By Bernard Lunn
It was time to reflect on what I have learned so far during the 19 stops so far on the Fintech Global Tour:
You know those school assignments to write about “what you learned on your summer holidays”. This is like that except in a parody of Internet journalism, I offer you a handy 10-point list:
- Traveling on the digit express is a lot easier than planes. No, I did not travel to all these places during my 5-month tour, although I did go to many and have been to many of the rest in the past and I want to travel to all of them when time permits (I enjoy travel). Traveling on the digit express meant I could go thematically; for example I could follow a theme from Singapore to Africa without worrying about flight connections.
- Thanks to my tireless tour guides. In each place I reached out to people who know the local Fintech scene. In some cases they just pointed me in some interesting directions. In other cases they wrote the whole post. They are the go to people for Fintech in that part of the world.
- Fintech is global because “bits don’t stop at borders”. That is a no duh statement, yet when I started the tour, people were only talking about the innovation from a few well-known centers. We are now seeing enough successes from all over the place that investors are taking note. This will help those entrepreneurs who do not want to relocate.
- Grass is greener. Every center has Silicon Valley envy. Some in Europe had London envy. Despite this, there were far more common threads than differences.
- Huge opportunities, but tough to seize them. Raising money was a tough challenge everywhere (even in London, New York and Silicon Valley). Seeing a huge opportunity is not the same as developing a product, getting Product Market Fit and assembling a great team that knows how to scale. As Warren Buffet puts it, “predicting rain is not the same as building an Ark”.
- Churning about relocation. Everybody understood that it is impossible for all ventures to relocate to London, New York or Silicon Valley; the property prices and travel congestion are already crazy in those locations. Most people don’t want to lose contact with their friends, family and culture. Yet, the success stories of those that do relocate resonate. The huge growth in local accelerators and hubs that connect investors and entrepreneurs may make it easier to stay local.
- Global specialties are emerging. This is just based on what people observe in their daily lives. For example, a startup in Singapore might understand the Underbanked from trips in the region and a startup in New York is more likely to focus on capital markets.
- Some markets are protected by regulation. In each country one can find startup digital banks (“challenger banks” in UK parlance) that are regulated and marketplaces for debt and equity that are protected by local regulation. It remains to be seen whether these ventures will be acquired by global winners, or crushed by them or whether one or two emerge as global winners.
- Regulatory competition driven by Return On Innovation. This was my biggest surprise. I thought of regulators as simply another “cost of doing business” that was utterly resistant to change. However there is increasing recognition by policy makers that innovation drives wealth creation (ahem, Silicon Valley is wealthy) and that smart regulation that encourages entrepreneurs to set up within your jurisdiction is a key driver for Fintech innovation.
- Entrepreneurship is Silicon Valley’s greatest export. A few years ago, basic startup techniques such as how to negotiate a term sheet or growth hacking metrics seemed to belong only to those in the inner priesthood in Silicon Valley. Now that knowledge has been dispersed through accelerators, startup classes available online, blogs and other collaborative tools.