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Usefirst

Know your future net worth

Belarus, Minsk city
Market: Financial services, Artificial Intelligence, Mobile applications
Stage of the project: Prototype or product is ready

Date of last change: 11.06.2020
Min investment
$  7.000
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Total required
$ 130.000
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Idea

The app predicts your future net worth by applying different scenarios. It answers when you'll be a millionaire and shows you how you should manage your finances to make it happen sooner. Usefirst provides you with a personalized financial plan and helps you develop good financial habits.

Current Status

We've launched in the US a month ago. So we're only gathering the metrics, but earlier we had run comprehensive customer research. We haven't launched our marketing and user acquisition campaigns so far. Also, we had a product in the EEA with sound metrics. They don't make sense now since we pivoted.

Current paid CAC payback: 7-11 months (based on our UA tests). We know for sure it'll be no longer than 7 months. We know our competitors' metrics. It's just a matter of time (tests) to come to them.

Users: 424 users and 830 installs. Yes, we lost 50% of users who installed the app but didn't register. We completely changed our onboarding and now we lose only 11%.

Purchases: we give away premium subscription for free just to collect more feedback. However, the purchase events show that every 7th new user tries to buy a subscription with a free 7-day trial. It means we've achieved a 14% conversion to trial.

Revenue: not applicable until we start selling actual subscriptions.

We talk to and listen to almost every user. We've gathered a lot of feedback from them. We know that almost 18% of the surveyed users come to us through recommendations from their friends.

The most important thing about their feedback is that we know what they really lack. We're working on it. It's our path to Product/Market fit.

We partner with BillFixers and have some negotiations, but it's too early to disclose.

We were also offered to sell the company with the team and technology.

Market

The main target audience is low-income individuals who can't afford to enjoy the financial planning service. Just a remark, they do have money to buy a consultancy, but it's very painful for them and they prefer saving on such consultancies. They even think it's a service for the wealthy. On the other hand, a one-time consultancy is a waste of money in most cases, because financial planning should be dynamic and continuous. It's like going to the doctor to cure diseases. Financial planning and advice is not just a consultancy; it should cure personal finances diseases. Customers want to get a course of treatment, not a nice talk with certified financial advisor/planner.

Our customer research shows that half our users are 19 - 26 y. o. It's very interesting because a typical user of such a service is 28 - 40 y. o. What does it mean? We see that new Gen's love the product and the way we present it to them. They say our American dream is cool and they love it. Yes, it may be a kind of entertaining for them and doesn't sound serious, but they do start using budgeting and other features. They just percept money management a bit differently from what we're used to.

The U.S. Financial Planning & Advice market is valued at $60.4 billion with growth at a CAGR of 5.5%, according to IBIS World Analysis 2019.

The worldwide personal financial management tools market is valued at $795 million in 2018 with a prediction that it'll reach $1.213 billion in 2023, according to Allied Market Research 2018.

Problem or Opportunity

1) Financial planning is very expensive for the majority. Low-income individuals can't afford to pay $200/h, a minimum $1k flat fee or $2k yearly retainer for financial consultancy, according to NerdWallet.

2) In its current state, financial planning is handicapped and outdated. It poorly uses the latest tech and data science. There's room for disruption. It almost remains as it was in 2004. It's not friendly for new Gen's.

3) Not dynamic in most cases. Financial planning by definition requires being dynamic to provide a comprehensive value. We bridge the gap between short-term and long-term financial management. Our app helps users achieve long-term goals through micromanagement of personal finances.

4) Poor financial literacy. Unfortunately, the education system doesn't teach about money and wealth management. We believe the problem isn’t in people. The actual problem is the current state of the financial system. Nowadays, a lot of financial services companies “cheat” consumers. It works because, in most cases, people have poor financial literacy.

Solution (product or service)

The Usefirst app predicts your future net worth and helps you develop good financial habits, make your American dream come true and get a free personalized plan.

1) Our app's basic functionality is free. The premium subscription costs only $8.3 - 14.99 per month. It means our dynamic financial planning service is at least 6 times cheaper. Based on our customer research, we see that our service is enough for our targeted customers. In other words, it meets their needs.

2) We go above and beyond the current state of financial planning and advice. We apply data science to predict users' future net worth, taking into account their financial behavior, lifestyle, interests and values. We show that a regular person can achieve the wealth they dream of by simply following good financial management rules. We also show what wealth they could achieve if they don't save and invest. This seriously encourages them to start working on their financial health and habits.

3) Our app helps users achieve long-term goals through micromanagement of personal finances. We provide services for both short-term and long-term financial management. It's a holistic approach.

4) We develop a range of modules that will help customers get the best and fairest deals in the market as well as receive free qualified financial advice in the best interests of customers.

Competitors

US: Albert (primary), SoFi, Personal Capital, Qapital, Betterment and micromanagement apps (non-primary) like Mint, Digit, Clarity Money.
EU: all of them are regional and there's not such a player as Albert. Although there are such competitors as Oval Money, Bankin, Numbrs, Plum, Cleo, MoneyBox, Emma.

Advantages or differentiators

Why we're unique and better:

1) We have an unfair advantage that's our unique algorithm. Only our app in the market can predict your future net worth.
2) A turnkey approach bridging the gap between short- and long-term financial management. Most of our competitors are focused only on micromanagement.
3) We go global. For example, our EU competitors are focused on their local markets. We're already compliant with PSD2 and GDPR to launch the app across the whole EEA including the UK.
4) In comparison with large players as SoFi and Personal Capital, we work on automation of financial planning and advice. It means that we'll have significantly lower costs.

Finance

Premium subscriptions and commissions from selling third-party services

Net margin per subscriber is 50% - 71%.

Business model

The business model is based on premium subscriptions ($8.3 - 14.99 per month) and commissions from selling third-party services that are of interest and value to our users. For example, we provide a bill negotiation service that helps to save more than $300 yearly. The service is provided by our partner BillFixers on the terms that are much more beneficial than our competitors' ones (they work with BillSharks that a bit cheat their customers on the actual pricing). We don't sell services that are of no value to our customers. If we have an option to sell a service that doesn't make money for us but it's the best for our customers, we'll do it.

Now we're working on our unit economics through paid user acquisition (FB, Google, Twitter and so on). It's adding up, but we're looking for other growth loops. For example, we'll start an extremely aggressive referral program with influencers and peers. The benefit for them is that we'll share our 6-month net revenue per user with them.

We see that our users share our app with their friends. It's great. It can turn into being viral. We listen to our users and know what they lack so that acquired users could retain for a longer period of time. We're working on it. Paid user acquisition works great, but it's not enough to grow truly large.

Money will be spent on

70% for user acquisition
25% for development
5% for legal and other expenses

Offer for investor

We're fundraising a $130k angel round in Convertible Note or SAFE (with discounts). Equity can also work but it depends. Welcome to negotiations.

Team or Management

Risks

A lot as any other seed-stage startup has. The risks we see are mostly related to Product/Market fit.

We can list most of them here since we've already identified them in our business plan. However, business plans don't work for startups :)

Incubation/Acceleration programs accomplishment

Completed YC Startup School Summer 19

Invention/Patent

Our algorithm that predicts future net worth by applying different financial management scenarios. There's no sense to patent this method at this sate. Why? As soon as a patent is filed it becomes public. Filing a patent would be a mistake for us at this stage.

All IP is transferred to our parent legal entity.

Photos

Photo 1 - Know your future net worth
Photo 2 - Know your future net worth
Photo 3 - Know your future net worth

Product Video

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video