How To Design Trust Into Your Product | Nick Murphy (Kutana Technologies)

Welcome to Beyond the First Wins, the podcast about what happens after the plateau, when early wins are no longer enough in business, product, and design. I'm Daniel, founder of Turan, and today I'm joined by Nicholas Murphy, founder and CEO of Kutana Technologies. Hi, Nick, really nice to have you here. Please briefly introduce yourself and what you're doing with Kutana.

Hey, Daniel, thanks, thanks for having me. So my name is Nick Murphy. I'm one of the co-founders and the CEO of Kutana. Kutana means to connect in Swahili. And what we're all about is how can we connect African businesses to each other across the continent and with businesses across the rest of the world. We do that through a range of products from multi-currency digital wallets to global payments to trade insurance, digital escrow, and hopefully very soon trade finance solutions as well. So effectively, we want to be that one platform where businesses can access all the financial services that they need in one place.

Oh, can you like briefly tell us about how you ended up building the product and eventually having this very cool name. I didn't know what that means.

Yeah. Yeah. So, I mean, the story of Katana goes back quite far, actually. My own sort of personal experience, I had the opportunity— so my own background's in financial services in the UK sector. But in 2016, I had the opportunity to live and work in Ghana for 3 months doing some consulting for small, medium-sized businesses. And through that experience, I met some incredible Ghanaian consultants. And we hit it off so well that we always knew we wanted to do something beyond that experience together. And so, in 2019, we started our own consulting company called Startup Lounge Africa. And what effectively that became was a market entry consultancy. So, helping European businesses enter Ghana, and then eventually we spread out, we included more African countries, and we eventually set up an office in Germany as well. Now, that was a really interesting experience because we really got to see all the pain points that the clients felt when operating in these markets. And what we really realized was there was a huge gap in the financial services supporting them in these markets. So a good example is, this is around 2021, 2022, a lot of remittance apps were starting to pop up and become very popular. So it was becoming easier and easier to send money to Africa, but these businesses were going for commercial purposes, which means they wanted to get money out of Africa. which is a completely different story. And that's linked to access to US dollar and really tight FX regimes at the central bank. We saw this challenge coming down the line, and that's when we thought, okay, there's a real opportunity to try and solve this here. We felt we had a unique perspective, having been working directly with the clients. So not necessarily, although we all have financial services backgrounds in some way, but on top of that, we also had the unique experience of, I've been importing, I've been in Ghana importing solar equipment from France into Ghana. We've exported stuff from Africa to Germany. So we've experienced all of these pain points that you see across the whole sort of trade journey. And we thought that was a really unique perspective that we could combine with our financial services experience to build products that solve real problems in these markets. So that's where the concept of Katana came from and why we decided to start building it. It was through that lived experience through our customers. And then in terms of the name, it just so happened one of the other partners partners at the consultancy had just been on a trip to Kenya, and they'd come back from Kenya, and they'd really become obsessed with this name, Katana, and the concept of connection. And that's really where the name came from. It was from that other partner. Now, interestingly, when we set off on this journey, we didn't set off— it wasn't clear exactly what we had to build. So first, we tried this sort of marketplace. type model where you bring in different parties, buyers, suppliers, and you connect them effectively. But what we realized was you could get people on the platform, that was good. However, they weren't actually doing anything. Once they were, you know, they would connect, but then nothing would happen. And we had to dig into why. And we sort of got to what we now believe is the crux of the issue. And the crux of the issue was trust. If you're a party in, let's say, Ghana, or you're in other parties in Kenya or the UK or China, wherever it may be, and you're coming across each other for the first time, There's zero trust there. And when you're doing B2B deals, trust is extremely important. And the risk that you take on as a business when you send money into another country is huge because there's very little in the way of protection. You send the money and you hope the goods that you've purchased arrive, full stop, but also that the quality is there, et cetera, et cetera. So trust is a really important issue that needs to be solved, and that's underpinned how we've approached product building from a Katana perspective.

Circling back, for me, what was interesting from what you said is basically that trip to Ghana kind of changed the whole perspective for you. So you had the background, right? But you had to go there, experience in a way how they live, I assume, or how they do business to come up with this whole first version of the product. Let's put it that way, right?

