Hauwa Okorie is a Senior Product Manager at Shara Inc., building inclusive financial products for Africa’s SMEs.
Africa’s fintech sector is widely recognized for its immense potential. With millions in funding pouring into startups, the narrative around the continent’s potential for innovation is compelling. Yet, despite the hype, a staggering 92% of these startups fail to secure Series B funding. Despite raising substantial funding, these companies struggled to sustain operations. This highlights the critical importance of achieving true market fit and building solutions that meet users’ needs.
Achieving market fit early on is crucial because truly understanding your customer brings you closer to the path of profitability. While speed is often prioritized in the startup world, building products that truly resonate with users requires a more deliberate, research-driven approach. In a market like Nigeria, the enormous market size can be tempting, leading some to adopt a “throw everything at the wall and see what sticks” approach.
When fintechs rush to market with solutions built on assumptions rather than insights, they create products that are technically advanced but not user-centric. The result? Products that fail to meet real customer needs, leaving companies struggling to maintain relevance. We need a shift towards a research-first mindset—one where we listen before we build, and understand before we scale.
Let’s explore how this approach can drive market fit and growth, with concrete examples.
Research: The Bedrock of Market Fit
To truly unlock market fit, a deep understanding of your customer is essential. This is where research becomes a critical tool—not only for developing products that align with user needs but also for identifying the gaps that others may overlook.
In Nigeria, SMEs in the informal sector struggle to access traditional financing due to collateral demands, limited credit histories, and lengthy approval times. Traditional banks have long ignored this space, mainly because it’s seen as high risk.
At Shara, we developed a model that evaluates businesses based on cash flow and monthly sales rather than traditional assets. Our user research revealed that SMEs didn’t just need access to capital—they needed a solution that considered their cash flow, not just their assets. This model allowed us to offer loans without collateral, while managing risk responsibly.
In practice, this meant providing quick access to a revolving credit. But this wasn’t just about providing credit. The unique challenges of running businesses in the local context deeply influence cash flow. We designed flexible repayment terms that align with the cyclical nature of Nigerian businesses, ensuring repayments are manageable and suited to their cash flow patterns.
By grounding our solution in user research, we’ve been able to carve out a niche that truly addresses the pain points of our customers, earning their trust and loyalty in the process.
The Role of Iteration as a Growth Driver
Research doesn’t end with the launch of a product. Iteration is the natural extension of a research-driven approach. By consistently gathering feedback from users and analyzing data, we can identify areas for improvement and evolve the product to meet emerging needs.
Ultimately, the true value of research is not just in launching the product—it’s in driving sustainable growth. By grounding every stage of development in real-world insights, businesses not only create products that better serve their customers, but also position themselves for long-term success. Research fosters a deeper understanding of user needs, which drives innovation and helps companies differentiate themselves in competitive markets. The ability to deliver products that address real, on-the-ground challenges can be the difference between a business that thrives and one that struggles to survive.
Looking at global leaders like Nubank, a key driver to their enormous success has been embedding feedback loops in their product development process. This iterative process fosters trust and drives growth. Nubank crossed its 100-million-user milestone in May 2024, positioning itself to be the largest and most profitable bank in Latin America. A critical element of Nubank’s success is its commitment to keeping user research in-house, with all teams required to engage with users at least once a week—regardless of whether there are prototypes or new features to test. This ensures that Nubank’s products keep up with the pace of the market and meet users’ evolving needs.
Takeaways for Fintech
- Prioritize research as a foundation for growth: Startups should focus on achieving market fit before scaling. By identifying the true pain points and needs of the target market, companies can create products that not only serve a gap but foster long-term customer loyalty.
- Adopt continuous iteration to adapt to changing needs: Research should not stop after launch. Consistent feedback loops and data analysis are crucial to iterate and improve products. This iterative process allows businesses to stay relevant, adapt to market shifts, and continually deliver value to users, driving sustained growth.
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