My first sale, how to turn your early customers into paying customers, Building a winning AI Fintech, and more

Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time?-Thomas Edison

Today's newsletter is ??. I will go through some learnings around my first sale and how the best B2B tech Cos have turned their first customers into paying customers, how to build a winning AI Fintech, and some exciting news such as Visa acquiring Brazilian Payment Processor Pismo for US$ 1Bn, and Nubank reaching 3 million customers in Corporate banking. Get yourself a nice coffee and let's get started!!

How to get your first customers in B2B Fintech

I landed my first customer this week ????, and will most probably close another two customers over the next 2 weeks, one of them at the enterprise level. Would love to share some actions that have helped me in the process:

• I first understood the market I was operating in (corporate credit cards and expense management solutions), and what the main customer pain points around the segment
• I got a great understanding of our solution and how it helped our customers
• Got deep into our customers' feedback: spoke broadly with the sales and customer support teams, participated in Sales calls, and analyzed customer feedback from both Sales and Customer Support, NPS surveys, and research reports
• Spoke with potential and current customers frequently over the past 90 days
• I attended relevant industry events in person where I met company founders and decision-makers and spoke about their financial management needs and pain points, not intending to sell, but to learn more about how we could help them.
• With all the above, the talks turned into my first customer acquisition ??

9 tips to get your first customers

1. ?Tapping your personal network?(i.e. friends, former colleagues)
2. Seeking out your customers where they are?(i.e. Linkedin, accounting journals)
3. You should BOTH hit up your personal network AND head to the places your potential customers were spending time. The question isn’t?which?of these two routes to pursue, but instead how far your own network will take you before you move on.
4. It’s a huge advantage to have a strong personal network in B2B, which you can also build by asking your investors for an intro or joining an incubator such as YC.
5. Tapping your personal network is even more important if you need to “sell” your product (i.e. not going bottom-up), because early customers need to have a reason to trust you and you got no track record.
6. Getting press is rarely the way to get started, build some reputation first, and build that brand awareness in parallel
7. Build relationships in person first, then go remote (if possible)
8. You need to have domain area expertise on whatever your problem field is
9. Speaking with your customers, both potential and current, is non-negotiable

How the best B2B Cos turned their first users into paying customers

I've been thinking a ton about the intersection between B2B and monetization, especially in times when the market is very tight and CFOs are canceling subscription renewals unless there is a clear business case for it.

I came across this amazing article by Lenny Rachitsky (highly recommend subscribing to his newsletter), which goes deep into how today’s fastest-growing B2B businesses relied on to?sell?their first handful of customers.

It basically boils down to three strategies:

1. Bottom-up + self-service: Users start using your product with a free plan with limited features, love it, then upgrade themselves for more features.
2. Bottom-up + inside sales: Users start using your product with a free plan with limited features, and then are either encouraged by a sales rep (or proactively reach out) to upgrade for more functionality.
3. Outbound sales: Founders or early hires from the sales team reach out to leads, help them trial the product, and then sign them up for a paid plan.

Key takeaways:

1. Regardless of the strategy, all of the companies ended up building a sales team
2. Most started with?founder-led sales
3. If you’re going bottom-up,?you don’t need to launch with a paid plan. Seven of the twenty-five companies researches by Lenny (including Segment, Figma, and Airtable) had no paid plans at public launch. --> Start working with your power-users and figure out what the paid plans should be.
4. You can adjust your sales strategy down the road?— Zoom and Amplitude started sales-driven and later became bottom-up-driven. Box and New Relic did the reverse.
5. Almost every company offered a free plan?from the outset — usually a freemium tier, and occasionally a trial period.
6. There are four options for charging B2B users: a flat monthly fee, a per-seat monthly fee, a usage-based fee, or a transaction fee. Most of the companies charge a monthly per-seat fee and sometimes include multiple changes (per-seat + flat monthly fee, or usage-based + flat monthly fee).
7. Outbound Sales strategy companies love blue logos

Building a Winning AI Fintech

This amazing report by 麦肯锡 's Anubhav B. , Violet Chung , Shwaitang Singh , and Rennstatey Thomas, states that the long-term success of financial institutions hinges on their ability to create an?artificial-intelligence-powered banking model?that is customer-centric, operationally efficient, and profitable at scale. The differentiating characteristics of winning neobanks are:

1. Launching products at high velocity
2. Focusing on customer engagement
3. Hyper-personalization of experiences and offerings
4. Adopting conversational design (chatbots)
5. Integrating Open Banking systems easily
6. Leveraging partner ecosystems (join forces and win)
7. Using customer LTV to drive decisions, with focus on return on investment (LTV/CAC)

?? Fintech Bites of the Week

?? QED Investors raised nearly $1B for two new funds to support fintech startups worldwide, with particular attention to Latin America. With the new funds, the firm expects to add up to 45 new companies to its portfolio, mostly early-stage companies.

??? Nubank owns nearly half of Open Finance's API calls --> big customer base in need of an increase in credit lines. However, Open Finance adoption in Brazil is still very low. More government incentives and regulation enforcement are critical to increasing adoption.

?? Visa acquired Brazilian payment infrastructure Pismo for $1Bn USD. All you need to know here

?? Mercado Libre was rated as one of TIME Magazine’s 100 Most Influential Companies

????Brazil’s central bank expects to launch Automatic PIX, enabling PIX recurrent payments in April 2024. As of today companies like Nubank already offer scheduled PIX to solve this pain point

??Brazil's crypto law is finally effective

??Brazilian fintech Asaas raised US$21m to accelerate their growth

??Brazilian central bank rehabilitated MB | Mercado Bitcoin to be part of the digital real pilot group

?? Nubank reached over 3 million customers in their Corporate Banking business in Brazil. Focused on the long-tail, underserved SME and smaller segment, Nubank has built the fastest growing, self-service platform. The next challenge for Nubank will be how to increase credit card adoption for those businesses, and later on penetrate bigger company segments

????Z1, the Brazilian Gen-Z fintech focused on teenagers has obtained the IP license in Brazil, enabling them to deliver more financial services products to their customers

?? Mercado Libre enables ATM cash withdrawals with QR codes in Chile

?? Paxos partners with Mercado Libre in Mexico allowing Mercado Libre to offer USDP stablecoins to their customers

?? Latam Trade Capital ?announced the acquisition of? Fivana , the Chilean factoring platform, to strengthen its position in the country

??Brazilian B2B Fintech Cora focused on SMEs announced?its entry into B2C

?? Belvo and 费埃哲公司 are partnering to deliver best-in-class credit risk scores in Brazil

??Latam Customer Insights & Stats

Nubank 's CEO David Velez explains what LatAm could learn from the US. He goes into:

• How Nubank has achieved — and maintained — profitability in this challenging macroeconomic environment
• How not only the LatAm fintech market differs from that of the U.S., but how founders in the region operate their businesses differently from their U.S. counterparts
• The state of digital banks in general and how David sees banking evolving in the next few years from the lens of both a founder and former investor (he once led Sequoia Capital’s Latin American investments)

Minsait: trends in payment methods

Venture Capital and Growth Equity Ecosystem in Latin America 2023 by Endeavor's and Glisco Partners cc Alfredo Castellanos

Carta's State of Private Markets Q1 2023

FedNow's impact in instant payments in the US

Market Map of Brazil's Credit Landscape, by A16Z ( Gabriel Vasquez and David Haber )

That was all!

Amazing week, full of exciting news and learnings.

If you enjoyed the newsletter, make sure to follow me, turn on notifications, and subscribe to the newsletter.

Un abrazo & have a nice weekend, ??

Edu