In the lead up to Demo Day, we’ve been sharing a series of stories that put the spotlight on some of the startups in Startupbootcamp Amsterdam’s 3rd cycle of the FinTech & CyberSecurity program. This next piece hones in on Bits, an investing technology company on a mission to make the (ever-enigmatic) millennial generation, the most investment savvy generation in history.
This one gets a little interesting because Bits, a US-based startup, originally entered the program as Emcee, a ‘paying it forward’ platform. To fit the European market and its regulatory and infrastructural environment, the team made a course correction. What’s impressive, is that they managed to do it all in just 21 days and now, are poised to launch Bits in the US and European market on February 2019, live on stage at Startupbootcamp Amsterdam’s FinTech & CyberSecurity Demo Day.
In the meantime, read the full story on the evolution of Bits, here:
The least invested generation of today is the world’s principal consumer generation
Millennials have come of age in a time of rapid technological change and economic disruption. Naturally, their habits, expectations and priorities differ from generations that came before them. For this mysterious group, it’s about ‘living in the moment’. Most young working adults in this demographic aren’t saving or investing. This is not surprising, considering how they are constantly confronted by brands who spend hundreds of billions of dollars every year, leveraging social media to feed their hunger for instant gratification.
So here’s the problem: If investing as a concept or product meant to improve people’s futures – how then, do you attempt to push this notion onto a generation obsessed with improving their present?
Getting the best Bits of the now… and the future
Meet Bits: They’ve possibly cracked the code on navigating the millennial psyche with one interesting realisation: It’s better to nurture the good habit of investing, on top of pre-existing habits. Meaning, it’s not about competing with spending norms, but enhancing this generation’s current experiences while empowering investment abilities.
“How do we enrich the ‘living in the moment’ experience without competing with their spending habits? That’s where Bits comes in. With Bits, you get bits of stock when you spend on the brands you love. All you do is link your bank account to the app, select the brands you frequently shop from several categories and well…shop!. Take your pick: Zara vs H&M, Albert Heijn vs Jumbo, ING vs Rabobank. Every time you shop, you get free stocks. I say free – because it’s finally time for brands to pay for your loyalty. Brands are willing to do this because stock ownership in their companies is actually a better loyalty and rewards program than cash back or points.” – Arash Asady, CEO at Bits
What sets Bits apart from other solutions is their business model. Bits employs a freemium model with consumers, investing money from brands in consumer loyalty. This, in turn, raises awareness and engagement for brands, achieves sales acceleration for merchants and generates leads for marketers. With Bits, users’ ‘investing gratification’ experience is instant rather than delayed, and they also receive recommendations for stocks among their network!
“With Bits, you’re getting these investments for free. It’s not something that we ‘round-up’ – they are individual stocks that have an identity. These are stocks that give you the power to vote on company issues. You become a real shareholder with actual ownership – for free. When you accumulate enough stocks, you can even transfer it to another company or even another party with our peer to peer gifting feature. We’re more of a loyalty investment platform than another cashback program.” – Arash Asady
The truth is, most millennials think financial security is essential, but not many are doing something about it. “I don’t have the time”, “I don’t have the money”, “I don’t know how to do it” – less than 30% have stock investments, but they can give you a list of reasons, why they aren’t investing.
“With us millennials, we consider a huge chunk of our expenditure necessary to our lifestyle. But if you cut out just 1-2% of that spending and invest – over time that can actually create real wealth for the future opportunities. The problem is that it’s hard to do. For me to download an app, fill out a form… it becomes a tedious process. On the other hand, we have no problems shopping or spending money. So that’s the reason we’re approaching Bits this way. You’re basically opening a brokerage account without thinking about it. The truth is, you can start investing with 10 dollars. At that price, you can purchase Ericsson or Blackberry. At that amount, the brand will start investing for you. It’s not much but when you open up the app and realise that you actually have stocks – this is the HOOK!” – Arash Asady
Not surprisingly, Bits is essentially #madebymillennials
The entrepreneurs behind Emcee are millennials themselves, and the team consists of 3 co-founders, Arash Aaasay, Colin Kuntz and Ryan Gary and their regulatory guy (COO), Matt Cheek. They’ve recently added a new member to their team, Corbin Norman, (an Entrepreneur-in-Residence at SBC), who is their Chief Growth Officer.
Bits is the brainchild of extensive customer validation and rapid prototyping done during the very first month of the SBC program. Reason being, it was a completely different ball game for the team here in Europe (compared to the US), in terms of API related infrastructural limitations and regulatory concerns.
“The retail investment market here is much more fragmented and not as developed as in the United States. That is because the culture of investing is different in Europe than it is back home. Additionally, the tech is not as developed. That is why we couldn’t do what we did in the US, here. The infrastructure to connect to over 100 brokers through a single platform is not something that exists in Europe.” – Arash Asady
Though going into the ‘cashback investing’ space was never the plan, tons of customer development (with partners of the program, stakeholders and even people at Amsterdam’s renowned Food Hallen) revealed an interesting – emotional – pattern.
“What’s the real problem? Is it spending? Maybe. But how do you feel when you spend money? You feel guilty, you feel insecure about your finances. So it really comes down to the feelings of the customer and understanding the emotions they experience. That really helped us come up with the idea for Bits.” – Arash Asady
The great thing about this team was that they have plenty of experience working together and were agile enough, to quickly prototype, iterate and build.
“We have the skills and the experience. Right now we’re trying to speed up the process whereby we have the capabilities to get from idea to MVP in just 8 weeks! We’re now at the 12-week mark. Imagine, if every 8-12 weeks you’re able to put out a new product in the market and test it. If you do that 6 times a year, one of them is going to work. To me, success means having an 8-week development cycle.” – Arash Asady
Ready for take-off
The team is currently gearing up for their launch in April, but you can get a first glimpse live on stage at the upcoming FinTech & CyberSecurity Demo Day: Bits will open to a limited number of users on a first-come, first served basis starting with an existing waitlist. But, there is a way to move to the top of the waitlist. Join the #getbitschallenge by sending us a picture or video of you and your friends enjoying your favorite brands. Visit Bits to learn more about the challenge and follow us on Instagram and Facebook to participate.
“I’m really impressed with the network that Startupbootcamp has to offer. The MD, partners and mentors all have opened up doors very quickly for us with the right people, at the right bank and insurance companies. Really, they’ve all gone above and beyond to help us with that.” – Arash Asady
Tune in to the livestream at 14:15CET, to catch ARASH (together with 11 other companies) pitching on stage at the Rabobank HQ in Utrecht!