Episode 155 / Viktor Nebehaj / Freetrade / CMO & Co-founder
How to Use Crowdfunding as Marketing
Starting off working for Google straight from university, Viktor Nebehaj has always looked to invest in himself and work hard to develop a successful career. After getting a taste of investing in other companies, such as Revolut and Monzo, he became co-founder and marketing leader at Freetrade, aiming to promote investing to everyone. His Shiny New Object is crowdfunding as equal parts fundraising and marketing tool.
The insight from which Freetrade started was that investment was becoming normalised. When Adam Dodds and Viktor came together to launch the company, they thought that, soon, having an investment account would be as popular as having a bank account and as essential.
Not only does investment in companies give people an avenue towards additional value creation, it also gives them a way to be closer to the brand whose products or services they wish to support. This is where crowdfunding becomes a great marketing tool, because those people who invest in brands will be the best evangelists for those brands as well.
According to Viktor, crowdfunding also relies on successful storytelling. “Everything is a story,” he told me: your product, your company, how you present them. This is why brands looking to resort to crowdfunding need to have a strong foundational story of what they stand for and to continue to tell this over and over again.
Viktor agrees that crowdfunding doesn’t suit all types of brands, especially not in the B2B space. But, for B2C, it’s a great way to create more of a community around a company and to build strong links which can yield better and more sustainable consumer engagement. And, in the end, it also leads to value creation for all.
To hear more about crowdfunding, as well as Viktor’s top marketing tips, head to the full episode here.
Transcript
The following gives you a good idea of what was said, but it’s not 100% accurate.
Tom Ollerton 0:00
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Hello, and welcome to the Shiny New Object podcast. My name is Tom Ollerton. I'm the founder of Automated Creative. And this is a weekly show about the future of marketing. Every week or so I have the pleasure and the privilege of interviewing one of our leaders, and one of our industry's leaders, I should say, and this week is no different. I'm on a call with Viktor Nebehaj, who is the CMO and Co-founder of Freetrade. So Viktor, can you give the audience a very quick overview of who you are, what you do, and how we got there.
Viktor Nebehaj 1:24
Yeah, absolutely. And thanks for having me on, Tom, really appreciate it. So by the way, you pronounce my surname surprisingly well. Originally from Hungary, that was really spot on Hungarian pronunciation. That's where I grew up. And in 2004, something really good happened to us, which is we joined the EU, right? That was around the time I graduated at university. And suddenly the world opened up. And I was able to go to either the United Kingdom, Sweden or Ireland to work without any like work permit or whatnot. And, as it happens, a relatively lesser known tech company, at least by European from a European perspective, a smallish tech company called Google open their offices in, in in Europe for the first time, in Dublin, all my peers from the universities, they wanted to work in banking, and I wanted to work on the internet, you know, on tech. So I applied, I had some 10 interviews, and I joined Google. And I spent seven years there. And I really enjoyed my time there. Got to spend time in California, India, and all these places. But after seven years, I felt that that was my first job. I was still young, I was still hungry, I wanted to do other things. So I went and lived in Asia, in Hong Kong, which is really nice. I came back to Europe, I did an MBA. And then I ended up in London, for personal reasons. My girlfriend, fiancee, she joined Google, she actually rejoined Google, she left for me, and her next job was in London. And so I ended up here, you know, you have to walk the walk to support your partner as well. And I was roaming the streets of London, jobless, and I saw a crowd tube advertisement. And I thought to myself, that was great, because you can invest any amount of money, even 10 pounds, you don't have to have your own, like Sony story or on deal flow. Basically, the platform takes care of everything. So I invested in the very first crowdfunding round of Monzo and Revolut, which both of them turned out to be great investments, but nothing is as big as my investment in Freetrade, which was my third investment that summer, in summer 2016. I saw the pitch and I had the same feeling again like this, this has to exist. I wanted to open my ISO. Then I arrived in the UK, I ended up with a suboptimal solution, eight pounds per transaction. So I was like, What can I do to make this happen? So I looked across my bank accounts in Ireland, Hong Kong, I put all the money I had at the time, and I invested everything in Freetrade. Thankfully, my girlfriend remained employed at Google. So I didn't end up on the street. But that was, that was why I got to know my now Co-founder, Adam Dodds, the CEO and founder of Freetrade. We got to talking after I invested and eventually I joined as his marketing guy. Because my background is there originally search engine optimization and acquisition. So yeah, that's a story in a nutshell.
Tom Ollerton 4:43
So if someone was following your footsteps, who was a student and wanted to get in to the industry, what would be your advice to them?
