In our 16th episode, we talk with Tom Kelly, a partner at IDEO, about the definition of innovation, how to take back your creative confidence, and the habits that can shape not only your current design team, but the up-and-coming design leaders of the world.
The word “innovation” has gotten overused. Kelley says innovation, at the most fundamental level, is a fresh idea that’s feasible and adds value. Ideas alone are not innovation.
In a world so full of screens and notifications sparring for our attention, it’s easy to get caught up in distractions. Kelley breaks down the significance of finding and protecting those quiet moments when you are most bombarded with creative ideas. Once you know when those moments are most likely to hit, it’s a matter of capturing those ideas for future implementation.
Jared Erondu and Bobby Ghoshal are the hosts of High Resolution. This post and episode notes were put together by freelance writer, Gannon Burgett. Watch for High Resolution episodes to drop every Monday on TechCrunch at 8 a.m. PT. You can also listen on iTunes and Overcast.
Nigerian online tutoring network Tuteria took home a cash reward of £25,000 after winning the top Engineering Innovation prize at the Royal Academy of Engineering Africa competition.
Tuteria connects students to qualified tutors closest to them. Customers can find any skill they want to learn using the mobile app, they simply set their budget and wait for the nearest tutor to contact them.
The platform also uses a rating system and allows customers to book lessons by paying for them through an upfront payment system. Once the tutors are paid after the lesson has been confirmed, Tuteria takes a commission of 15% to 30% for each paid lesson.
‘Godwin Benson’s invention changes way Nigerians, Africans share knowledge’
Tuteria founder Godwin Benson collected the cash prize at the awards ceremony held in Nairobi last week. Tuteria along with four other finalists had to present their solutions before a panel of judges as well as a live audience who voted for the most promising startup.
Said Benson: “I am so humbled and grateful to the Academy for the training and support. It’s such a vote of confidence to be chosen out of sixteen such incredible businesses – we will do the Africa Prize proud”.
Head judge Malcolm Brinded said in a press release that the Tuteria invention changes the way Nigerians and Africans share knowledge and skills with one another.
“We’re proud to have him as our third Africa Prize winner, and we trust Tuteria will go on to change the lives of millions of people who are eager to learn and develop new skills.
“His engineering innovation is not only new technology but also a new way of thinking about education. Benson has successfully incorporated the training of the past six months into his project, and we are eager to watch Tuteria grow on the continent,” said Brinded.
The 16 companies that were shortlisted for the prize also received six months of training and mentoring which gave the participants enough support to develop business plans as well as market their products and solutions.
The three runners up, who also won a cash prize of £10,000, are:
- GreenTower Microgrid (Andre Nel from South Africa) — Reduces energy used to heat water by 90%. According to the company, a single unit can service 15 homes.
- Yaaka Digital Learning Network (Hindu Nabulumba from Uganda) — Is an online platform where teachers and students can share their academic knowledge as well as materials.
- Mobi-Water System (Kelvin Gacheru from Kenya) — Allows water tank users to both monitor and control their tanks remotely using your mobile phone. According to the company, you can save up to 30% more water.
Applications for the fourth Africa Prize for Engineering Innovation are now open. Individual entrepreneurs or teams living and working in Sub-Saharan Africa dealing with engineering innovation can enter. Deadlines for entries close on 24 July.
Getting access to the right seed and growth finance is critical to the success of most emerging technology companies. But finding the right investor can be a daunting task for any founding team.
You have to deal with different mandates, big egos, various terms and long lock-in periods just to start discussions and there are many boxes to tick. In working on over R300-million worth of seed and growth finance deals for our clients (see the infographic below), our team has seen it all.
Without significant direction, founders can spend months worth of crucial time and energy in pursuit of an investor instead of focusing on growing the company and its value.
Founders need to know where in the investment cycle they fit, what types of mandates are applicable to them and where to find those investors. A working knowledge of the various types of investors available is critical. Let’s unpack the most significant ones:
Angel investors and angel consortiums
Angel investors are high net-worth individuals that fund entrepreneurs at a quite early stage. They will normally invest on their own or in a group.
Angels are usually successful entrepreneurs who have built and sold their own companies over many years. They understand what it takes to build a business from the ground up, having done so themselves. They can also spot others who will likely be successful at doing the same.
They have usually built their companies or spent their corporate careers in a certain industry for which they build an indepth understanding of. It’s often in this industry or a complementary industry that angels would look to invest.