Yeah, yeah, exactly. And I think the world is such a huge place and you can't you know, have a full understanding of everywhere all at once and to really, truly have that experience and then understanding of the problems and the challenges. I think, you know, being there and living it is extremely important. I think that it opened my eyes in 2 ways. So, one was the problems that were faced, and there were obviously unique challenges to that particular area, country, region, and they're a very different set of challenges that are faced in the UK, for example. But also then the positive side of it, there's such a great hustle culture there. Everyone's an entrepreneur, everyone's got a side hustle going on, and everyone's trying to build something. And there's a sense of, you know, a real sense of collaboration there as well. There's competitors, but they're also supporting each other in many ways to help lift each other up. And I really liked that part of the culture that, you know, go try and do something special, try and build something big. And, you know, we've seen that come through. a number of industries. African fintech is probably one of the most successful industries that we've seen success in. Flutterwave, there's a number of unicorns that have come out of Africa in the fintech space. So that culture really attracted me, as well as a unique set of problems that were there to be solved. And as an entrepreneur, that's really what gets you out of bed in the morning, is solving problems. these really tough problems, but you know that if you can do it, it'll be, it could have a really positive impact on people's day-to-day lives.

I'm very curious about how you built, especially the product and the UX in the beginning. You mentioned that first you built the marketplace. It was mostly you handling product UX and everything around it. It was your co-founder. From my discussion, sometimes if there is a co-founder, they kind of split. One, it's more like business-oriented, the other is more like product-oriented. How it was in your situation?

Yeah, in the Katana side, so myself and Sam, who's the CEO and the COO, are non-technical in terms of, you know, we don't come from software development backgrounds. We can understand the logic and the principles of software development, but, you know, sitting down and writing code has never been where our backgrounds lie. So we did have that gap starting out, but Sami had worked on a previous project with our CTO, now CTO called Zach, who worked for, who was a trainer at Code Train Africa. So he was an experienced, a senior software developer, but also had this sort of unique experience where he trained over 500 developers in Ghana. So, you know, when you're thinking about the right person to build a team around, someone who's very highly focused on training and upskilling, you know, is a pretty good place to start. But also the other benefit of that, his network of developers in Ghana in terms of good quality people to bring into the team was fantastic. So, you know, it was a really good fit for us in terms of his own network. We got some fantastic engineers involved in Katana who are still with us today. You know, that constant focus on how do we upskill. And, you know, when we first started back in 2023, there was no, uh, Or maybe there was, but it certainly wasn't widely adopted. There was no coding technology, coding agents, or anything like that. It was all done line by line by us. But now there is access to a lot of that stuff. And he's been able to lead the charge on making sure that we're using the tools that are available in the market, such as Claude and other tools that we use. So, Yeah, I think for us finding the right technical person, and we've worked with the wrong technical person in the past and other sort of side hustles, and it has real implications for the business, particularly if it's heavily reliant on software.

Yeah, that's true. And on the UX side and the product side, it was the CTO who took charge of all of these as well, or it was more one of you, the co-founders driving it and the CTO more like implementing and with the development team?

Yeah. So initially it was the CTO, and the idea was, let's get something that works. It doesn't matter if it looks nice. Let's get something that can move money from point A to point B. So version 1 was very clunky. It didn't look great, but it worked. And that was the point. Could we sell this? Because was the pain point real enough that sort of user experience was less important than just solving the problem?

Mm-hmm.

And so we were able to get some good traction around that. And once we were able to see, right, okay, there's definitely something in this, Then we sort of rearranged the team, and that's where we structured it a bit differently, where we created a product function, which I lead. And then we also brought in a designer as well to really design out and start to do a lot of the research around, okay, what are users thinking and feeling? How do we get the feedback around this? Really, the concept being, how do we get fast feedback loops? That was the question, because we can move fast as a development team, but that's only good if you're actually getting useful feedback into the loop as well. So yeah, we managed to do that quite successfully. We revamped the platform completely. We did competitor analysis, not just in Africa, but we looked at some of the great examples of Revolut and Wise, some who've done it in Europe and the US to great success, and took a lot of inspiration from that and had lots of discussions then about really specific points, such as when we spent a a lot of time on was how do we tell the customer what we're charging them? At what point do we tell them in that journey how much we're taking? And then how do we display that information to them? Little things like that started to become more and more important. And then every sort of step improved the product.