Viktor Nebehaj 4:51
Well, my advice would be to consider that in any system, you can basically only get as much out of the system as you put into it. So when I arrived at Google, I was really intense. You know, I came from Eastern Europe, basically, there was no way back, I did not have much. You know, in terms of belongings, I basically packed the purple colored duffel bags, and I moved to Ireland, I basically filled it up to maybe like half with, you know, T shirts and whatnot, my mentality was that I'm going to make it, I'm going to be the best they've ever seen. And I've figured it out, I invested a lot into my own performance, and I got a lot out of it. I progress my career. Basically, it's your 20s and 30s, when you can really develop your carrier, when you can make big jumps, when it comes to your 40s that I am now, you know, the jumps are not quite as big, and you just can't progress quite as well. So when you are young, that is the time to make, make big moves. And I appreciate it's not for everyone. Some of my ex colleagues from Google, at one point, they decided they didn't want to build a carrier, they are fine, where they are. And that's also legitimate, not everyone has to make it, you can have a complete happy life without being a CMO or anything like that. But if you want to follow my footsteps, it's all about being intense and proud about your own performance and, and invest as much as you can in your 20s and 30s.
Tom Ollerton 6:26
And outside of that, what is your top marketing tip? What's the thing that you've learned in all of these different positions in your current role? was the one bit of advice that's put you in good stead that you pass on to others most often?
Viktor Nebehaj 6:40
Yeah, there are a few there, but I'm going to prioritize for you, Tom. So, of course, every company is different. It all depends, right? We all know, these, these generate through sales. But once you have product market fit, it's amazing how much you can make out of referrals. If you focus on that. And, you know, a good referral mechanic, and building a channel that you fully own and not surrendered to, you know, the platforms that are Google and Facebook, that the whole planet advertises and tries to acquire customers, it's really important to figure out, you know, and then try to build if you can, your own acquisition channel. That's what we did with Freetrade, the free Share Program, which works fantastically, but underpinning that something that's underappreciated often is the storytelling aspect of things. Everything is a story. We know that. Since that book, I think it's called Sapiens, I forgot the name of the book, right? I read it a long time ago. But basically, one of the tenets of the book is that everything is a story. And that's very true to your product, and company, as well. So on underpinning all of that, you want to have a strong foundation of what your company is about, and you have to continue telling it over and over and over again.
Tom Ollerton 8:12
This episode of the Shiny New Object podcast is brought to you in partnership with MADfest. Whether it's live in London, or streamed online to the global marketing community, you can always expect the distinctive and daring blend of fast paced content, startup innovation pitches, and unconventional entertainment from MADfest events, you'll find me causing trouble on stage recording live versions of this podcast and sharing a beer with the nicest and most influential people in marketing. Check it out at www.madfestlondon.com.
So your shiny new object is crowdfunding. So I imagine most people listening to this podcast will know what crowdfunding is, but why is it your shiny new object? Why do you think it represents the future of the industry?
Viktor Nebehaj 9:04
Well, the way society is going and the way the world is going. Investing is becoming normalized. It's the insight we had a long time ago, when we started our company, that having an investment account is going to be as normal as having a bank account. And there is an underlying current of, you know, ownership and having equity in the businesses that whose products you use. If you consider companies like let's say, let's say Nike, for example. They are extremely popular. Basically the cash deal is ringing, nonstop people buying sneakers. If I buy sneakers or any kind of product from Nike, I want to benefit from that growth. I think that's only fair. And, you know, companies historically treated customers or users and shareholders as very different groups of people. We live in a world where information is extremely accessible, you can analyze a company, some some of the best company analysis I see is either on on the free trade forum or on Reddit. Information is very accessible. And it's time for people to benefit from the value creation that's happening in the world, and equally crowdfunding, that enables that. It's also a great tool for marketing, people that invest in your business, you know, chances are that they become your biggest brand evangelists. That's why I would consider it our shiny, new objective. And we've been doing it for a number of years. It bears repeating, it's, it's a really great tech tick.
Tom Ollerton 10:44
And so tell me more about crowdfunding as marketing, how does that actually work for someone who's never attempted that before?
Viktor Nebehaj 10:52
Yeah, there are various platforms, we use Crowdcube. Always, they have the biggest community. So you raise money on on these platforms, and people that pledge investment, they become shareholders of your company. So there is a lot that goes into that. But that's, that's on the high level, and there are a lot of mechanics, you know, they are still, you know, retail investors, potential customers of your company, they are big on rewards. So tactics that you can use is giving away rewards for certain investment levels. Somebody who invests a grand, maybe they have free access to a feature they would have to pay for otherwise. And, you know, it takes, you know, for us, it typically takes a couple of hours for the to raise, raise money, typically, it goes on for four weeks, or a month. And then it concludes, and then the platform collects the investment pledges for these investors, and it's in your bank account. So that's the high level view.
