The NAB SME Hackathon

The recent week-long Intersekt fintech festival kicked off with a 48-hour hackathon, sponsored by NAB, hosted by Stone & Chalk and York Butter Factory, and designed to meet the needs of NAB’s SME customers.

Using NAB’s own transaction data APIs, participants were asked to come up with a solution to one of the following challenges:

1. How to make the lives of SME owners easier
2. How to help SMEs generate more business

12 teams competed over the weekend, and each presented their ideas to a panel of industry experts. Clearly, these were not the usual startup pitches (and none have a public website), but it was interesting to see the results. Projects are listed here in the order they presented:

NABTax – “tax audit insurance”
Designed to encourage better/best practice tax governance among SMEs, it uses a combination of a tax risk rating linked to a reduced cost of premiums for tax audit insurance.
The solution would help SMEs to be better prepared for an ATO request for information, aid understanding of the ATO’s current small business benchmarks, and provide insights on the ATO’s data matching protocols.
Essentially it would generate a risk rating based on quantitative and qualitative analysis of supporting documents supplied by the SME.

EasyPay – “reconciling invoices and receipts”
Deploying an e-invoicing model, the platform would generate a unique reference number, linked to an ABN, and generate a QR code to be scanned by the payer.
At its heart, it would better match invoices and payments. The service would be sold under a freemium model, and would be compliant with the New Payment Platform (NPP).
The main challenge would be in reaching and gaining traction with consumers (the bill payers).

ORDR – “managing cash-flow, inventory ordering and sales”
Drawing on a dashboard showing SKUs of items in stock, it would use machine learning
to predict stock ordering requirements. Although this concept was based on actual SME experience, the panel felt that there would be integration issues with existing POS and supply chain systems. Also, how would it link to CRM data, and how would it be able to both accommodate new season stock, and accurately forecast demand?
Finally, what level of SKU data is actually available from NAB transaction data?

Just-In-Time MBA – “a financial/business coaching app for SME owners”
According to data presented by the team, 60% of SMEs fail within their first three years. And given there are something like two million micro-businesses in Australia, and 250,000 new ones established each year, if nothing else, there is a huge opportunity to reduce this failure rate.
Using the available APIs (plus data from the SMEs’ accounting systems), the platform would analyze payments data and issue alerts designed to prompt remedial action.
Based on the presentation, it seemed that the proposed analysis is only capturing cash-flow – clearly, the real value and insights would come from holistic health checks.

NAB SME Connect – “connecting small business to customers”
Using a number of data inputs, this service would push deals in real-time to your smart phone. The customer app shows only relevant offers – based on preferences, proximity, etc. The client SMEs can see the level of interest and demand, to generate “Smart Deals” based on transaction data. The panel wondered about the opt-in model, and also felt there were already similar competitor products, or that any competitive advantage would be difficult to defend.

Wait< – “wait less for elective surgery”
Aimed at time-poor SME owners, the team wanted us to think of this as an “eBay plus Afterpay for elective surgery”. Taking the approach of a two-sided marketplace, it would
support transactional loans to cover the cost of surgery, and match customers (patients) to suppliers (health care providers). Drawing on NAB’s current healthcare payment services, the solution would combine NAB’s transaction banking and health APIs, plus Medicare APIs (for patient and practitioner verification), to generate a pre-populated lending form. No doubt designed to appeal to NAB Health, this was a very niche project.

Tap & Go – “turning customer loyalty into rewards more easily and more cheaply”
This idea would enable SMEs to use transaction data to decide who gets a discount, and how much. Built on a merchant administration platform, it would capture transaction data from POS systems. It would be offered as a subscription service for merchants. The panel wondered how this solution compared to the competition, such as Rewardle.

TAP – “smarter marketing solutions”
Commenting that only 16% of SMEs are maximizing their online presence, this service is designed to increase merchants’ digital presence. It would use NAB APIs to manage and track campaigns – by comparing the data to past sales periods and previous campaigns. Campaigns would also be linked to social media accounts. The panel questioned how the solution would fare against competitors such as Hootsuite.

