Building a Legitimate, Profitable FinTech Unicorn Using AI: Cynthia Chen, Founder of Kikoff (Part 4)

Sramana Mitra: Let’s go back to the beginning of when you decided to quit Figure and kicked off Kikoff, what were the circumstances? How did you kick this off? How did you get this off the ground?

Cynthia Chen: I did some limited advertising on Facebook just to test people’s interest in building credit. I also did credit education, and I got pretty warm responses, so I knew the market.

Sramana Mitra: What did you target? Who were you targeting as you were looking to find people who may be interested? What targeting got you to people who had low credit trading? Was it zip code?

Cynthia Chen: It’s not zip code. Facebook wouldn’t allow zip code level advertising. I think it was pretty generic. I created a survey and advertised it to see whether people would be interested in knowing more about credit building.

Sramana Mitra: If it’s just generic advertising with no targeting, how can you find your target audience?

Cynthia Chen: It had no targeting because Facebook would not allow you to target at zip code level. I think Facebook’s algorithm will start to calibrate to optimize conversion once you have run this for a while and then they know what kind of user profiles would respond to this better.

So, Facebook will do its own optimization, but I did not specifically target any geographies.

Sramana Mitra: So once Facebook started to find its sweet spot, what did you learn? Who were responding? What kind of target audience were responding?

Cynthia Chen: Our target audience is millennials who are in their mid to late thirties who have a ton of student debt and probably burdened by their debt and their credit score as a result of very heavy debt burden is not that good. They would like to build their credit so that they can have a better score, which will open more opportunities for them. Okay.

Sramana Mitra: So that gave you the demographic positioning to which you would offer this product?

Cynthia Chen: Yes.

Sramana Mitra: So then what happens? How do you build the product? What’s, what were the next steps in building the business?

Cynthia Chen: So we are a venture backed business, right? So this is not really a small business that can be easily bootstrapped.

Sramana Mitra: So tell me, how did you raise your first round of venture funding?

Cynthia Chen: First round of venture funding was very easy because I had a background in startups, so I already knew quite a lot of venture capitalists. So, I could just go to my network, talk to people, and get term sheets.

Sramana Mitra: But not just that. You also had a lot of domain knowledge in this domain. You had experience in credit, not just financial institutions. You were in tech startups. So, you were definitely a domain expert, in tech and credit. That’s what got you the money.

Cynthia Chen: Right. Obviously, that helped. Even if they trust you, they wouldn’t write a check. I had the domain knowledge, I had the track record, and I also had the network.

Sramana Mitra: This validation exercise that you did on Facebook, is that before the fundraising?

Cynthia Chen: Yes, that was before fundraising. So, that data also helped. My advice to any other entrepreneurs, especially in the consumer space, is that if you can collect some data, even if it’s very preliminary, even if it’s not that targeted, it’s still a very strong signal to the venture capitalists that you are serious about this. You did your homework. There is more indication that this may get traction and also great validation for yourself. You actually want to make sure that there is a market before you quit your job and start something brand new.

This segment is part 4 in the series : Building a Legitimate, Profitable FinTech Unicorn Using AI: Cynthia Chen, Founder of Kikoff
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