Maximilian Rofagha is the co-founder of Finimize, a UK based startup making finance accessible to millennials. Finimize is backed by London based VC Passion Capital and the company has more than a million users. Before Finimize, Max co-founded an e-commerce startup with about 200 employees backed by Lakestar and sold it in 2015. He also mentors startups and runs programs with Techstars and Startupbootcamp. He is also one of the youngest startup founders around, and Forbes named him one of the 30 under 30 in 2016.
Max spoke to us about the three steps by which a brand can leverage the power of community. He explains his philosophy of hire slow, fire fast and talks about how he built the largest financial community in the world with what started as an email newsletter.
Q. Talk to us about your entrepreneurial journey right up to starting Finimize?
Max: I was born in 1987, and I am part of the last generation that experienced life before the World Wide Web. When we first got internet access at my house, I remember very distinctly, that grabbed my attention and shaped me. I started tinkering around with a lot of online products and digital products like flash. I even built my own website when I was in school. And that’s how I got into this whole digital space.
Then I studied economics and international relations, and in my final year, I did a summer internship at eBay. And that re-sparked my interest in digital products because I saw how they went about building their website, optimising different sections etc. I also worked in consultancy for a while, and I was throwing around a couple of ideas when a friend of mine called me and told me he is starting an e-commerce business and if I wanted to join. We built an e-commerce business for more than five years and then sold the company to the largest media house in Switzerland, and then I started Finimize.
Q. You recently said, “in building Finimize, I learnt that there are three ways to leverage community as a media brand. And the three ways are, drive up Net Promoter Score (NPS) and thereby, word of mouth, increase retention, and enable user-generated content.” Let’s start with driving NPS. How do you do that?
Max: I highly encourage everybody to track their NPS scores right from the get-go. NPS measures customer satisfaction. It’s interesting because the question is how likely you would recommend our product or service to a friend? And what you want to understand is the people who say they’re very likely to recommend the product- the promoters. Why are they so likely to do that? What do they like about the product? That will help you understand your strengths.
Then you have the neutrals, who are not really sold on the product but also don’t hate it. And then you have the detractors. What you want to understand is who the detractors are? What is it about the product or the service they dislike, and then you start to think about what we can do to make it a better product? And how can we resolve those points?
Ultimately, what you’re trying to do is move people from one segment to the next. Move the detractors into becoming neutral and then move the neutrals into becoming promoters. In doing so, you develop a really interesting process of constantly speaking to users, making product changes and shipping improvements. The logical consequences of this are that the more you improve the product, the more people recommend this service to friends. And so, as a result, the more you drive, word of mouth.
Q. How do you track NPS at Finimize?
Max: We do surveys. We try to put them into our products where we prompt you to fill out the survey. We also do dedicated emails regularly to ensure that we get a large sample size to feel that we have a very representative NPS score.
You can also start segmenting that a little bit more. You can measure what’s the NPS score for people who are paying users versus free users? What’s the NPS score of people who recently joined versus people who have been there for a while? And you can start adding a bunch of tracking attributes to qualify the NPS scores in a little bit more detail.
Q. What are some of the things that work for you in moving your detractors to neutral and neutral to promoters?
Max: We do a combination of things. Number one is we try to be very, very close to our users. We build the product and the service the way that we envisage it and then we try to listen as much as we possibly can. We might not prioritise some things that people want because we recognise that it might be a power user, or maybe only 1% of the users will benefit from it. And so that might be less of a priority than something that 90% of the users would benefit from.
We try to speak as much as possible to our users. We’re in a very fortunate position because we have this vibrant and active community. And we have chat groups with our users, and we interact with them very regularly. And so we have a very clear understanding of what our users want, and who they are and all of that stuff. And then we pair that with data. It’s always about that constant balancing act of listening to the users and then quantifying it as much as you can. It’s that art and science that we try to practice.
Q. Can you explain to us a little bit about the process that goes into listening to the users and bringing all these things back into the product?
Max: We try to always have two dimensions when we build a product. The first dimension is strategic, and the second one is tactical. On the strategic level, we place large bets that are primarily driven by conviction because it’s part of a larger product vision and product strategy.
With the strategic bets, we’re not looking for 10% jumps, we’re looking for 50 or 100% improvements, and we try to place a couple throughout the year. In parallel, we work tactically. We run weekly growth meetings, where we look at the data, we try to understand wherein the data can we generate efficiencies, improvements to create gains, specifically around the funnel. We try to understand why a particular funnel step is not where we want it to be. Try to understand the problem by speaking to our users. Then we come up with a bunch of ideas around what could solve this. it’s always this constant parallelism on the one side, continuing to iterate and getting those tactical games and then, on the other side, placing large bets that you think can bring the product from one level to the next level.
Q. How do you focus on increasing retention. You say “come for the content and stay for the community”. How did you make this happen?
Max: We’re focused on the retail investor, and our product thesis is that people come to us for content because we have very high-quality content that’s bite-sized, modern, and it’s mobile-first. But ultimately, people really value our community.
