When mentoring start-ups, I sometimes hear a pitch like this: “With our revolutionary fintech service, we are looking to get 10,000 customers in the first year and need $300k of funding”. This immediately tells me I am talking to a first-time entrepreneur – or that they have the most amazing product. It is usually the former.

The reason is that it is extremely expensive to get customers to use new financial products. Even Lending Club, the world's largest p2p lending platform, still spends upwards of $200 to win a single customer. In fintech, I have seen some incredible start-ups that managed to get their customer acquisition cost down to $30 but, in general, $50 to $100 is usually a minimum and $500 is not unheard of. Which means that anyone who is thinking of acquiring 10,000 clients might have to spend from $500,000 to $5 million in acquisition costs alone.