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Drew Glover

The Hidden Power of Distribution



In today’s fast paced world of startups, where new apps and services seem to sprout overnight, there's a secret weapon that separates the unicorns from the one-hit wonders: distribution. 


The fintech industry is riding a new wave, and it's all about getting your product into users' hands - but not in the way you might think. As the battlefield gets more crowded, companies are pulling rabbits out of hats with distribution models that don't just sell products, they create experiences that stick.


Gone are the days when plastering your logo on a billboard or bombarding inboxes with promo emails was enough to get your fintech solution adopted. Today's fintech maestros are cooking up distribution strategies so clever, they'd make Houdini tip his hat. And at the heart of it all? A laser focus on the customer journey - the true north star of fintech success.


Here are three interesting distribution strategies that are turning heads and wallets:


  1. The Freemium Feast: A Journey of Discovery


Imagine walking into an all-you-can-eat buffet, only to find out the dessert section requires a VIP pass. That's essentially what freemium models in fintech are doing. Companies like Robinhood lured millions with the irresistible aroma of commission-free trades, only to tempt them later with the taste of premium features.


Successful freemium models aren't just about the features. They're about understanding every step of the user's journey, from that first curious click to the moment they decide to upgrade. It's about mapping out the 'aha' moments and the pain points, then crafting a user experience that guides them seamlessly through each stage.


  1. Wearable Wallets: Never Leave Your Body (or Your Customer's Journey)


The integration of wearable technology into fintech products presents another opportunity for effective distribution. 


Consider this: Your fitness tracker notices you've crushed your workout goals for the month. Suddenly, it suggests investing the money you saved on gym fees into your retirement account. That's the power of wearable fintech—turning everyday actions into smart financial moves without you even having to think about it.


As these devices become more sophisticated, we're moving towards a world where managing your money is as natural as checking the time. The companies that master this integration will not just be selling products—they'll be offering a lifestyle upgrade that customers won't want to live without.


  1. Ancillary Distribution Models


Here's where it gets really interesting. Some of the most successful fintech products aren't even masquerading as fintech at all. They're like financial ninjas, hiding in plain sight. But make no mistake – their success is rooted in a deep understanding of the customer journey.


Take airlines, for example. You think you're just booking a flight to Cancun, but before you know it, you're signing up for a credit card that earns you miles, pays for your baggage fees, and probably walks your dog while you're on vacation. This isn't by accident. These companies have mapped out the traveler's journey from dreaming about a vacation to returning home, identifying every opportunity to add value (and slip in a financial product).



The Copper Bank Story: A Masterclass in Journey Mapping


Let's talk about Copper Bank, a fintech startup that's cracked the code on banking for teens. Their journey to success is a perfect example of how understanding your customer's path can lead to distribution gold.


When Fiat Ventures teamed up with Copper Bank, we didn't just slap together a teen banking app and call it a day. We figured out that the journey didn't start with the teens at all – it started with the parents. Parents were the ones opening accounts, looking to give their kids an allowance and teach them about money.


But here's where it gets interesting. We quickly realized that to keep and grow the user base, it was important to understand the Gen Z mindset. These kids didn't just want to save money; they wanted to earn it. It was like a lightbulb moment – financial literacy wasn't just a nice-to-have, it was the secret sauce.


So, what did we do? Copper baked financial education right into the app. But they didn't stop there. Understanding that Gen Z craved earning opportunities, they created an "earn" section in the app. This wasn't just a cool feature; it became a major engagement tool and a significant revenue stream for Copper Bank.


This story illustrates a crucial point: distribution isn't just about getting your product out there. It's about deeply understanding your users' needs and desires at every stage of their journey, then building features that address those needs. That's how you create a product that doesn't just reach users – it resonates with them.



Welcoming a New World of Fintech Distribution


In the end, the most successful fintech companies aren't just building products; they're crafting experiences. They're creating ecosystems so enticing and interconnected that trying to leave would be like attempting to extract yourself from a giant bowl of spaghetti – messy, time-consuming, and likely to leave you covered in sauce.


Welcome to the new world of fintech distribution – where understanding the customer journey is the key to unlocking growth, engagement, and loyalty. It's wild, it's wacky, and it's only going to get more interesting from here. 


Fiat Ventures has honed its investment strategy to focus on founders who demonstrate a deep understanding of the customer journey in fintech. We're not just looking for innovative ideas; we're seeking visionaries who can map out every step of their users' experience.


We're not just investors; we're co-pilots on the journey to fintech success. If you're a founder who can navigate the complex terrain of customer experience with the precision of a cartographer and the vision of an explorer, we want to talk.


Buckle up, – the fintech ride is just getting started, and your journey is the roadmap!


We’d love to build with you, please drop us a line if you’d like to build with us.

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