October 12, 2015
|By Consulting Group|
Last week Dominic Crosthwaite from Black Swan Partners and Matthew Lenzi from our partners Hanno joined forces to lead a rapid prototyping workshop at Level 39 in Canary Wharf. In attendance were the six finalists of the 3DS Fintech Challenge:Algodynamix, CheckRecipient, Passfort, Quarule, My Stock News and Percentile. A brief round of introductions kicked off the workshop with each start-up explaining what they hoped to learn from the event and Matt outlined the basics of rapid prototyping.
What is Rapid Prototyping?
Rapid prototyping is the process of a designing and creating products over very short periods of time, measured in hours and days. In contrast to traditional development methods, it emphasises iterative design over extensive documentation and seeks to use innovative techniques such as real-time feedback and designing directly in a browser to speed up delivery.
Hanno see it as much a philosophy as a technical skill and Matt emphasised a number of core beliefs necessary to be successful:
- Explore new ideas, learn through actions and get real time feedback. Hanno’s preference is using design thinking
- Build communities on social media as co-creation is key – there is a group of people for everything and early adopters will be supportive
Identify Your Target Audience
A prerequisite of successful rapid prototyping is the identification of the target audience. Dominic explained its importance and how Black Swan Partners approach these challenges for clients. The obvious risk is that if you collaborate with the wrong users, then you will invalidate the benefits of rapid prototyping and could develop with the wrong end user in mind. This process of client identification includes:
- Review of publicly available marketing reports and data sources including the FCA’s Customer Spotlight segmentation research
- Paid for services such as Experian’s financial strategy segments
- Where relevant, analysis of existing client activity data
The analysis of existing data and information rather than bespoke research can accelerate the learning around audience segments and enable the full benefits of rapid prototyping to be realised.
Uber from a Rapid Prototyping Perspective
Uber London was struggling to sign up drivers at the same rate as in the US and asked Hanno to create a website to attract and onboard drivers – in 2 weeks. The first step was to get an Uber account, use it to get to work every day and talk with the drivers. Writing a journal allowed Hanno to utilise the the driver’s feedback and through a combination of collaborative tools, Hanno co-created the site with both the Uber team and the drivers Uber was targeting. Through this process the cultural nuances between the US and the UK became apparent; the London drivers predominantly used mobiles instead of desktops, the majority highlighted English as their second language, wanted to be able to share the Uber opportunity with friends and classed driving as their full time job. Instead of lengthy and costly focus-groups, Hanno responded by creating a mobile first website written in clear and concise language that emphasised the flexibility of working hours and that could be easily shared.
We also took time to talk through another case study, Transcence, an excellent product that allows conversations to be transcribed onto smart phones in real-time, helping the hard of hearing engage in conversations. In one week, Hanno built and iterated through 10 prototypes and at the end of the sprint delivered several validated prototypes and insight into how to solve the next challenge. As well as the case studies, there was a lot of interest from the room in what tools are used in the process. Some of the key tools are listed below:
|Google Docs||Online document creation, storage and editing|
|Mural||Online brainstorming, synthesis and collaboration|
|Skype||Instant Messaging and video chat|
|Bootstrap||Responsive, mobile first projects|
|InVision||Prototyping, collaboration and workflow platform|
|BugHerd||Bug tracker and client feedback|
|Unsplash||High resolution photos|
The work-shop then moved into an open discussion with all the participants discussing how rapid prototyping could apply to their start-ups both within a b2c and b2b context.
We received very positive feedback from participants, the sponsor Dassault Systems and their partner Deutsche Böurse. Everyone at Black Swan Partners and Hanno would like to wish the six finalists luck with the remainder of their accelerator programme!
July 13, 2015
|By Consulting Group|
Since the invention of Bitcoin in 2008, fintech innovators have been eager to follow the development of cryptocurrencies and their acceptance alongside traditional monetary systems. Bitcoin has returned to the news most recently after domestic capital controls in Greece led to many citizens turning to the digital currency. But what actually is Bitcoin and why are people using it?
What is Bitcoin?
Without delving too deep into its intricacies, Bitcoin is a decentralised, digital currency that is transferred from person to person without the need of an intermediary who takes a cut. Bitcoins don’t represent anything in the physical world and the only value attached to them is the willingness of people to trade a good or service for a higher number of Bitcoins next to their account, as well as the belief that other people will do the same. Bitcoins are created through a process of ‘mining’ whereby ‘miners’ solve complex mathematical calculations around the World.
Why Would You Use It?
An enormous amount of confidence has been lost in the traditional financial systems since the crisis of 2008 and this has been further exacerbated by Greece’s drawn-out negotiations and the Cyprus bailout in 2013. Bitcoin is attractive for a number of reasons:
Cheap and fast – It is possible to send money anywhere in the Word at any time for either no or very low fees
De-centralised – There is no central bank or authority which means the system can’t be manipulated by persons, organizations or governments
Anonymous – Personal details are not attached to a payment which keeps them safe from identity theft
Transparent – All transactions can be viewed in the public block chain
But Bitcoin’s life has not been all plain sailing…
Teething Problems – Since its creation, Bitcoin has had a fairly chequered history including information leaks from exchanges, software incompatibility, and the currency being used to fund illegal activities on the Silk Road
Protection – Bitcoin has no buyer protection, once the money has gone it’s gone. If a user loses their private key, it is effectively impossible to recover the lost coins
Volatile – Valuation has fluctuated massively since its creation. The currency lost more than 90 percent of its value between June and October 2011. This is partly due to its finite nature (only 21 million coins will be mined, running out in 2040) and the relative lack of acceptance by retailers.
