Digital fatigue: Fintech Superhero burns start-up playbook by swerving social, piling into out of home, TV for rapid scale and embracing media wastage as good

Originally shared on Mi3, 13.9.21

The brainchild of a former stockbroker and Booktopia’s CTO, Australian fintech Superhero has ripped up the start-up playbook and powered to massive millennial and Gen Z growth off the back of out of home and TV — during Covid. When most brands fled the out of home sector last year, Superhero rolled the dice, piled in and launched. It worked. “To create big impact and really reach scale, brand awareness and credibility, fast… digital just is not going to get you there,” says marketing lead Rachel Hopping. With CommSec and the big four banks worried, she and Hardhat’s Dan Monheit talk through the retail investment and superannuation management platform’s next major push. With 12 million-plus Australians to target, the plan is to go large — with an IPO in the offing.

What you need to know:

• Australian fintech start-up Superhero smashed first year growth targets within three weeks.

• It went hard on out of home and TV in a bid to gain trust — it’s asking people to trade hard earned cash or manage superannuation funds — and rapidly gain scale.

• The firm, launched by Booktopia’s former CTO Wayne Baskin and stockbroker and Zip advisor John Winters, this week confirmed a further $15m funding ahead of a planned IPO.

• Marketing lead Rachel Hopping and agency partner Hardhat’s Dan Monheit say there is a tonne of growth to come — and the platform is putting brands at the forefront of retail investing while applying e-commerce UX to bring stock trading to the masses.

“You are going to be hearing and seeing a lot more from us in the coming weeks and months. With so many millions of Australians still not even in this category as customers, we’re just getting started. There’s a huge amount of headroom for growth.”

— Dan Monheit, co-founder, Hardhat

Billion dollar save club?

Fintech start-up Superhero is harrying CommSec and the rest of the big four, disrupting retail investing and riding the post-Covid wave that has seen under-40s pile into share trading.

It’s putting brands at the forefront of its share trading platform and driving growth through those bastions of millennial and Gen Z media — out of home and TV — flipping the start-up playbook by throwing rocks on digital and social media launch orthodoxy once led by posterchild Dollar Shave Club.

Superhero smashed year one growth targets within three weeks. But with circa 12 million Australians that have never traded a share, there’s plenty of growth to come, say marketing lead Rachel Hopping and Hardhat’s Dan Monheit.

Suffice to say Superhero should be firmly on the radar of Australia’s financial grandees, now seemingly under pressure from all quarters as global and local fintech platforms eye what was once their turf alone.

“I can’t say too much,” says Hopping, “but I think we are.”

Investors also spy pay dirt. In the last few days, Superhero raised a further $15m in funding ahead of an IPO slated for 2022.

Given the form of its founders — and early investors including Zip co-founder Larry Diamond and Zip chair Philip Crutchfield — the smart money suggests institutional investors may soon join the retail throng.

Fate amenable to change

Superhero was intended to disrupt superannuation self-management. But founders John Winters, a former stockbroker at Shaw & Partners who had a big hand in fintech Zip’s IPO and Wayne Baskin, former Booktopia CTO and Afterpay advisor, found themselves caught up in regulatory red tape just as the retail investor boom was taking off.

Like all good tech entrepreneurs, they performed a ‘pivot’, repurposing the platform and launching Superhero six months later as a stock-trading platform. It now does superannuation self-management too, but it’s the trading afterthought that has to date driven the bulk of growth — though Superhero’s go to market strategy also played a major role.

The TV-out of home combo is an atypical approach, given social and digital platforms are all the rage for start-ups. But that formula, suggests marketing lead Rachel Hopping, has become somewhat “tired”. Perhaps more importantly, investing super and hard earned cash requires a degree of trust and credibility.

Hopping and Hardhat co-founder Dan Monheit say those truisms drove its media strategy, albeit with fortuitous timing: With the first wave of Covid, advertisers “thought the world was ending”, says Monheit, which meant bargain inventory — with OOH hardest hit.

“We didn’t have a lot of money to work with, so we launched with three big out of home messages, white text on a blue background,” says Monheit. “We were up against some big, established stodgy competitors, and Superhero wanted to make an impact from day one. So the secret sauce was in the tone.”

