Thought Leaders in Financial Technology: NorthOne CEO Eytan Bensoussan (Part 4)

Sramana Mitra: Which of these channels is producing? Is Google search producing the best?

Eytan Bensoussan: They’re changing almost every month. The growth team is not dogmatic about where we go. We have very specific constraints. We look for where people come in that have the attributes of the highest likelihood to use the product. Then the cost guardrails. That will shift meaningfully as the pricing on these channels puts them out of our budget or keeps them within. A lot of channels where you can put visual collateral help a lot.

We found that putting little videos and visual ads is helpful. If it’s outside the bounds of the constraints we’re willing to spend on, then the channel is dead to us for the meantime until it comes back to a reasonable range.

Sramana Mitra: Let’s talk a bit about how you’ve built the companies. In 2019, you launched. You launched, I presume, with an MVP and you were in bootstrapping mode at that point. How did you get the company off the ground? These kinds of companies need a fair bit of capital to build. How did you marshal that capital?

Eytan Bensoussan: It’s a combination of deeply-stubborn determination and luck. We started the company with the idea that a bank could play a different role in the life of a small business. If we play the right role, it could change the outcomes for that business. 40% of our customers tell us that within a month of using NorthOne, they’re spending materially less time on financial management. That’s the idea.

When we got started, we were early. Talking about this idea in 2016, they thought I was crazy. The concept of a challenger bank the way you might see Revolut or N26 was just starting then. It was just a doesn’t-compute situation. The banks were not interested in talking. Investors were not interested. The goal was to hold out and continue to make progress until someone started to get in.

One thing that we knew that we could hang onto is it was so clear that the problem was raw and unsolved. That was the single piece of truth that I could shop around and say, “It doesn’t matter whether you think it’s viable. This is a fact.”

Sramana Mitra: These customers are paying a subscription fee?

Eytan Bensoussan: Yes.

Sramana Mitra: How much MRR or ARR did you get to in this bootstrapped mode before people started seeing actual evidence that there is a validated problem here?

Eytan Bensoussan: It’s one step before that. Especially in neobanking, there is a meaningful amount of capital that needs to be put in before you can even turn the lights on. You have to go through all sorts of compliance verifications, partnership negotiations, and product development, and then you’re able to turn the light on. What we had was what’s the next best thing if I can’t have a live product. We built a waitlist. We had businesses signing up for NorthOne. We saw that had meaningful traction. It grew to about 100,000 businesses before we launched.

Sramana Mitra: You signed 100,000 businesses on the waitlist?

Eytan Bensoussan: Yes.

Sramana Mitra: How did you sign up 100,000 businesses?

Eytan Bensoussan: We started by doing small-scale stuff. We’d go to e-commerce meetups. We‘d give a section on financial planning to business owners. That’s just at the micro-scale. As we started looking at the data, we started getting a persona of the kinds of folks that could be interested. Then we started moving across channels. We’d be very active in answering questions when they were asked on Twitter.

Our whole team was dedicated to answering questions on Quora, Twitter, and LinkedIn. Very quickly, the need was common enough that people would pass on the invite to their communities. That one person would become a source of three or four other invites. Many small business owners know each other. They all have the same problem.

All of a sudden, someone said, “Someone’s trying to solve this. Why don’t you sign up?” We barely spent any money promoting it. It was just about scrappy and smart ways to get our message and value proposition in front of possible customers.

Sramana Mitra: How many people were you at this point?

Eytan Bensoussan: 15 people.

This segment is part 4 in the series : Thought Leaders in Financial Technology: NorthOne CEO Eytan Bensoussan
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