A fintech's pivot from B2C to B2B (Part IV)

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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.

Can the Pivot Really Work?

In this series, we've explored the potential for a pivot, the complicated process it entails, and the crucial changes that must be made. Now, we reach a vital question: "Can this really work?" Based on my observations and experiences, a successful pivot hinges on a blend of culture, process, people, and timing. When these elements align, the results can be remarkable. Here are types of elements that I’ve found to be positive ones:

 1. Adaptability and Innovation Fintech startups that are energized by and thrive on adaptability and innovation stand a better chance in a significant pivot.

Likely conditions for success:

  • Less Capital Raised: Startups that haven't overextended in early funding rounds will usually find it easier to maneuver. Less complexity in your capital structure means more flexibility to pivot.

  • Responsive Product Development: The ability to listen to market feedback, adjust your product offerings, and quickly implement changes is crucial.

Key Takeaway: Agility is your best asset. One of our BankTech Ventures companies, Torpago, adjusted its focus after recognizing a niche in providing its platform to banks—demonstrating adaptability in real time.

 2. Strategic Partnerships The foundation of a successful pivot often lies in forging strong, mutually beneficial partnerships with established financial institutions.

Likely conditions for success:

  • Credibility: You must establish trust to engage with banks’ top decision-makers effectively.

  • Market Alignment: Understanding and integrating your partners' needs into your business model is essential.

Key Takeaway: Partnerships are more than agreements; they are the pillars on which your new business model will stand. Consider how you can get feedback and even product design help from a bank, which is more likely if they sense the true partnership opportunity, and you can also leverage their credibility to gain market trust.

 3. Market Understanding & Positioning To pivot successfully, you must not only stand out but also resonate with your intended audience.

Likely conditions for success:

  • Expertise Development: Position yourself as a thought leader by offering unique insights and solutions.

  • Market Insight: A deep understanding of the regulatory environment and customer needs is non-negotiable.

Key Takeaway: Positioning is everything. Your ability to articulate a clear and compelling value proposition sets you apart.

4. A New Vision Pivoting can feel like switching from driving a bus to piloting an airplane. It's about embracing a whole new way of moving forward.

Likely conditions for success:

  • Comfort with Change: Embrace the new direction wholeheartedly.

  • Acknowledgement of New Realities: Recognize and adapt to the significant shifts in your business landscape.

Key Takeaway: Change is daunting but necessary. Like Shopify, which successfully transitioned from an online store to the leading provider of e-commerce software for other store owners (and eventually even a fintech company), your new vision should redefine your trajectory.

5. Capital & Value Evaluate whether the new business model holds more potential value than the existing one. This assessment will guide your financial strategy moving forward.

Likely conditions for success:

  • Investor Alignment: Ensure that your current investors support the pivot, and prepare to attract new ones if necessary.

  • Financial Planning: Develop a robust financial model that supports your new direction.

Key Takeaway: Your pivot's success may require a fresh financial strategy. Transparency with investors and clear communication about your new path are imperative.

Conclusion A pivot from B2C to B2B in fintech is laden with challenges but also ripe with opportunity. Success depends on thorough preparation, deep market understanding, and an adaptable team. Risks are inherent, but with the right approach and effective partnerships, your startup may be able to navigate these changes and emerge stronger.

As we conclude this series, I hope you’ve found some value in it to guide your thinking or reflect on how these insights apply to your business. Feedback is always welcome, as are additional thoughts, suggestions, and opportunities to connect further on this topic or the broader fintech one.