[YS Learn] How True Balance built a robust MVP to allow for incremental portfolio expansion

Charlie Lee started in July 2014 True balance in India as a mobile credit check app. Under the radar for the next three years, True Balance had one goal: to become the number one financial platform for the next billion Indians.

Charlie said it was important for the team to find the Product-Market-Fit (PMF) among Indian users and then expand their offerings. In November 2020, the startup raised $ 28 million in funds from investors, including Softbank Ventures Asia, Naver, BonAngels, Daesung Private Equity and Shinhan Capital.

Charlie Lee

The startup, headquartered in Seoul and Gurugram, has come a long way since then.

True Balance has expanded its portfolio to offer comprehensive financial services to low-income citizens and make finance “available to all”.

It paid out Rs 1 billion in loan products to the understaffed, financially illiterate and undercredited people of India in 2020. The company’s loan book is reported to have grown eight-fold since January 2020, capped by the cash advance and level-up loan service – with an average ticket size between Rs 1,000 and Rs 15,000.

The app now offers solutions to all of its users’ financial needs, be it shopping, insurance, instant loans, paying utility bills and topping up. It has also started to focus on providing small loans across India.

In conversation with YourStory Media, Charlie Lee explained the key steps the fintech startup took during the MVP phases to ensure the product could scale and grow quickly.

Edited excerpts from the interview:

Your story (YS): What steps did you take in setting up the MVP and what were the findings?

Charlie Lee (CL): MVP development follows a build-measure-learn process that enables you to release a product that can be continually improved by validating (or debunking) assumptions, learning what users want, and future iterations of your app create that will better serve your customers.

Once we have the data to analyze behavior and patterns, we can start on a larger scale. For our products, we introduced them on a smaller scale and tried to understand the response. With the data collected, we were able to restructure the repayment rates for our consumers.

YS: What are the challenges in building the MVP and what do you do when you are bootstrapped or have limited capital?

KL: Our target users have been clearly identified since our inception until today. This is an important aspect before launching a product.

True Balance has only focused on the next billion mid-range users who rely heavily on cash but don’t have the means to access it. These users cannot borrow from traditional banks and have little to no credit history. In such cases, lending becomes a challenge, so we’ve invested a lot of time and resources building categories that give us insight into customer needs.

We’re trying to solve the last mile challenge, but there is no pre-made data. That leaves us the leeway to find ways to get the data we need and scale from there. Hence, it is important to take small steps before entering the bigger market.

YS: How did the product develop and what steps did you take?

KL: We started out as a credit checking service using the USSD code. After that, we introduced a function where people can not only check their mobile balance, but also top up with our app.

Interestingly, people don’t even top up like they do with the postpaid system; They charge up three to four times in small amounts. This gave us an insight into the amount of money customers are spending, how often they top up, etc.

We diversified this and offered our customers the option of paying for electricity, gas, water, and offered ticketing services and e-commerce. We haven’t launched a full batch of services. We did it little by little, and that worked in our favor. Starting in 2016, we have introduced new services every year. It’s important to innovate and deliver what customers need, but at a reasonable pace, backed by research and data.

YS: What mistakes did you make while building the MVP? How long did it take to fix these in the next version of the product? What should you watch out for when solving redundancies and errors?

KL: Like any other established company, we’ve learned a lot from things that didn’t work out initially. We put some products on the market that worked on a small scale but didn’t gain in importance when launched nationally. For example, we introduced digital coupons; they weren’t doing well, so we took them down.

We have also introduced and withdrawn the top-up loan service as it did not have many customers. The realization was that we have to provide services that the customers need, but if something is rejected by the customers, we have to act accordingly. It should not be viewed as a failure, but rather as an understanding that some features or products are not required. We can then focus our resources on creating new services and improving existing ones.

We are firmly convinced that new services are an aspect, but only if it becomes leaner and more compact. In fact, we had planned to start our credit function in early 2019, but we couldn’t do it. We only launched it in November 2019. It seemed like a setback, but we plowed it through – that’s important. We must not allow setbacks to take precedence over greater benefits.

YES: How did you work and design the model to add the right feature at the right time?

CL: We started the company with a vision to be the digital financial platform for last mile users who are underserved. We call them the next billion users, and this segment has always been in focus. With each new introduction, we fulfill this vision while solving the needs of these users.

We have continued to focus on this. In everything we do, we prioritize these customers; that distinguishes us from the others.

YS: How important is the core tech architecture? How do you build a robust system with limited time and funding constraints?

KL: Core tech architecture is everything that the product builds up. It takes time and resources to build this up as a priority. Technology is evolving rapidly, and because of the type of penetration they have, it’s all about smartphones.

You have to devote resources and time to core technology architecture to ensure that a strong product is developed. It is important to build a system that is foolproof and free of interference in order to gain trust and bring a successful product to market.

As a digital financial services platform, technology is critical at every stage of the product. With every round of funding, we’ve invested a large amount in developing our technology to make it trouble-free and secure. We have succeeded in creating a secure lending room and at the same time ensuring data security.

YS: What advice would you give CPOs when they start developing a product?

KL: You may have a clear focus on what you want to do, but knowing the market thoroughly is also important. The first important aspect is knowing the size of your market. Second, how fast is this market growing? Lastly, the stage – like a mature, raw, and early stage – that this market is currently in. It is important to know the market well.

Another important aspect is the presence of your brand. Be present wherever the audience is present. It is very important for a CPO in the early stages of product development to catch customer eyes in the right place at the right time.

Edited by Teja Lele Desai
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