From idea to product to a successful Fintech startup


The Founder of Selma Finance (middle) with the two Nerd Entrepreneurs

“I think what’s important is that you go back on the bigger vision and what you actually do. That helps because sometimes you have these nitty-gritty things.” – Quote from Patrik Schar, co-founder of Selma Finance

In this episode, we sit down with Patrik Schär, one of the co-founders of Selma Finance, a digital finance advisor that helps people on how to invest their money in the right way. They offer online solutions and services even to people who cannot afford a pricey face-to-face consultation with a private bank.

We explore the platforms they use and how their remote team works with it. We also talk about how they were able to scale their business, from first finding the “right” investor who was not only willing to invest but someone they “liked” – something that was quite challenging from the start but has taught them a lot of lessons on how to sell their product.

Link to the episode

In this episode you’ll learn:

  • How Patrik Schär became an entrepreneur

  • How Patrik and his team work and the strategies they have employed to make things run smoothly

  • How they reach their customers and the contributors that help them improve their product and make better decisions

  • Why finding the right investor is not only about the money

  • The challenges and learnings they have, and why they are hopeful for the future


What Selma Finance is About

In this episode, we talk about Selma Finance, a digital advisor that helps people invest their money in the right away. We have a chat with one of its co-founders, Patrik Schar. Patrik is someone who never thought about he was going to become a startup entrepreneur. He had a classic banking career working in different places in banking. But when he studied at Copenhagen Business School, there he was exposed to startups for the first time working as an advisor in a startup boot camp and helped startups with finance and creating business plans, etc. There he saw how startups had a totally different approach when it comes to work and not so much focus on themselves – contrasting this to his previous job in Swiss banking where he was working in huge projects with major external consultants. After that he got involved in another startup Now, a meetup app for activities, which didn’t really take off. This was done hyperlocal, which means that they were the only one in a certain place doing a certain activity, which also means they needed to build communities in every single city requiring a lot of marketing. When they decided to halt the development of the app, Patrik thought that he could change things in finance and banking as this was his area of expertise, and he felt that they could do much better there as he found that a lot of people just get a product at too high a price, and this is something they could change. Thus, the start of Selma Finance, an “advisor in your pocket” offering digital solutions and services of a private bank when it comes to investing to people who cannot afford the face-to-face bank consultation.

An MVP to attract first customers

The first thing Selma Finance launched as an MVP was an ETF fund search. In speaking to his co-founder/colleague, they discovered it was not enough to make a nice fund search but that they needed to go back earlier and explain to people basically what they should do. After figuring this out, they then set up a chat option for their clients and then figure out for them should their client invest or not.

How to work as a remote team

Using Flowdock as the platform for communication in their remote team that is composed of people all the way up north, “everything” goes through this service and is open and shared to all employees. Like all things, working remotely does come with challenges. Processing feelings and emotions is difficult to do unlike when you're sitting on a desk and see a person’s facial expressions. Although every month to two months, the teams do have sessions to come up with strategies and work in one place. But what’s nice too is they can work from anywhere. Another thing they do is they “walk” together with someone 20-30 minutes covering non-business-related topics and just no agenda – a cool idea that they got from another startup and so they adopted it into their own. This strategy has given them a sense of connectedness even though they work remote.

Reaching customers

Reaching customers is a challenge especially since it’s a scale business, meaning a certain number of customers reached has to be achieved before it yields returns. What they have at Selma is that there is a contributor community where people give feedback on the product by doing usability tests and through this they are able to cater to the needs of their users. What they also do is they have 5 to 10 client contributors sitting around and working on something with them that then goes directly into Selma where the user can act as co-developer. Obviously, this helps them grow through, simply, word-of-mouth as a fintech startup.

Dealing with negative reactions

The decision to post their product on Reddit was, one, because they found it was a place to get the honest and often blunt feedback they wanted; second, it was because they needed to place ads (even though it’s annoying to see) as they still had the struggle of getting known. They had to explain it because when there is an ad about a financial product, people are very skeptical and sensitive to it. And this helped them make better decisions in which direction to go next, particularly in Germany.

Customer acquisition

It all depends on how much a person invests. Also, their customer acquisition cost is cheaper than their competitor’s. And their new customers, a big part of that comes through the community, something their competitors don’t have. This has been taken into consideration as they continue to grow in scale and as they gain more organic traffic. They are still now in the phase of implementing more data into Selma, collecting facts from situations that users tell their digital advisors so that the APIs will in the future no longer require a customer to tell everything but just simply connect, and in turn, make better investments for them.

Finding the right investors

It takes quite some time to actually get funding especially from people that help you not only with money but are also a fit, so preparation is key. If you are forced to take money from the people you don’t want it from, it surely is not going to end well. The process they went through is, first, figuring out what kind of investors they needed. Meaning they needed to figure out what kind of story they had to tell, and maybe also a part of the money. They needed to clearly convey where they were and where they wanted to go, and from there the money follows out of that in order to get to the next stage. That was how they came up with their investor pitch. From there they were able to see the kind of investors that they needed. And at the end of every meeting, they asked people they met who could potentially help them or who they should talk to. This advice has helped them meet their first investor, just starting from and reaching out in their personal network. In those talks they were also able to tell if they “liked” that investor and see if they were a personal fit.

The biggest challenge as an entrepreneur

Like any startup, they too had those days where they felt it was all going to fall apart. There is also no celebration of your wins in a startup culture. A lot of things can and do go wrong pile after pile, but at one point it will all be over and then things will start to work out nicely. The whole process isn’t enjoyable but then everything becomes easier. As Patrik explained, what’s important is going back to the nitty-gritty and the vision. If something does not work, it should be communicated so that something can be done about it.

Get started and continue to do it

In a startup, Patrik has learned that you need to get started and just continue to do it. And if your competitor copies you, it's a compliment. Also, you need to share your ideas. Sharing your ideas can be as simple as writing it on a piece of paper or PowerPoint. You start asking people and try to sell your product to them. If they’re really interested, ask them to buy it.

Be courageous and bold

If there’s anything Patrik would like to change, he wouldn’t say he’d want to change something because one might not know what the consequences are and things might have gone differently, but if anything, it’s to be even more bold and more courageous. He is hopeful for the future because he thinks that what they offer creates a lot of value for their customers.

Link to the episode

Link to the startup:https://selma.io/ Links/Weekly recommendation:

  • A method calld OKR (Objectives and Key Results) – that helps you break down the goals of your company to know what each individuals and teams contribution is [00:51:47]

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