Monthly Archives: September 2014

Hackathons, payQwig, Money up, ChangTip & more fintech news (innoupdate 39.2014)

Overview by Maarten Korz (@korz) of this weeks innovations & startups in de financial and banking industry. This week:

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What Rabobank needs to learn from startups: three key principles.

“Today is the slowest pace of change you will ever experience”, tells Rob Easton from Google. His public consist of a group of ten selected entrepreneurs in the Startupbootcamp (SBC) Fintech program. They listen closely to learn how Google supports startups. It is a drizzling Monday morning at work, next to the iconic Tower bridge. These founders are the chosen ones to participate in the SBC accelerator program and have been selected over 430+ applications globally.
How can Rabobank adapt to a rapidly changing environment. This question one of the reasons to participate in the SBC program, together with MasterCard, Lloyds and Intesa SaoPaulo. What can we learn from the startup mentality? How do startups cope with change and uncertainty? Here are three principles that help startups realize their dreams.

Principle 1: A startup is a pile of guesses
Business Model Canvas“I wish I had known that sooner” is a common phrase among startups. This is a common topic at large corporates as well. Startups invest huge amounts of time, losing their key advantage: speed, to find out that what they deliver is not what customers want. To cope with great uncertainty: this is the great dominator among startups. Under conditions of uncertainty you cannot plan. “A startup is just a pile of guesses”, Jordan Schlipf an experienced serial entrepreneur tells us, “the sooner we can bounce our guesses of the market the better we’ll do”. At this stage, before starting anything, it is crucial to identify your fundamental assumptions. One of the helpful tools is the business model canvas. At Financial Logistics they already use this tool in interaction with their customers. As an intra- or entrepreneur you apply the tool to address all the aspects of your intended business model. Based on this concept you can start asking questions. “So you want to reach this customer segment with this value proposition through these channels, tell me more about it”. Here in London, startups who were working on a product for over five years were sent back to the drawing board – temporarily demoralized.

The result is that you have identified your key assumptions. It is time to get ready for the next step.

Principle 2. “The faster we can bounce our guesses off the market, the better we’ll do”
The key asset of a startup is speed. This is the advantage a startup has over incumbents and should exploit to a maximum. The question you should ask yourself: ”What can I do today to answer my key assumptions”? This stage is all about experiments. Not building products but translating key assumptions in rapid experiments. The results help you to build a solid fundament, or leave your startup before committing to much time. A great way to assess the feasibility is to find early customers and confirm their intent to buy before building everything. Www.kickstarter.com is a perfect example to assess buying intent. Questions you can ask at this stage: who are our customers? Who wants our value proposition? This applies directly to Rabobank. There are many parties that represent the customer: marketing, local banks, UX center. Yet, you might ask yourself: do they really represent the customer? How do successful startups work? They talk with their customers. From day one. Every day.

Principle 3: “Learning is progress; building stuff isn’t”.
A common mistake among startups is to focus too much time on building a neat product. Once you deliver the product it is hard to measure which features are appreciated by your clients and which are considered waste. Making it hard to decide the features to kill. ”We should get a product into our customer’s hands as soon as possible”, Jordan continues, “any extra work we do beyond what is required to learn from customers is waste”. To get to learning startups apply a build-measure-learn approach. In the build stage you develop an essential piece of your product, a key feature. You measure this by showing it to customers. Based on this confrontation you gain feedback. These data points can be applied to the next build run. Now repeat.

The lessons shared here are based on The Lean Startup by Eric Ries. The Lean Startup proposes tree fundamental principles: It favors experimentation over elaborate planning. Customer feedback over intuition. Iteration over traditional “big design up front” development.

hanveldwijkHan Veldwijk (http://uk.linkedin.com/in/hanveldwijk) is ‘executive in residence’ for Rabobank at Startupbootcamp Fintech in London. He helps startups gain traction while exploring opportunities for the Rabo Group. Questions or remarks? Drop a line: h.veldwijk@rn.rabobank.nl

 

Recommended reading
Alex Osterwalder and Yves Pigneur (2010): Business Model Generation. Some departments at Rabobank already apply this framework. When applied correctly it can explain any business model in fifteen minutes and give insight in all the crucial underlying assumptions.
Eric Ries (2011): The Lean Startup. Eric laid out the combination of customer development and agile practices.

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