As the term “angel investor” suggests, traditionally terms set by angels are very generous, like a shareholder loan with long repayment terms or low interest for a small piece of the pie.
In South Africa, because the angel community is still small and access to early-stage finance is limited, in many cases angel terms range from relatively generous to extremely onerous. Angel ticket sizes will generally range from as little as R100,000 to about R4-million, with almost all such investments originating from personal relationships.
A large concentration of angels can be found in the Stellenbosch area. The nodes of Johannesburg, Cape Town and Durban also have established angel investor circles.
You can also connect with the South African Business Angels Network (SABAN) to get in touch with some of the parties interested in making angel investments.
My top tips for dealing with an angel investor would be to make sure that it is someone who can (and is willing and available to) actively add value to your business. Also don’t try sell too large a stake in the company at this early stage, as this will limit your ability to raise future equity rounds.
Venture capital (VC) funds are investment entities with a specific mandate to invest in a certain type of company.
Being formalised investment entities, they normally have shareholders or investors who capitalise the fund, a management team that identifies and monitors opportunities and an investment committee that makes the final call on proposed transactions.
Their mandates range from early-stage companies with proof of market acceptance, to more established companies that are still growing at a high rate, with general ticket sizes in South Africa ranging from R2m to R15m.
VC companies invest at a stage where the company has gained some traction in the market, with a proven product and a strong team. They do still take a big risk at this stage, as the company’s future growth is still uncertain.
A VC will only invest in a company that has a scalable business model and defendable intellectual property with the ability to scale to five to 20 times the value at which they buy in at within a five to 10-year timeframe. The South African Venture Capital and Private Equity Association (Savca) has a list of the main VCs.
In engaging with a VC the best is to ensure that you fit their mandate. Most would publish this on their site. It’s no use knocking on their door if you are not in the right industry, stage of growth or ticket size that they are looking for. Again, if you have personal introductions or relationships with VC managers you will have a much better chance of getting their attention than e-mailing them a slide deck.
Lastly, be very sure of your company’s value before entering into negotiations, as these guys are experts in driving down your price to get a good buy-in.
Private equity funds
Private equity (PE) funds are large, quite sophisticated and highly regulated investment entities. They will generally only consider investments into established companies where the risk is much lower than early stage VC. Their ticket sizes generally range from R15m to upward of R500m, with investments being made for the cash flow generated from profitable, established companies.
With limited investee companies in the market, some PE firms are starting to look at somewhat more early-stage opportunities, which is exciting for emerging entrepreneurs.
Before taking on a PE investor consider whether you are ready for the corporate structures and intense reporting that would come with such investment, as this could stifle growth and flexibility in the process of trying to create sustainable, predictable cash-flow earnings.
Government funds really warrant a complete chapter instead of a paragraph, as there are quite a few out there. I’ll touch on some of the most notable ones. For early-stage technology commercialisation, the Technology Innovation Agency (TIA) has three funds that invest in technology development in the pre-seed stage.
You’ll also find Small Enterprise Finance Agency (Sefa) at the early stage of the spectrum, with loans and investments of up to R5m, and the Department of Small Business Development (DSBD) which also provides small grants.
On the other hand the Department of Trade and Industry (DTI) and the Industrial Development Corporation (IDC) fund more established companies, with various mandates applicable to different industries.
When approaching a government fund, make sure that you understand the funding criteria before going through the application process. Most funds have detailed criteria based on how long your business has been in existence, percentage black ownership, supported industries and more. Also make sure that you are patient, as unlocking government funds can take months to years.
Enterprise and supplier development funds
The Black Economic Empowerment (BEE) codes have incentivised large companies to set up various funds to channel corporate enterprise and supplier development funds to emerging entrepreneurs. A good example of this is Edge Growth with its ASISA fund tailored to the financial services industry.is a good example.
These funds are usually mandated to invest in emerging black-owned companies with turnovers either below R10m or below R50m. Being able to fit into the supply chain of the corporates that are the ultimate financiers would be a plus. These funds can normally structure debt and equity transactions across a broad range of ticket sizes.
The need for fast, continuous innovation, paired with corporate giants’ general inability to easily innovate in-house has led to many corporates entering the market for emerging tech companies. It’s often easier and less costly to buy a large or controlling stake in an innovative company than it is to innovate within existing structures.
Different corporates will have different mandates, but all of them would invest in companies in their industry or that would complement their industry. Corporate pockets are deep, so price tags and go well into tens of millions of rands.
