A big year in #FinTech

Posted on December 8, 2015 by Content in Context

Looking back over the past year, it’s easy to see that 2015 has seen a giant leap forward for #FinTech in the Melbourne #startup scene. Much of this progress can be attributed to the efforts of the FinTech Melbourne Meetup Group, which, in little over a year, has established itself as one of the leading local startup groups, culminating in its first pitch night last month.

Backdrop

There have been some significant business developments this year, including the launch and expansion of new P2P lending providers, payment platforms, digital currency solutions and robo-advice services. And while Melbourne does not yet have an equivalent to Sydney’s Stone & Chalk (a dedicated FinTech hub), there is enough momentum across the network of co-working spaces and the startup ecosystem of founders, advisors, incubators and accelerator programs to ensure that the city is building on its status as a financial centre.

For myself, the year in FinTech really got going with the inaugural FinTech Startup Weekend, which for me was a steep learning curve. I not only learned how to survive a hackathon, but I also gained a much deeper understanding of FinTech itself. I had become increasingly aware of the topic, via other meetup events, business networking and through reading (and writing for) specialist trade publications.* But until you actually see some of the innovative and practical ideas on new technical solutions for financial services, FinTech can seem like a lot of vaporware.

Emerging Winners

At the recent FinTech Melbourne Pitch Night, five local startups presented to a panel of distinguished judges in front of a packed audience at Melbourne Town Hall. Representing core fintech sectors (and the key messages from their pitches) were:

Fuzo – mobile payments platform: “2.5bn people don’t have a bank account”
CoinJar – a Bitcoin exchange: “targeting digital nomads”
StockLight – investment research: “24% of investors want help with analysis”
Moula – SME lending: “not a lender of last resort”
Timelio – cashflow finance: “factoring has missed the internet generation”

In what is traditionally a bank-dominated area of trade finance, Timelio is challenging the usual models for invoice discounting, while offering a new asset class for selected investors. I’ve featured Moula in this blog before, but this time around, I felt the presentation was quite low-key, and rather coy about the business model and the financials – maybe that’s because things are moving very quickly, and Moula is in the process of building significant traction via key commercial partnerships. The Fuzo pitch was quite complex (and probably too much technical information to present given the format), but the SIM card-based technology looks very interesting. StockLight‘s proposition is quite simple, and with access to quality content and a range of commercial models, could be one to watch as every financial institution is having to rethink wealth management and personal advice. However, on the night, CoinJar took out the first prize, and not for the first time, demonstrated how a simple concept can actually make the complex more straightforward: if nothing else, it proves that “Bitcoin can be done”.

Backlash

Some comments in the specialist trade publications have been quite scathing about FinTech, in particular those few startups that have embarked on public listings and IPOs. Much of this backlash relates to governance, disclosure and transparency; fair enough, they are important issues. But these criticisms should not be used to undermine the innovative technology, new business models and strategic partnerships that FinTech startups are bringing to the market.

Going mainstream

When otherwise conservative institutions such as industry superannuation funds start to embrace FinTech (e.g., Equip’s tie-up with Clover), or if the ASX decides to deploy blockchain technology to replace the CHESS clearing and settlement platform, it means that FinTech is definitely on the map, and can’t be written off or even ignored as some sort of irritating, disruptive upstart.

Next Steps?

In the wake of announcing the Victorian Government’s $60m LaunchVic startup initiative, the minister for small business, innovation and trade, Philip Dalidakis has been on a flurry of highly visible public speaking engagements, networking events and social media posts. Keen to get the message out there that his government intends to make Victoria a startup success, the minister is certainly generating considerable goodwill in the community.

I’m yet to understand fully the actual remit and stated goals of this new Quango. For example, what does “investing in core infrastructure” mean? Do we really need another bureaucratic body? Couldn’t the initiative have been better structured as a peak body to represent and support the private sector activities already underway?

If the minister is going to be true to his introductory remarks at the recent #hscodefest hackathon, the government needs to create the right environment for startups to flourish, not try to pick winners – leave that to the investors, entrepreneurs and industry experts. As an example, run a FinTech-themed hackathon to improve the Myki system…..

