E-commerce SME lending in Argentina  - Learning Launch

Challenge

I am a founder and CTO of Cyber Wellness Student Ambassador Programme, an Argentina based company builder. Our  company builder model differs from other Argentinian and Latin American models since all of our  startup ideas come from our own management team, employees and advisors. We ideate, test, build and grow our business ideas. We are 15 professionals with diverse specialities, software development,  product development, marketing, design, user experience but with one thing in common, our area of  expertise is finance. We were eager to test some hypothesis we have regarding SME (Small Medium Enterprises) lending in  Argentina and since e-commerce is constantly growing in the region, and as in any other type of  company, financial aid is a key part in planning the company growth, it seemed to be an interesting  field to test them.

These companies, usually small and new, don´t have access to Bank Loans, the amount of paperwork is discouraging, the timing is usually bad, taking from 2 to 4 months to have a loan approved. So there  were plenty of pains from where to start our work.

The following were our hypothesis

• E-commerce sellers would find appealing to have access to loans in 48hs, from requesting it to  disbursement.

• E-commerce sellers would find appealing to access loan´s amounts proportional to their  income.

• E-commerce sellers would find appealing to access loans in a paperless procedure

• E-commerce sellers, in order to access all 3 above benefits, will grant permission for us to view  their sales information.

As in any lean, startup methodology we have time and budget constraints, we needed to test these  hypothesis as fast and cheat as possible.

Selection

We have selected the learning launch tool. This tool is a very simple, fast and cheap way of testing  hypothesis. It let´s you learn about customer needs, their problems and the ways to solve them, since  one of its main characteristics is customer engagement.  This tool needs the learning ground to be big enough to obtain meaningful feedback, if not, a few false  positives could guide you to incorrect conclusions. Another way of getting incorrect conclusions is  having a small and single skilled team to conduct the experiments. The team should be small or  medium sized but always diverse in skills and area of expertise.

We found this tool appropriate since:

• We were trying to solve final customers needs, our experience was not enough to deduct the  root causes and ways of solving them.

• We had a huge community to test out ideas (7MM sellers).

• We have only 90 days to design and build the experiments and 60 days to execute them and  confirm our ideas.

Application

We started by generating assumptions from our main hypothesis. Hypothesis: E-commerce sellers needed financing and banks were not satisfying that demand.  Assumptions:

• A simple, online loan request process will attract sellers. Contrasting with bank procedures.

• Placing ads in the online tools sellers use every day will generate brand awareness and traffic.

Hypothesis: We need the sellers to trust us with their detailed sales information.  Assumptions:

• Generating a brand, logos, a company vision and press appearances will generate trust in our  company.

• Generate a web site in order to communicate above content will ease communication with  possible clients.

We shaped a team in order to build the artifacts needed to test our key assumptions. The team had the  following skills: marketing, user interface design, communication, credit risk and legal.

We generated:

• A company vision and communication message.

• Brand name, logos, design guidelines.

• Web site, just for communication, it didn´t have any functionality or logic.

• Banners for digital marketing.

Finally, we launched out site and the marketing campaign with minimum investment. We also have a  person dedicated to customer support by phone, email and chat.

In the following weeks we collected data from web analytics and all emails, chats and calls were  recorded. Every few days we tweaked our message, banners and process, in order to deduct the root  causes of the clients pains and the most engaging message to generate their trust.

I believe that our way of applying this tool is interesting because we had some base tests to try but also  we generated small variants from each of them to achieve the best possible result.

Insight

We learned a lot from applying this tool. In fact we had a huge pivot in our product. Our approval  process was designed to fulfill small and medium enterprises requirements. During the tests we  discovered that the most needed for financing were not small and medium companies but micro  companies and individual sellers. This fact had a huge impact in the product and future company focus.

Approach

In our next approach we might change the test design process. Despite the tests where cheap in  comparison with a classic project approach, where this would have been discovered after 12 months of  building a full product, we believe that the tests can be carried out cheaper, smaller and earlier in the  design thinking process, for example we could test some early ideas at the same time we do some field  interviews just by asking questions about them: Would you apply for an online loan for your company  just by sharing your sales information?