Tom Ollerton 12:01
And so what I'm trying to get to the bottom of is, what are the pitfalls here? One, what kind of business would this not work for?
Viktor Nebehaj 12:09
That's a great question, Tom. So just like with every, every strategy, it there is no one size fits all. So if you consider, let's say, a b2b company, let's say you produce, I don't know, specialty chemicals for sunscreen, that is a very, it's an actual company, thinking of it, it's on the stock exchange. That would be I mean, it's always about storytelling, you can do things to get it closer to the customer with storytelling, but if you are a b2b business, that's not the strongest position to do crowdfunding from, I'm not saying you can't, and you should be as a marketer creative. But it's, it's best suited for companies that are b2c, and they have broader consumer appeal.
Tom Ollerton 13:04
And so who do you think maybe yourselves is doing crowdfunding as marketing in a successful way? Who did you look up to in this space?
Viktor Nebehaj 13:15
Yeah, actually, we are in this position. And it's a very interesting position to be in because I've been here in the UK for six years, and I'm acquiring the traits of, you know, self deprecating humor, and, you know, I think you guys don't like bragging but, you know, internally, we think about ourselves as one of the champions of crowdfunding. So it's really hard to, you know, find companies that we truly look up to, because, you know, for us, crowdfunding is such a foundational thing that we consider we are the category leaders of, but if I'm, like, hard pressed, um, you know, I'm looking, looking up to other companies that made it, you know, have made it a success, and they have their own story, whether that's Monzo or, you know, Revolut, or all these different businesses, they, you know, they definitely helped improve this category, and they have their own success stories. We, we also think of crowdfunding there is, you know, a very strong marketing component, but equally for us, there is a strong fundraising component, because the way we structure things, a lot of our you know, or all our early fundraising came from crowdfunding and that was by design, because, you know, who else to benefit from the wealth creation that happens from a very early stage. And of course, when you consider investing at that stage, or at any stage, you have to consider your risks, of course, but a lot of wealth creation happens from that point where, you know, the company's super early and for us, it was very important that it's our crowdfunding, you know, customer investors. For a lot of other companies, it's a smaller component of a bigger fundraising story. But, you know, there are lots of lots of other companies that made this a success. And I guess it's a very lengthy way of saying that. Well, we we are pretty good, Tom, you know.
Tom Ollerton 15:13
And so why is it not more popular, I mean, makes sense that you create the opportunity to buy into the brands that you have, that you buy yourself. But yeah, you talk about Revolute and Monzo. We had the ex CMO of Monzo on this podcast talking about the very topic a couple of years ago, but I, you know, I'm not overwhelmed with other stories of other brands doing this. So why is there an inertia? Or have I totally misread the market?
Viktor Nebehaj 15:48
No, I don't think you misread the market? Tom, we are on a journey, right. And I think what we really need to achieve is that there are really positive financial outcomes coming from crowdfunding for this story to be whole. And I think we are getting there. Some of our early investors as part of our series B fundraising with VCs, earlier this year, they had the benefit of choosing whether they want to sell some of their shares. A few people do have that option. So we are getting there in terms of making crowdfunding really successful. I think we need even more success stories. And it takes a number of years, right building a company. That's potentially up to 10 years of a journey to get there. So it's not an instant gratification thing. I think the other thing is about crowdfunding, it's really important to disambiguate it from, you know, the likes of Kickstarter, there is a place for those products and all that. But I think the dominance of American media, and American stories and companies, you know, the successes on Kickstarter, you probably remember the smartwatch Pebble, for example, that I actually pledged to when I was a user while they existed. You know, I think that has had a dominance over here. And I think it got maybe a little bit conflated. And like I said, we need more success stories coming out of crowdfunding, and it's going to take a number of years, but it's definitely going to be bigger.
Tom Ollerton 17:30
Well, that's a lovely way to finish it, Victor. So if anyone wants to learn more about crowdfunding and wants to hear from the horse's mouth, how would you like people to get in touch with you?
Viktor Nebehaj 17:41
I prefer Twitter. My handle is @v18n. And I thought it would be a nice and short handle, but I always have to explain it a little bit. So I'm available on Twitter under that handle, and my email address is viktor@freetrade.io. So bring it on.
Tom Ollerton 18:05
Thank you so much for an excellent interview.
Viktor Nebehaj 18:07
Thanks a lot, Tom. I really appreciate the opportunity.
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