The Last Word…

Finally, for anyone needing an overview on crypto-currency and the future of money, I highly recommend Torsten Hoffmann‘s award-winning 2015 documentary, “Bitcoin: The End of Money as We Know It”, which received its Melbourne premiere last week at Collective Campus.

FOOTNOTE:

* I can’t claim any credit, but a few months after my Trade Finance blog, ICICI and Alibaba announced a new partnership – in part proving my theory that collaboration soon follows in the wake of disruption…

Next week: Crate-digging in Japan

There’s an awful lot of coffee in Japan (but not much espresso…)

Posted on December 1, 2015 by Content in Context

Living in Melbourne all these years, I have become spoilt when it comes to the choice and quality of coffee on offer in the numerous cafes and bars around the city. So when I go overseas, I can get withdrawal symptoms if I don’t get my morning doppio. And I don’t mean an over-priced and over-rated big brand product from a certain you-know-who-you-are multinational chain store. My recent experiences in Japan, which has the third largest coffee consumption by nation, revealed that espresso-style coffee is on the increase, but is competing with some entrenched coffee tastes.

Walter de Maria "Seen/Unseen Known/Unknown" (Photo: © Rory Manchee - all rights reserved)

On my recent trip to Japan, I not only found some excellent new espresso outlets, I also acquired a renewed respect for siphon and filter coffee, which are both great when they are done well. As anyone who has been to Japan will know, coffee (both hot and cold) frequently comes in a can, either from a vending machine or a convenience store. In cafes, the coffee is usually brewed, and however good the coffee beans, this style just doesn’t do it for me. Rarely have I seen a cafetière (“plunger”) or percolator in use, although iced drip coffee is something of a delicacy.

From three weeks of travel, here are some of the highlights:

In Tokyo’s Ginza district, there is the Renoir Coffee Room which has a certain appeal, if you like authentic retro (i.e., it’s probably the same decor since the 1970’s, without a hint of irony or post modernism). Certainly a favourite with an older clientele, presenting a genteel atmosphere (somewhat undermined by the popular smoking section) and a reminder of a slower, gentler time. In the absence of espresso, I had a standard filter or pour over coffee, and despite being a little on the weak side, it had just enough of a roasted flavour to compensate. Rating: 6/10

Over in hipsterish Ebisu, I was expecting to find loads of local coffee shops, packed with neo-beatniks, retro-hippies and proto-punks, and the constant hiss of espresso machines. Not to be – maybe it was too early in the afternoon, but there were few options. Marugo Deli is more of a juice bar and organic cafe, that also happens to serve espresso. It was a friendly place, nice atmosphere, but the coffee was nothing special. Rating: 6/10

Down in Himeji, after a challenging climb to the top of the castle on a hot day teeming with hundreds of other visitors, it was a welcome relief to escape into the cool, calm comfort of Hamamoto Coffee. Again, they don’t serve espresso, but they specialise in siphon coffee (something I probably haven’t had since I used to visit the former Martinos Coffee Lounge in Hong Kong’s Causeway Bay in the 1990s). Sitting at the counter meant that I got to see the whole process close up, as the bar tender kept several siphons going at the same time. It’s as much an art as working a good espresso machine, and makes for interesting entertainment. The coffee itself was bold, yet mellow at the same time – full-bodied but smooth with an almost zesty edge. HIghly recommended. Rating: 8.5/10

Wandering around Kyoto‘s hipster quarter close to Nijo Castle, I came across Cafe Bibliotic Hello! (quirky name, quirky building!!!) where it’s easy to while away the time browsing through the library of art books and sampling the excellent baked goods from the adjoining store. The espresso was a welcome bonus, and was the best I’d had up until then on this trip. Rating: 8.5/10

Outside Kyoto, in Saga-Arashiyama (near the bamboo forest), % Arabica has recently opened its second Kyoto coffee shop. Overlooking the river, this tiny cafe is really only a takeaway stand, but everything has been designed for maximum aesthetic effect. There’s clearly a personal statement being made here, almost verging on the pretentious/precious, but not surprisingly it is very popular with the passing visitors. And the coffee is also pretty good – full-roasted, robust, just enough acidity, and an excellent crema. Rating: 9.5/10

