How This Startup Went From Launch To Acquisition By Goldman Sachs In 18 Months

This week’s Fintech Focus podcast is taking a very holy grail topic in Silicon Valley right now, which is going through a successful exit as a startup founder.

We sit down with Colin Kennedy, COO of Clairty Money, a fintech startup that helps consumers manage their finances better through AI. Two million users later, Clarity Money now has the backing of Goldman Sachs Group Inc. GS and more access to advancing its machine learning process to make the user experience better.

So lace up your skates and strap on your helmets, fintechnicians, because we’re heading into hockey stick growth territory.

Listen to the full episode here.

The Attractive Part Of The Affiliate Model

“So, what really made the business overall attractive is stepping back and saying, "Okay, it's clear that there's an opportunity out there to leverage the latest technology, specifically to leverage artificial intelligence on the back end," but really very simple front-end design that makes that ... that lets that artificial intelligence, behavioral science operate in the back-end. But, really, what the users are acting with is a much, much simpler, cleaner design, and what they're being presented with is essentially a simple version of an API ecosystem, so five, 10 years ago, it would've been much harder to offer a solution like Clarity, where you have that type of artificial intelligence working in the back-end.”

What Is Clarity Money’s Differentiator?

“... It's an overall sense that the way we interact with consumers is making the information, making their financial information very transparent, and dealing with the emotional reality of a financial decision, and anytime a consumer is talking about finances or has to engage with their finances, nearly everybody and myself certainly included, we start to pull back, we get a little bit paralyzed and afraid.

Not too many people are excited when you say, "Hey, let's talk about your finances." The approach that we've taken in clarity has been very deliberate and thoughtful and responsive to user feedback such that, when you first open the application, you see a very simple display. You see the weather. You see and inspirational quote on top. It's a softening or a gradual introduction into this financial experience. It can sound trivial, but it goes to show the amount of thought and attention we try to put into dealing with the fact that finances are inherently an emotional issue for a lot of people. If you take the approach of being a little bit more welcoming upfront, if you follow up by, for example, if a person is spending more than she or he may like in a given month, if you're going to start to use the technology to put out a lot of shame and guilt and red flags, users are gonna turn off.”

What Can Other Founders Learn From Your Acquisition?

“I think the couple things that come to mind are: One, I think anybody who's operating a business with a goal of an acquisition is going to be sorely disappointed and will, more importantly, sorely disappoint their customer base. Our focus was very much on building a long-term sustainable business. That was proven to help by building for customer growth and also the approach we took at how we were cultivating longer-term relationships, and it's great to look back and say, "Hey, 15 or 16 months after launch, we still have a significant number of customers who are engaging actively with Clarity."

So, the first point would be focusing on acquisition would be the wrong area to focus and very counterproductive. The second piece is the process itself will certainly involve a change from your core business. So, the biggest area of focus, I think, where companies sometimes get mistaken or sometimes miss, is if you're leading a fintech company, is not thinking through fully, "What will this next phase really mean for your customers and for your your company, including both your employees and the customer base."