How MoCaFi Founder Wole Coaxum is Charting a New Course for Financially Underserved Communities in the U.S.

While we may not know exactly how FinTech will impact our future, we have an idea as to who will be leading the charge. Our latest blog series, “The New Faces of FinTech”, spotlights some of the emerging leaders in the FinTech world to get their thoughts on what the future of the industry will look like. Their origin stories are different, their paths to entrepreneurship are unique, but their impacts on their respective industries are significant. No one truly knows what the future of fintech holds, but these industry leaders may have an inkling as to what we can expect.

MoCaFi understands the world that we live in today, and seeks to leverage technology to displace the more common AFS providers. Financial technology has historically been used to solve first world problems. Problems like needing to refinance your student loans or consolidate your credit card debt or find a way to invest more efficiently at a lower cost. Technology has also been used to solve third world problems. Businesses work with people who live in places like Kenya to create a vibrant digital economy and leapfrog the lack of brick and mortar branches in those places.

So technology has helped people in these two worlds gain unprecedented efficiencies, but what about how we solve second world problems? The challenges facing a home health care worker who frequently goes to a check casher or a payday lender in order to take care of their financial needs? Or tip worker who needs a mechanism to get their cash into the digital economy when they live in a community that doesn’t have any bank branches. We know the services for this market are hard to reach, expensive and extractive. We’re working diligently to address that market need.

Wole: We raised our first nickel back in 2016. It started with going through the process of taking an idea and having no customers, no technology, no partnerships, and no platform. From there, we completed a friends and family round that led to a pre-seed round, where we raised $3 million. Just recently, we closed a seed round which totaled $3.5M. We plan on using that money to strengthen our platform, drive more users, and expand and deliver against a couple of big key clients that are in the closing stages of our pipeline.

I spent a lot of time thinking about that issue, and while I wasn’t writing the code or doing the programming myself, I was responsible for driving efficiencies and changing customer behaviors. When I first started to think about starting a company, I was struck by the amount of things you can accomplish with a smartphone. I translated that simple thought, which I honed while at J.P. Morgan, into what we’re building here at MoCaFi.

One challenge I had was just shifting my mindset from a corporate one to an entrepreneurial framework. In that phase I was fortunate to have an army of tech people at my disposal where I could wave my hands and say, “Here’s what I want to get done, and here’s why we’re going to do it.” My job was to make sure that people were being timely with their deliverables, and had the resources to deliver the end result.

With MoCaFi as a start-up, I was now thinking about all aspects of the business from the mundane to the very strategic. There are some things you take for granted in a corporate environment that you can’t take for granted in a startup environment. From benign things like how to pay others and open up bank accounts to more meaningful things like what’s the right security to raise money and what will the company structure look like in three to five years. Those aren’t issues you think about when you’re managing 12,000 bankers and 5,600 branches, but those are critical issues you need to get right if you’re starting a successful business because it lays the foundation from which everything else evolves.

I’ve probably made every founder’s error in the book, and have added a chapter or two. In many instances, I learned the hard way, because a lot of the things you deal with when building a startup aren’t things they teach you in business school or in a corporate environment. But it’s what you learn when you’re in the trenches trying to build a company. The most important skill is resilience. Start-ups can’t win if they aren’t in the game. The other lesso is that time and money are like oxygen for a new business because without those two elements a company cannot survive.

Wole: That’s a great question, and I mentor people on this topic all the time. Two things happened that signaled it was time for me to change things up. The first thing was just knowing that financial mobility was a big issue for communities of color, rural communities, and rural white communities. Essentially, this was an issue for people not in the financial mainstream, which turns out to be 50% of the population. This, to me, registered as an entrepreneurial opportunity that I wanted to help improve.

The second thing was the death of Michael Brown. Those images and that moment just felt like, particularly as a black person, the black community was really struggling with the same issues that we’ve been struggling with for a long time. A lot of these issues result from economic disparity, and I felt like there wasn’t enough in the discourse around how to address this economic disparity. I thought I could have an impact on that conversation by taking on an entrepreneurial venture like MoCaFi, so that’s what I set out to do.

I was also struck by conversations I was hearing revolving around one question. The question asked, what’s worse, being underemployed or unemployed? Unemployed, I would argue, is better than being underemployed. If you’re unemployed, you know what the opportunity cost is in terms of what you’re not getting paid. If you’re underemployed, you might think, “I have so much value that I could be contributing that is not fully valued in terms of where I am.” I wanted to put myself in a position where I could be fully employed, and let me tell you, being an entrepreneur is being fully employed — maybe overemployed, but it is great. All of those moments were critical parts of my journey.

