Banking industry veteran, Mark Zmarzly, wants to help bring understanding and transparency to consumers so they can make more informed financial decisions. After a couple of product design iterations, Mark has rolled out Hip Pocket and has already landed his first big client!
The Big Plate: What’s on your plate?
Hip Pocket: Right now the full focus of Hip Pocket is getting our app out to the next round of clients. This means marketing, demos, a partnership with the American Bankers Association, etc. That and emptying the trash. My CEO role encompasses a lot of duties, some more glamorous than others.
The Big Plate: What’s the backstory on the decision to build Hip Pocket?
Hip Pocket: One of my passions is helping people save money and that’s really the DNA of this product and the ”big idea” behind it. I spent almost ten years in the financial services industry and saw that people don’t always have accurate information to make the best financial decisions. Then, even when they do, they may not have all of the emotional desire to make the best decision…we are all wired like that. From those two areas the idea formed: if people had more context about their current financial situation, would they better understand where they stood and what they can do about it? The validation said yes and at that point I wanted this to exist so I set out to build it!
The Big Plate: Hip Pockets enables individuals to check their current financial status against their peers. What is the significance of this?
Hip Pocket: As mentioned above, it’s about giving the user context. People know how they are doing financially when it comes to their rate or savings but it’s all in a vacuum without context. The banking industry has historically been bad about being totally transparent because they were protecting their spread revenue, which is the difference between what they pay for deposits versus what they charge for a loan. As the rates go down, it was in the banks’ best interest to have people stay where they were (higher rates). Now data is becoming ubiquitous so the consumer should be in charge. Finally, by seeing where you stand compared to your peers, you will likely want to do better because “it’s not fair that others are getting a better deal than me.” Psychologically that’s important for people to want to change their financial situation.
The Big Plate: You are currently in beta with a large financial institution. What is your goal for both the bank and Hip Pocket customers?
Hip Pocket: The bank is my ultimate client so I want them to generate new loans not just leads. The secondary goal for them is to build trust with their current customers and prospects. The future of banking will be more about which bank or credit union will be able to take care of me and actively look out for me. This is because banks are consolidating and will continue to do so and also because technology is giving the customer more tools to do this.
The Big Plate: What experiments have you run to uncover potential customer demand? Has your target customer changed from when you began this venture?
Hip Pocket: The original idea was to build a website that was consumer facing and wasn’t tied to a bank directly. We were going to be like Mint.com but with this peer comparison and a more transparent market place. Our testing of the idea was done with a now defunct website called LincolnMortgageComparisons.com and was just for the Lincoln, NE market. We build the frontend inputs and comparisons but then faked the backend by taking the consumer’s current mortgage information and calling, emailing, or visiting the websites of 17 banks or credit unions in our market. We got all of the potential offers and presented them 24 hours later to the person along with the comparisons against their peer group.
Our biggest discoveries were two fold. First, the results and layout needed to be more intuitive. A person needed to see the info and just flat out “get it” and what to do. We eventually found this with more research but didn’t’ get it right the first time. Second, a mortgage broker at Union Bank & Trust (our first client) said, “I’d love to have something like this for our website.” That triggered us to pitch their marketing head with a nine-slide presentation.
The Big Plate: Consumers continue to gain access to information that can help them make better buying decisions. How do you think business will respond?
Hip Pocket: Banks and credit unions will need to embrace this new transparent marketplace and find ways to compete on value. That’s a given. Those who don’t won’t be around.
Hip Pocket wants to be a tool that “good banks and credit unions” can use to show value. The demos we’ve had in the last few weeks show that the bankers understand this and appreciate the way we’ve designed this product with the customer’s needs first, not the bank’s needs.
The Big Plate: As a startup, what facet of building your business has been more difficult to execute then you originally planned?
Hip Pocket: Where to start? It’s all been difficult in that it takes constant focus, learning, and failure. Finding the right tech/dev team, delivering on schedule, funding/sales, quitting the safety of corporate America, and general operations have all pushed me to grow and change. At 39, this is by far one of the most challenging and yet professionally rewarding things I’ve done in my life.
The Big Plate: best startup advice you have received?
Hip Pocket: I don’t know that I straight up “received” this but when it happened it was like, “holy shit, I get it!” That moment was selling the idea to our first client before it was even built. The nine-slide presentation I mentioned above was presented to the marketing team at Union Bank & Trust and the head of marketing was like, “Stop talking. We get it. We want it.” This was around slide seven before we even got logistics of implementation. If you have a strong concept, sell it, get paid, then figure out how to deliver. There are a thousand ways to deliver but only one way to sell: solve someone’s problem.