Sibos 2018: How to approach the market place in the age of plenty
Walk the floors here at Sibos, and go to town meeting the cool kids with the cool ideas. Dr Leda Glyptis, chief of staff at 11:FS and CEO at 11:FS Foundry, has plenty to say about the right way.
I just got off the phone with a company with a vaguely defined offering. On the blockchain. They were unable to describe the offering or explain ‘why the blockchain’ without chasing their tail and wasting my time in buzzword-rich circles. In the end we got to them using the blockchain for the encryption.
There was no requirement for a ledger in their solution, definitely not a shared one. And all sensitive data was stored on end users’ mobile phones, with no tokenisation.
The end. Ta-da.
You are laughing, I can see you.
The question is how did they get to be on a call with me?
They are doing a pilot with a central bank (not laughing any more, are we?) and used that reference and access to a former colleague to get introduced and of course when friends are involved you take the call.
And the less you know, the more impressive the buzzwords sound. Pilots with serious organisations. Shiny words you’ve read in the paper.
This happens all the time.
Things we dismissed four years ago are live and mocking us now.
Things compliance would never approve last year now come to us from compliance complete with exasperation: get with the programme, business people, the world is changing.
So as we are bombarded with ideas and companies, solutions and potential partners, we know that the stalwart defenders of the status quo have relaxed, we know some of the things we knew we knew are changing. And we know there are 13,000 fintech firms and counting for us to choose from, many walking the floors of grown up conferences like Sibos looking for all intents and purposes real and viable.
That’s because they are.
So how on earth do you pick?
Of buzzwords and empty calories
The era of learning pilots is over.
Now it’s do or die.
But not every firm you will engage with is getting with the programme.
They know that for the last ten years buzzword-heavy, PR-generating, futuristic pilots were easy to sign off because money for them came from discretionary spend. There was money to be made there for start-ups. Not necessarily sticky, repeatable money. But money nonetheless. So the price for pilots started climbing – to often 90% of a full fat implementation – as the start-up realises how the game is played. Good on them. But that doesn’t mean you have to pay the price they ask.
It means you have to pay closer attention.
Not to them. To yourself.
It’s all about you
Innovation was meant to keep us in the game. Not keep us at play.
So stop playing.
What’s your business model now?
How much of it is at risk over the next ten years? Is it worth investing in solutions to future-proof it or are you better off looking for ways to service your customers differently, upstream or downstream from what you are doing now, building on your brand permission but not flogging a dying horse, assuming the horse is terminal?
These are your questions to answer. Answer them before you go shopping. No start-up will help you answer those and if they offer to, don’t let them.
Once you know what game you are playing, then pick partners.
If you don’t know what game you are playing and need help figuring that out, what the options are, what the dangers are, what the journey of becoming something new may look and feel like, then you need a different kind of partner. But that’s still a conversation to have before you go shopping in the much-lauded ecosystem.
You need to know what you will be doing to make money, before you look for things to help you make it.
Once you’ve got that figured out, with heartache and trepidation, it won’t be an exact science after all, unleash your hounds and go searching. Walk the floors here at Sibos, and other events, go to town meeting the cool kids with the cool ideas.
Filter out the buzzwords.
Bypass the pilot chat.
You are here to play ball. You are here to buy. This is a commercial conversation. We are no longer shooting the breeze.
- Ask them how they make money. Not price point. Monetisation philosophy.
Are they subscribing to the same economic model as you? Good. Proceed to question two. If they are not, however, if their entire premise is resting on a very different way of making money, either taking a ‘saving’ out of your P&L or by destroying the market your clients live off, then they are not the droids you are looking for.
Sure the PR would look great but after the expensive pilot and the photo op you are no closer to building yourself a viable business for the future.
- Use their product. Test it for the unhappy path.
Using their product will immediately filter for vapourware; the ‘I know we said we have an API but it’s more of a point to point so why don’t we send you a spreadsheet to get you started’ brigade; and the folks with a single successful implementation that their pilot client owns so you buy knowhow but no code and they will start from scratch with you.
Now you have a smaller pool.
You have the app, the connection, the log on credentials. However they deliver. You have it.
Now use it.
Use it a lot. Look for the unhappy path.
Last week my high street bank asked me to uninstall their app and download it again to access my account from my new phone. A challenger gave me no option to register a new device (nobody had thought of that user journey?) and insisted on treating me as a new customer while also emailing me insurance offers for my new phone.
Oh the beauty of your own analytics showing you up.
Slick user journeys and fit for purpose architecture are hard.
Kick the tyres hard before you choose a partner.
Kick your tyres too.
The partner you found may have the APIs they promised. They may have the best developer experience your IT folks have ever seen. But you still have a lot of critical data on spreadsheets. Does this partner have a cadence and process that can help you mature to where you need to be to work with them? If not, they are not the right partner. Yet. You need to do some cleaning up first.
- Don’t white label the magic sauce.
Stating the obvious here (my favourite thing) but whatever it is you believe your clients come back for and are willing to pay for, needs to be specific to you. If it’s your service, product, pricing or experience; portfolio, footprint, unique knowledge or bespoke solutions. Whatever it is that makes you a living, don’t outsource it no matter the cost saving.
If the differentiating factor is built, designed and delivered by someone else, then it belongs to someone else who may hold you to ransom or just take it… somewhere else.
If what the clients pay for is not what you do, then the clients don’t come for you and it is a matter of time before they figure it out and cut you out of the payment equation.
By white-labelling, outsourcing and partnering on large chunks of you business before doing the hard work of thinking up your desired business future, you could be giving away the crown jewels in the name of speed, cost optimisation or just to assuage a rising sense of panic.
Until you know what will make you money tomorrow, don’t pick partners.
Until you know, keep learning. Get the right partners for the right things. And don’t assume time is on your side however deep your pockets.
Banking used to be risky business. This is what the risks look like on your watch.
It’s hard. But it’s meaningful.
And some of the best players in the game are here, in this expo hall with you.
If you know your game, go road test my questions.
This article is also featured in the Daily News at Sibos 2018 – Day 1 edition.
Click here to read the issue online or pick up a print copy if you are at the conference!
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