The American Dream
A fantasy for many fintechs, and for others a quick entry and exit. So what’s different about Curve’s 2021 launch in the US? Here’s our Head of Product in the US, Dan Poswolsky on how we’re doing things differently.
Previous successes of European fintechs entering the US present a playbook for expansion. Or do they? Replicating someone else’s approach is a no-brainer. Copy the format, scale it, then fortune and fame will follow. But in my mind, a one-size fits all approach to launching in the US constitutes a dangerous journey.
The trap starts with the shared language and popular culture of the US. We feel closer in theory than we are in practice, especially when it comes to money. But like the vast disparities within the United States, from New York City to Miami, to Austin, the American financial services landscape is as different in itself as it is to the UK or Europe.
From regulation to consumer behavior, we are looking at complexity that must be approached by teams and products that cater to that matrix.
Take physical cards. In the US, plastic still rules, and contactless technology lags behind many other countries. Just 3% of cards in the US support contactless (as of 2018). And when it comes to checks, Americans still write 4.4bn of them (what a waste of paper!).
Rewards schemes and store cards are hugely popular, with American Express and its world-renowned rewards program setting the gold standard. Foreign exchange fees are also less of a pain point for Americans, who venture abroad infrequently compared to their European friends.
Localization is crucial for launching abroad. Starbucks offers a good example. After opening its first outlet in Australia in 2000, the mighty Starbucks had all but exited by 2014 after years of losses. Even under the globally-reaching Howard Schultz, Starbucks misunderstood the lack of appetite for expensive big brand coffee in a country proud of its strong independent café culture.
Tesco also tried and failed to make an impact abroad. The UK supermarket giant closed its Fresh and Easy stores in 2013, wasting $2bn and six years in the process. Their mistake was misunderstanding how Americans buy food, including the US love of coupon culture.
Do devolve control
To truly localize, we’ve found there are two important steps. First: hire local talent and run with them from the start.
No one understands the market like embedded experts, particularly those like Amanda Orson, Curve’s VP for North America, and Cheun Park, Curve’s lead designer for the US.
Second: let the experts dine out on their ideas, and serve them the resources, including budget, to hit the ground running. Being too prescriptive can create a product that fails to meet the needs of American consumers, or lead you down the wrong route for customer acquisition.
Sharing your vision and aligning internally on the goal is crucial early on. Don’t be afraid to make trade-offs and hard decisions, because one person's “must-have” in the UK, or Germany, could be a “no one cares” in the US. It’s less excruciating, and expensive, to face these challenges head-on from the starting line.
Curve’s US team is functioning like a start-up within a start-up, thanks to the support from Shachar Bialick and Curve HQ in London. For that hats off (or is it baseball cap?) to Shachar for living Curve’s ‘Ownership’ Principle - leading for leaders.
Do differentiate your product
No one else can simplify people’s financial lives like Curve.
No other company lets users condense all their cards into one card and app. Or lets users Go Back In Time and switch payments from one card to another.
In the US, it can be hard to differentiate among financial services, as there are licencing requirements for lending which means banks are, essentially, all on the same footing from the start.
Branding alone can often create a strong point of difference in smaller markets, but this is a much larger challenge in the US. The country accounts for 40% of global ad spend, and just 4% of the world’s population, making advertising a costly endeavour.
Don’t wait and see
Testing and feedback are crucial parts of any product. At Curve, we strive to create new and innovative features through evolution, not revolution.
But it’s essential to have a path to profitability when entering the US market, right from the start. It’s the largest consumer market in the world, with more than 300m people, a $20 trillion GDP and the highest household spend. That means American consumers already have access to the best things in life, and won’t waste time on a product that doesn’t work for them.
A “see what happens” approach won’t cut it here, in arguably the hardest market in the world to crack (the other is China). Instead, knowing what you’re giving your American customer-to-be, and being prepared to reshape and fine-tune, 24/7, is essential. On this one I’d say, “Come together.”
Do work with your structural advantages
Curve is not a bank, and in the US, that’s a huge advantage.
It's hard to be a bank entering the US market. A new wave of neobanks, alongside more traditional banks, leave American customers spoiled for choice. There are more than 5,000 FDIC insured banks alone, so it’s no wonder that the average American carries around seven cards and is a member of 15 loyalty programs.
On top of that, the US may be home to the planet’s consumer market - after all it’s where Amazon was born - but its financial technology and regulation is incredibly complex. The UK’s own is a walk in Central Park by comparison.
In a highly competitive market, where regulatory hurdles are high and capital intensive, not being a bank is a strategic win. Curve gets to sit above the existing infrastructure - it’s to finance what Netflix and Spotify are to films and music. It flourishes because the more fragmented customers’ financial relationships, the stronger need there is for our product.
The harder the journey, the sweeter the victory, and fought for with a little help from my friends.