Get updated on how FinTech has advanced over the years in a special Techsauce Global Podcast talk with Trawut Luangsomboon, the CEO and co-founder of Jitta Wealth.
Having gained recognition for using algorithms to identify investment options in major stock markets in countries such as the United States over the years, Jitta Wealth shares its insight on what lies ahead for FinTech and its thoughts on cryptocurrency.
It all started about 10 years ago when Trawut wanted to help his friends invest in stocks. In spite of being clever and successful in their fields, his friends sometimes ended up losing a lot of money in stocks. As an investor at the time, Trawut decided to create a platform to address this pain point with Sira Sujjinanont, now the CTO and Co-Founder of jitta.com. Together they built a platform that provided in-depth fundamental analysis of stock markets around the world.
Since then, the company now provides stock analysis that covers about 95% of stocks around the world.
“With 80% of their users based in Thailand and another 20% abroad, the company has been quite successful all through word of mouth.”
With a massive fanbase of users that share positive experiences on their platform, word has spread like fire across borders and this is the one thing that the Jitta team is proud of.
After the successful launch of their first business, Jitta started to get requests from users to manage their money because many did not have time to follow up on information to rebalance their portfolios. Trawut said everyone wanted that “magic button” that they could press to gain money from stock markets in ease.
Trawut says Jitta was built to be a tool to help individuals invest by themselves. He admits investing is not that hard, but at the same time it is not that easy. You need to learn and you need practice. With Jitta, some users could invest successfully while others could not. The latter group of investors wanted Jitta to manage their assets for them.
So Jitta did just that with Jitta Wealth, an automated investment platform where clients could open accounts, deposit money, and that money would be invested with AI technology. All users need to do is just add money into the system every three months. The response was quite positive. Ultimately Jitta Wealth aims to transform the wealth management industry to use technology to reduce management fees to benefit users and enable them to sustain profits.
With anything new, the challenge has always been getting people to adopt your product or service. The challenge is even harder when it involves a financial or an investment product because it involves people’s money. They need to trust you before they decide to follow your advice and hand over their money to you to manage.
At the beginning it took a while for Jitta to explain to people how their platform was powered by AI that followed the value investment strategy of Warren Buffet. At first Trawut said people were skeptical. He said people asked for the proof of concept and everything. The company attempted to educate the public because it knew that if people followed Jitta’s financial advice and lost their money in stocks, the blame would fall on the company. However in some cases a user’s financial loss might be from the user not having enough understanding of Jitta’s advice.
This is why the Jitta at the very start did not open its app for everyone. The app was made to be invitation only. This unique action was to ensure that every user had a certain level of financial knowledge. At first there was a group of 20-30 people that had access to seminars taught by Trawut himself. The company built a website called Jitta Library on their website that included video clips and investment information. After successfully running a series of seminars, each member was granted five invitations to invite their friends to join Jitta. The advantage of doing this is if a newcomer had any questions, they could ask early adopters on Jitta’s social media groups. At the end, there was a significant number of users who had deep understanding of Jitta’s product that became advocate users. Trawut says this was the key to sustaining adoption growth.
“That’s how we were able to keep our adoption growth rate up 5-10% every week for the first year.”
Trawut says the adoption was organic as Jitta made sure not to hard sell their services, but instead give people time to check out Jitta’s information first before deciding whether to become a subscriber. Sometimes it would take six months to be a customer of Jitta Wealth. Jitta knows it would be a waste of time for both users and the company if they do not truly understand the platform.
“We want to cherry pick clients that will want to stay with us for life as well. This is still the key principle for customer adoption for Jitta.”
“If you want to go overseas, you need to have it set up from day one.”
Trawut says from day one Jitta set itself as a global company by setting the site in English first. The team did it even though they did not have good English skills. At the beginning there were even people emailing the company about wrong English grammar on their site. The experience was embarrassing but at the same time, it felt good to have someone outside Thailand using the platform.
“When you force yourself to think globally from the start, anything is possible even though it is hard.”
The first stock analysis was on the US market because Trawut knew Americans were trendsetters and if they could capture the interest there, it would prove that the services could scale abroad. The first group to try out the service were people living in Silicon Valley and they loved it. Word spread to other countries and Jitta very carefully monitored the feedback. Ultimately it was a success because investing in stocks is definitely something universal. Jitta just focused on its strengths in algorithms instead of English content because it knew it would struggle going against a lot of competition because the company lacked native English speakers.
However the company did make sure as they built their website, there was English translation so that at the end, it would not have to redo everything in English. Trawut suggests those seeking to go overseas to start slow. If you have a customer base of 100 or 1,000 in one country, it is already a good starting point to go global.
Trawut considers FinTech to be the backbone of the Internet. It has been around for a long time. One of the very first popular FinTech companies was PayPal in the period before the dot-come bubble in 1998-1999. After a while PayPal faded into the background when compared to e-commerce. Trawut believes this happened because there was a trust issue.
“Trust is a very big issue.”
When it comes to users paying for something online, there was always some sort of hesitancy in putting their credit card on a website.
