In part one of our three part series with Finimize CEO and Founder Max Rofagha we find out more about Max and what it takes to be an entrepreneur.
Finimize is a financial news service on a mission to empower everyone to become their own financial adviser. With 250,000+ followers globally, the Finimize community looks to revolutionize the investment industry.
In part two of our three part series, Max Rofagha tells us how the idea of Finimize came to fruition and what it's like to run the company.
Watch the video below to learn more about Max, Finimize and everything they stand for.
In part three, Max discusses what he believes the future of finance looks like whilst also providing his expertise on investing for the first time.
I’m Max Rofaghe, I’m the founder and CEO of Finimize, and we are building a platform that is aiming to provide the tools and information that anybody can use to make a more informed financial decision.
How did you get started as an entrepreneur?
I’ve kind of always been working on projects or thinking about projects with friends of mine, and at one point I was so desperate to just start my own thing that a friend of mine and I, we wanted to create a website where you could customise chocolate, and so we found a chocolate factory here in, I think, Hackney, and everything was kind of set, and then I went home one day and I was like ‘I never eat chocolate, I’ve no association with chocolate, I probably shouldn’t start a chocolate factory’. But with that same guy then I ended up setting up Dein Deal in Switzerland, because that’s where he was based at the time, and so it wasn’t really a day where I said ‘I want to start a company’, it was more sort of tinkering about with online products, that then got me into the start-up world, that then got me to start a company.
What lessons did you learn from Dein Deal?
When I started the company, back then I was still quite young, I was 24. I think when I started I really underappreciated and undervalued the ‘soft factors’ that you need in a business, namely building a great culture and being very specific, and almost pedantic about hiring. I used to think that the primary sort of objective of the business is to increase revenues, but actually, if you have a toxic culture, which I’m not saying we had, but if you do have a toxic culture it’s very, very hard to fix. And so, at Finimize now, from day one, we’ve written down ‘This is our culture manifest’, and being very, very clear, ‘This is who we are, this is who we want to be, and these are the people we want to hire’. Then I think the second point is scale. At Dein Deal we had a very large scale, 25% of all households within Switzerland were shopping with us, so we were reaching pretty much everybody we could reach, and that allowed us to test quite a lot, it was an e-commerce platform. So we tested a bunch of different product categories and we saw this works, this doesn’t work, this works, etc. So now, with Finimize, obviously, as we start to grow our community more and more and more, that gives us a lot more possibilities to sort of expand into other areas, like the user generated reviews. So I think having scale and having an engaged audience has been the second lesson for me.
How do you turn an idea into reality?
If you’ve found a problem that is real and that you can see in other people’s lives affects them, and then, if you build a product that sort of helps solves that problem even just a little bit, I think that then really, really drives you. I think oftentimes people have a great idea for a problem that doesn’t really exist, and then it’s very hard to stay persistent because, at the first set-back, you’re going to be like ‘Oh this is actually not really worth it’. So I think finding a problem, really believing in it, and then just pure persistence, and there’s no shortcut, it’s just hard work. If you look at all the big companies in Silicon Valley, none of them were overnight successes, they were always portrayed like that, but most of them started off as totally different products and then, over the course of multiple years, developed into what they are today, and I think that part always gets skipped when that story is told, and I think that’s sort of what creates the wrong illusion for new people coming into this entrepreneurial space, but I think it’s really all about grit and persistent.
What is Finimize?
Our overall value proposition to the end user is that we want to provide a platform that allows users to make more informed financial decisions, and we’ve started off with our daily financial news service, that’s allowed us to build up a very engaged and very large community around the world, we now have more than a quarter of a million people who engage with us. Then we have a web app where you can see a bunch of user generated reviews on financial products, and our ultimate aim is that we would sort of do that for a range of categories. We currently have crypto exchanges, we have robo advisors, and we’re about to launch brokerages, and we kind of always think of it like in the travel industry; so back in the day you’d have to go into a travel agency, you’d sit next to a travel agent, they’d look at a screen and you’d sort of sit next to the screen, and then the likes of Expedia or KAYAK came along and basically all they did is they just turned the screen around and then showed it to the end consumer, and we kind of think of it in the same way. So we think, if you go into your bank or your financial advisory, they’re also looking at a screen, they’re looking at information, and what if we could just take that screen and turn it around so that the end user can look at that screen themselves and can make informed decisions if you give the information in a digestible manner?
Why did you create Finimize?
