Getting to Know Gaurav and FinStack
Q: Can you briefly introduce yourself and your startup?
A: I’m Gaurav, the Co-founder and CEO at FinStack. I used to work for Walnut App (A Capital Float company) – now Axio, where I built credit underwriting engines for lending. After that, I joined PhonePe, India’s largest UPI payments app, where I got exposure to building software for scale for bill payments. While working in FinTech, I noticed redundancy in how companies built their solutions. This observation led to the inception of FinStack, a no-code platform enabling any company to become a FinTech.
Q: What is your target audience?
A: Our main customers are regulated entities like Banks or NBFCs. The digital tech penetration for lending and banking is limited mostly to top-tier institutions. Such Banks and NBFCs have an even bigger advantage in terms of distributing their products by partnering with FinTechs serving their desired target audience. However, Most financial institutes still don’t have the capability of digital onboarding because of the massive engineering dependency needed for the same. Our focus is on these entities. Additionally, we target companies aspiring to become fintechs who are looking to work with Banks and NBFCs.
With FinStack – Banks, NBFCs, and companies aspiring to become FinTechs can collaborate together and enhance their distribution through a completely digital onboarding. The best part is that they can make use of any of their existing vendor and in-house APIs or plug in their custom data – without hiring a single engineer! FinStack is a platform through which any company can become a FinTech powerhouse.
Why Entrepreneur First
Q: What motivated you to join Entrepreneur First?
A: Entrepreneurship requires you to do things you probably might have never done in your career. A software developer is unlikely to know marketing or design concepts but will have to run ads, design prototypes, and even do sales at some point for their venture. This makes the entrepreneurial journey confusing and uncertain I saw the benefits of starting up with Entrepreneur First while working at Rightbot. EF offers a clear path for ambitious individuals, who might feel lost when considering starting their own businesses. It became a primary motivation to join Entrepreneur First.
The Entrepreneur First Application
Q: Can you describe very briefly the application process?
A: Entrepreneur First has a straightforward application process. They have an online form that asks for your details, and background and tries to gauge if you have domain expertise. Apart from various other factors, they particularly look at “Edge” – it’s your unfair advantage in a particular domain and industry. If you’ve worked in growth, you’d have an edge there, knowing more about business growth than anyone not in growth. Similarly, if you have worked in a particular industry like SaaS, FinTech, Logistics, etc., you should know more about the industry than anyone not associated with that industry.
Once In the Program
Q: Can you describe a typical day in the accelerator program?
A: My experience was slightly unique. But on average, it’s an open-ended program. Every week you might have sessions with industry experts guiding you on basics like gauging market size and doing customer development. They also recommend reading “The Mom Test” by “Rob Fitzpatrick”, a guide on asking unbiased customer questions. The first 4-5 weeks cover standard accelerator content which you can apply in any domain or industry, and then you’re expected to apply what you’ve learned.
Regarding team formation, they categorized cohort members into areas like catalyst talker, doer, domain expert, and more. They aim to pair you with someone from a similar background but with contrasting skills. For example, my tech background meant they wanted to pair me with a business or sales expert in FinTech. However, the co-founder whom I met during the cohort had discrepancies in their performance and background which I could not overlook. I then invited my college friend and colleague from Capital Float – Dhawal Patel to join as CTO.
Finding the right co-founder is like a marriage. In three months, it’s tough to assess if you can trust and rely on someone. In India, where I am based, over 75% of startups in my cohort faced co-founder breakups. Co-founder break-ups are a celebration at EF since they too agree that it’s better to ‘break up ‘ if things are not working out. Building a startup requires patience and long-term trust. When I expressed my concerns to EF, they still backed me even though I was perceived from a CTO lens initially. They saw Dhawal’s potential and I partnered with a long-time friend who too had exceptional experience in FinTech.
Q: Did you get much hands-on support from the mentors and the entrepreneur first team?
A: In the beginning, maybe for a month, yeah. But to be straight, Entrepreneur First isn’t like your usual venture capitalist fund. They are talent investors and are betting on Founders instead of a thesis. They are very hands-off and let the founders figure out challenges while connecting with relevant people who can help.
Q: Can you share a significant milestone that you achieved during the program?
A: The big shift for me was in how I viewed starting up. I used to think you must build something first, then find customers. However, EF made me focus on understanding the problem first and then gauging its size before even starting to create a solution. It was super helpful. Before, I might’ve built something that only I thought was cool, instead of what was actually needed. The real takeaway from EF was to focus more on the problem, which I value.
Company Progress Post-Accelerator
Q: What is the current status and achievements of the company since completing the accelerator program?
A: We started with a minimal investment in a market that has a long sales cycle. In my observation, serving the FinTech industry is also a factor in how long you’ve been participating in the industry and observing the directions and intent of the regulations. The situation made it hard to get big clients, spend on growth, or hire experienced people with a good network for distribution. We seemed too early for seed investment as per most VCs.
We embraced a lean approach to managing our company. As founders, we reduced our salaries to about 25% of what we used to earn in our previous roles. The strategy extended to our hiring practices as well, where we brought in fresh rockstar talent and trained them from our experience to keep our expenses low. Our monthly expenditure was around $3,000, and we were making about $1,000 to $1,500 per month in sales since January 2023. We’ve consistently added at least one new customer each month, which has been a positive sign of growth. This also helped us run the company for 18 months with an initial investment of USD 55,000.
Our product, FinStack, is gaining recognition in the industry as a notable no-code marketplace solution. We’ve participated in multiple accelerators post Entrepreneur First, which has helped propel our upward trajectory. Excitingly, we’ve received an investment offer of $300,000 from Transpose Platforms. This opportunity arose from building a strong relationship with them and enabled us to target customers in the US, where SaaS monetization prospects are higher compared to India.
Our strategy involves maintaining the Indian arm of the company as a self-sustaining entity with positive unit economics. However, to accelerate growth and revenue, we’ll be exploring ways in which our platform can work in global markets too. The nimbleness of our product allows us to do so easily but it has to be for the right use case, with minimal compliance complications and when the timing is right. This ambitious goal represents our current focus and direction for the company.
Final Thoughts
Q: Do you have any final advice that you will give to founders who are thinking of applying to Entrepreneur first?
A: I’d suggest being very clear about what you want from the program. Set your expectations right. Remember, you’ll be parting with a significant chunk of your equity for an early investment. The real benefit lies in potentially finding your perfect co-founder. There have been cases, like Rightbot or Beatoven, where individuals with diverse backgrounds discovered great synergy.
While it’s successful in some instances, it fails in many too. If you’re creating something valuable, you’ll likely find many investors willing to offer you better terms if you already have the right Co-Founder and traction. Be sure that the co-founder you might find through Entrepreneur First is genuinely worth giving up equity for a fixed investment.