Carey Ransom is a SaaS entrepreneur, executive, investor and advisor, and has started, grown and/or led 8 B2B and consumer SaaS companies during startup and growth phases. He is currently President of Operate and the Managing Director of BankTech Ventures, a newly launched strategic investment fund focused on compelling technologies for community banks, and founded and funded by leaders in the community bank ecosystem.

Welcome back! I’ve discussed the initial steps of making a pivot in your fintech startup. In this article, I’ll try to help you with one of the biggest changes you’ll need to undertake—the team.

Who stays and who goes? You have a team of people who joined the company with the belief in the future vision and better world that the company could create. With an adjustment to that vision, can they both stay bought in and provide the needed value to a different company?

These assessments, both by the leaders and through self-reflection of the team members, will be an important part of your personnel changes. Roles and the day-to-day work change in any fast-growing company that stays in the same business, let alone one that is making a significant business pivot, so adaptability, learning agility, and communication are critical. Nobody will have all of the answers, which is why I referred to a pivot as almost a “re-founding” in a prior post. 

Here are some examples of likely role (and possibly team) changes in the pivot from B2C to B2B:

1. Sales and Business Development:

Fintech startups shifting to B2B will require a stronger emphasis on sales and business development than one that was more marketing heavy to consumers. Building and nurturing partnerships with financial institutions become critical, necessitating team members with expertise in negotiating and managing such relationships.

Watch out: Marketing people may welcome and embrace the challenge, but they should understand that the new role is significantly different. Make sure everyone is clear about the work, and the management and measurement of it.

2.    Product and Solution Integration:

Teams will need to adapt to the intricacies of integrating their solutions with existing financial systems and managing those integrations and service levels on an ongoing basis. Cross-functional collaboration with product development, engineering, and IT professionals becomes essential to ensure seamless integration and optimal performance. Additionally, the platform may now need to lead with the partner’s or customer’s brand, and the work to make that possible will also need to happen.

Watch out: Internal product and project managers could be good candidates to lead this work, but they’ll have to proactively think about repeatability, re-use, and leverage; you want the business to become more efficient with better margins over time. The prior role likely focused on everything being one-time and custom, so the goals will be different now. Can they make that leap?

 3.    Regulatory Expertise:

B2B fintech models often involve navigating a variety of regulatory landscapes, depending on the size and types of customers and partners. Teams will require regulatory experts who can guide the company through compliance challenges associated with working more closely alongside and within established financial institutions. 3rd party and 4th party risk management will become a much more common conversation in the company post-pivot.

Watch out: The current compliance and legal team may be suitable, but a change to the business model could make some current requirements less important, while also introducing new ones. How adaptable and interested is this group in the changes?

Additional Risks and Challenges:

1. Offering and Integration Complexity:

The integration of fintech solutions into the systems of financial institutions can be complex, costly, and time-consuming. Delays or difficulties in this process may pose significant challenges and hinder the success of the pivot. I’ve seen companies run out of money and time in the process of trying to land that first big bank customer. This can happen when the company starts with a focus on selling to banks. It might be even harder when pivoting in that direction.

2. Cultural Misalignment:

Fintech startups and traditional financial institutions often have different organizational cultures, decision frameworks, senses of time, urgency, and incentive structures. Navigating these differences, aligning goals, and fostering effective communication are crucial to the success of collaborative efforts. If your fintech had more of a “move fast and break things” culture, you’ll need to adapt that to be more aligned to traditional financial institutions’ cultures if you’re going to sell into and partner with them.

3. Market Realities:

B2B fintech solutions must still contend with a competitive landscape. There may be a number of existing solutions that have to be sold against or replaced for you to be successful. Understanding the ways that potential customers are addressing these problems and opportunities today is critical, before ever embarking on the pivot. Are they motivated to find newer, better solutions, or do you have to drive this motivation? The market may already be saturated with established players, and if the customers are generally happy, then you’ll have to create substantial innovative value and differentiation to have any chance to stand out.

 Hopefully you understand how significant a pivot actually is, and you commit to do the necessary work to learn, plan and execute the changes to give it any opportunity to succeed. You’ll need to inject new energy and capability into the team to make it happen. And in my last part I’ll wrap up the series by trying to answer the question, “Can this really work?”