You mentioned trust before, and I was curious how much the UX and the product plays into this part of trust and how you end up building, in a way, trust through the product with the people that are using the product.

Yeah. So we went through a really interesting exercise with this one. We brought in a master's student studying in Berlin who was writing a thesis on the psychology and UX/UI, like the intersection of it. So how does UX/UI impact human psychology? And when we were talking about that trust problem, that's exactly, you know, the spot that we want to play in, which is how do you build trust? How do you broker trust between 2 parties? But to do that, first of all, the parties have to trust the platform. And then how do you do that? So there's a number of ways of doing that. Compliance, being licensed in local markets, and having that credibility. But there is also the UI/UX experience of it. So for example, our product Trade Secure is effectively an escrow with embedded insurance. It's a slightly unique combination of a financial But what it does at its core is the escrow protects the payment, the insurance protects the goods. So we bring the overall risk of the trade deal down. And then the concept being we can then lend on top of that because the risk is controlled. That's something that's been really interesting from a UX/UI perspective. So we've been on a journey with that. And so what we did was we brought this master's student in, we did 2 different designs, Design A, Design B, and then took it to our current customer base and tested it on them and got their feedback, a lot of qualitative data, asking them how they were feeling, really trying to dig into how does this platform make you feel and how does the design of the UX/UI impact that and impact the perceived trust you have. So things like being able to clearly see the money that's in the deal being locked away, you know, had a real impact. On confidence, being able to download the insurance policy and be able to clearly see that that's linked to the deal. Again, more credibility. I can see there's a real insurance company that I recognize the brand that has insured this deal as well. Explode icons like the padlock icons and things like that. Just all these things that build up the confidence in the user that that number on the screen represents real money that's locked away and secured and will be released to me if I'm the seller and fulfill my obligations, or if I'm the buyer and the seller doesn't fulfill their obligations, it was some sort of attempted fraud or whatever it may be, I will get my money returned to me, um, and it's— and, and taking that sense of security. So yeah, a lot of thought went into that, an interesting exercise into that psychology, UX, UI world.

Do you still use these kind of usability tests, user interviews, or how you deal with, with With these fast feedback loops that you mentioned before.

Yeah. I mean, we've been quite fortunate that a lot of the products that we've pushed out have been demand-driven. So a good example of one is bulk payments. Now, that was something that one of our customers was really needing. They had to pay their logistics companies, kind of like Amazon. They've got all these drivers that are going out delivering stuff. all day. And every week they've got to pay them based on the number of packages they've delivered, or how is it they're doing it. So, they've got to pay 50 people at one go, and going in and doing individual payments for 50 people wasn't really working for them. They run everything off of spreadsheets, so they just wanted to upload the spreadsheet and go from there. So, because of that, what we've got is a customer who really needs a solution But we've also got that instant feedback loop, which is, okay, we've pushed it to production, can you test it out? And then they'll come back with all these things. Can you change this? Can you change that? And it really helped us refine the product. And now it's running so smoothly, it's fantastic, particularly in Ghana. It's just everything clears instantly. And in other markets, it depends on other markets how quickly things move. But Ghana was our first home market, so it's where we're strongest. So yeah, we're always trying to get that fast feedback loop. And I think part of the trick to that is get things into production as quickly as possible, and don't be scared if it's not the fully polished version. Now, there's a caveat of that in the financial services world. If you're going to push something and then people's balances start changing, then you've got a big problem.

Yeah.

There is a limit to that, but generally with new products, you can push them out. And we actually had an issue just in the very first couple of tests with the bulk payouts we were doing the payouts, but not deducting it from the balance of the purchase. So, you know, it was great for the customer and they were getting free payments. So, I mean, there's things that you learn along the way, but by going into production fast, you'll— I just feel like you learn these things so much.

If you look a bit back, I'm very curious to just understand how you made the switch from the marketplace to the current product and kind of what pushed you to make that change or what kind of signals or patterns you saw that This, this, you should move from marketplace to something else. And once you get to the product itself, that this is the thing that you actually want to build or need to build.

