Why This Fintech CEO Hid Cash in the Norwegian Woods

0:00We took our budget for the entire month and a half, which was around$100 ,000, and we put that in a glass box and we hid it in the Norwegian forest. Then we live streamed it. It was actual cash in the box. By using the app, which is free to download and free to use, you can find hints to its location. Misconception that consumers have about managing their personal finances? A lot of people trust their bank too much. You're kind of like gamifying the education of finance. Most technology can be replicated, but building a strong brand is something that takes a really long time and it's harder to tear down.

0:47Hey everybody, welcome to the Future of Consumer Marketing podcast and thank you for listening. My name is Andres Figueira, I'm located in Buenos Aires, Argentina and I will be your host today. This show is brought to you by the Global Talent Company, which is a company that's connecting top remote professionals from Argentina, South Africa, and all over the world with leading tech companies worldwide. So if your team is looking to hire world-class talent from South America, South Africa, or anywhere else, just head on over to theglobaltalent.co and see how we can help. I'm also here with Alf Gooder Andersen, CEO of Horde, which is an intelligent personal economy app which empowers thousands of consumers to manage their daily finances through actionable insights and innovative alternatives to traditional financial services.

1:36So how are you doing, Alf? It's a pleasure to have you here. I'm doing great, Tomidas. I'm very, very happy to be here. Yes. We're very glad to have got you on this episode as well. And without further ado, Alf, if you would like to give us just a little bit of your background, what you've done, what Horde is, just so that we can give the audience a little bit more context. Yeah, sure. So my background is that I have a degree in finance. So I worked in the finance space as a financial advisor for nine years. Previous to that, I worked at our family company. So my father is also an entrepreneur, of course, within oil and gas industry, because that's what Norway basically does.

2:16Of course. So I figured at some point it kind of runs in your blood. You want to start something and create something yourself. So after becoming a partner in the firm I previously worked at, I felt urged to do something more. And at the same time, you had PSE2, which is this European regulation that basically solidifies that you own your banking data. and you can share that with other third parties. I thought that this is something that's really going to have an impact. It's going to open up the market and open up new players to deliver real good financial solutions for people. And yeah, I wanted to create something for this space.

3:04Oh, dang. Yeah. Wow, that's very interesting. And being able to manage your own personal banking details to send to third parties, that is different it because at least here in Argentina, my understanding is banks own all the info I have. Like I have no way of actually leveraging what they have or knowing that. So that's cool. And this leads me to my first question. Like when you begin Horde, how are you able to convince thousands of Norwegians to trust a startup with their money when traditional banks have always been around and usually they give people a bit more trust than a new app or something like that?

3:38That is one of the big hurdles that you have to surpass. And I think that you have to create something really compelling for the end user. For our case, we were like the first app probably in the world where you can, with one simple login, suddenly see all your credit cards and consumer loans and JARNA debt and whatever, like outstanding consumer debt you had in one space. That was pretty compelling. And we also, of course, got some pushback from the large banks because they're not super happy when you try to enter their domain. Because basically what we are is a platform, right? So we show you, we're bank agnostic, we show you the data wherever your bank is, and we let other banks connect and kind of compete for you as a customer.

4:31So, of course, that will increase competition in the market. We also did then have some banks that tried to kind of sidestep us and that became some media stories. And that's how basically you can build confidence as well, right? Because then you could read about us and you could Google us. You saw that this is a company that is actually in the mainstream media here trying to create better solutions for individuals. But we also, of course, we also have a podcast which has quite a good following. So it's kind of building the brand from the ground up. As an entrepreneur, you have to dare to be the face of the brand, which is not something that I intended to be.

5:19But it's kind of like the way it turned out. So, yeah. Okay, I get that. Now, and you being the CEO, I imagine you're the face of the brand because it's what gives people the most confidence in what you're saying. and what board is representing. But okay, it was funny to me when I heard that banks were trying to sidestep you guys. But it must be a little bit intimidating for a bank that always has the control over the people that get into their system. And being able to just see it all within one app, I do think that's really cool. That really provides a lot of insight for people. And how is it that you're able to turn what would be in, I would say, a common person's mind, like boring financial data into insights that actually help change people's behavior?