The first piece set the tone: ‘We’re giving trading a kick up the ASX’. The second, ‘Hang on a CommSec, why are you sill paying $19.95 a share’; and the third, ‘Get your fair shares’ continued the theme.

“We wanted to open up trading to people that wouldn’t have considered themselves to be share traders before,” adds Monheit. “So we had to take a playbook and a language that was more in line with the average person on the street than the average person working in a stockbroking company.”

“Seeing a banner once might not make you make a decision. But if you feel like you can’t get away and a brand is following you everywhere you go [out of home], that’s when you start to take notice.”

— Rachel Hopping, marketing lead, Superhero

Zigging when the market zags

Rachel Hopping credits Avenue C, “ a great media agency,” with executional nous, but agrees Superhero got lucky with market dynamics.

“Everyone was pulling out of out of home, so we were able to get some cracker prices and it meant we were on [billboards and buses] a lot longer than we otherwise would have been. So instead of four weeks, we were able to spread that over months and months and create long term frequency,” she says.

“Seeing a banner once might not make you make a decision. But if you feel like you can’t get away and a brand is following you everywhere you go [out of home], that’s when you start to take notice.”

Next, the brand followed up with TV — primarily catch-up or BVOD.

“Out of home was our stamp on the map. But TV allowed us to go into new and more national markets, which allowed us to expand our reach,” says Hopping. “But more than that, TV allows you to tell a story, and it allows you to really connect one to one with your audience.”

A big chunk of the TV dollars went into AFL. But Superhero also invested around reality TV, including Love Island.

“Digital is big for us, but people are overwhelmed with content on social media. It’s just a constant scroll of the same thing; now every second thing I see is an ad.”

— Rachel Hopping, marketing lead, Superhero

Digital too, but not first

To be clear, Superhero also invests significantly in digital media: “having multiple channels is where you get best effect”, says Hopping. But she says the halo effect from its OOH-TV launch is still paying dividends.

“Digital is big for us, but people are overwhelmed with content on social media. It’s just a constant scroll of the same thing; now every second thing I see is an ad,” says Hopping.

“So, not only are people overwhelmed, but I think there’s a tiredness that’s coming from digital media as well. At the end of the day, it’s on your phone. So to create that really big impact, reach and scale, brand awareness and credibility, fast… digital is just not going to get you there in the same credible way that those more traditional media channels do.”

Plus, says Hopping, there’s the trust factor.

“We did a survey with around 4,000 of our customers, and a large portion of them said that they heard about Superhero from friends and family,” says Topping.

“Someone has seen the ad on TV, they ask a friend or relative if they have heard of the brand; they have and that creates this loop of trust, it’s that reassurance from those close to you as an effect of seeing our advertising.”

That ‘feedback loop’ calls into question the notion of “wastage and the idea that people who aren’t in our target market shouldn’t see the ad,” suggests Monheit.

“For any product, the safety and security of knowing that other people have seen the ad is important. But for something like financial services, we’re literally asking people for their trading money and then for their life savings,” he says.

“If you think about that football audience, it is really important that even if half the audience is never going to become a customer, when the half that are say ‘I’ve just put some money into Superhero and it’s great’, it’s really valuable that the other half say, ‘I know that brand. They look interesting’ and not ‘Who? What are you doing that for?’”

How Superhero made trading cheaper

In a nutshell, Superhero means users can quickly start to trade shares in US and Australian stocks. It bundles up trades under a single ‘Holder Identification Number’ or HIN — whereas usually traders have a single HIN.

Under this ‘custodian model’ developed for the original superannuation play, the platform then settles trades collectively, which means transaction costs are reduced versus trades with an individual HIN. That means Superhero can still make a margin by charging $5 trading fees on Australian shares, versus $20 charged by the likes of CommSec. Meanwhile, trading in US shares and via exchange traded funds (ETFs) are free — and there are no account fees.

But cheap fees are redundant if nobody uses the platform. Which is why the founders have focused on simplicity — aiming to make trading shares as easy as online shopping.

“It’s all about making sure customer experience is as smooth as possible at the start. If you lose someone in onboarding, it’s a lot harder to win them back if they’ve already had that difficult experience with you. After that, it’s all about control and transparency.”