Make sure that you know which companies would be interested in your business and why. Also take heed that you do not end up selling your company and working for your investor if this was never your intention in the first place.
Lastly, various international investors are setting their sights on South Africa. Even with its current unstable political and economic environment South Africa still makes for a good stepping stone for international investors looking to access African markets. The country is still a far less risky investment opportunity compared to most other African states.
There is also a big discount on equity investments here versus other global startup hubs. In San Francisco, with a million dollars you can barely buy into a pre-revenue startup.
In South Africa, the same amount would get you a big stake in an established emerging company that has strong revenues and market validation. Apart from good value, low buy-in opportunities, operating costs in South Africa are a lot lower than most of the world’s other startup hubs. Those companies that are able to earn international revenues and pay salaries and overheads in rands can do exceptionally well.
The lifestyle here is also attracting funders and investors alike. A top tip for taking in international funds would be to make sure that any debt is repayable in rand. Otherwise you might find yourself on the wrong side of currency devaluation.
As South Africa’s funding ecosystem matures and more sophisticated angel, VC and other types of investors enter the market, entrepreneurs that are build high quality companies that aim to solve real global problems should have a lot to look forward to in years to come. But remember, always make sure that you partner with the right type of investor at the right time and that it is done on mutually beneficial terms.
Louw Barnardt is the founder and managing director at Outsourced CFO, a financial management company that specialises in unlocking growth and raising finance for emerging technology companies. He is also a founding director of Glenheim, a venture capital company.
Featured image: Caleb Roenigk via Flickr (CC 2.0, resize)
Looking to get into the South African startup scene or catch up on some of your skills? Well, you’ve come to the right place. There are loads of competitions, networking sessions and workshops happening around South Africa and the rest of the continent (namely Kenya, Nigeria and Ghana) that we’ve rounded them up to make your life a bit easier.
This article is part of a weekly series that highlights all the top startup competitions, networking sessions, workshops and conferences around South Africa, and the greater region. If you have any event recommendations for us to add to the list, or next week’s, please let us know in the comments below or send us an email.
Not all of the events are free and some will require booking in advance. Please click on the event names to find out more information.
This networking event hosted by Business Networking International (BNI) welcomes all entrepreneurs to join a group of 30 business owners to build stronger relationships and networks relating to their industries. The group however only caters for one person per industry. If your industry already has a representative, you will be referred to another chapter.
The breakfast is R130 which needs to be paid in advance for a seat to be secured. You will also be required to register for the event before you’re able to attend.
Date: 31 May, 8:15am to 10am
Location: 144 Campground Road, Newlands, Cape Town
Join young entrepreneurs at the MTN Venture Incubation Programme as they pitch their business ideas to a crowd of connected individuals and investors.
Date: 31 May, 6pm to 8:30pm
Location: UCT Graduate School of Business, Solution Space, 9 Portswood Road, Cape Town
The theme of Silicon Cape’s May #SCTalk is Tech eKasi. Vuyisa Qabaka, Baratang Miya, Bhuti Mbele and Lebogang Madise will highlight the role startups play in solving township challenge using tech and looking at how we build a truly inclusive ecosystem. The event will be moderated by Cape Talk’s Kieno Kammies.
The evening will also include pitching battles and networking.
Date: 31 May, 5.30pm to 8pm
Location: 17 Dock Road, V & A Waterfront, Cape Town
This workshop is dedicated to female entrepreneurs who want to discuss other women in entrepreneurial endeavours. The meetup is designed to be a supportive space for open dialogue.
Date: 1 June, 8:00am to 11:00am
Location: 7 Dock Street, Waterfront, Cape Town
Join the Codebridge Community evening, a dedicated time, every two weeks where those from the community can work on interesting projects they just never seem to get around to doing.
Bring along your passion project or join a project already on the go.
Date: 1 June, 6.30pm to 9.30pm
Location: 1 Thicket Street, Claremont, Cape Town
The Lean Coffee event is an agenda-less event which gives its participants the floor to choose the agenda as well as to constructively debate and explore it. There are only a limited amount of spots available.
Date: 31 May, 7:30am till late
Location: Proof Cafe, 6 Sandton Gautrain Station, Johannesburg.
This workshop will aim to help your business to better utilise Google by getting you to stand out on the search engine; reach your target market and improve your page rankings.
Date: 31 May, 6pm to 8pm
Location: Community Centre Co-Working Space, 357 Jan Smuts Avenue, Johannesburg.