6:08Well, I think the first step is to acknowledge that this is pretty boring, right? It's not something... You have other things you want to spend your time doing. So going into how can we solve these issues for you with the least amount of friction for you as a consumer. So being really, really determined that you're going to create stuff that people actually need and want to use. So a lot of the things like everyone's trying to create this app that tells you that you're spending too much money on Starbucks or something like that. But consumers don't necessarily want that. They want to be in control and they want to have a simple, clean design and quick calls to action to fix if there's a problem.

7:00So one of the main things we also have is that we have probably the best loan application system in the world. So you fetch your data, it takes you about a minute, and then you will have an offer from probably 10 different banks, which is quite quick. You don't have to go into and identify yourself. Everything's electronically. Wow, that's cool. And have you seen any surprising or weird user behavior that you've discovered since launching the personal app? That's a really good question. We do see that we have different types of users. We have some people who are in financial distress and they have a lot of debt and they need to use the app to have an overview.

7:50And for them, we're trying to build this overview and then guide them to which debt should you tackle first and how can we build something that visualizes your progress here? You actually get positive reinforcements when you're doing good stuff. So we built something that's called the reward store. So if you pay down a credit card before it becomes interest-bearing, you get points. If your debt shrinks from one month to another, you get points. And we have an economy quiz each week that is like, okay, if you buy this from Karna and this is the interest rate, how much will it cost? and blah, blah, blah.

8:32So kind of teaching you about finances that way and you get points for all these tasks and you can redeem the points for different gifts and actually also additional down payments on your debt. Okay. We know from our own data and from our partner bank's data that customers that use the whole app are significantly healthier

8:58than the general population who has debt issues. And that's a win-win. For you as a consumer, it's a win for the bank because they don't want you to default and it's a win for us, of course. No, of course. And it's like a super useful tool. And I love the fact that you're kind of like gamifying the education of finance and receiving points and being able to redeem it gives concrete rewards to a person who doesn't even know if they're doing the right thing. But that's a really noble cause, like helping them understand and educating them financially. It'll really help them to avoid having them be in that situation once more.

9:38If they get your app and they have like, I don't know, a bunch of money in debt and they pay it all out, hopefully they'll not be in debt again. And yeah, and then we see that we have other users like we have users who just really like to use their credit cards to accumulate points. Okay. So that's then we're trying to ask ourselves, okay, what service can we offer these individuals? Right. So we started with the one that we felt was the most in need. And it's also for us the most commercial viable customers, because they probably need to refinance their their death. And then a new bank will then be willing to pay us to get them as a customer, of course.

10:16But yes, we're trying to segment what are the different use cases that your people or your customers are using your product for and trying to then build some revenue channels that is custom to those groups. Okay. Okay. And do you believe that there is any traditional banking practice that fintech companies should completely avoid or abandon? I'm not sure. Like, I'm thinking about how usual banks work, the processes they have. And if you as a fintech, maybe you use some of how banks work as an inspiration or maybe you saw things they do that it's like, this is not going to work for us. This is maybe...

10:57I think I understand. There's like a fine line there because of course, banks have been doing this for thousands of years. So there are of course some best practices that they've kind of... But also, we see a lot of things that they do basically because that's how it's always been done, right? Exactly. So we are now 32, 33 people in Horde. And we have one person who has worked in a bank before. Okay. So I think it's a strength for us. It's kind of like a double agent. Yeah, but we needed him because he understood a bit. He is like our partner manager. So he understands the banking language and how the market works there.

11:40And so he's better at that. But developing a problem, it's a solution to a problem. It can be good to come from the outside and ask really stupid questions and say, why are we doing this? What can we do? Why can't we do it like that? And sometimes you're wrong. You spend a lot of time going down a rabbit hole and seeing that, okay, the banks are actually really, the way they're doing it is good. And sometimes you find something that's really valuable and can increase efficiency quite a lot. Okay. Okay. And is there a way that you guys try to balance all the data-driven? Like this app is very data-driven.

