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The case for building hyper-niche lending products
Carlos Caro
October 24, 2024
The TL;DR — Personal finance platforms (like Credit Karma) are now at scale, with the ability to recommend products at the 1:1 user level. Further, they’re incentivized to recommend niche products that are highly customized to each user. Lending products, however, are designed for mass audiences. This disconnect presents a huge opportunity for lenders.
Backdrop: How social channels match content to users
I write about a topic 99.999% of people don’t care about.
And yet, it’s worth my time to maintain an active LinkedIn feed, a Podcast, and this Newsletter.
That (small amount) of attention is powering relationships, networking, and ultimately business for my consulting/agency business.
Gary Vaynerchuk describes what’s happening on LinkedIn as the Tiktokification of social media.
Platforms like TikTok, Facebook, Instagram, LinkedIn and others have figured out how to distribute content based on WHAT people care about, not based on WHO they follow.
That means it’s game on for niche-creators.
Anyone with niche content that helps a small audience can build free distribution for their products and services.
The social media networks love it because they can serve highly relevant content for every person in their network, no matter how eclectic or rare their interests. That keeps eyeballs on their platforms. And that keeps advertiser marketing dollars rolling in.
The key ingredients that make this happen:
At scale audiences — this gives niche creators an incentive to create content to attract attention from the consumers in the platform.
Niche creators, at scale — without them, the platforms wouldn’t have content that’s hyper-relevant to each user. Without niche content, LinkedIn would feel like CNBC + resumes and messaging.
Matching algorithms — without sophistication in the matching between audiences and content (machine learning + AI), audiences wouldn’t get the most useful content, and creators wouldn’t get their content in front of their ICPs. Both sides would eventually give up.
The upshot of all of this?
A 2024 creator on LinkedIn with no resources, no connections, and no history of success can get a content piece in front of a billionaire angel investor who may decide to put $50MM into their next venture. And, that nobody creator might get more attention from VCs than entrepreneurs with much deeper pockets and traditional media connections.
That nobody creator didn’t have much of a chance against the deep-pocketed, well-connected entrepreneur even 15 years ago.
But, social media is a playing-field leveler, and the best content will win. Period.
The stage is set for hyper-niche financial services products
The same thing is about to happen in financial services. But, most don’t know it yet.
Let’s look at a platform like Credit Karma.