Join award-winning consultant, Landi Jac and entrepreneur Mike Handcock as they take you through various factors on how to better your business. The two will look at factors such as what to address in your marketing, how targeted messages can bump sales and what trends will impact your business will be looked at.
Date: 1 June, 9:30am to 12:30am
Location: RE/MAX Dazzle, 75 Monument Road, Johannesburg.
The Imbizo will allow other small and medium business owners to interact and collaborate on certain ideas and issues facing their businesses.
Date: 2 June, 9am to 11am
Location: 252A Montrose Ave, Northriding, Randburg.
The event will cover two sessions, the first being Bithub’s African Blockchain Opportunity followed by Brave Ventures’ Big Data in the Retail Industry.
The first session will feature a quick intro on bitcoin and blockchain followed by a Q&A with the panel.
The second session will feature an introduction to data science toolkits as well as a hands-on analysis of retail data.
Date: 30 May, 9am to 12pm
Location: Mettā Nairobi, 14 Riverside Drive, Belgravia Building, Nairobi, Nairobi County.
This financial modelling bootcamp will tackle issues around designing and structuring models to various financial issues and translate them into Excel.
The bootcamp will also help its attenddees to process and create easy to maintain financial models in Excel and learn charting and dashboarding techniques among others.
Date: 3 June, 9am, to 5pm
Location: Hilton Nairobi, Mama Ngina Street, Nairobi, Nairobi County.
This workshop will detail such topics as how SMEs can sustain an HR department with a limited number of employees, the simplest way to manage employee performance and how to hire the right employee.
Date: 31 May, 10am to 1pm
Location: Simeons Pivot Resources, 19 Town Planning Way, Lagos, Lagos, Nigeria.
Leap Africa’s CEO Forum will tackle issues covering corporate governance, innovation and marketing, financial planning and management, as well as how to manage your staff for operational success.
Date: 1 June, 9am to 6pm
Location: Landmark Event Centre, Water Corporation Road, Lagos, Lagos, Nigeria.
This seminar is targetted at women entrepreneurs who want to take their businesses to the next level by addressing issues around business and financial planning.
Date: 2 June, 9am to 5pm
Location: American Corner, Nigerian Society for Information, Arts and Culture, Leventis Building, 54 Magazine Road, Jericho, Ibadan, Oyo, Nigeria.
Have a startup event that you’d like featured on next week’s event roundup? Send us an email
IT graduates and related computing discipline graduates at Ethiopia’s Wollo University will be able to access a six-month internship, where they will work on real-world software development projects with senior software engineers.
In a press release to Ventureburn, Microsoft 4Afrika said on completion of the internship graduates will be able to design, implement and deploy cloud-enabled, mobile and IT solutions in various sectors. They will also be equipped with critical business skills helping them to secure jobs or create their own businesses.
This is the ninth Microsoft AppFactory to be launched in Africa, with eight others in South Africa, Egypt, Nigeria, Rwanda and, recently, Ghana. To date, over 300 software system developers have graduated from the AppFactories, with 90% of these graduates having since been placed in jobs.
“Across Africa, public and private sector organisations are finding it difficult to recruit capable software engineers,” said Lutz Ziob from Microsoft 4Afrika. “Many end up resorting to hiring expensive expatriates, or spending lots of money on in-house training.
“Yet there are hundreds of local IT graduates who are either unemployed or underemployed, because they are deemed unqualified for these high paying opportunities. The AppFactory is bridging the competency gap for these graduates, so that they are able to take on these kinds of opportunities the day they leave the AppFactory Academy,” he said.
‘Initiative will help local graduates to take advantage of local opportunities’
Wollo University will host the new AppFactory at its institution of technology campus, the Kombolcha Institute of Technology (KIoT). Each year, it will set projects based on different sectors, from healthcare to education, agriculture, air transportation and others.
KIoT scientific director Ahmedin Mohammed said the academy will focus on certain sectors each year, to ensure there are large enough number of quality graduates in various disciplines, who can innovate and solve problems that advance the social good and improved livelihoods.
In its first year, the AppFactory will focus on healthcare, through the partnership with Tulane University – CGHE.
Tulane University – CGHE director Wuleta Lemma said the university and Lalibela Networks presently offer extensive expertise to render proven IT solutions and services adding that the university’s healthcare ICT solutions have been deployed in hundreds of clinics and hospitals in Ethiopia.
