From 0 → 1, Building a Fintech Start-up for the Latinx Community
Poder, a funding platform that unlocks capital for Latinx small business owners
FinTech User Research Low-code MVP
Context
I completed this work as an employee of the Ideas42 Venture Studio. The studio recruits talented individuals from diverse backgrounds, with direct, lived experiences and we work directly alongside them for 18 months in an intense research, behavioral design, prototype, sell, deployment, and fundraising process. At the end of 18 months, our entrepreneurs have a product in-market making a difference in the world, with capital to continue to grow far beyond the Venture Studio.
I partnered with an entrepreneur and engineer to identify the problem space, define the problem, and ideate on the solution: a funding platform that unlocks capital for Latinx small business owners.
The Problem
When I joined the team, the entrepreneur knew they wanted to focus on building for the Latinx community. They had identified a few problem spaces they were interested in, within the building capital space. They were in the process of identifying assumptions they had about the problem spaces and needed to validate or invalidate those assumptions.
Screenshots of the Miro boards, from left to right: sample of debrief boards, detailed view of debrief board, synthesis boards (behaviors, barriers, motivations, needs)
Research
We began by talking to people in the Latinx community to better understand their behaviors, barriers, motivations, and needs around money. The team completed 24, 1-on-1 interviews, mostly in Spanish. I facilitated all the debrief sessions, capturing the most important insights from each interview. When the interviews were complete, I facilitated a synthesis workshop. We grouped and themed all of the insights from the interviews.
After this initial research, we identified a few key insights: the Latinx community supports each other, they primarily communicate via WhatsApp, they recommend new products, services, and businesses via word of mouth, and when Latinx small business owners are supported and successful - the whole community benefits.
With these insights, we narrowed our target demographic to Latinx small business owners. We did another round of 1-on-1 interviews with Latinx small business owners and completed desk research to understand the capital products and services that are available.
We learned there’s a $60 Billion Lending Gap for Latinx-owned businesses. Only 20% of Latinx Businesses who apply for bank loans receive funding (compared to 50% of white-owned businesses) even though 50% of all net new small businesses created are Latinx-owned (2007-2017).
With the wealth gap continuing to widen, Latinx business owners must gain access to capital in order to grow their businesses, support their families and community.
The wealth gap continues to widen. Source: Insider Inc.
Experiments
Next, I started concurrent projects to understand more about those we sought to serve. Every experiment was done in English and Spanish and written in plain language by an expert. This added an extra layer of complexity but ensured we were reaching those we sought to serve.
Quick landing page section & Test Results
I ran a few qualitative studies to understand the knowledge and interest in existing financial products within the Latinx community.
The winning option read “Buy Stocks - Start investing today in Latinx led and owned businesses with custom index funds, with as little as $25”
I designed and built a landing page in Squarespace that encouraged small business owners to download an “Access to Capital” resource pdf, allowing us to capture email addresses.
They could also opt in to a Whats App group, that brings Latinx small business owners together and shares resources with them.
We didn’t have a product to offer yet but wanted to start building a relationship of trust with Latinx small business owners.
I created and ran social ads to understand what messaging was most compelling. When clicked, the ad led to a landing page and then a Typeform to collect information about their businesses and capital needs. In subsequent ads, I increased landing page conversion by 16%.
Making the MVP
At this point, we had the idea to build a crowdfunding platform where small business owners would ask the community to contribute 10% of the loan they needed. We would use this community funding as a factor in the loan underwriting process. We started talking to lawyers and understanding all the steps in would take. Simultaneously, I started working with our engineer to map out what a low-code MVP would look like. However, the more we learned about what it would take to operate a crowdfunding platform, we realized it was extremely expensive and heavily regulated.
We finished the MVP so that our entrepreneur would have a demo to show perspective community and lending partners and perhaps future VCs.
The planning documents I created to keep us on schedule and assign tasks
Mini Pilot
Before committing to building a crowdfunding platform, we knew we had some assumptions to validate. The biggest one was: would the Latinx community financially support small business owners in their community and to what extent?
We decided to start small and run a mini-pilot: one Latinx small business owner asking her community to financially support her business. Through a community partner, we were introduced to Leidy. Leidy has been making desserts for over 22 years. She opened Leidylicious Bake Shop, a retail bakery, in May of 2023. She quickly had so many orders that she ran out of fridge space. She needed to buy another fridge in order to take on more orders. She went to a few banks but was told she wasn’t eligible for a loan. We met Leidy in August of 2023 and didn’t know what to do next. She wanted to grow her business but she needed capital.
When we told Leidy our idea of asking her community to support her business financially, she was hesitant! Her community was already supporting her business, she didn’t want to ask them to give with nothing in return - we agreed. We came up with a plan to give an exclusive cupcake to those who donated to her community campaign. With Leidy on board we started working on all the necessary pieces to make it a success.
Check out some highlights below:
Crafted a landing page that Leidy could share with her community to inform them about the campaign to raise money for her business and linked it to stripe to accept payment.
Created posters that Leidy posted in her Bake Shop and Instagram posts that both Leidy and Power Capital used to market the campaign online.
Set up a zap in Zapier, so when a contribution was made they would get an email with a coupon to redeem their cupcake. It also added their name to a spreadsheet Leidy could cross reference for redemption purposes.
The Results
Leidy met and exceeded her campaign goal! Now the entrepreneur is expanding the pilot to add 5 additional business owners. We learned a lot from working with Leidy. Like it was better to sell a product than ask for money and small business owners are busy - sometimes the best way to meet with them is in person.
The entrepreneur, Alexandra Ruiz, is still working on Poder Capital. She’s building slowly and intentionally with and for the Latinx community. It was a joy to build alongside her.