Project Description


This Finco was part of a Silicon Valley hub supported by an incubator funded by an international bank.  The company was started and well funded in 2014. They were launching a proven product and taking it into different international markets. They employed 3 senior industry-leading executives and a full-time internal team of 6 product tech developers.

These statements were our introduction to this company:

“US Finco” is transforming the loans industry. With US Finco proprietary technology, we enable lenders to offer highly intelligent, personalized loans that:

  • Increases lenders profits while decreasing borrowers costs.
  • Reduces risk to both lenders and borrowers.
  • Enable lenders to acquire more customers and retain existing borrowers
  • Latest News: Winners at XYZ

The business was well funded in 2014 with a few years of funding, with an experienced leadership team of 4 and an internal tech product development team of 6. Yet to 2018, it had achieved $0 sales and had very few prospects likely to pay in the near future.

The introduction from the bank hub VP was that the proposition did not make sense, but he was not sure why. So winningthinking were asked to look at it. At the time the business was going through another round of fundraising, and a new CEO had been appointed to recover the sales plan and accelerate the fund raising.

Ability to integrate with the company 

We asked how much money they had and what was their cash burn rate. They said they had $50k cash and $30k monthly burn rate. So despite the positive introduction, without additional funding of cost-cutting, they would run out of cash in 6 weeks.

We recognised the flawed mantra, the denial leading to the inactivity to act.

To get to the bottom of this we proposed to the CEO that we ran a 1-day winningthinking review and a 1-day financial turnaround plan to preserve cash, accelerate their fundraising to confirm value created to date, validate their sales pipeline and confirm their proposition. (which seemed to be conflicted).

It was clear to survive that they should cut their development team (6 developers) to extend the window, but they did not see the issue, were overconfident they would raise additional funding so were inactive. This mantra was the root cause of the inactivity, but the CEO could not persuade his peers on the board :

  • Increases lenders profits while decreasing borrowers costs.
  • Reduces risk to both lenders and borrowers

These discussions took place over a few 30minute calls on the phone. The CEO could not get support from his peers to run this piece of work, nor cut costs to protect the business solvency.

Impact on the Bottom line

So the business failed to take the corrective action to preserve cash and failed to regain the confidence of their shareholders or their hub so went bust in 6 weeks as projected.

Leadership and Working style

Despite the fact that the engagement was only a series of short calls, the CEO agreed that the root cause of the business failure was the subtlety of the original thinking that was the basis of their proposition, that had failed to engage customers:

  1. “Increases lenders profits while decreasing borrowers costs.”
  2. “Reduces risk to both lenders and borrowers”

The inability of the CEO to identify or address the mantra caused business failure. These two flawed mantras were the basis of the business formed in 2014, not identified by the incoming CEO, so determined a blind spot that misalgned actions and eventual business failure.

Client comments

After a delay of a month, the CEO could not influence his peers… “At the moment it looks like we won’t be able to use your service. I appreciate your help and I hope to stay in touch.” Finco CEO

“It’s critical we get your input at an early stage in our portfolio companies so I will intro you to the Global Hub portfolio companies regardless as it is the fount of all FinTech firms” Bank portfolio VP

Conclusion and learning

Tragically this company had a good financial product that was proven in the US market, yet the flawed business mantra that surrounded the business undermined the proposition so there were o sales as well as a misdirected strategy. This caused failure and insolvency.