that’s prettier or faster isn’t enough anymore, especially if your platform will only be prettier or faster on a laptop and not a smartphone or tablet. You must do a thorough analysis of the competitive landscape and note all possible gaps, no matter how small or unusual they might be. There were companies selling insurance online before Progressive, but before Flo hit the limelight, no company had dared to showcase its products and prices alongside those of its competitors.
- CONSUMER WANTS: You’ve identified something that isn’t being done or something that you think your platform could do better. Now ask yourself this question: Will users care? Even if it is easy for you, there’s no point in delivering a “solution” that does not fix a problem. Sure, you can argue that no one knew they wanted an iPad until Apple unveiled the iPad, but users of computing devices had been signalling for years that they wanted a platform that was simpler and lighter than their existing desktop or even laptop computer. What is it that users want from the service that you are proposing? Have you asked questions about their needs that are open-ended and informative, or questions that will give you the answer you already think you want?
- TECH PARTNERS: Few companies can match Google’s raw technology power. If we are going to develop a best-in-breed technology solution to a financial services problem, we will need to leverage third-party technology to the greatest extent possible. Right now, in our industry, people are exploring a host of innovative ways to measure creditworthiness that have nothing to do with a traditional credit score. They are looking for traits in the human psyche that could predict whether or not a business owner will repay the funding he is extended. We must all be technology agnostic and be on a constant search for the best design, the best code, the best lead generation options and the best system architecture possible.
- TAKE TESTING TO HEART: You’ve listened to users, you’ve partnered with geeks, you’ve built your platform. Now it’s time to get someone to break it. You’ve got to make sure you do enough third-party testing to make sure that your platform is as intuitive to your prospective users as it has been to your developers. The aspects they have spent months fine-tuning may not be the things that give users pause. Let the testers put the users first and see where that leads.
And now comes the biggest question of all: Even if you do all four steps correctly, how do you know that your platform will fly in the fast-moving alternative finance industry six months from now or a year from now? The simple answer is that every option that we put in front of businesses now is encouraging them to want even faster and better funding options. They are spurring us to constantly improve the user experience with alternative finance. Will the day come when businesses will go through our systems without having to upload supporting documents because we’ve collected everything we need on the back end? You bet it will, and sooner than you think.
Stephen Sheinbaum is the founder of Merchant Cash and Capital, which has originated $1 billion in alternative finance to small businesses since 2005.