Yeah, I think there's, there's, there's 2 things to that. So one is looking at customer behavior and are they behaving in the way that you would expect and that you've kind of your business model off the back of. And if they are, then great, you can double down on that because, you know, the business model works. There's margin, there's revenue to be made, there's margins there, and that's working well. But if they're not behaving in the way that you expect them to behave, then something's not quite right. One of your assumptions is wrong, or there's something that needs to be looked into a bit more. I think that's sort of the early indicators of, is this going to be a success? Because everything's built off assumptions, essentially, and you've got to validate those assumptions in the real world. We saw that in this particular case, we saw customers just— businesses were signing up, they were filling out their profiles, blah, blah, blah, but nothing was happening afterwards. And that was not our expectation. Our expectation was, okay, they have met each other, they've learned about the opportunities they could have, now they'll do business and they'll trade with each other. And that just wasn't happening. And so we had to go back and sort of learn why and talk to those customers. And you just have so many war stories about how they tried to buy something from King in the past, and they sent the money and they just got defrauded or whatever it may be. And there were so many times it just felt like a lot of businesses had been burned one too many times that they just weren't willing to take risks. And you sort of see that in other studies as well, that people tend to trade with who they know, and they don't take too much risk when it comes to new trade partners, particularly in emerging markets. So we had to learn that the hard way. We had to go through that process. But what it did do is it got us to what we now see as the crux of the problem, is that people don't trust each other and they shouldn't trust each other either. Therefore, there's a gap there to be filled and there's a space for a product/service to fill that gap, broker that trust, or bring the security into a trade deal that means that if something does go wrong, both sides are protected and don't lose out.

Just to sum it up, to make sure that I understood correctly, you basically used data, obviously, to see if people are doing what you expect to do. And then you talked with the customers that you had or users that signed up for the product to see why the things are not happening, right? Okay. And then how you ended up with the new idea or how this new product that you built is different than the marketplace that you had before?

Yeah. So what we're going for now is more of a fintech banking-esque play. Whether or not we become a bank or not is we'll wait and see. But generally, we combined that experience with the experience of the consultancy in the past, and we looked at the market and we saw, okay, the market's fragmented. The businesses use one company for their payments, they go to the bank for a loan, they find an insurance broker somewhere, and there's not really escrow services for the SME space. The banks will do escrow for large corporates, but ultimately it costs them the same amount of money to do an a million-dollar escrow as it would a $10K escrow. So the smaller side they're not interested in. They would do letters of credit, but these require a lot of collateral, and actually foreign companies don't really accept African banks' letters of credit. They don't trust them. So when we saw this is how businesses are accessing financial services today, we thought, well, there's an opportunity to just have them access in one place. And if they can get all these financial services in one place, you're doing a number of things. You're giving them the efficiency of, okay, you're getting everything in the one place, so you're not paying full price across different providers. We can start to bundle things together, which will give you cost savings. So yeah, I'd say that's the first point. And then in terms of the second side of things, if we focus on the SME space, which we know is underserved, I mean, the SME space is still underserved in the UK. So it's a global issue, but SMEs underpin most economies. And in Africa, it's no different. And, you know, they're responsible for up to 80% of GDP, up to 90% of jobs in some markets. So our hypothesis was, let's focus on underserved who actually have a lot of activity going on and a lot to bring, and effectively give them the same level of financial services that the large corporates have, and level the playing field in that way. So yeah, I mean, that's ultimately what's led us down to building these products. And then in the case of Trade Secure, the problem of trust is an interesting one, and you can come at it from many, many different ways. You can verify businesses, et cetera, et cetera, which we still may do as well. But ultimately, what we found speaking to customers is it was the care about their money. Where is my money going, and how can I protect that as much as possible? So, So that's what brought in this escrow concept. And it says, well, there's 2 parties that don't trust each other. And by the way, it's not all about the buyer. Suppliers also get scammed and defrauded as well. So both parties are at risk. And an escrow solution to us was a neat solution to step in the middle of 2 parties, hold the funds centrally, and say, okay, you've got your agreement, you've both signed up to that agreement. And based on that agreement, as soon as the terms and conditions are met, the funds will be released. And if they're not? then the funds will be sent back. If there's a dispute, you need to go to court over it. And, you know, from a Katana perspective, we are just holding the money and we're following the terms and conditions that everyone signed up to.

