Chris Britt, CEO and Co-founder of Chime, built a company that was focused on a customer base and customer behavior that investors hadn’t yet caught onto—debit card transactions among middle-income Americans. But he and his team had data that this was a powerful market opportunity, and they were driven by their passion to promote greater financial wellbeing. Eventually, Chime attracted the interest of many investors and became the market leader, and so far they’ve fulfilled their mission of helping people build better financial foundations. There are a few key takeaways that businesses may want to keep in their own back pocket, especially those who are breaking into new markets and competing against giants.
It’s important to have a strong culture. Your company culture is similar to your brand. It’s the foundation of how you show up and what you’re going to produce and why. Starting in the earliest days, Chime brought on people that shared in the mission and were focused on being authentic and member-obsessed. (Chime’s culture is about being human, working as a team, seeking to simply, being results-oriented, and making things happen.) The team is obsessed with solving problems for their members, and they don’t just trust Chime’s position in the market—they share the hunger and passion of those who were with the product in the early days.
Don’t break the wrong rules. In a highly regulated industry like banking, Chime can’t be a renegade. While they might break boundaries in the SaaS side of things, their strength is that they offer something that’s as reliable as the banks that people have been using since the beginning. Chime requires regular approvals from the FDIC and banking institutions, but they balance these restrictions with product innovation that doesn’t run contrary to the rules. While it’s not sexy, Chime’s “respect the rules” policy, which is mounted on the wall, has served them well.
Be solid with the basics. When Chime started, there wasn’t a real value proposition in the market around debit products, and credit cards were successful with their rewards programs. Chime included some rewards features in its own platform, and while they were able to open the funnel this way, the rewards initiative wasn’t as effective in getting customers to use the product as their primary banking platform. Now Chime focuses on problems that people have with their banking relationship and provides value around that, which has resulted in the response they wanted.
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Prove your proposition. Chime was not the belle of the ball when it came to raising funding in the beginning. There weren’t many successful debit-focused software products, and most investors didn’t have any data about debit cards, such as the fact that debit transactions are more popular than credit cards. Chime had to show that it would be impactful, and they did this by being a reliable product that people became dedicated to using. By the time Chime got to Series C, investors had a lot more interest because it was sure to be a market leader.
Be member-obsessed. There is a natural bias for founders to want to solve problems for their former self or for family and friends. For Chris that wasn’t the reality, yet he and his team empathize with the mainstream middle-income Americans that they serve. They know who needs them, so they’re not trying to serve Silicon Valley engineers who work at Google—they’re focused on the 70% of Americans that aren’t as desired by, or cared for by, bigger banks. By knowing who their customer is, they’re able to reduce friction and be helpful. The team members also all use the product themselves, which gives them even greater insight into how to improve it.
Be in touch. Chime researches the market and checks in with its customers regularly through surveys, social media, and in person so they get a good sense of the challenges that their members face day to day. They learned that members were concerned about access and availability with money, and they were able to make sure that they delivered this through the app. They also added other features to boost their members’ financial wellbeing, such as a credit model for customers to build their credit scores.
Remove friction. Chime is competing against banking institutions, which have many offerings for consumers but don’t make things easy for them to navigate. By offering things like automatic savings and making certain features as easy as the click of a button, Chime allows members to use things that they wouldn’t have taken advantage of at the bank, and there are high levels of interest and buy-in.
Build trust. Most traditional institutions aren’t held in high regard to begin with, so Chime offers a solution to something customers had wanted to get away from anyway. Traditional banks have pillars in front of their buildings, however, so Chime did have to work to make members feel like they would be as secure and reliable as these institutions, and they had to do this through their actions and by building community. Once they were able to get social proof and social media evangelism from members, it became easier for them to build this trust more deeply.
Make things easier and cheaper. Traditional banks have incredibly high operating expenses, and they focus on whale customers. But since it’s a technology company and not a financial services asset-based company, Chime is able to focus on everyone else. They do the majority of work internally and keep moving more things in-house, which means the cost stays low, and so does the pressure for monetization. Chime is able to monetize primarily through transaction activity, not fees, which means they stay aligned with the customer and build a good business.
Expand when it’s time. Chime knows that the fintech space will change and needs will increase, including within the realm of cryptocurrency. They’re interested in increasing usage first, but also implementing things like getting members set up with IRAs and investments. However, this is part of the strategy to help middle-income Americans be more financially secure, not just for growth’s sake. Because Chime already has a loyal base and deep customer relationships, they will be able to shepherd members towards any additional services that will benefit their financial health.
It’s not every day that David beats Goliath. But when you understand why people don’t like the Goliaths they engage with day-to-day, Chime proves you can build a solution that’s even stronger than the giant.
