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Royal Park Partners: The 5 Mistakes Made by Fintech Start-up’s and How to Avoid Them

Launching any company can be difficult, and creating a successful fintech enterprise is no different with up to 90% of fintechs startups failing. 

In response to this, Aman Behzad, Managing Partner at Royal Park Partners, and Lana Tahirly Abdullayeva, Advisor, Digital FS & Growth Strategy, have combined their 40 years of fintech experience into a recently released five-point fintech playbook, aimed at helping startups get through that first year. 

Here, Aman shares some insight from their playbook, outlining the 5 biggest mistakes made by fintech startups and how they can be avoided.

Aman Behzad, Managing Partner at Royal Park Partners

Despite the reputation that fintech start-ups have for achieving staggering valuations, the truth is that 90% of them fail. A fifth don’t even make it past their first year. When done right, fintech has the power to reach and improve the lives of billions. However, we often see start-ups fall at the same hurdles.

I invited board adviser and global strategist Lana Tahirly Abdullayeva to join me in the creation of a five-point playbook. Together we combine 40 years of Financial Services and technology experience across growth and funding specialisms. The Royal Park Partners Fintech Start-Up Playbook brings together our insight to set out the best practice for fintechs to grow, as well as the common pitfalls for them to avoid. I’ve outlined five of those pitfalls below.

1. Having the wrong mindset

A great concept isn’t enough. If a founder isn’t prepared for the hard yards, they won’t last long. A recent study showed that over a quarter of founders worked between 60 & 80 hours a week, more than half never switch off, and roughly a third stated it negatively impacted their family and social lives. But at the bottom line- 75% would do it all over again.

To avoid this failure, founders should only begin this journey if they truly believe in their cause and if they’re ready to re-prioritise their life for a period of time. Their team should feel the same. They should share a clarity of purpose in a shared goal, confidence in the founder and the drive to transform an invention into an enterprise.

Without this, a great concept will stay just that.

 2. Ignorance of the product, the market, or the customer

You can know your product. You can know your market. You can know your customer. But without an understanding of how the three work as one, any fintech will struggle.

Always bear in mind that your product should be a solution to a problem, not a solution seeking a problem. You should be able to demonstrate its impact with meaningful metrics, and you should have developed its capability beyond the competition.

There is no substitute for understanding your market. Whether you see incumbent providers as competition or not, they will challenge you. Start-up founders must understand the market their seeking to disrupt. Around 42% of start-up failures are attributable to a disastrous unfamiliarity with the market they seek to enter.

Finally, a brilliant idea is only brilliant if paying customers think so too. Research reported in Forbes suggests that “Nine of the top 20 reasons for start-up failures – and five out of the top 10 – were related to customers – not meeting customers’ needs, not listening to them or even ignoring them.” Take time to master data and analytics and really understand your customer, their behaviours and their needs.

This lack of knowledge is avoidable. Take the time to know your product, the market and the customer.

3. Unbalanced leadership

For a fintech to succeed, it needs to be agile, proactive and always relevant in fast-moving markets. You can’t do this on your own. Without a diverse leadership structure in place, founders will struggle to balance these demands.

This balance at the top of an organisation is critical, but different for each start-up. A digitally-focused CEO may need a financially minded CFO. A commercially minded CEO might need a CIO to deliver technology insight. This balance, alongside a board that offers a wide general skillset, industry-specific specialists, credibility, independence of thought and constructive challenge, will give your fintech the leadership and dynamism it needs to avoid stagnating.

4. Having the right expertise at each level of funding

Funding is an essential step in the start-up process. A failure to deploy the right people at the right times will lead to the wrong outcomes. As fundraising requirements increase, so does deal complexity. Luckily, there are organisations focused on the provision of this expertise. Getting the right help from these organisations is essential.

Each funding round demands specialised skills, so you will need a team who understand the dynamics and challenges of start-up funding. Seed and Series A funding are often done by the CEO/founding team. Once you move into Series B & C you should take on an advisor. Select a long-term partner to see you through your whole journey.

A high-quality advisor who is able to initiate dialogue with the right kinds of investor will help you address any shortcomings your business may exhibit and present your start-up in the best possible light.

5. Poor execution

Founders can do all of the above perfectly, but if they fail to execute their vision, then it’ll all be for nothing.

The key is to maintain the agility of a start-up, staying innovative and constantly relevant, while also embedding repeatable processes that empower scaled, predictable growth. It may have been individual brilliance that started you on this journey, but it will be systematic processes and high performing teams that ensure your company survives, thrives and scales.

Starting a fintech isn’t easy. The right idea, at the right time, with the right expertise and the right leadership means the sky is the limit. If you can learn from failure, and given 90% of start-up’s fail, there’s a lot to learn from. All founders looking for success should be aware of these common mistakes and learn how to avoid them.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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