Archive for the 'disruption' Category

Why do I need to know what payment systems my vendor accepts?

The answer seems obvious. Because I need to be a member of one of the payment systems my vendor accepts in order to complete a transaction. But it then occured to me that it does not necessarily have to be so. Wouldn’t it be simpler if I could use whatever payment system I want to release a certain amount of cash and if the vendor can have some guarantee of being the owner of the money before releasing the good to me? The answer is of course yes!

In fact, to get back to the former answer, it is not necessary that one organization like Visa, PayPal or a coalition of them controls the entire chain for making the whole thing possible. It’s only because this entire chain of processing takes today very long – like days or even weeks – to complete that my vendors asks me to use the payments systems they accept. They need to be sure of receiving the money, some day, to agree handing the good over to me now.

So, if we had an open and real-time settlement system, we could perfectly imagine that we would no longer have to care what is the ultimate system that vendors would be using.

To give a brief explanation of what a settlement system is, I’ll just say that this is a way to make valid the change of ownership of a certain financial property, in this case cash, from one party to another. A real-time system would be a system that would process the entire chain in a couple of seconds. And an open one would be a system which would let any cash sending system and cash receiving systems interoperate.

So, if my vendors could know in real-time that the money I’ve just parted with is now in his full posession, they would be perfectly happy completing the transaction. Which means I could send the money from my mobile phone – or any other online device – using whatever payment system I would like and I would feel comfortable using. My vendor could also use the payment system most convenient for him. As long we are both happy and trust our payment providers, we would no longer have to determine if both of us are members of the same systems.

Now, do you think it all sounds science-fiction because we can not create such an open and real-time settlement system or because current payment service providers have too antiquated backbones to dream processing such a transaction in real-time and have no incentive to move to an open system? If this is the latter, this suggest the word “Disruption” to me.

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Would your organization accomodate an outer-space organigram zap?

James Gardner has just been putting in his latest post the case for an increased ability by organizations to nurture disruptive innovations. I’m not sure I share James’ optimism, furthermore I don’t think that a renewed agile strategic process will do any difference in that regard.

This made me think of an intellectual experiment. What if we witnessed the appearance of alien ships equipped with a new arm aimed at our business organization? In the vein of a neutron bomb – that leaves intact the building but destroy any life forms within it – this weapon would be more lenient and able to keep the occupants, their brains and skills intact- to the exception of any recall of what was the former organigram and the functions attached to anyone.

My first question would be: what do you think would be the instant drop in capitalization of your company on the market place after such an attack? My second question would be: do you think it will ever be able to recover?

With that in mind, I believe that the market has shown an amazing capacity at creating this sort of organizational value by quickly assembling different skills readily available to build on an innovation. I see an extreme difficulty in reshaping most organizations beyond acceptable adjustments.

We can take the Google and Microsoft example as a yardstick. I think that , if we were to investigate the composition of the two employees population, we should find statiscally a very comparable pool of talents, age distribution and so one. Nevertheless, I think that Microsoft’s pecking order makes excessively unlikely that they will ever be able to compete with Google on their turf.

If you are still sceptical in the leeway that the market has and that organizations have not: Can you imagine an organization accepting to replace most of their 50-something senior management staff by 30-something guys? This is what the market is putting ex nihilo in place regularly. Whenever a 40-something has acceded by chance to the upper position of a venerable organization, he/she has never tried to rejunevate the executive populations and usually stay on the chair for the next 20 years aggravating the excutive age problem all along.

Heading to San Francisco for first BarCampBank of the Year

I’m packing my things to be ready Wednesday morning when I fly to San Francisco. Next week-end there will be BarCampBank San Francisco, first BarCampBank of the year, and quite an unsual event because of the wealth of startups that will be represented there: Wesabe, Mint, Zoppa, Zecco, just to name a few who confirmed their presence here, and I hope a lot more will drop-in to join the mind-shaking debates we can anticipate.

I will use the opportunity to discuss with all the brilliant people there a couple of projects I’m currently working on:

1) creating a virtual incubator for FI-startups

In the spirit of P2PVenture, I think there is an opportunity to create a virtual space where entrepreneurs, professionals and investors can mingle and co-develop projects up to the point where some of the professionals can join the project and investors finance it

2) creating a FI angel investors network

One of the components of the previous space could be a virtual angel investors club dedicated to the FI-business. I’m thinking of maybe setting up such a club in a near future

3) organizing a FundCamp FinTech

While launching FundCamp is one of the main action of P2PVenture.org right now. I’m also thinking of organizing a FundCamp dedicated to FinTech. I also see this as an opportunity to boot-strap the 2 previous points.

4) setting up a FinTech venture fund

This is a rather longer term project. There are not so many venture funds dedicated to FinTech and I believe there could be an opportunity to offer real value along the money a dedicated FinTech venture fund would invest in FI-startups.

As you see, quite a lot of things to discuss and get feedback on. Hopefully, critical mass could be assembled on a couple of these subjects and we could see something taking off in a not too distant future.

Private Banking ready for disruption

Alex Osterwalder and the team at arvetica have just announced their new blog dedicated to the innovation in Private Banking. Alex and the team have been writing on subject for some time now on their company’s blog and you can then already find good content with a collection of their previous posts on this entirely new blog.

You can also find video material through The Bank Channel‘s post on Innovation in Private Banking . Behind good coordination, I see it as a sign that we may reach a point where a lot of ideas will emerge in the coming months on how Private Banking can be entirely disrupted. Of course, I hope to see a lot of these ideas shared within a workgroup in the BarCampBank.

Virgin acquires majority stake in CircleLending

The announcement of Virgin’s acquisitive move is interesting on two fronts.

First, with a major household name like Virgin, peer-to-peer lending is gaining respectability (funny indeed).

Second, Richard Branson – even if categorize has a respectable lord – has always been a hell of a disruptor; so acquisition should be hinting the diehards that there’s definitely something cooking up.