Tarang Patel (TP) started investing when he was 13 after his grandfather gave him a small parcel of shares to get started. Since then, he’s had to figure his way around and has since learnt the nuances of managing his own investment portfolio.
… finding the right people who share your vision. Aristotle famously said, “The whole is greater than the sum of its parts”. Today for an idea to gain traction you need a team where there is understanding and collaboration between its members.
Tell us a little bit about your idea and what made you decide to take the plunge and make it happen?
FirstStep was inspired by our teams’ collective passion for technology, particularly mobile, as well as investments. TP has been investing since he was 13. Increasingly, companies like Betterment and Robinhood have demonstrated the potential of financial technology and a mobile-first approach to investing. We wanted to do something as significant. Traditional banks and brick-and-mortar wealth management firms dominate the Australian financial services industry. We believe technology will be the next catalyst for positive disruption in this area.
FirstStep wants to provide a no-minimum ($0), investment option for the masses. FirstStep is a mobile app that will allow users to automatically invest the loose change from their electronic transactions into a diversified, low-cost investment portfolio that the user chooses. Say a movie ticket costs $17.50, FirstStep rounds up the purchase to the nearest dollar and automatically invest 50c in the user’s portfolio. By investing their loose change, users make regular passive contributions and in turn they grow their investments. In addition to investing loose change, FirstStep allows regular top-ups or deposits.
With users only requiring just a bankcard and smartphone, signup that takes less than 2 minutes and no-minimum investment, FirstStep aims to remove the barriers Australians face when investing.
The loose change is invested in a simple, diversified portfolio comprising of a number of ETF that track a broad basked of securities. FirstStep will allow its users to invest in domestic and international share ETFs, Australian government bond ETFs and themed ETFs. Users will also be able to withdraw their investment and have their money in their bank accounts in 3-4 business days if they choose.
Can you explain your business model to us?
We charge a management fee for providing access to investment portfolios, automated deposits and withdrawals, portfolio rebalancing and continuous trading. Our competitive fee structure is 1% p.a for accounts under $2,000 and 0.25% p.a for accounts over $2,000.
What are you working on right now and what are you most excited about in the next year?
We are one of two financial technology (fintech) startups currently at the University of Sydney’s Incubate accelerator program. Currently we are exploring a few partnerships, which we will be happy to announce publicly once finalized. The app is currently in beta, we are awaiting regulatory clearance and hope to launch on the App Store in early 2016. We are really excited about getting our app out there as soon as possible.
How do you make ideas happen?
By finding the right people who share your vision. Aristotle famously said, “The whole is greater than the sum of its parts”. Today for an idea to gain traction you need a team where there is understanding and collaboration between its members.
What does your typical day look like?
I generally get into the Incubate office around 8am and read up on finance and investing news before I start working on the app. We generally have interesting workshops and events as part of the Incubate program. I also spend time engaging potential customers and learning about the other startups in the program and what they’re doing. My time is spent developing a lot of the backend infrastructure, making the app better and testing it as well as helping out on getting our name out there and growing our early access sign up list. This pretty much takes up my whole day.
What challenges have you faced when starting or growing a business/organisation in Australia?
The main challenge we and most other fintech startups face in Australia is overcoming the regulatory red tape. The legal costs along with licensing fees are often significant. Most Australian fintech startups need external funding to overcome these barriers.
What is one idea you are willing to give away for free?
This is less of an idea but more of a suggestion based or our experience; engage with people who are potential customers, in our case millennials, in particular uni students, young professionals, and even young parents wanting to give their kids a small nest egg by the time they turn 18. At Incubate we’ve had a great experience bouncing ideas off and learning from other startups in the program.
What people/companies/organisations do you think are doing really cool stuff in your industry, in Australia at the moment?
What about internationally?
I’m a big fan of companies like Stripe, what they’ve done with payments APIs, as well as Uber and AirBnb which has been really helpful in helping me settled down in Sydney. Y-Combinator is also really impressive in terms of the companies they are focusing on now, including hardware and even energy.
What role do you think business can play in affecting social change?
Buisness has a role to play in affecting social change for the better and providing socially conscious alternative for people. People are increasingly aware of their impact on the environment and the influence they can have in society.
At FirstStep we want to provide our clients with ethical investment options, the option of investing in renewable energy companies or companies that promote gender equality in the boardroom.
Speaking of affecting social change, we’ve teamed up with Shout for Good to encourage readers to ‘shout a coffee’ to charity by clicking the button below. Is there a particular charity you’d like to support?
UNICEF and OXFAM
Can you name 2 websites you would recommend to our readers?
Hacker News – https://news.ycombinator.com
Reddit – www.reddit.com
What about 3 Australians we should follow on Twitter?
James Alexander (@jamesaSYD)
Shane Herft (@shaneherft)
Incubate Sydney (@SydneyIncubate) – although that’s more a program
Are there opportunities for people to get involved with your idea (e.g. are you looking for funding, interns, marketing help)?
Yes, if you’d like to be part of the FirstStep story, we’d be happy to hear from you. You can contact us via our website (getfirststep.com) or email us at [email protected]. We are currently pursuing funding and seeking to partner in innovative ways.
We’re aiming to build a community of Australian idea makers helping each other. If you could have one question answered about startups, marketing, social media, accounting, monetization, product development etc. What would it be?
The Australian startup community is in its infancy and we need to help each other grow. At the University of Sydney Incubate, we’ve had the opportunity to get help and ideas from other startups and in turn return the favour. Periscope, which is part of the Ideas Hoist platform was something my co-founder and I got to contribute to.
Our question for the readers would be: what are the best marketing and customer acquisition hacks for startups targeting millennials you’ve noted?
What’s your favourite bar/café/restaurant?
I really like the burgers at Café Vue.