“We want to ensure that our IT solutions are locally maintained and continue to evolve, however it’s a challenge to find enough qualified information technologists as we expand and scale up in the market. The AppFactory Academy will play a significant role in enhancing local capacity for IT innovation that can transform Ethiopia and the continent,” said Lemma.
Featured image: Robert Scoble via Flickr (CC 2.0, resize)
Everyone already knows it: all our online actions are being recorded, whether it’s the first click on an ad, multiple visits to a website, the first registration in the foreign exchange trading platform, a first-time deposit, or pressing the play button on a tutorial. Each and every action traders take is part of the complete story of a trader’s digital behavior, or as marketers call it – the customer journey.
As McKinsey explains, focusing on these single touchpoints misses the bigger picture: the customer’s end-to-end experience. Only by viewing the customer experience through your customers’ eyes can you finally start to understand how to improve performance.
Compiled by many single actions arranged on a timeline, the trader journey is often complex to comprehend. But, as with many things in life, it’s about asking the right questions. With the right questions in hand and the right tools to analyze online behavior, brokerages can receive the correct interpretation of the trader story, which leads to valuable insights and actions that eventually contribute to higher conversions and continued trading.
Most brokerages rely on simple KPIs such as the number of sessions and registrations, the total of deposits, the rate of FTDs (First Time Deposit), or the number of demo trades. But these don’t give businesses a true understanding of their performance or the complete data story of their traders. In order to gain an edge in this fiercely competitive industry, brokerages need to be able to quickly answer vital business questions such as:
- What geographic regions will give me the highest ROI?
- Which acquisition campaigns and which marketing channels give me the highest ROI?
- Which affiliates perform best in terms of registrations and FTD?
- Which leads should be sent to the sales department for immediate follow-up, and which should be nurtured until they deposit?
- What is the typical journey to FTD in the same session?
- What is the identified behavior of big spenders?
- Which customers have a higher ROI, and which have a higher probability of churning?
- Do educational videos increase the likelihood of trades, and do these traders have higher amounts of trades?
Analyzing Trader Behavior Over Time
To answer such critical business questions, all trader actions data from across the different data points is collected and joined together. The raw event data of user actions are the building blocks to a deep understanding of trader behavior.
Trader journeys are often complex, relying on data from multiple “touchpoints” which come from a variety of the web or mobile apps, affiliate data, trader data from a brokerage’s CRM or Affiliate data. Data might originate from the ad clicked before coming through to the registration page, or from the first trading steps all the way to the CRM. Moreover, each data or session might be attached to a separate user identity. To analyze the trader journey as a whole, those different datasets must be joined under a single unified user identity.
Based on these capabilities, behavioral analysis of the data can shed great insight on the complex trader journeys to conversion and retention, allowing brokerages to react in real-time to maximize trader engagement.
Here are a few examples of how brokerages do this:
Identifying the most valuable traders
Advanced analytics can help identify the valuable traders based on their actions and build trader segments, such as whales (those traders who have a high likelihood of higher retention and higher deposits).
Source: Cooladata Trading Analytics
On the other hand, brokerages can identify the typical behavior of those about to churn, the one-time traders.
These are the types of insights a platform can only glean over time, by gathering raw data collected from massive traffic which is then analyzed using funnel analysis, path analysis, and cohort analysis to compare behaviors and find patterns that are revealed when observing actions over time. And by identifying these trader profiles in real-time, businesses can focus on optimizing the profiles most likely to maximize their ROI.
The executive view – Top performance charts
It is then possible to integrate this information with data from marketing campaigns as well as financial data about chargebacks to gain a more accurate understanding of these trader profiles. If traders who are considered whales have high chargeback amounts in a trading platform, then they are costly, and should not be considered a source of top revenue for the business. But the only way to know whether or not these traders are valuable is by joining raw data from these different platforms to gain a better understanding of the complete trader journey.
Once brokerages understand which traders are valuable, advanced analytics can show the top marketing channels or trading assets for that trading platform. Brokerages can use this more accurate understanding about trader behavior to adjust their marketing campaigns to focus on the most successful trading assets, channels or affiliates. The ability to understand which trading asset is most popular for each trader is especially valuable for foreign exchange brokerages.
Source: Cooladata Trading analytics
Discovering which traders are most likely to deposit
Not all traders make it to deposits, which is why being able to identify traders most likely to make a deposit is extremely valuable to brokerages. Brokerages should focus their efforts to optimize the numbers and amounts of these FTDs.
