GZV #39: Gen Z Fintech
Should I just make this an Elon Musk Fanclub instead?
Welcome to all of my new subscribers! Happy to say we passed 600 subscribers! I am realizing the more that I write these newsletters I have a tendency to lean toward the fintech sector. Interesting.
Let me introduce you to FiVana.
Problem:
Americas, mostly Gen Z, have no idea how to manage money. Despite this, they do little to nothing to fix it.
Solution:
FiVana provides an easy platform for financial management where they do the work and assist you with your future and present financial needs.
Gen Z Insights:
A financial planning platform for Gen Z is needed, problem is it seems boring and most people have a very basic way they manage their money.
Most people earn money, deposit it into either checking or savings, then spend it. Only a handful start to invest that money and put it to work.
FiVana has a unique approach where it recommends other products, like Sofi. This makes it easier for Gen Z because these are brands that we have likely heard of which will make us trust putting our money there.
When it comes to money, Gen Z wants to have as much of it as possible, yet we really don’t like discussing it. It is important to make the experience on a finance app comfortable.
Recommendations:
Unfortunately, it is always hard to get Gen Z to consistently invest for the long term. A good amount of “investors” treat it like sports betting and get caught up in trades like GME.
This problem is a fundamental flaw in Gen Z, it is going to be very hard to solve, but a company like FiVana has the best chance of tackling it.
Fundraising?
Yes. Pre-seed. Check out there Onepager.vc: https://onepager.vc/fivana.
Love how motivated the founders are to solve this journey. I would bet on them.
Article Analysis: Gen Z is Going to Have A Hard Time Getting Rich
Link to article here.
Staying on the topic of Gen Z and finance, I thought I should provide some analysis on a recent Business Insider article I read.
“Gen Z will earn a third less on stock and bond investments than past generations, Credit Suisse found”
Well right now this is true, it doesn't have to be long term. I feel the idea of the Roth IRA “Get Rich” plan, where you contribute $x a month for 40 years so to make $1.2 million or something, doesn’t click in Gen Z minds. Investing in this sense almost has to be “sexy”. Someone like Titan, has a great chance to grasp this market. They have built a sexy platform that makes you feel like your money is important.
"Like the financial crisis in 2008 to 2009 for millennials, Covid will challenge and impede Gen Z's career and earning potential
This is a pretty accurate statement, many Gen Z’ers, including myself, are having a hard time finding full time work and internships. This will get better and better as the months go on and companies can support younger employees. One trend I am noticing from this is some Gen Z’ers are becoming very entrepreneurial. Some are building their own companies or joining young startups. With this, we've have seen a record amount of VC money flow into startups in 2020.
What startups or products can be made to help this?
I don’t know if startups and products are exactly the solution. With that said, startups like Titan and CommonStock are doing a great job making investing less scary and more comfortable for Gen Z. In terms of financial management I have actually helped a few of my peers set up investment accounts and start investing.
Every Gen Z should operate the same way; Half of every paycheck should go into savings and investments, while the other half goes towards spending. There is nothing more I hate than people who sit on cash, your money should be working for you. I have been heavily investing since freshman year, and even in 3-4 years I have seen excellent returns. This notion needs to be taught by schools, parents, and friends.
Even though CS says Gen Z will only achieve 2% return, I think it will change and we will actually beat millennials at 7%. So watch out.
Cheers!
Tom