Back in Tokyo, nearing the end of my trip, I spent a day walking around the district of Kiyosumi-Shirakawa, visiting the numerous galleries, second-hand bookshops and the Kiyosumi Gardens. In 2014, the New Zealand-based Allpress Espresso roastery and cafe group opened a branch here, in a former timber warehouse. It’s an interesting space, and is bringing some serious competition to a rival coffee roaster nearby (which only serves filter coffee to its customers). However, not all the locals seem to have taken to espresso – after having the coffee menu explained to them, a number walked out without trying, looking somewhat confused. But for me, having an Antipodean barista was obviously a plus. Rating: 9/10

Finally, I tried a couple of other espresso bars on my stay in Shimo-Kitazawa, one of which was not much more than an espresso stand, offering good coffee (Rating: 7.5/10), but the service was very slow. I can’t remember the name, and I can’t find a website for it, but it was close to the west entrance to the railway station. This trendy neighbourhood has a number of well-regarded coffee shops, but sadly, I did not have enough time to visit many of them. Next trip, perhaps.

Next week: More #FinTech stuff

The convergence of #MedTech – monitoring, diagnostics, remediation

Posted on November 24, 2015 by Content in Context

Earlier this year, I participated in MedTech’s Got Talent, a competition for medical technology and biotech startups, organised by STC. Now, HCF in partnership with Slingshot have announced a similar accelerator program, called Catalyst. Launched at a recent meetup event hosted by Startup Victoria*, Catalyst is the latest industry initiative to lend support to the growing #MedTech sector. It’s fair to say that the sector is not without its challenges (regulatory compliance and IP protection being foremost), but there is substantial investor interest given the potential for growth and widespread application of the resulting technologies. I also see that there is increasing convergence in respect to some of the digital products being brought to the market – through the use of wearables, mobile apps and analytics to deliver monitoring, diagnostic and remedial solutions.

At the Catalyst launch, three #MedTech founders discussed their startup experiences and offered some insights to budding applicants. Jarrel Seah (Eyenemia), Phil Goebel (Quanticare) and Leonore Ryan (Cardihab – Cardiac Rehab Solutions) covered the product development process, being part of an accelerator program, and the specific challenges of medical technology.

There was broad agreement that Australia (and Victoria in particular) has a strong and successful history of #MedTech development and innovation. There was also a sense that the future funding of telehealth services will be key to the sector’s development, especially the shift from “fee for service/solution” to “fee for value” models.

Aside from the regulatory and IP challenges, two of the biggest hurdles for #MedTech are the customer complexity, and procurement models, which can be summarised as follows:

Who Pays? Is it the clinician, patient or carer? Who, in effect, is the customer?

How Do They Pay? Each State has its own procurement and hospital funding models, plus there is the interplay of private health insurance and providers.

During the product development process, the founders stressed the need to manage expectations for an MVP, the use of customer discovery interviews, and the importance of making clinicians part of the solution. There is also a problem with data gaps (e.g., hospital re-admissions), and the requirement to establish patient trust: while the software, data and apps can support more meaningful consultation, there still has to be some human component to foster behaviour change. There was also a comment about marketing for tomorrow’s market, not the current state.

Having each been through some form of accelerator program, there was common agreement on the benefits:

Access to networks of mentors and strategic advisers
Help with navigating the regulatory landscape
Options for one-off funding to help convert trials to customers
Ability to focus on the project, along with peer stimulation, and a sense of urgency

Each of the three startups mentioned here deploy some combination of smart phone technology, sensors and analytics – just as Dr.Brand does, which featured at the recent Future Assembly. The notion was reinforced most recently at Swinburne University’s Design Factory Gala NIght which showcased, among others, innovative #MedTech student projects that utilise a mix of digital display/visualisation, wearable devices, mobile apps and analytics to address three key cognitive-related issues: patient falls in hospitals, dementia, and Asperger syndrome.

Previously, I have described health as one of the three pillars of the digital economy. Furthermore, the future of #MedTech (as distinct to biotech) is going to be built on the combined deployment and integration of smart sensors, personal devices, artificial intelligence and machine learning to monitor, diagnose and remediate behaviour – not necessarily to cure the patient, but to overcome physiological challenges and age-related conditions.

*Apologies – normally I acknowledge the Startup Victoria event sponsors – but since the team have been doing such a great job in securing new supporters, there are so many to mention!