What is the future of Bitcoin?
Bitcoin’s price should settle down as more retailers start accepting it as a method of payment; currently its valuation jumps around with events that affect digital currencies. Just this morning it took a hit after the announcement of a Greek deal. However with no central authority permissionless innovation allows developers to make the currency more secure and accessible. Its popularity is certainly on the rise as demonstrated by companies such as Microsoft, Dell and CeX now accepting it, and big institutions such as the Bank of England stating that it could have “far-reaching implications.” Whilst the masses may initially struggle to understand a currency with no physical state, as I did, write off Bitcoin at your peril; an early reviewer of the iPhone said “Apple should pull the plug on the iPhone. I’d advise people to cover their eyes. You are not going to like what you’ll see.” Bitcoin sceptics could find themselves in a similar position.
That being said, it is still unclear exactly what the future purpose of Bitcoin will be. While to those Greeks currently treating it as a reserve currency it no doubt appears a bastion of stability compared with a possible return to the Drachma, the reality is it remains incredibly volatile. This is as exacerbated by the fact that other crypto-currencies are being developed all the time (more than 3,000 at present, with the biggest being Stellar, Globe and Litecoin). At some point one is almost certain to be so much more user-friendly than Bitcoin that it takes its place as the crypto-currency of choice, which could lead to the value of Bitcoin collapsing to nothing. This risk is always likely to be present unless it becomes almost universally adopted as a reserve currency.
However, were it to actually become a true reserve currency, replacing national currencies, then many more countries would find themselves in the same position as Greece, uncompetitive, unable to pay debts and unable to rectify the situation through devaluation or printing money. The future of Bitcoin is potentially very bright, but who knows what that future may be?
July 8, 2015
|By Consulting Group|
So – budget day, first day of the Ashes, Wimbledon Quarter-Finals… This blog isn’t about any of those, which for a firm targeting the UK personal finance industry screams displacement activity, especially with the boss on holiday.
However, it is timely, as overnight the leading robo-advisors in the US, Wealthfront and Betterment have gone to war (whether or not they were actually inspired by Terminator Genisys is unconfirmed) – and Wealthfront started it.
Along with reducing their minimum investment from $5000 to $500 (undeniably a good thing, especially as Wealthfront doesn’t charge any fees on the first $10k under management), its CEO, Adam Nash, published a blog directly attacking Betterment’s pricing, and accusing it of taking advantage of its poorest customers. It’s the latest in a series of blogs from Wealthfront attacking its competition, following pieces criticising Charles Schwab’s robo-investing product and a more general piece accusing its competition of failing to innovate as successfully as it does. I dabble a bit in politics in my spare time, and try to work on the principle that any direct attack on an opponent should be absolutely on the money – and unfortunately this one misses the mark.
For those with less than $10,000 under management, Betterment offers a ‘builder’ product, with a charge of 0.35% for those who have a direct debit set-up contributing at least $100 a month. Those without the direct debit are charged a flat fee of $3 per month, and it is this charge at which Wealthfront has taken aim. However, as Betterment makes clear in its rebuttal, it doesn’t want to make this charge to customers, and communicates extensively with those who pay it encouraging them to switch to monthly contributions. It is used partly as a mechanism to nudge those with low levels of assets to make regular investments, which is particularly positive behaviour for newer investors. It is one of several features of Betterment’s product which make it especially attractive for new and inexperienced investors.
The starting point of Betterment is to enter your age and income, and to select an investment goal – for example, rainy-day or retirement saving.
A suggested portfolio, such as the one above, is then created, which the customer can either adjust manually or go ahead and invest in – if manual changes to the allocation mean the expected returns are no longer enough to get to the customer’s goal, the customer is notified. While these features would need to be adapted in the UK in order to avoid being seen by the FCA as advice (a subject for another blog), they are exactly the kind of support a new, inexperienced investor seeks to get the reassurance they are investing in the right things. It is because of this user experience that Betterment has had so much success in attracting smaller investors, with 3 times as many customers as Wealthfront (albeit with a much lower average account size).
Wealthfront is a hugely impressive company, brilliantly innovative with a great product. However a big part of its success so far has been its ability to attract large investments from Silicon Valley employees, which has contributed to its phenomenal growth in AUM. Reducing its minimum investment from $5,000 to $500 gives it a chance to attract more smaller investors, and by not charging a fee below $10,000 it offers those investors a phenomenal deal. However, new and inexperienced investors want more than just low-cost services. If Wealthfront is going to continue preaching from its pulpit, it needs to get its facts straight first.