What happened— sorry, what, what happened, or what you were looking for? Because you mentioned that in the end everything is an assumption, like you have a hypothesis and you want to see some kind of proof. What happened, or what were those points where you started to feel that you're on the right track or the right path to build the product and the business, and that things are going in the right direction for you?

Yeah, I think the traction from customers, so seeing real money flow through the platform, seeing that grow month on month, customers using us more, more customers coming in, larger customers coming in as well. I mean, one of our largest customers has locations in 10 African countries as well. So, we're starting to see larger players. Actually, an assumption we got wrong was that we thought this would just be a small business problem, and it's not. There's large businesses that are also facing the same problem. So, seeing that and seeing the self-service on the platform as well, that adoption grow more and more. So, with our customers that have been with us for probably 3 months plus, they've become totally self-reliant, which means they go on, they make their deposits, they make their payments, and there's zero human interaction from the Katana side. We have relationship managers, of course, who keep that relationship going, but in terms of them doing what they need to do, they can just go and self-service, which makes it really scalable from our side. So that's how we're starting to see That's your tell for whether or not we're hitting the problem in the right way. And for the first 4 or 5 months of this year, growth, month-on-month growth was over 100%. It's dipped now. It could have gone forever. We'd have loved it to, but it had to stop at some point. That sort of validation says we're onto something here and it's adding real value.

With this whole growth period, how the product and the business and the team is changing to like accommodate? Because I assume you have more feedback, more data, more customers and feature requests and bug reports and whatever. So how, how you manage to, to make sure things are going, still going in the right direction and how the setup is changing around you?

Yeah, I would say AI has definitely helped with a lot of that. I think a lot of things, a lot of insight would've taken us a lot of time to get, you know, a couple of years ago, for sure, maybe even this time last year. But now we have the data, we can funnel it into AI models and start to really get insight out of that. So, of the customers we've got, how many have transacted in the last 3 months? What's the activity? What do we see in terms of the B2B space? So, most businesses clear their invoices and payments at the end of the month. So, we see a lot of activity in the last 7 days, sort of few days. of every month. So yeah, getting that insight, because that then helps us to plan things like operations or treasury management and all the supporting functions that sit around the product. And in terms of how the team's changing, we're not growing the technical team because we think the platform's well established. We are able to move faster with the help of AI, so we don't think we need to grow the technical team too much. On the operations side is probably where we need to start growing more, because as the company grows, we do need more people to support. Now, AI will help to a certain degree, and we are trying to build our own solutions to solve this, but I think we're not in a space yet where we can just completely rely on AI for operations. I think we need definitely more human input there. And then the last part is sales. So one of the learnings we've had is that in the markets that we operate in, things like AI-automated cold outreach doesn't really work. Why does it not really work? Emails aren't really a huge form of connection in the markets we serve. WhatsApp is much more widely adopted. It's the most widely adopted, but there's no way to— there's not really a way to cold call WhatsApp yet. So what we've found is in-person sales is working the best. Now, it's not the most scalable model. But what we're trying to do is create network effects. That sort of links back to product and create a referral scheme. It's similar to what Revolut have. You can get $300 for every customer, for every business you refer, and they sign up and they do a certain amount of activity. So, Revolut's seen that work very well. I think 1.60% of their new customers came from the referral scheme. So, we know it works, we know it works at scale. It's just finding the right flavor of that that hits the right chord with the local market.

When it comes to, like, finding the next steps and assumptions and hypotheses, I'm curious about a couple of things. If you had some kind of, let's say, an assumption or a bet on the product side that didn't work out, and how you work around that one. And on the flip side, if there was anything like maybe a small change or a small thing that it was, like, quite an easy fix and ended up being, making a huge difference for you and the business.

I would say, I think payment links is quite an interesting one. We thought payment links would be super useful. We've actually got a whole business sort of focused around payment links, but we've not seen the adoption of it that we thought we might. I mean, it's super easy to set up. It takes 30 seconds to set up a payment link on Katana. Yeah, we've just not seen that adoption. of it. The assumption was people will find this super easy. You create a payment link, you add it to an invoice, or you email it to your customer directly. But yeah, we've not seen that activity. Why? We've yet to properly delve into and understand. It may be a, we didn't know it was there thing. The communication around it may not have been good enough, or it may not be genuinely something people are are interested in, and it's just not how their operations work today. So, you know, that's definitely an assumption we made that we've not seen the behavior or the response that we'd expected to or hoped. And then small tweaks that had a big difference.