Being an entrepreneur is no small undertaking, regardless of what stage of life you’re in. There are reports that say older entrepreneurs (40+), who have the right experience are just as likely to find success as younger entrepreneurs. Age is nothing but a number, so you shouldn’t let that be a reason to not pursue the entrepreneurial journey. However, at the same time you need to be thoughtful about what your lifestyle is, and if you can maintain that while also building a successful company.

You have to understand that most startups fail, so you must be prepared to handle that both financially and emotionally. When you’re thinking about launching a startup, it’s important to take a hard look at your own experience. If there are gaps in your experience, you should think about who you can find to help fill those gaps, because you can’t win this battle by yourself. And if you don’t have other tools, such as recruiting, domain credibility, managing large complex organizations, it can be especially tough. Also, if you’re wishy-washy about your business idea, you don’t necessarily have to start your own startup right away. You could first try working at a different startup that you’re passionate about in order to start the journey towards entrepreneurship. There are a lot of lonely roads that you’re walking down over the course of the start-up journey, so you just need to be prepared to persevere through it all.

If you want your startup to be successful, you need to have a strong network of people, a strong reputation so that people are willing to take on your idea, and a strong passion for whatever it is you’re building. It can’t just be a passing fancy. The business needs to be something that you know you’re ready to dedicate your life to. Being an entrepreneur requires a certain amount of fortitude. If you think you have strong relationships and a strong reputation, commitment, and fortitude, then you should go for it.

There’s a great quote from Winston Churchill, “Success is never final and failure is never fatal.” These words certainly ring true for the entrepreneurial journey. If you go down a path that doesn’t work, it might be a failure, but it isn’t final. You can still learn from that experience and move forward. And if you are experiencing success, don’t get too comfortable because it’s a journey, not a destination.

Wole: We’re doing a couple of different things. The first thing is that we’re marketing directly to the consumers. We’re spending a lot of time building our brand, as well as targeting specific marketing messages and onboarding messages for our target audience. We’re increasingly amping up our PR game on television and radio, and working hard to be featured in different publications and profiles. We’re also working in paid media and spending time on the Google platform, Facebook platform, and Instagram platform.

Wole: Absolutely. We have a great partnership with Facebook, and they were kind enough to coach us in terms of how to use their platform, specifically leveraging their Audience Network. We can use this as a way to reach our customer base, while still considering how to best use the Facebook and Instagram platform. Typically, what we do is we just create a variety of images and ad copy and mix and match them together. We’ll then put dollars behind these ads on varying channels, and we’ll monitor how they’re performing to see not only how many people are looking at our ads, but also how many people are taking the action we want. From there, we follow customers’ interactions all the way through the funnel.

My advice to people who aren’t sure how to break into paid advertising would be to just try a lot of different approaches to your ads and learn what’s resonating and what isn’t. You don’t need to put a lot of money into it initially, but eventually, you can allocate more of your ad budget into the ads that are performing well.

Wole: I think we need to start by reimagining banking for the half of the country that doesn’t have access to traditional bank branches. We need to address that market failure and get to a place where there aren’t more check cashers than there are McDonald’s. I think we can do better than that, and do it through a mobile platform that makes it affordable for people to bank within the digital economy. Our goal is to be that solution. We want to help others reimagine what digital banking looks like, and ensure this message reaches people that are using more traditional alternative financial services.

We think this message applies to both small business owners and individual consumers. Most small businesses behave like consumers, so we want to be the bank and platform that can service businesses and consumers alike. We also understand that, on average, 70% of people in white communities own their home. In black communities, that number drops to 40%. We know that there’s a wealth gap in this country, and we want to provide tools to people that will allow them to close that wealth gap.

Closing the wealth gap can happen in a lot of different ways. One way is by owning your home, which is usually the biggest asset you have. We want more people to understand the benefits of homeownership, and provide them with resources that get them closer to owning their homes. Another way we can help close the wealth gap is by creating opportunities for people to become engaged in the entrepreneurial journey we’ve been discussing. This can range from being a company that’s backed by a venture capital firm or just starting a local bakery and everything in between. Like I said, succeeding as an entrepreneur will depend on the relationships you have early on. In this context, these relationships can provide you with mentors and resources that can help you as you start to get your company off the ground.

One of MoCaFi’s goals is to provide people with a roadmap to becoming entrepreneurs. We also want to be a platform that helps people close the wealth gap, whether it’s an individual in their personal life or a small business just starting out. There’s a lot of good we can do in the short-term and long-term to help people get their financial dealings in order and put them on a path to create wealth.

In this end goal, everyone wins. One person becoming wealthy doesn’t diminish the wealth of someone else. It’s all additive to the economy. Our big idea is to become an economic engine that transforms communities in this country and gives everyone the chance to participate in financial services and find success in whatever they do.

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