In LFP001 – Fintech The 30,000 Feet Overview I mentioned that the first reference I had seen of the word Fintech in its modern sense was by a man in a pub 3yrs ago, Eddie George was that man (and you’ll have to listen to the episode to find out which pub 😀 ). He talks about the journey from a beer in a pub to now running the worlds largest Fintech professional network. New Finance has getting on for 3,000 members, events in London, New York, San Fransisco, Paris and looking to open in Toronto and Warsaw, and has an active YouTube channel where highlights of events are shared for free.
Above and beyond these bare facts what I find more impressive about Eddie is that in my full-time hanging round and talking to many many folks and businesses in the Fintech scene, Eddie’s name not only crops up time and time again but also always in a positive light in terms of how he helped someone. In a world where plenty of folk talk the talk (of helping others) Eddie walks the walk.
Eddie and I have deep backgrounds in computing (going back it transpires not just to Unix days but also both having owned a Ti58 (one of the first really programmable calculators in the 70’s)). We also joint experience of over 50yrs in the City. So as well as New Finance the organisation we took the opportunity to have a “3,000 feet” level conversation about the evolution, challenges and opportunities of Fintech.
Key conversation topics are:
How innovation really works
a) The need in a world of accelerated change for “give it a go”, “iterate quickly”, “use your wits” not the classic, textbook, research and business plan – as you don’t know what the market is going to do. It’s jazz improvisation not playing a classical piece on the piano. “Entrepreneurship is an irrational choice, you have to be slightly crazy” – Eddie quote George Bernard Shaw:
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.”
b) the need in most of FS for domain expertise. Too much importation of “Valley” approaches are imported unamended – this, de facto, glosses over the vital fact that the classic “couch-surfing” founding of a billion dollar retail tech company already had great domain expertise (ie of what other couch-surfing 17 year olds want). By contrast in FS in its modern form much of it is highly complex and needs plenty of experience to understand the issues/regulation/structure/etc.
The Evolution of London Fintech
a) When Fintech in London hit a tipping point
Eddie believes we are in year 2 of a 10yr cycle. London Fintech really started taking off in 2013 but the boom started in 2014 for all sorts or reasons especially funding – although there is a little scepticism as to whether headline figures in terms of funds available have been “bigged-up”
b) Froth and noise
One of the side-effects of being in the early years of the Fintech cycle is that there is a lot of hype. Plenty of folks and fintech-incubators/support businesses have a high PR:performance ratio. Do you spend 99% of your time promoting yourself or 99% of your time on your product? Results rather than shouting louder than everyone else will ultimately succeed in the long-term (especially in the City where the word always gets around and it’s hard to lose a bad smell).
c) What London Fintech needs to produce more IPOs
A combination of insider domain expertise and outsider fresh thinking.
A combination of young tech smarts and older/wiser domain/business expertise.
And some way to “bash all this together” and make teams that are balanced.
Too many Fintechs are held back by not just starting with a tech focus but, out of familiarity, getting stuck there due to lack of knowledge of BizDev, Marketing, Sales, HR, Legal, Compliance etc etc.
Right now we have plenty of companies which have gone from idea to product but far less which have made the jump from being “a Product” to being “a Business”.
d) The future of Fintech as Global in Production and Markets
There will be a series of clusters around the world, connected digitally which will produce the components for Fintech. Consumers will buy anywhere limited only perhaps by regulation. Against this backdrop ideas that one centre will or even could dominate Fintech is a fantasy belonging in the froth & hype category.
As FS in an old and conservative industry most “innovation” is recognizably the same as prior products (eg “cheaper FX”). However over time once components are put in place there can be more radical innovation in producing far less recognisable approaches and products.
How to get into Fintech
Both Eddie and I share the experience of Fintech as being more fun and full of more interesting, nicer. more helpful people than in more corporate FS. I have personally spoken to plenty of people who are currently earning less than they used to but enjoying work far more, far more enthused and far more motivated than they have been for a long time.
If you are in a dull day job there are ways to siddle out without taking a huge risk and jumping into the unknown. Notably networking, attending New Finance events, side-projects – plenty of risk-reduction and, importantly opportunity-creating angles. “Just help out, get involved”. Life only looks limited from “within the cubicle” – plenty of opportunity lies outside it 😉