I'm very curious if you had anything like maybe a product/UX issue that somehow slipped under the radar for quite some time. You just like left it in the product and I don't know if somehow you ended up fixing it or you just left it in the product way too, too longer than you would have done knowing the change or knowing the impact of it.

Yeah.

Yeah.

I would actually say we, there's probably 2 areas that, yeah, everything's a trade-off.

Yeah.

And I'd say probably 2 areas that maybe would need a revamp and probably have done for some time is adding a new recipient to your recipients list. So we kind of work similar to a banking app where you add your recipient and then once they're in, they're stored. And you can always just click on them. I think that experience is a bit clunky and slightly, we probably ask for more information than we need. So there's more user input, it takes longer than it probably should. And same with our deposit process. It probably is a— we ask for more information than we actually need through that process. And so it could be a lot slicker. And if it would be a lot slicker, it'd probably help us with the automation side a bit better as well. But these are things that But they work for now. We're focused on pushing out new product lines at the moment, and eventually we will get around to sort of tightening those things up. So they're not a blocker. They're just— is it the best representation of ourselves and of Katana? Probably not. You know, it's for the greater good, which is getting new solutions out there, such as trade finance and lending, which will really help businesses. So it's always that sort of trade-off that we're facing.

Cool. And like towards the closing, if you would give some advice to another founder, maybe in a similar space as you are, when it comes to product, business, UX.

The main advice I would give is get it in front of customers as quickly as possible. In fact, even before you've even built something, get in front of customers, even if it's just, I mean, it's so easy to come up with a wireframe design these days. There's so many tools out there. AI can just do it for you and get that in front of a customer. get their feedback, but get it in a way of not just that they're nice about it. Oh yeah, it looks good. Go with a commercial mindset, which is, would you buy this? And you can even push so far. I would try and push as far as I can with a customer to really get a sense of— because people will say, yeah, I'll buy it, but they know it's just a wireframe and there'll be no pressure to buy it until it's months down the line and they're not thinking that far ahead in many cases. So really try and Push as much as you can to get some level of commitment. You know, be okay with just signing a letter of intent or something like that to show that you're willing to pay for this. That the more you push down that route, the more honest the feedback will become. Yeah, that's it in short.

Nice. Cool. And in the end, could you share some future plans regarding the product and what you plan to build, especially now with like all the AI tools and whatever is out there? Do you plan to integrate something or? Did you integrate something in the product and how you see the future?

Yeah, so we're in a very fortunate position that, okay, so we've built an escrow insurance product which collects a lot of data about a trade deal. We know both parties that are involved, exactly what the goods are. We've got the invoice, we have where it's traveling to, what ship it's on. You know, we've got all of this data and for the AI tools, They need good quality data, and we have that. So what we have the opportunity to do, and what we're looking at in terms of the future, is how can we best use that data to build new products? So, for example, another headache, which is actually non-financial services related, is customs clearance. It's difficult. It's a lot of form filling out. However, we are holding all the data that you need to do customs clearance. So could we just create an AI agent that depending on the market, it will spit out your customs clearance form automatically, and it just gives the user something they can just go hand straight over to customs, and then it's problem solved. But that's something that, things like that we're looking at, is how can we use all this really high-quality data we've got, set AI on top of it, and create spin-off services that might not actually be financial services related, but they're still part of the same trade lifecycle. And there's so many pain points that are non-financial services related for a business that is trading internationally, customs being one, logistics being another. So there's a lot of opportunities to use our unique position as that source of trust, the source where the platform where the money moves and the deals happen, to then push out into the other areas, logistics, customs, et cetera, et cetera. So that's kind of what we're looking forward to in the future.

Well, thanks so much for being here, and thanks for taking the time to explain all the details. Yeah, good luck building the next steps of Copilot.

Awesome. Thanks, Daniel. Pleasure.

Thanks.

Take care.

Bye.