12:22And how do you balance maintaining the human touch with so much financial data and like the debts and how you show it to the consumers? Is it maybe in the branding of the application or in how you got the UI to work? I would say it's a bit of both. Our branding is... We have a fairly high and good brand recognition in Norway. And that is because I would say we've been true to our values. We also have a lot of both influencers and media profiles that speak higher levels that join our podcast because they see that we are actually doing stuff that works. That means that sometimes you have to turn down a quick buck to build a brand in the long term.

13:15And I truly believe that that is the way to build a sustainable business. Because most technology can be replicated, but building a strong brand is something that takes a really long time and it's harder to tear down. So yeah, I would say it's the brand and it's of course also the features that we are developing. The ones you're implementing? Okay. Okay. And do you know of any big misconception that consumers have about managing their personal finances? A lot of people trust their bank too much.

13:51I don't think that comes as a surprise because you go to this advisor and if you're going to get their mortgage, you're kind of like happy you just got a mortgage and you don't think much about, okay, what's the interest rate here? Of course. You have other pressing issues. You want to buy a house, right? And it's the same if you're buying a car or you want to go on vacation and you don't have the money right away and you're more interested in getting it financed and thinking about okay, what are the terms here? And I do think that a lot of the jargon that is in the banking sector, like I don't think that people know enough about it.

14:34And you have this very digitalized society now where you kind of expect that this knows everything and everything is just optimized for you. But with banking, there are so high regulatory barriers that even though it's been digitized, it's still the same boring products and you're paying fees for stuff you really shouldn't be paying fees for. Okay. So, but you don't know any better because it's not a product that you want to read a book about. It's that you want to know. No, that's true. And banks, as you've mentioned, since they've been here for so long, people have them as the source of trust and the way to get a quick solution when they need a financial help or to ask for a loan or something like that.

15:15The first place you go is a bank. But it's true that in those times with need, you don't look that much into the future to see how much it will cost you or whatever. and you'll just go for whatever interest rate they give you. You'll go for whatever interest rate they give you as long as they actually lend you the money in the spot. So I get that. What I find is really strange is that it's a very homogenous product, right? It's basically$1 or one for now in Norway. It has the exact same purchasing power. There's no brand involved here, right? It's basically, this is the value of what you get. So you should try and get that dollar as cheap as possible, right?

15:55In some ways, it's easy to build products if you have that mindset that you're really focusing on that. When it comes to insurance, it's a bit more complicated because you have different degrees of coverage that should be customized. But banking products, it's like... You've heard probably the term like Bill Gates says that we need banking, but we don't need banks. Exactly. It's true. And I see that's really, really true, but there's such a huge regulatory capture and trust that is built in the banking industry that it takes some time to disrupt it. Yeah, no, and it's been a while, even with these new fintech companies, with the cryptocurrency market, like there's a lot of things that are moving, that are kind of swaying the grasp banks have on the world.

16:45But talking about that, do you see any way that you build trust with your consumers while disrupting an industry such as the banking that you're mentioning right now? Yeah, like one of the first thing we did, and it was a really easy feature actually, was to make it simpler for you to cancel credit cards. Okay. So we've sent like almost 700 ,000 credit cards to cancellation in Norway. And that was because how it works in Norway is that if you have a credit card and you're not using it, the potential balance that you can put on a credit card that actually decreases the amount you can get in a mortgage.

17:38And people didn't know that. So if you had like 200 ,000 owners in an unused credit card, that would decrease the amount of credit you could get on a mortgage. Oh my goodness. Okay. So we of course then said, Hey, people should know about this. And we built a feature so you can basically click in the app and then cancel credit cards. But then of course, one of the bigger banks or the biggest bank in Norway, they started to try and sidestep that solution. But then that became like a media story. Wow. I imagine, like I'm comparing it to the fact that nowadays it's becoming a whole thing, being able to provide the cancel button for any subscription that you have because they make it super difficult.