— Rachel Hopping, marketing lead, Superhero

All about UX

Rachel Hopping thinks user experience (UX) is what sets Superhero apart.

“You can have the greatest marketing in the world, but if you don’t have a product that lives up to customer expectation, you’re never going to be successful,” she says. So while Superhero has made huge gains from canny media investments, “the product is why Superhero is seeing continued success”.

Hopping says all successful platform businesses share the same common ingredients.

“If you think about how we use technology today, whether watching shows on Netflix, ordering food, ordering an Uber to get from A to B, everything that we do is instant, transparent, easily accessible. But the finance world really hasn’t caught up to that,” says Hopping.

While challengers such as Afterpay and Zip are starting to tip the balance, “the investment space and particularly the superannuation space were still in the dark ages”.

Ease of access is critical, she says, which is why Winters and Baskin focused on onboarding: users can sign up and trading within 20 minutes, with 24 hour Sydney-based support for those that get stuck.

“It’s all about making sure customer experience is as smooth as possible at the start. If you lose someone in onboarding, it’s a lot harder to win them back if they’ve already had that difficult experience with you,” says Hopping. “After that, it’s all about control and transparency, so people can manage their trading and super in one place… with the experience as simple as possible.”

“We’ve got one ‘invest’ tab where you can see different categories of shares, and we use brand logos, which I think is a really important differentiator for the stocks. Instead of seeing a whole bunch of codes and names that you don’t really understand, you see the logos of brands you know and love — Apple, Nike, Spotify, Shopify.”

— Rachel Hopping, marketing lead, Superhero

Invest in brands, not ticker codes

Superhero is extending that simplicity to stocks themselves. Rather than rely on users knowing the listed stock’s three or four letter trading acronym — e.g. TLS for Telstra or GOOG for Google parent Alphabet — the platform lists brands and logos.

“We’ve got one ‘invest’ tab where you can see different categories of shares, and we use brand logos, which I think is a really important differentiator for the stocks,” adds Hopping.

“So instead of seeing a whole bunch of codes and names that you don’t really understand, you see the logos of brands you know and love, whether that’s Apple, Nike, Spotify, Shopify. Then the conversation shifts from finance and stocks to the brands that we know people are using,” says Hopping. “So that opens up the conversation to more people — not just those from a finance background.”

The platform takes a similar approach to baskets of stocks, traditionally called exchange traded funds or ‘ETFs’. Superhero breaks them down into everyday language, so that ‘The Beta Shares Nasdaq 100 ETF’, for example, becomes ‘US Tech Giants’, says Hopping, “because that’s what it is — the biggest tech companies in the world listed in the US”.

Hardhat’s Dan Monheit thinks that dedication to UX — basically designing a stock trading platform as if it were an e-commerce store — is what will power further growth.

“If you have shopped online using Asos or Net-a-Porter, you get onto Superhero and it’s just obvious. Then you go and look at some of the legacy systems and you realise why 12 million Australian adults have never actively bought a share,” he says. “They have been designed out of the market in the actual user interface, and in 2021, there’s really no need for that.”

“You are going to be hearing and seeing a lot more from us in the coming weeks and months. With so many millions of Australians still not even in this category as customers, we're just getting started. There's a huge amount of headroom for growth.”

— Dan Monheit, co-founder, Hardhat

What’s next?

If Superhero is going to successfully scale from 100,000 to 500,000 users, Hopping says more easy-to-use features will be key (hence the latest round of funding). But she also says the platform must continue to educate users about greater possibilities while supporting them “so that they are empowered to build their wealth and make better financial decisions”. In short, what’s next is “Enablement… education… and empowerment.”

Hardhat’s Dan Monheit says the year ahead is about flipping the brand “from plucky challenger into the leadership position” around the new way of trading. As he puts it, “there is a chapter in every great tech startup story where it moves from being pirates to being more like the Navy”.

That prospect should bring some pre-Christmas cheer to out of home companies and TV networks.

“You are going to be hearing and seeing a lot more from us in the coming weeks and months,” says Monheit. “With so many millions of Australians still not even in this category as customers, we absolutely believe we’re just getting started. There’s a huge amount of headroom for growth.”