Next week: There’s an awful lot of coffee in Japan (but not much espresso….)

Seeing Japan with #Airbnb

Posted on November 17, 2015 by Content in Context

Hotels in Japan can be very expensive, and despite the fact that the shared economy operates in something of a regulatory grey area, I am pleased to say that the experience of using Airbnb throughout my recent visit was a great success. Luckily, my travelling partner had done extensive advance research, so there were very few hitches.

Whether innovation is on the rise in Japan, or whether the “illicit” sharing economy is gaining traction, it seems that Airbnb in particular appeals to certain enterprising and entrepreneurial types who see an opportunity in the current market. The various hosts comprised an agent managing several properties on behalf of the owners, professional couples renting out an investment or spare apartment, and a self-motivated entrepreneur also building social enterprises.

I won’t specify the apartments I stayed in, partly because these particular hosts in Tokyo, Kobe and Kyoto are proving very popular (especially over the upcoming holiday season), and partly to avoid any potential “regulatory” hassles. But hopefully the following insights will be helpful in planning your own trip.

First, the bookings were all for self-contained apartments (usually a studio dwelling, close to public transport), and selected based on previous positive feedback. In each case, the accommodation was situated in older, low-rise developments, located in mainly residential neighbourhoods. In one case, it was a traditional apartment, complete with tatami mats, sliding doors/room dividers, and an older style wet-room bath and shower.

Second, the “hosts” were all very helpful in giving travel directions, offering suggestions on where to eat nearby, and/or providing local guides and maps. One had even posted a self-made YouTube video showing the walk from the train station to the front door. Obviously, the fact that they were happy to take bookings from foreign visitors meant that all of the communication was conducted in English.

Third, for the most part decor was simple but comfortable, but some of the beds were on the small side. And one apartment was owned by a fan of a certain cartoon character, with furnishings to match, which was quite surreal.

Fourth, due to the apparent semi-legal nature of Airbnb in Japan, the hosts were keen to make sure that not only did their guests not make any noise or disturb the neighbours, they did not want guests either to talk to or to answer the door to strangers. One host even suggested that if guests put rubbish in the wrong place for collection, they would be extorted by the local Yakuza.

Lastly, although the basics were consistent (bedding, towels, soap, shampoo, hairdryer, cutlery, crockery), there were some significant differences in what other facilities were provided, as follows:

Apartment 1

Location: Close to the Metro, convenience stores, restaurants, bars and a shopping mall. Also, in the vicinity of museums, galleries and other cultural attractions.

Accommodation: Studio apartment, with own bathroom and kitchenette.

Amenities: No TV, but free WiFi, kettle, microwave, single-burner stove, fridge, washing machine.

Apartment 2

Location: Reasonably close to the local private railway station, supermarkets nearby, and a couple of small shops in the area. No bars or restaurants in the immediate neighbourhood, which was mostly residential, but there were the ubiquitous vending machines. More choices in the nearby suburbs.

Accommodation: 3-bedroom traditional apartment (tatami mats, futons), with own bathroom and kitchen/diner. Very spacious.

Amenities: No WiFi and no washing machine, but free-to-air TV, kettle, microwave, single-burner stove, fridge. And no knives. Of any kind.

Apartment 3

Location: Very near to a large JR station and major bus routes, with a supermarket and a couple of convenience stores on the same street, and several small bars and restaurants close by. Mixed residential, commercial and light-industrial area.

Accommodation: Studio apartment, with own bathroom and kitchenette.

Amenities: Free portable WiFi, free-to-air TV, kettle, single-burner stove, fridge, washing machine. But no microwave.

Apartment 4

Location: Few hundred meters from a major interchange station, and very close to several convenience stores, bars, restaurants and a decent coffee shop. Adjacent to a very popular shopping, eating and entertainment precinct, getting very trendy with the hipster brigade (even some co-working spaces in the neighbourhood!).

Accommodation: Studio apartment, with own bathroom and kitchen/diner.

Amenities: No microwave, no stove and no TV. But free WiFi, hot-water urn, fridge, and washing machine.

Finally, the only major criticism I have is that the Airbnb app itself was not that easy to use while travelling, so messages to/from hosts were often delayed. (More on Japan in coming weeks….)

Next week: navigating #MedTech