This combined line and bar graph, below, joins and integrates marketing and payment data over the entire month of March using advanced analytics to display the number of leads (green) in contrast to the rate of deposits (blue). We can see that in the middle of March, there were over 1,000 leads but a less than 1.25% deposit rate. Later in the month, however, lead generation became more targeted, with only a few hundred leads but a conversion rate of over 5%.
Source: Cooladata Analytics
Drilling down further can reveal even greater insights. By querying the number of traders that joined per day over a four-day period and how many days they waited to make a first-time deposit, brokerages can have a better understanding of which marketing campaigns were more successful in driving FTDs.
Source: Cooladata Trading Analytics
A competitive advantage equals more business impact
Forex is one of the most competitive and expensive industries to compete in. One of the best ways of gaining an edge over your competition is by having a better understanding of your trader behavior. Advanced analytics – which collects, analyzes, and integrates data from multiple platforms, touchpoints, devices, and sessions – offers this advantage. This ability to receive a more holistic view of the trader journey, and the ability of brokerages to react in real-time to these insights, is what will drive the future of online trading.
At Ness Technologies, Guy served as Senior Vice President for Global BI and Big Data, where he worked with some of the largest corporations in the world. With over 20 years of experience in big data and startups, he is an active angel investor and adviser of several Big Data startups.
Latest posts by Guy Greenberg (see all)
You may also like
“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
I know many of us are familiar with this famous Bill Gates quote but it seemed timely (pun intended) this week; it’s just a great quote. FinTech is about the future; a future which is always just around the corner. This week, we highlight FinTech insights colored by a sense of timing.
Tulips, Myths, and Cryptocurrencies (Stratechery*)
“The problem, of course, is that while blockchain applications make sense in theory, the road to them becoming a reality is still a long one.”
Bitcoin, cryptocurrencies, and blockchain are just fascinating. Recently, we’ve seen the price of Bitcoin, Ether, and other cryptocurrencies go on quite a run. Speculating the reason is for another day; however, many have been comparing their sharp price rise to the famous Tulipmania in 17th century Netherlands.
Ben Thompson’s excellent article finishes by stating we’re way off from true blockchain viability and that the current rise of cryptocurrencies may be a bubble of timing, not of a fad (sorry blockchain naysayers). The question then becomes, are we 15 years away a la the dot com bubble? I don’t think so. Cryptocurrencies and blockchain are coming of age in an entirely different world – a world of the internet. The implications of having the most powerful tool for finding information, collaborating with others, and computing must mean something, no? It’s going to be fun watching.
*Full disclosure, I’m a paying subscriber to Stratechery and I highly recommend it.
The 50+ Segment Will Spend $15 Bn on the Alternative Financial Services Sector by the End of 2017. What Are We Doing to Meet Their Needs? (Let’s Talk Payments)
I get it; winning over millennials may be the best long-term strategy. But ask yourself, how much do you know about your business prospects in 10-15 years? What about focusing on the population that has more money… Today? If your user experience is that good, it should work for a 65 year old, right?
With the average lifespan somewhere in the 70s, it seems helping millennials’ partners and grandparents may be the best bet for a great FinTech innovation today, and one that will probably catch the eye of their millennial children.
TransferWise Launches ‘Borderless’ Account for Businesses, Sole Traders and Freelancers (TechCrunch)
“TransferWise’s main target here is undoubtedly the incumbent banks, and initially the rather neglected SME or sole trader market”
This is a product development that is so obvious that I felt like a numbskull for not seeing it coming – I’m secretly hoping many of you feel the same way as I’d love the company! That said, I loved this product. If we take this idea further, you start seeing a fuzzy picture emerge a truly integrated, global bank that works wherever I go, with any business, and any currency. The tech of FinTech has that magical power to abstract the complicated aspects of transactions and TransferWise seems keen on bringing that future a lot sooner than expected!
See you next week!
Patrick is building and strengthening partnerships for MEDICI, FinTech’s Global Knowledge Network, powered by Let’s Talk Payments (LTP). MEDICI enables collaborative innovation within FinTech’s complex ecosystem of banks, financial services providers, startups, investors, and innovations programs
Latest posts by Patrick Rivenbark (see all)
You may also like
No one can dispute that data has significant value for organizations. We see it every day in how they use data to successfully deliver better customer experiences – whether that means more personalization or better products and services based on collected and analyzed customer behavior.
Examples abound: we’ve all read how Netflix has used viewership data to design and produce new series that are adjusted to viewer behavior and preferences. Waze is also an example of the power of big data and analytics. Companies built solely on data, such as The Climate Corporation, have been successfully acquired.