However COVID-19 changed all of this as during the pandemic people had no choice but to pay for things online. Things like mobile banking or WealthTech that were once viewed as experimental concepts have now become the norm. There has been a large number of customers who have invested large sums of money with Jitta, but have never met the team. There has been a boost in people registering for trading accounts in Vietnam too.
Trawut has FinTech themes for investment on the Jitta Wealth platform. Overall he is still keeping an eye on crypto and DeFi because the mission of his company is to create better returns with a simpler investment method. Jitta involves a lot of trust. People trust the company and they put a lot of money into the platform. So if the company were to get involved with something, there is a need for evidence that it will make clients wealthier. Personally Trawut thinks crypto and DeFi are good concepts, but there is still not enough data to analyze to make sure it can be diversified. The company will just wait and see. If everything goes well then it might be put in the Jitta platform.
“My principle is you don’t have to be first to enter the market.”
Trawut says when you are ready and have some competitive advantage, you enter the market. You make sure that you will be the last. Everybody has to die in the market. You should be able to outlast every company and survive. For example, Google was not the first on social media, but at the end it still had a competitive edge. For Jitta, it is the same. If there is great growth for crypto and DeFi, there will be time for Jitta to enter. When it does, Jitta will have good propriety and a competitive advantage.
“It is a “belief” that bitcoin and crypto could replace fiat money in the future.”
Trawut says there is no expert in the world including himself that can be 100% sure crypto and bitcoin will replace fiat money. Personally Trawut views fiat money as having some advantages that cannot be replaced by bitcoin.
Unlike candles that could be replaced by electricity, fiat money cannot be replaced in every single way. This is because it involves politics. It involves the national interests of each country. Countries need to have control of the flow of money.
Trawut does believe bitcoin will develop in the future to be more like fiat money and it could have its own market share. He says it will have its own loyal users and people will use digital currency in their own ecosystem. If people choose to use fiat, they will use fiat. There are advantages for both fiat and bitcoin. In the end, Trawut does not think bitcoin will destroy fiat money.
Trawut says the first thing is to pick the angel investor that is for you. You don't just accept anyone as your angel investor. You want someone who really believes in your product and mission.
Secondly, you need to show them your productivity, how you build things and launch things. You need to set up annual meetings to update news for all parties to show that you are still growing.
Thirdly, there needs to be transparency. You need to talk about the good things and the bad things. You need to ask for advice and you need to be honest. Trawut can still remember the time when he told angel investors the company was running out of money and it had not figured out how to make revenue. At the time, investors still believed in the company. This is because the company did not just talk about bad news. The company admitted to not having a solid business model yet, but had thought of possible business models that could fit the company. They talked about the steps that they were going to take to try the models out.
Trawut says it is ok to have a problem, but it is also crucial that you have possible solutions to solve it in your hand. Being truthful to investors will benefit you as they may have good advice for your company.
Trawut says first you have to manage cash flow. You have to survive. Dinosaurs die, but cockroaches survive.
“Cash flow is the blood of the company.”
You might have a good team, a good product, and some revenue. However if you do not have cash flow, you risk failing because you will not have money to pay salaries and everything. Trawut says once you raise money, you have to be as efficient as possible. You don’t need to spend a lot of money on marketing or extraordinary things. If you are not at a scalable state yet, you need to spend carefully. Trawut says most founders are not aware of the importance of cash flow because they don’t have a financial background. Luckily Trawut has a background as an investor and so he was always thinking about cash flow and kept co-founders as well as the rest of the people in the company informed on what needed to be done financially. Trawut says it is no good keeping it all to yourself because you won’t be able to get sleep at night. Instead you should be honest with employees and once you put it on the table, people can rally together for solutions.
Secondly, Trawut says you should not just focus on the product. As a founder, you do need to have a problem-solution or product-market fit. After this, it is your responsibility to do a business-market fit model. You have to think of good ways to make revenue and the best sustainable business model.
A good example is when Jitta decided to create Jitta Wealth as they saw that their premium model for subscription was not going to be sustainable. The company wanted a win-win situation where both the clients and the company profited from gains.
Lastly, one of the key tools for any company is the excel sheet. Trawut says it is a “magical” tool that will help you keep ahead with the direction of your cash flow. Trawut looks at numbers every month with his accounting team to make sure the company has enough cash-flow.
Overall Trawut says it is a lot easier to manage companies when you have positive cash flow.
“To stay the course.”
Trawut says from day one where you wanted to build something to solve a problem for people, where you wanted to create a bigger company in the future, and where you wanted to help people outside Thailand, you need to stay the course. From time to time there will be good news and there will be bad news. You could run out of cash flow. You could have a fight within the company. All in all you need to stay the course and believe in yourself. You have to keep telling yourself even though the world does not see it.
“If you believe in yourself enough, people will believe in you too."
Trawut says whether it is in the next 3 years or 30 years, it will be the same mission. It might take longer than his lifetime. Ultimately Trawut wants to build new algorithms and new products or services that will bring high returns for everyone. Trawut says there will be expansions of new products and algorithms. Everything will be done to fulfill the mission they set out from the very start.