I was in my mid to late 20s, everybody around me was telling me ‘You need to start saving up some money as you approach 30’, and while everybody tells you that you should be saving and how to be saving nobody really tells you what you should be doing once you have saved something. That really then sort of led me on that journey, where the first thing that I did was ask friends of mine, ‘Hey, what are you guys doing?’ A lot of them were working in banks, and what I found was that they could build very complicated and complex financial models for Fortune 500 companies, but when it came to their own personal finances they were pretty illiterate, as I was. So then I decided to go speak with a banker, I sat down just at my regional branch at the time, I couldn’t afford a financial advisor, and what I found was that the banker started asking me very generic questions, probably she’d been given those questions by her boss, and then ultimately laid all the brochures of their products onto the table, they all had their logo on it, and at that point I was like ‘Okay, this seems to be more a sales pitch than you giving me financial advice’. So I was pretty frustrated by that experience, I went back home and I started Googling, and I was basically trying to find a platform that could provide me with the information and tools so that I could essentially create sort of my own financial plan or get some financial advice, I just couldn’t find anything. I guess that was like the genesis moment for Finimize, and that really got the ball rolling. So the very first thing that we started thinking about was ‘How can we make this world of finance a bit, on the one hand, less dry, and on the other hand, more accessible, but also a bit less daunting and a bit less intimidating?’ And so for us it was a really easy way in, was this financial news element that we’ve started off with.
What’s been key to Finimize’s success?
We didn’t come to the start line and say ‘Hey, we want to make people love finance and sort of obsess about finance 24/7’, we said ‘Hey, maybe we can get people to start thinking about finance three minutes a day’, and just get that sort of tiny, tiny part of their day, but every day, and therefore sort of onboard them into this daunting world of finance. So I think oftentimes you’ll see people who have the substance, and then it’s so complicated and takes you so much time to read that it turns most people off, and then, on the other hand, you have simplicity and people often then make it so simple and really dumb it down that it really lacks any value. I think what we’ve always tried to do is merge the two, and I think that’s pretty much been our recipe why it resonates so well with our audience.
How do you manage your personal investments?
I did sit down with sort of an IFA and found it to be quite underwhelming, at least in my experience, and so I do everything myself. I try and speak with the people on the team who really know a lot about finance and sort of get a better understanding of how they deal with their own finances. I think all of us are really going for a sort of a do-it-yourself approach.
What advice would you give your 21 year old self?
Yeah, I think being optimistic, having that naivety, and then being very, very passionate about the problem that you’re trying to solve, and then just going for it. I think a lot of people then start over-thinking it, start doing market research. A lot of these businesses that are game changing don’t have a market, so you’re not going to find anything interesting in the market research. I think Airbnb is a great example, I mean, there wasn’t really a couch surfing market and now there is, and it’s worth billions and billions. So over-thinking can be a bit of a hurdle, and so just really follow your gut and go with it.
How can we encourage the younger generation to invest?
A lot of the times people who are scared to make that first step think ‘Oh I need to invest all the money that I have’, and maybe they’ve saved £10,000 or less or more, and then we say ‘Hey, you know, maybe you just start off investing £500 and then see how it goes?’, and then often the reaction is ‘Oh yeah, I could do that, that’s a good way’. Then there’s a lot of micro-investing propositions out there now, that you could just start with a couple of pounds or dollars, but if that’s then sort of taking too slow then I think there’s also the other option of going with an automated solution or doing it yourself, and then again I think there’s a real wealth of information out there that you can use to start informing yourself. That’s the benefit of today, is there really is a product for everybody, you just have to understand which one is the right one for you.
Have milliennials’ attitudes towards investing changed?
What we’ve seen is that there’s been, sort of across different propositions, a lot more interest in the world of finance, because of cryptocurrencies, we’ve sort of revised I guess the ‘sexiness’ of the sector that maybe you had in the 80s. A lot of people are saying that that was sort of the educational element or the on-boarding that our generation or the next generation has had, is playing around with cryptocurrencies, understanding sort of how trading works, and now are getting into sort of the more traditional assets as well. So I think a lot is going on and I think you definitely see a lot more interest in that space again.
What’s changing the landscape?
If 86% of the millennial demographics save each month, but only 50% of those assets are invested, then that leaves 50% to be invested, and then you combine that with the biggest transfer of wealth that’s currently happening. So the baby boomer generation I think in the US alone is handing over something like $40 trillion from the baby boomer to the millennial generation, it’s the biggest transfer in wealth ever, and it’s estimated that only 20% of those assets will stay with their current advisors, and so again that opens up 80% of what’s going to happen with those assets. Our core belief at Finimize is that a lot of that will be done through do-it-yourself, finance is probably the most information driven industry out there and yet remains one of the most opaque ones for the end consumer. So eradicating those information symmetries and then putting more and more power into the hands of the end consumer, so they can make decisions themselves, and if there are more complicated financial decisions that’s when they will go to a professional advisor. If I’m 30 and I have 50k in savings, I don’t really need to go speak with somebody, there should be a lot of tools and information out there that I can make a decision myself. If I’m 60, I’m divorced, I have a family and I have three mortgages, then all of a sudden that’s a very complicated financial life and there you might need somebody to help you with it. So I think do-it-yourself is going to be a lot, lot, lot more in the future.
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