What inpired Yotta’s unique approach to savings?
The inspiration was a program in the UK called premium bonds, which works pretty similarly. People save money, and instead of earning interest in their savings account, they get the chance to win a prize every month. It’s been hugely successful there.
I’ve always been super interested in behavioral psychology and personal finance. I’m an avid reader of books like Nudge and Thinking Fast and Slow.
In the US, half of the country has hardly any savings. Half the country also spends north of $700 a year on the lottery. Those two groups have a lot of overlap. The idea is to use our psychology, which is kind of wired towards instant gratification, to drive long-term savings behavior. It’s not fun in the short run, but in the long run, it pays huge dividends.
What has your journey look like up to this point? What are you focused on for the next six months?
We launched last summer, so it’s been seven or eight months. It was mainly about finding product-market fit. Do we have users that love the product, and do they stick with us?
The product itself is also super limited because it’s just a savings account. Our users want to be able to do other banking-type functions. The next step is expanding the product offering into other banking areas while focusing on the viral social piece because that’s what sets us apart.
People don’t want to talk to their friends about what bank they use. We have this compelling hook in the lottery savings format that makes people want to tell people about it. That’s a big differentiator for us versus competitors. Coming soon, we’re launching a debit card product. Down the road, we want to become a place where people can manage their entire financial lives in a fun way.
Did you do anything within the product specifically to encourage that viral sharing?
Yeah, there are a few things. We have a referral program where if your friends sign up using your referral code, you each get a hundred extra tickets into next week’s drawing. We have milestones that keep you wanting to hit them.
We designed the product to have people talk about it. With the typical lottery, the numbers all come out at once. We have seven winning numbers every week, and we release one every night. Those releases create more touchpoints for people to open the app with their friends and talk about it. Every Thursday, some people have three or four of their tickets, and they talk about it. If we did it all at once, there’s no suspense being built out.
What did you do to get your first hundred customers?
As a consumer FinTech company, it’s harder than anything to get your first a hundred customers because you’re involved with people’s money. If they Google you, there’s literally nothing about you. Depositing money and linking a bank account to a brand new app with no reviews and no PR is pretty tough.
We did two things. One was using paid social to get people to sign up and test the app when we first launched. We posted on Reddit, ProductHunt, and HackerNews to get people who are likely to be early adopters. Then we made sure they were having a good experience and being retained before we tried to grow.
How do you think about the trade-off between making your brand fun and making it trustworthy?
That’s still a challenge today, to accomplish exciting things while also being trustworthy. It’s a fine line to balance. We didn’t want to make the app’s UI overly flashy or casino-like because it would skew too far in one direction.
To maintain the trust component, we’ve been very focused on not having bugs pop up, and when they do, squashing them very quickly. A lot of that reflects in our messaging, having security features like 2FA, alerting you if you have a big withdrawal. All these different things will make someone comfortable.
We also invested a little bit in PR last summer because we wanted someone who Googles us to find reputable articles about us. We were in Bloomberg, Yahoo Finance, and Forbes. I think all those things really helped.
What’s one thing, you know, now that you wish you knew when you were just getting started?
Every time we build something, we design it for the 99% of well-intentioned users. Once you start growing, especially in financial services, people will try to take advantage of your systems to commit fraud or do something nefarious. Every time we roll out a feature, we think about how it could be vulnerable and how can we fix that? Every new consumer FinTech that gets to a certain critical mass becomes a target of bad actors.
It’s not something to worry about in the early days before you even have users. It’s a good problem to have when you have enough users to have to worry about it. Once you start hitting a critical mass, it’s going to happen.
If you’re interested in consumer FinTech, reply to this email and we’ll get you in touch with Adam.