Today was a breath of fresh air. And of all the sessions, speakers and exhibition stands that SIBOS has thrown at me, the biggest buzz was held out for today.
It was the grand final of the Innotribe Start-Up challenge. It was a chance for the best start-up companies in Financial Tec (FinTech) to pitch and showcase their company in six minutes.
Although there was considerable buzz, you could feel the pressure on some of these companies. Up for grabs was $50,000 in prize money, which for these start-ups would be vital in getting their products to market.
Organisations like Innotribe are vital for small young companies like those on display today. It puts these start-ups in front of the big business they want to sell and distribute their products to.
But it wasn’t just prize money up for grabs. A successful pitch could translate to millions of dollars in funding from the right investor. Add the credibility and distinction of the win, and it was high stakes competition.
It’s competitions like this, put on by groups like Innotribe, that could spark the next great tech company. It’s very possible one of the nine start-ups in this grand final could go on to be the next PayPal, Square, Mint or Xero.
Of the nine pitching companies, three were micropayments start-ups. Essentially their angle is to bank the unbanked of the world. The billions of people that don’t operate a bank account still often need to send and receive money.
To do that through traditional bank channels or companies like Western Union is expensive. Fees can be 10% to 20% of the transaction cost. Often the payments are as low as $100 too. So it’s a big whack for people who haven’t got a lot of cash to begin with.
Of course every one of the new payment companies wants to be the next big thing. Downside is they’re competing in a hot space. There are a number of companies already involved in micropayments that are low cost, easy and quick to use. Some established companies (although new themselves) are already billion dollar businesses.
But with potentially billions of users up for grabs there’s space for a few competitors. Africa is still the key target, with Asia and the Pacific not far behind. It’s an interesting space.
I spoke with Michael Kent, CEO and Founder of Asimo, one of the start-ups. Asimo was one of the three pitching as a payments company. I’m sure you’ll be hearing a lot more about this group in the coming months. They were particularly impressive.
Michael pointed out at the moment 25% of their flow goes through Poland. But they’re only in early phase development. Although with their focus on customer satisfaction and ease of use in the digital age they might be onto something.
Asimo was the first company in the world to enable money sending through Facebook. It’s clear to see the passion they have for change to a better system. And I think they’re on their way to some longer term success.
Australian Innovation on the Global Stage
Another one of the most impressive start-ups to pitch was an Australian company, PocketBook. Alvin and Bosco are the founders, and by far and away had the best pitch, the most enthusiasm and concept of what a good tech company is all about.
I enjoyed how they handled one question from the crowd during the Q&A. The question was, ‘How do you make money?’ Although they answered the question, they didn’t really have a clear-cut answer.
There’s two reasons I liked their lack of a response. One, because their focus is front and centre on solving an unmet need. That is they’re building a platform and technology first. They’re building and caressing an idea to life…then worrying about how to make money from it.
As I’ve mentioned previously, it’s a similar mentality Silicon Valley takes to new businesses and technologies. First you build great technology, something that solves a problem.
Think of how you can change the world first. Then you find a way to make money from it. If the idea is good enough and the technology is sharp enough, the thing will practically sell itself anyway.
Of all the start-ups there, Pocketbook seemed to have the most entrepreneurial flair of all their competitors.
They didn’t win, but in a room full of bankers I wouldn’t have expected them to either. And that’s the other great shame about the competition.
You’d Think Banks Would Be Interested in Innovation…They’re Not
Innotribe put on a brilliant competition. And to be fair, all the start-ups were excellent. There were some pioneering ideas and technologies. But the room was only three quarters full.
Over the whole week, this was the ONLY session showcasing brand new companies all less than a couple of years old with under $1 million in turnover.
Now there is something like 7,000 delegates at SIBOS this week so I got to this session half an hour early. I thought I wouldn’t get a seat.
I was expecting queues out the door. People clambering over themselves to see what some of the best start-ups in the world had to offer. If I were one of the major banks, I would have had every major decision maker in the session.
I had two empty seats next to me and even saw people walking out during some of the pitches! It was a bigger reflection of the narrow mindedness of the incumbents in the banking and finance world.
I’ve written over the last few days that banks are losing trust. You only need to look at Pocketbook to understand why. With over 35,000 users in Australia already, the Pocketbook app requires access to your bank account and email to work their tech magic. Having seen the app and what it can do, how easy it is and the benefit it would have to managing my money…I’d be more than happy to provide that level of access.
But ask me if I’d give any of the existing banks that I use access to my email? No way. If CBA came to me and said can we use your email to help you manage your money better, I’d tell them to nick off. Same for Citibank, or Bank of Melbourne.
It was pleasing to see some homegrown Australian talent on the global stage. And more importantly it was pleasing to see something truly innovative and mould-breaking in FinTech,
The Pocketbook guys might not have won. But they certainly got my vote.
Start-ups like these are vital as we shift towards a new future of money. It’s companies like Asimo and Pocketbook that will be the household names you hear over the next few years.
You might not necessarily agree, and you might continue to use your existing banks and manage your money perfectly well. But as I wrote yesterday, the Digital Natives of this world will be looking for companies that fit their psychological framework.
Companies that get how they think and work and tailor solutions to their problems. And it’s the digital native of tomorrow that will be the customers Asimo and Pocketbook.
It’s best summed up by something the Pocketbook guys said in their pitch and a question I posed to you on Tuesday.
If Google become a bank, what would it look like? The fact that was the only question Pocketbook asked itself before building their platform is the exact reason why they’re going to be successful.
It’s also the reason why the world of FinTech will help to shape the future of money. The revolution in banking and finance is underway. As more start-ups grow and come to market, the picture will become clearer for those of you that doubt things are undergoing significant change.
Ed note: You can follow Sam at SIBOS on his Google+ page here…