Cubed with Elliott Limb | E296
Partnering to prevent fintech failure.
On today’s episode of Fintech Impact, Jason is going to talk to Elliott Limb, founder and CEO of Cubed. It is a company assisting fintech companies scale, while mitigating the high failure rates commonly faced by startups. The conversation underscores the challenging dynamics that fintech startups face when accepting VC funding, including the need to continually meet milestones and the potential for increased pressure as the company progresses through funding rounds.
Episode Highlights
00:21 Elliott discusses Cubed's mission, which is to help fintech companies overcome high failure rates. Cubed serves as growth partners, actively involved in running and growing fintech businesses.
02:20: Elliott is frustrated by the high failure rates in the fintech industry, especially concerning venture investments led to the development of data models, operating plans, and strategies to improve fintech success rates. He co-founded Cubed to help fintech companies succeed.
05:51: As per Jason Fintech start-ups often approach traditional finance institutions with novel ideas, wireframes, and slide decks, while the traditional sector expects well-established, bulletproof systems. This divergence in expectations can hinder collaboration.
06:45: Elliott acknowledges that the cultural divide between traditional finance and fintech is a common issue. He mentions that this divide is gradually improving, but it has been a significant challenge in the past.
08:10: Elliott highlights a common mistake made by tech companies, where they focus solely on selling their cool technology without addressing the specific business value and customer needs.
09:37: Jason seeks advice from Elliott on how to prevent the challenge of knowing when to decline potential sales and engage in the difficult conversations with clients who demand hyper-specific, non-scalable solutions that offer significant financial incentives for custom development work.
10.25: Companies should take a more strategic approach rather than jumping straight into execution, even if it means walking away from potentially lucrative opportunities initially.
11.22: Elliott points out that it's common for entrepreneurs to make the same mistakes repeatedly, especially when faced with enticing offers, and it's crucial to avoid falling into the trap of burning through resources on non-scalable projects.
12:22: Cubed's engagement with fintech companies varies depending on the specific needs of the venture capital firm and the stage and condition of the fintech start-ups they are involved with.
12:42: Cubed works closely with entrepreneurs who are seeking guidance and support. They help entrepreneurs by identifying issues within the company, such as ineffective customer targeting and a lack of profitability.
14:51: Jason acknowledges that for technical founders and entrepreneurs, constantly seeking funding can be frustrating and time-consuming.
16:39: Jason and Elliott discuss common issues faced by fintech companies and methodologies for course correction.
18:47: The conversation highlights the critical role of investors in the success of fintech companies. Strategic investors who bring more than just financial backing can significantly enhance a company's prospects by opening doors to partnerships, offering industry insights, and helping with strategic decision-making.
20:27: Founder dynamics, investor selection, and organizational alignment, could contribute to the challenges faced by fintech startups and potentially explain the higher failure rate in the industry.
23:57: Elliott's assessment suggests that the fintech industry faces unique challenges related to due diligence, investor experience, and rapid funding cycles, which could contribute to a higher failure rate compared to other sectors in the venture capital market.
24:27: In this part of the conversation, the discussion focuses on the culture within fintech companies and how it can impact their success and failure rates.
26:29: Elliott emphasizes that while the fintech industry offers a lot of upside and opportunities, it can also be challenging and demanding. The fast-paced nature of fintech can quickly wear down individuals and organizations.
29:14: Effective pricing is essential for fintech companies to attract and retain customers while maintaining profitability. It requires ongoing analysis, market research, and the ability to adjust pricing strategies as needed.
31:32: Elliott highlights the lack of transparency in the fintech industry and expresses his wish for more openness and honesty among industry players.
32:09: Fostering an environment of transparency and open communication can lead to more effective collaboration and problem-solving, says Elliott.
34:32: Elliott expresses his excitement about making a difference in the industry by helping entrepreneurs and companies succeed. He finds satisfaction in seeing companies grow and improve with the assistance of his expertise, and he views each success as a win.
36:02: Elliott is driven by the goal of making the market better and increasing innovation within the fintech sector.
3 Key Points
Elliott provides a holistic view of the challenges and responsibilities that both start-ups and investors face in the fintech industry. He highlights the need for strategic planning, rigorous measurement, and a strong focus on team execution to improve success rates.
Elliott explains that Cubed's involvement with fintech companies from the venture capital side usually happens for three main reasons: Due Diligence Support, Portfolio Review and Turnaround Assistance.
Jason and Elliott highlight the need for fintech founders to strike a balance between loyalty to early employees and the necessity of bringing in diverse talent that can help the company navigate the challenges of growth and innovation.
Tweetable Quotes
“Building a great piece of software is not enough for success; you must consider distribution and other business aspects.” – Jason
“Companies should position their technology in a way that clearly demonstrates how it will improve the customer's business and provide a sustainable business model.” – Elliot
“Once fintech companies secure VC funding, they often face the pressure of achieving specific milestones to unlock the next round of funding.” – Jason
“Companies often hire experienced individuals but fail to provide the necessary enablement and alignment to ensure success.” - Elliot
Resources Mentioned:
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