For example, if you’re a user, you might get a premium membership with us because you want to find out things about a specific topic, and we have content on that. As a premium member, you also get access to chat groups that we have only for premium members to interact with other premium members. You can interact with our analysts, and you can attend special meetups. And we have all these community initiatives that if you then no longer have a premium membership, you won’t have access to those. And we find that people get a lot of value out of them. And so that’s a valuable retention driver for us.
Q. The third piece that you talked about was getting user-generated content. How do you go about this?
Max: We have multiple user-generated content strands. One is within the premium groups, there is a centralized resource database where people share things like what investment platforms do they use, what ETFs do they look at etc. All that collective intelligence is constantly being collected and stored in a database that everybody has access to.
The other piece which is probably what we’re most well-known for is our meetups. We have a very active meetup culture, where community members host a meetup anywhere around the world. Now it’s virtual. People would organize a meetup to discuss a topic that can be anything from vegan stocks to ESG to NFT to whatever the local community finds interesting. And that’s 100% organized by our community members. Last year, we connected 30,000 people through these meetups. This year, we’re on track to connecting 60,000. In the first quarter of this year, we connected 15,000. So we’re already half as many as last year. And this makes us the largest financial gathering in the entire world by far.
A lot of content gets produced at these meetups. People talk, there are guest speakers and all these different things. We record these, and people write blogs that creates a new form of user-generated content that we can then share with the wider audience.
Q. 60,000 people connected through your platform is a considerable number. How did you get it started?
Max: We started Finimize with a newsletter product. One day we did a shout out in our newsletter asking if people wanted to meet us at a pub. We expected maybe three people would come if we’re lucky. Fifty people showed up, and Finimize users took over the entire pub. We were surprised by that and we thought there was something there. It was also a fun activity so we organized more of these reaching up to 400 people in London.
People started emailing us to organise meetups in Sydney, Los Angeles, and New York, but we couldn’t fly around the world to host these events. We thought that members could host the meetups themselves, so we developed a playbook, and now we roll the playbook out to the hosts and together with these hosts, we’re active all over the world, every single continent. That’s how we started with an organic community-driven approach.
Q. How did you delegate things as you scale, and how did you go about building your team?
Max: We’ve always put a lot of emphasis on hiring the right people. We have a very rigorous hiring process and we have this ethos that we are slow to hire fast to fire. We take our time because we want to make sure that we’re making the right hires. As a result, we have a fantastic community team, and basically, all the credit goes to them.
I hire people firstly based on their skill-sets and then on the culture fit. I always tell my team that if you hire someone on your team, the hire needs to be better than you at that specific task or role. If you hire an ad salesperson, that new hire has to be better at selling ads than you because that’s how an organisation grows. Culture fit is also really important because in a small company people have to understand what we’re trying to do and be willing to go that extra mile.
At the end of the day, it’s about finding excellent people who understand what you’re trying to do, understand the mission, understand the product, and understand the users. Then our approach is, hire amazing people, get them on board. And once they’re on board, get out of their way, and let them be amazing because that’s why you hired them.
Q. What are some of your top lessons as an entrepreneur that you picked up on the way?
Max: Number one is to focus on some of the soft factors and try to build a culture from day one. With Finimize, I wrote the culture manifesto before I made the first hire. I did this to set the tone of who we are and these are the kinds of people we want to hire, and these are the kind of people we don’t want to hire. And when we do go about business, this is how we do it. And this is why we’re here, and this is what we’re trying to achieve. And it’s been really clear, and that’s been super, super helpful as an internal compass to guiding us as we went about our business.
The second thing I alluded to earlier is to hire slow and fire fast. You want to fire as few people as possible, which means that you need to do an excellent job of hiring in the first place. Ensure that you get the best people you can learn from and then who also fit culturally. If you have investors, they might be pushy to get you to hire faster, so you can move faster. What we’ve done is to say, if we’re not 100% convinced of a specific hire, we’re not going to make the hire. The reality is that if you make a wrong hire, it can cost you quite a lot of time. From the interview process to the probation period, then you realise it’s not working out. And then you have to hire a new person. And before you see it, more than half a year has gone. Which in startup land is a very long time.
Q. What are some of the lessons that you would give to entrepreneurs who are in the market to raise money?
Max: Often today, because of the way that the market is. People, by default, think that their business is going to get funded. People need to think about it. Is that true? Or can they perhaps build the first version of their business without external capital?
I know some founders who’ve bootstrapped their companies profitably to $10 million ARR, and then they go out and raise capital. Those are always the best stories because firstly, you have a business before you take on external capital and secondly. After all, you have way more control and leverage than if you had taken on external capital from the start.
So be thoughtful of what your game plan is. If you go down that venture-backed route, then really think about who you want to get on as an investor. The reality is that once you get a VC on, they’re there, and you’re not going to get rid of them. Make sure that you get the right people both in terms of skill sets and also in terms of cultural fit, just like with hiring new employees.
Q. If our listeners want to reach out to you, how do they do that?
Max: The best way is to hit me up on Twitter.