Making analytics work
As easy and seamless as the end result may seem, many companies are still struggling to make data and analytics work for them. The data journey is indeed promising, but companies are still struggling with the fundamentals of data management: reigning data in, getting business units aligned with data solutions and creating data products that are embraced and adopted. The last point is critical because it highlights the importance of leadership and culture in successfully adopting a data and analytics culture. Progress is complicated even further by the noise created in the marketplace by things like big data, machine learning, artificial intelligence and the Internet of Things.
The truth is, a lot of these buzzwords have been hijacked by vendors that portray technology solutions as silver bullets that will solve all problems. They imply that by acquiring these technologies alone, companies can solve all of their challenges and start implementing solutions right away. Similarly, companies believe it’s enough to hire data scientists, equip them with technology and just hope for the best.
We are beyond the point of asking why companies should get into data and analytics. Using data is a core competency that is starting to make a difference between organizations that succeed and those that fail. It is imperative for companies to define and start executing their data and analytics strategies as soon as possible.
That said, companies need to focus on a few things that I call the fundamentals of the data and analytics journey.
- Keep a balance between people, processes, and technology when designing and implementing data and analytics solutions.
- Implement data solutions that are aligned with business needs.
- Implement solutions in an agile way, in small iterations that deliver business value quickly.
Let’s take a look at each of these points in detail:
Balance between people, processes, and technology
In my experience, this is one of the most fundamental elements companies should consider when delivering data and analytics solutions. It’s also one of the most overlooked.
“We are beyond the point of asking why companies should get into data and analytics.”
In the data and analytics space, the lack of balance between these three elements manifests itself in many ways.
- Technology: Many companies start their data journey by making significant capital investments in technology, such as business intelligence tools, database appliances, Hadoop clusters or similar components. Little do these companies know that they probably already have plenty of technology they can utilize. Furthermore, the latest cloud computing offers easy access to technology that can be consumed on-demand and allows companies to start without large investments. These aimless investments in technology can be traced back to business leaders who request that companies jump into data and analytics and technology teams that react by impulsively acquiring the technology.
- People: The lack of balance can also manifest itself on the people side. When companies hire armies of data scientists in hopes they’ll deliver business value, this often results in fantastic algorithms that are disconnected from the reality of the business needs. I call these ‘orphan algorithms’ – perfect solutions with no problem to solve. Nowadays, there are plenty of ways to start small in this regard, such as relying on consulting companies. But first, organizations should define what they want to accomplish in a prototype kind of approach.
- Process: When it comes to the process, the lack of balance manifests itself when solutions are implemented without regard to adoption methods. For example, companies often implement a sophisticated forecasting algorithm that reduces process time from weeks to a few hours. However, sometimes the only problem is that the business team consuming the results of the forecast isn’t ready for the solution. It’s easy to assume that by producing a better forecast in a more efficient way, the business team will be able to adapt to it and ‘run with it’ – but that doesn’t give the process changes enough consideration.
Alignment with business needs
Similarly to the points above, team’s leading data and analytics work need to have a laser focus on the business needs of the company and how data solutions can help address them. This requires data teams to be in close sync with the business teams, with focused conversations on understanding what the real business problems are. Many times, the relationship between business and data teams is transactional in nature, putting data teams in an ‘order taking’ kind of role. Data teams need to elevate themselves out of this position, focusing the relationship on delivering high-value business solutions.
Agile solution delivery
Recently, I was in a session at a data and analytics conference led by Jared Souter, CDO, First Republic Bank. One of the key points he shared was the need for data teams to understand that momentum forward is more important than perfect trajectory. Data teams need to ensure that value is delivered quickly, in an agile way that allows business teams to realize concrete results in the short term.
“Many times, the relationship between business and data teams is transactional in nature, putting data teams in an ‘order taking’ kind of role.”
This can and has to be done without losing sight of the long-term vision for data and analytics: short-term gains with a long-term view. Don’t wait until your solutions are perfect or let a significant amount of time pass before implementing them. By the time the solution is delivered, the business context may have changed, rendering the solution useless. Delivering small, quick solutions also has the added benefit of allowing business teams to face less change when adopting new solutions.
Making data a core competency
There is no doubt that there is plenty of value to be realized from leveraging data as a core competency. As business processes become more digital, the amount of data available has increased significantly. Organizations that focus on the right priorities, in the right way, will be able to realize the most desirable benefits.