18:26And also canceling your credit card, you being able to provide a one-stop shop to just press a button and have that canceled. That really does help people out a lot. a lot okay and i did not know that specific thing about norway that's very interesting like it decreases your ability to to get um to get a loan in the u.s it's it's all the way around like the more credit cards you have the more the more uh the more uh like credit line you can get but in norway it's actually the opposite the more credit line you have the more the more reduced mortgage you get okay if i think about it logically it's like okay if you have that credit line you need to pay that so you won't be able to pay the mortgage.

19:06Maybe it comes through that reasoning. Yeah, because let's say that you have this mortgage but the bank sees that, okay, but you have also a million or$150 ,000 that you could draw a pair at any given time and if you do that, you won't be able to pay the mortgage. So there are some national rules there that the bank has to do this calculation and then they have to include the potential usage of these credit lines Okay, wow. So it's like avoiding having to owe more in case that happens. Okay, okay. And Alf, how has Horde been able to, I imagine, the media exposure with all the sidestepping of the big bank you mentioned when you created that feature helped, but how do you properly compete with tech giants and banks who have unlimited marketing budgets and brand recognition?

19:58Well, that is one of probably the biggest obstacles we had to face a couple of years ago when we kind of, you reach a certain point on like reality alone, and then you have to just start to do some marketing stuff. And like since our main business is currently refinancing more expensive than like credit cards and consumer loans, that is a very expensive space to be in. It's the most expensive Google search term you can have in the Nordics. Wow. At some point, it costs up to$100 just for a click on Google. I had no idea. That's crazy. Okay. It's probably the most expensive in the world. So we have competitors who are using like$100 million a year on marketing in this space.

20:55Probably around a third of that is to the Norwegian market. but and then we have a very limited budget so for us it was kind of like okay we can't compete on outspend and we know that these players they're they're sometimes they're spending money money just to buy out the ad space so competitors like us that don't get get in okay okay so they're willing to lose money over a certain period just to keep us out so for us it was kind of like okay We have this marketing budget, which is like 10-15 times less. Okay. So what we did was we also said, how can we get the most exposure for this? What we did was actually we took our budget for the entire month and a half, which was around$100 ,000.

21:45Okay. Or a million Norwegian kroners. and we put that in a glass box and we hid it in the Norwegian forest and then we live streamed it. Wow! Yeah, so it was actual cash in the box. Okay. And by using the app, which is free to download and free to use, you can find hints to its location. Oh my God, and that was how you got people to actually download the app and start using it and stuff to see if they could find a hint? So we had, at that point, quite good user base already. But that stunt went quite viral because people were all over the Norwegian Woods trying to find this treasure chest, basically.

22:37So I think that we got approximately 60 ,000 new users. Wow! And wait, did anybody find the box? Yeah. I think we had like 15, 20 ,000 people watching the live stream at 3 o 'clock in the morning when the box was discovered. Oh my goodness. It actually was inspired by, I don't know if you remember it, but Shiel Abouf, he had this flag that he planted and the internet kept finding it. So he moved it to a new location. And then so we kind of like that was really cool. What if we do that with a million kroners? So then you have to cut it into your brand, of course. Why do we do this? And so the number was 1 ,087 ,973 kroners, which was the number of people with interest bearing consumer debt in Norway at that time.

23:37Okay. So the number also had a meaning. It's like, okay. Yeah, so that's basically a third of each adult. But no one wants to admit that they have credit card debt that is interest bearing or consumer loans because it's kind of like frowned upon. Yeah, it looks like you're a bad payer, like you don't pay your debt. But in reality, like one of every three adults has this debt. So we want to kind of to remove some of the shame for it and then show you that this app helps you to have overview of this and can actually pay it down and and yeah get better uh control of your finances okay no no if we're talking about this disruptive marketing stints that was amazing like that is a cool way to market your brand and your app like i would have gone in the forest to look for that million kroners as well we actually did it one more time and that was also okay it didn't have the same punch but it was a very successful campaign but our biggest issue now is that you have these groups on both discord and Facebook with thousands of people who are monitoring our campaigns.

24:43Okay. So, so people are so good at finding it that it's hard for us to kind of I did well. Yeah. Cause you have like one discord group with like 1500 people and they analyze, they have people on there all the time. They analyze the flight patterns, the sound, the wildlife, the weather, and they overlay all this stuff. So it's geolocation and they're just like determining it on Google maps before even going. Oh my God. Yeah. And this is like in the middle of the woods, right? So it's kind of, and that also we had to build like a rig that would survive out in live stream from the woods. And you would think that that would just be putting a couple of car batteries there.

