How to Start a Money Transfer Business – Problem Tip! (What problem are you trying to solve? Are you mistakenly a solution in search of a problem?).
Hello. My name is Faisal Khan. I’m a banking and a payment consultant. Continuing with our how to set up a money transfer business YouTube series. The next question I have for you to think about is what is the problem you’re trying to solve. What is the problem?
Usually people will come with two answers. Oh, I have this amazing technology. I have this superb technology that I’m going to use and it’s going to make money transfers be amazing. A technological advantage is a temporary advantage. I will repeat that again, a technology advantage is a temporary advantage. You may have rightly the advantage now but rest assured, six months maximum, maximum one year. Competition will, you know, will not only catch up, will beat you. Your technology will then might be one year old. It might, obsolescence may have set in for you rather than them. So, a technology advantage is not an advantage in this game. So that’s not a problem that you’re trying to solve.
Second, people answer that people give me is oh, price. If price is a differentiator for you and that’s the only differentiator you shouldn’t be in the game – at all. Why? Because the market makers, the market makers, the major players in the corridors that you operate in, will lower the price just to drive you out of the business and will take the price back up. I have seen it happen.
I know of a corridor in Africa where a new player came in. The average was about almost 3.2 percent. The guy came in and offered 0.75 percent, the existing incumbent made it zero for two months – the guy went out of business. The existing incumbent raised the price back to 3.2 percent. So these tactics do happen, will happen. And rest assured if you think its not going to happen to you, it’s going to happen to you.
Price and technology are not the solution, are not the problems that you’re trying to solve. So, you need to be very clear in your mind. What is it that I’m trying to do? What, what is a problem that I’m trying to solve?
Remittances to Africa are very expensive. Africa is 58 countries. Which, which country are you talking about? From where? And how do you know just because how much time have you spent looking at the problem? More importantly have you validated the problem? Have you gone to people and asked them without telling them without telling them, is this a problem? Have people told you of the same problem that you have thought of? If they haven’t, then maybe something is wrong. Do a lot of field research.
Spend more than 100 hours in ensuring that you, that the problem that you have is indeed a problem. And then ask the people, because the cool thing about field research is when you ask people they will have the solution for you. So, you need to do a lot of surveys, field surveys, go ask people, find out. They will tell you what the solutions are, they will tell you what they’re looking for because the solution is what they’re willing to pay. The solution is what they have been asking for all along but no one is giving it to them. So you need to be the listening ear and get that out and you need to do this for at least about a 100 people to get a solid understanding of what the problem is.
Go validate your problem. If you haven’t validated your problem in the field, your business plan is guaranteed to fail.
Till the next video, see you then.