All roads lead to Rome

The Peutinger Table. Reproduction by Conradi Millieri — Ulrich Harsch Bibliotheca Augustana.

I spent three years as a Design Lead at Cash App. During my time there we saw a substantial growth in both active users and revenue, and had the pleasure of helping to build out the Growth team.

A few focuses of my team were new user acquisition and existing user engagement. In simple terms, this meant getting non-Cash App customers to become customers, and getting current customers to become better* ones.

This meant one of the largest challenges we were trying to solve was finding a user who was using Cash App just to pay their roommate back for dinner, and getting them to also use the product as their bank account… and the place they get their paycheck deposited… and the place they spend that money on a debit card… and to engage with rewards on that debit card… Not to mention also getting them to buy bitcoin or stock in their favorite company…

These were some big challenges that required thought on not only designing around traditional methods of growth, but also digging a layer deeper into our users’ relationships with money. It was some of the most exciting, rewarding work I did.

But these challenges weren’t unique to Cash App. Many consumer fintech products are moving in a similar direction today, developing an innovative solution to a specific product vertical within the consumer finance suite, then horizontally engaging their customers with a broader set of functionality.

In consumer fintech, “all roads lead to Rome”

Despite the competitive landscape of the space, most product differentiation comes at the beginning of users’ lifecycles. Regardless of which road the user starts on, they end up in a similar spot.

Whether it’s Cash App’s peer-to-peer payment network, Robinhood’s commission free trading, Chime’s early direct deposit, or Point’s rewards that become the road in which a user travels, they’ll eventually end up in Rome — surrounded by upsells for debit cards and checking accounts.

If acquisition is the battle, engagement and retention is the war.

This shared model of acquiring customers through a vertical product and then horizontally cross-selling is no surprise. More often than not, these acquisition hooks share a common thread of a relatively low customer acquisition cost, with the extended product offerings being highly monetizable.

There are two primary paths to being successful as one of these players:

The real winners, of course, are the rare products that can accomplish both. I may be biased, but this can largely explain Cash App’s success in recent years.

It’s worth noting that although these companies are moving in similar directions in terms of product offerings, I don’t believe any one of them will eventually own a majority of the consumer finance market. Rather, users will continue to rely on these products and brands for their differentiated verticals, and we’ll see a new wave of consolidation and curation-based products.

We’re already seeing the unbundling of fintech It’s only a matter of time before the curation and subsequent rebundling processes begin. I’m excited to see the next wave of fintech products be built on top of this unbundled foundation.

In the next few years, I predict we’ll see three common themes within fintech startups:

Introducing organic growth in primarily utilitarian products is a challenge. I’m excited to see the creativity that startups bring in introducing social layers to their products. This will create an opportunity for viral network effects to be introduced into previously-idle products.

I have a thesis that anything done as an individual sport will eventually be done as a team sport, and I think we’re just getting started on how it will happen in fintech. Some examples of this would be Public, introducing a social element to investing. Or how about TabTab, a sharable spin on subscription payments.

My friend Gaby Goldberg published an essay on the topic of curation. I strongly recommend you give it a read after this. In the piece, she writes,

The same is true in consumer behavior of choosing the right toolset to accomplish their daily financial needs. With countless ways to spend, save, move, and invest their money, consumers will need to rely on intelligent advice — from both individuals and AI — to inform their decisions. I’m excited for the startups that enable this. This has previously looked like services such as CreditKarma, offering card suggestions based on credit score, but there’s lots to be built here.

In a gold rush, sell shovels.

To bluntly apply it here, when everyone is becoming a bank, be the one that makes it easy for others to offer banking services.

The penultimate example here is Plaid, but it’s safe to assume we’ll continue to see more startups like Check, Pinwheel, Synapse, and Marqeta show up in the coming months.

I was saddened to see Simple recently shut down. They were an early pioneer of this neobank movement we’re seeing, and set the high-quality standard for many startups still in the game. But that’s how it goes. Even though the fintech industry will continue to change, I’m excited to see how it evolves from here. Companies building, growing, becoming successful in their own rights, and paving the way for others along the way.

One of the key takeaways I have from writing this is just how big the overlap is within fintech. This is what excites me the most. For every vertical neobank that gets created, the market for a banking integration platform increases. For every debit card rewards program that gets built, the market for a merchant rewards platform grows. The list goes on and on…

It’s just the beginning. See you in Rome.