You may also like
The amount of news, ideas, and opinions that flood our digital feed, typically, feel disjointed. From the author’s perspective, they are making a timely contribution to the progress of an idea, individual, or industry (well, sometimes they just want likes). For the rest of us, it’s one more data point within the dizzying task to connect all the dots and make the information useful.
For me, last Monday wasn’t disjointed. It felt like a big bang of information. I was attending an identity conference listening to Edward Snowden and my phone buzzed letting me know that Stratechery’s Ben Thompson had sent his weekly article (Disclaimer: I subscribe to Ben’s daily e-mail and he is a personal favorite. Highly recommended). I’m hoping you can learn something from my cosmic fortune so this article doesn’t become just another data point. Let’s start with the conference.
The ‘dry heat’ industry of identity
Identity is on fire these days. It’s what I call a “dry heat” industry; it’s not sexy (dry) but it’s really important and really hot right now (heat, obviously). Plus, it has its own conference! (Yes, I know, conferences can evoke that same disjointed information overload feeling – the only difference is they make you walk around to get that same feeling.)
The inaugural K(NO)W Identity Conference was different; it was cohesive. OWI’s hyper-focus on identity made it feel like every conversation built off one another. It’s something special when everyone in the room is interested, engaged, and is excited about learning. I’ll certainly hope to attend next year and I’d recommend it if you are interested in the identity industry!
Aside from the clever wordplay in the title, the K(NO)W Identity Conference started with its own “bang.” Edward Snowden, the headline keynote was the first speaker on day one. Snowden popped up on stage (well, on screen) for an interview with Manoush Zomorodi, host of Note to Self. Regardless of your feelings on Snowden, he raised some thought-provoking points about identity, data, and the future.
Snowden’s keynote used WannaCry, the global ransomware cryptoworm, to highlight the structural flaws and challenges the global identity industry is trying to address. The discussion covered a lot of ground and would take several articles to unpack: KYC/AML, IoT, blockchain, a database of ruin, and the psychological effects of not owning our own identity (spoiler alert: not good).
Two ideas stood out:
- Most transactions don’t need a true identity and precise knowledge. Snowden challenged the audience to approach their business as if true identity didn’t exist – what do you really need to know to get the job done?
- He made the observation that today’s internet-connected world (and IoT) has broken the liability chain. As an example, a medical device manufacturing is liable for faulty surgical equipment but connected device makers – like computers, wearables or cameras – in the hospital are not. The civic, legal, and business frameworks haven’t caught up to the avalanche of new, connected devices (and there are more coming!).
The danger of misaligned incentives in business models
As I’m walking out of the main hall, I open my e-mail from Ben Thompson.
To overly summarize, Ben uses the WannaCry ransomware attack to highlight the danger of misaligned incentives in business models (I strongly encourage reading the article). Ben exposes how the structural flaws (and murky liability chains) in the software ecosystem, set into motion years ago, lead to poor decision-making from all sides, creators, and buyers. Software creators (like Microsoft) must take on the cost to support software for which they’ve already been paid, like Windows 7.
Meanwhile, for the buyer, Ben states, “Computers and their associated software are viewed as capital costs, which are paid for once and then depreciated over time as the value of the purchase is realized. In this view, ongoing support and security are an additional cost divorced from ongoing value; the only reason to pay is to avoid a future attack, which is impossible to predict both in terms of timing and potential economic harm.” Ben’s solution is the SaaS model, aligning ongoing delivery of value with continued payment.
Ben ends with, “Expect little progress and lots of blame, the hallmark of the sort of systematic breakdown that results from a mismatched business model.” Which brings me back to identity and FinTech…
There is a lot of blame going around in FinTech for the lack of progress: regulators, core banking providers, and industry culture to name a few. Meanwhile, the identity industry is full of entrants trying to solve a fundamental aspect of FinTech, business, and society in general. It’s easy to get consumed by new selfie authentication software, machine learning KYC models, and IoT frictionless payments. This technological progress is truly awesome and needed. But aside from talking about “customer experience,” it seems like a lot of FinTech is still searching for its identity and the accompanying business models to deliver on the promise of a new financial services industry.
Patrick is building and strengthening partnerships for MEDICI, FinTech’s Global Knowledge Network, powered by Let’s Talk Payments (LTP). MEDICI enables collaborative innovation within FinTech’s complex ecosystem of banks, financial services providers, startups, investors, and innovations programs