E - commerce SME lending in Argentina - Learning Launch Challenge I am a founder and CTO of Cyber Wellness Student Ambassador Programme , an Argentina based company builder . Our company builder model differs from other Argentinian and Latin American models since all of our startup ideas come from our own management team , employees and advisors . We ideate , test , build and grow our business ideas . We are 15 professionals with diverse specialities , software development , product development , marketing , design , user experience but with one thing in common , our area of expertise is finance . We were eager to test some hypothesis we have regarding SME ( Small Medium Enterprises ) lending in Argentina and since e - commerce is constantly growing in the region , and as in any other type of company , financial aid is a key part in planning the company growth , it seemed to be an interesting field to test them . These companies , usually small and new , don´t have access to Bank Loans , the amount of paperwork is discouraging , the timing is usually bad , taking from 2 to 4 months to have a loan approved . So there were plenty of pains from where to start our work . The following were our hypothesis • E - commerce sellers would find appealing to have access to loans in 48hs , from requesting it to disbursement . • E - commerce sellers would find appealing to access loan´s amounts proportional to their income . • E - commerce sellers would find appealing to access loans in a paperless procedure • E - commerce sellers , in order to access all 3 above benefits , will grant permission for us to view their sales information . As in any lean , startup methodology we have time and budget constraints , we needed to test these hypothesis as fast and cheat as possible . Selection We have selected the learning launch tool . This tool is a very simple , fast and cheap way of testing hypothesis . It let´s you learn about customer needs , their problems and the ways to solve them , since one of its main characteristics is customer engagement . This tool needs the learning ground to be big enough to obtain meaningful feedback , if not , a few false positives could guide you to incorrect conclusions . Another way of getting incorrect conclusions is having a small and single skilled team to conduct the experiments . The team should be small or medium sized but always diverse in skills and area of expertise . We found this tool appropriate since : • We were trying to solve final customers needs , our experience was not enough to deduct the root causes and ways of solving them . • We had a huge community to test out ideas ( 7MM sellers ) . • We have only 90 days to design and build the experiments and 60 days to execute them and confirm our ideas . Application We started by generating assumptions from our main hypothesis . Hypothesis : E - commerce sellers needed financing and banks were not satisfying that demand . Assumptions : • A simple , online loan request process will attract sellers . Contrasting with bank procedures . • Placing ads in the online tools sellers use every day will generate brand awareness and traffic . Hypothesis : We need the sellers to trust us with their detailed sales information . Assumptions : • Generating a brand , logos , a company vision and press appearances will generate trust in our company . • Generate a web site in order to communicate above content will ease communication with possible clients . We shaped a team in order to build the artifacts needed to test our key assumptions . The team had the following skills : marketing , user interface design , communication , credit risk and legal . We generated : • A company vision and communication message . • Brand name , logos , design guidelines . • Web site , just for communication , it didn´t have any functionality or logic . • Banners for digital marketing . Finally , we launched out site and the marketing campaign with minimum investment . We also have a person dedicated to customer support by phone , email and chat . In the following weeks we collected data from web analytics and all emails , chats and calls were recorded . Every few days we tweaked our message , banners and process , in order to deduct the root causes of the clients pains and the most engaging message to generate their trust . I believe that our way of applying this tool is interesting because we had some base tests to try but also we generated small variants from each of them to achieve the best possible result . Insight We learned a lot from applying this tool . In fact we had a huge pivot in our product . Our approval process was designed to fulfill small and medium enterprises requirements . During the tests we discovered that the most needed for financing were not small and medium companies but micro companies and individual sellers . This fact had a huge impact in the product and future company focus . Approach In our next approach we might change the test design process . Despite the tests where cheap in comparison with a classic project approach , where this would have been discovered after 12 months of building a full product , we believe that the tests can be carried out cheaper , smaller and earlier in the design thinking process , for example we could test some early ideas at the same time we do some field interviews just by asking questions about them : Would you apply for an online loan for your company just by sharing your sales information ?