25:29It's not. Oh my goodness. Okay. With the whole process being able to create something that would withstand and and film everything? Yeah, what we ended up doing was to basically... We had to have it at a power outlet and then we just had a very long cable to get it out there. Because you have to have like 400 kilos of batteries to sustain it for a week if we're going to have it... How long was the cable that you guys used? I don't know. We got a cabin that was fairly isolated and then we probably had like 50 meters of cable out in the woods. Oh my goodness. I love it. I love it. It just sounds like such a genuine stunt to do and the way you guys pulled it off.

26:25It's just so wholesome. And we did it all internally. We did not use any agencies to help us. Okay. That speaks volumes as well. That's super cool. And you mentioned that the Horde team is about what? 30 people to 35? Yeah, 32 people. Okay. And how do you know Elf when it's time to actually expand the team or that you need it to open up a new role? Is there any SOP that you have or just like as the need comes, you'll fulfill that? You, like as the CEO, of course, have to try and look around the bend and what we need in like six to 12 months. When it comes to office space and the different team dynamics.

27:12But yeah, we're fairly conservative when we hire, actually. So we try to figure out what do we actually need and have a good process there. And it's always like we're growing, then we add more people and you have to, like you say in Norway, you don't want to get ahead of your skis. Okay, of course. You have to make sure that you're kind of keeping this balance. And so knock on wood, we haven't been in a position where we had to downsize yet. Okay. I know a lot of other startups that went for like 12 people and then they went to 60 and then they have to downscale to 25 and it caused so much turmoil in the organization.

28:01In Norway, there's very strict hiring policies. So if you hire someone, you're stuck with them for a while. So making sure that if we do hire that it's a good fit and it's something that we actually need. them. Yeah. Okay. Okay. Wow. I understand that. I understand that. Um, okay. And have, have you noticed any changes in consumer behavior and money management since the pandemic to nowadays? Because, um, let me check. Yes. Um, we see that there's a growing trend, especially about, uh, It's actually across the board, but especially with young people that they're using these buy now, pay later services like Klarna or other vendors.

28:52And that I think is a concern. It's so easy. I went to a hairdresser to cut my kids hair. And even there, I could pay with Klarna in a physical store. So you kind of remove this friction that can be useful to kind of make you think twice. Okay, and avoid getting into debt just because of whatever. Yeah, I think now that 45 % of our refinancing applications, they contain Klarna debt, which has spiked massively after the pandemic. make basically obviously clonar is doing well uh which which is good for them and i use clonar myself but but it's kind of like i think there should be an age limit to it i don't think you should have a person that's 18 19 20 years old and like they're very impulsive they have their brains have developed from thinking consequential and it's it's very hard or destructive for them to kind of start up their grown-up life with$15 ,000,$20 ,000 in consumer debt, which is not necessarily a lot if you're like in your 40s.

30:14But if you're 21, you feel basically that you've screwed up your life and you kind of give up on everything. So I think that something should be done there to kind of ensure that we have 21 years drinking age on liquor in Norway, for example. Okay. You should at least have the same for this unsecured debt. Of course. If you have the judgment to at least consume alcohol, you should wait until you have also the judgment to get into debt. Because what I do get is that, yeah, students and young people, they're in difficult spots where they need money. But nowadays, it's harder for younger people to actually make the same amount of money that our parents or our grandparents used to make.

31:07And I do get that starting debt and then just having$20 ,000 when you're 25 years old. It's a bit daunting. And it could lead to depression and a bunch of other stuff that they just won't get out of if they don't work it out well. But okay, I understand that. And I agree as well. and finally what has been the biggest challenge that you alf has faced as a ceo when you've been scaling horde and this fintech product that you have there's been many challenges but i'm trying to think of something that not everyone would say and i think that would be basically how you use how yourself you have to change on this journey from being like when we were three people in the beginning and just building stuff.