When a knee injury forced footballer Philip Haglund to miss a season for football club IFK Gothenburg, he knew he had to do something different during his time for recuperation.
Haglund chanced upon an article that talked about how as a society we were moving away from cash-based transactions to paperless or digital money. Haglund realized that along with such perceptible shifts, there were new opportunities to be exploited. “Of course, this has been going on for a while, but what we believe is that there is a need for digital money to be tweaked and adapted so that youngsters can understand it better,”
The idea about Veckopengen started to grow when Haglund started researching about kids and the way they were using their cell phones. Haglund says it was clear that teenagers in Sweden use the Internet on their phones more than any other country, but there was no tool that could handhold or teach them about the use of money and financial goals. Haglund wanted Veckopengen to be that tool.
What Haglund wanted to do was in stark contrast to his background of being a mid-fielder. However, what helped Haglund was his degree in Bachelor in Business and Administration from Stockholm School of Economics and subsequent degrees in Journalism and Law. “The struggle to get where I am, and where I was going with my football career has given me an understanding of what it takes to reach my dreams,” says.
Bend it like Haglund:
In hindsight, Haglund is right about his presumptions. It is relatively easy to track your child’s spending if all transactions are cash-based. Extend a certain amount every month as pocket money and the cash left in his or her hand at the end of the month demostrated what the month’s spending looked like. Want to reward the same child for doing odd chores and it is still easy to track income and expenditure in a cash-based society. However, with the advent of digital money, it has become increasingly difficult to keep a track of money.
Haglund started Barnpenga and soon came with an app called Veckopengen. The app is relatively simple in terms of what it does. It helps parents’ inculcate in their children a sense of monetary discipline, manage the child’s money and teach its value. “The core features are the weekly allowance, a piggy bank and chores that could be given out to the children,” says Haglund.
Haglund says being focused and having a clear vision about the problem he is trying to solve has been very important.
“Of course, certain goals always change, but the vision needs to be the same. Our vision is to educate young people on how to use money,” says Haglund.
He adds that the name Veckopengen came very naturally to the startup as in Swedish the name stands for the weekly allowance that parents give to their children. “It is a common saying in Sweden and everyone knows what the word means,” says Haglund.
Started with his own savings, Barnpenga has gone on to raise capital from Reforce International in the range 100 000 – 500 000 Euros. Haglund says the startup is now looking to bring 1-2 new investors as it looks to expand to other countries.
Given the phase of the startup Haglund says the business model is tuned towards attracting as many users as possible to the app. “While there are many payment solutions that include banks, mobile payment systems among others, very few focus on user experience. We want to work on the strong and positive relationship between children and parents,” says Haglund.
While the startup has not monetized the app at the moment, going ahead Haglund says he is integrating the application with services that parents can subscribe to.
“We have over 30000 registered users in Sweden alone. Our retention rate exceeds 25% after 3 months and there have been over 35000 chores given out to children from their parents all over the country. We are satisfied with the usage of the application so far,” says Haglund.
Haglund is also buoyed by the fact that users have responded positively to the app and investors and potential collaborators have warmed up to the idea. However, challenges exist and Haglund says the startup now needs to assimilate as much feedback as possible from the users and then incorporate the same in product development. “We still need to shorten our lead-time, because in the end it will only come down to one thing – how good is our app in filling the market need for a digital tool of handling children’s money,” says Haglund.
Haglund says to get traction, efforts are now being made primarily to adapt and develop the application to reach a high satisfaction and usefulness. Secondly, the startup wants to communicate and advertise the application and the main purpose of teaching kids about money. Lastly, the company also plans to integrate the solution to payment methods and bank services to create a broader platform.
According to Haglund there is no substitute for hard work and a background in sports has prepared him well for the adversity he has to face as an entrepreneur. “I believe that hard work, great structure and striving for perfection ends up in success. It sounds kind of boring, but it is not. The challenges keep me going. Barnpenga is my first start up and I am trying to put to use my life lessons to develop as a team leader and entrepreneur, ” says Haglund.