StopOne – “integrated hub for making data driven decisions and connect with a NAB banker”
Conceptually, this was a very ambitious project, designed to let SMEs use dashboards and forecasting from NAB transaction data (and other sources), to drill down into visualized data records. It would also integrate with social media insights, incorporate a messaging platform to allow SMEs to communicate with their bankers, and enable SMEs to share their dashboard with a business banker. The panel queried the cost of the data analytics for the SME, which presumably comes on top of their existing accounting software.
They also suggested the team take a look at what 9 Spokes is already doing in this space.

Spike – “accounts payable solution”
Currently, paying invoices can involve a 10 step process. The average SME has 90 suppliers. Accessed via a NAB accounts payable login, the solution incorporates the Google vision API to capture an image of the invoice and extract key data points. The SME then chooses the date and account for payment, the invoice is stored in the cloud, from where is posted to the Xero ledger, and the NAB payments portal. In addition, the client can share purchase order data with their supplier to pre-populate the invoice. It could
also optimize expenses, by recommending offers or product switches. When asked about the commercial model, the team suggested it could be offered free by NAB, who get access to extra data.

nablets – “focus on things that matter”
According to this team, 90% of SMEs are not taking full advantage of digital tools. Using NAB APIs and event-based triggers, clients would use their NAB Business Connect account login to create “if this then that” rules and tasks. It would also leverage open banking data APIs. The panel asked about the logic and the parameters to be embedded in the rules-based activities, as well as the proposed categories and range of functions to be automated. They also wondered how it would actually help SMEs to adopt digital tools – some of which are already integrated into the current banking portal.

NAB Hub – “Small Business Hub”
Designed to present banking data the way customer wants to see it (P&L, balance sheet, net asset position etc.), it would also help in generating leads for pre-approved loan products, and help with investments via optimized rates, and for insurance cover it would
assist with policy reviews, claims and risk analysis. The panel asked if this was intended to be a NAB add-on or a standalone product. They also suggested the team look at what Tyro is doing around lending analysis – but recognized that there was possibly a place for this type of tailored advice.

Based on the judging, the winners and runners-up were:

1. Just-in-time MBA
2. Spike
3. NABTax

Meanwhile, the crowd favourite was Just-in-time MBA, and the best innovative idea was TAP.

If I had to summarise the presentations, it would be as follows:

1. Most of the presentations were still talking about yesterday’s/today’s banking products, rather than products of the future
2. There was very little evidence of projects designed to help SMEs grow their business
3. Any effort to gain traction for these projects will revolve around changing customer (and bank) behaviours….

Next week: VCs battle it out in the reverse pitch night

 

 

Another weekend, another hackathon….

Last month, I competed in my second hackathon of the year, the #HSCodeFest sponsored by the Herald Sun and News Corp, and hosted by Melbourne University’s Carlton Connect. I’m pleased to say that our team of four, which was only formed on the first night, came 3rd in the pitch competition – with an idea for a news quiz app.

Screen Shot 2015-12-18 at 3.44.56 PMThat particular weekend was quite an eventful one for local startups – not only were there at least two other hackathons being held in Melbourne at the same time, but the State Government also announced its LaunchVic initiative. Small Business Minister, Philip Dalidakis found time in his busy schedule to address the #HSCodeFest participants, which was a great incentive. The previous weekend saw another Startup Weekend event, and last weekend Carlton Connect hosted yet another industry hackathon sponsored by the GE Industrial Challenge. And of course, since then we have had the Prime Minister announce the National Innovation and Science Agenda. To paraphrase Mr Turnbull, there’s never been a more interesting time to be a startup….

Having participated in Startup Weekend’s first #FinTech hackathon back in March this year, I was a lot more prepared, and had a much better idea of what to expect. Even though I didn’t pitch a specific idea on the opening night, I used my previous team-building experience to make sure we had a balanced mix of skills and expertise. I was also clear to make sure that once we had agreed on the project idea, everyone had specific roles, and we constantly checked in on progress and next steps.

As usual, the team generated far more content, data and ideas than we actually used in the pitch presentation. We also kept it very simple, by focusing on the key concept, demoing an MVP, outlining the commercial strategy, describing the business plan, and establishing just enough knowledge and awareness about the market opportunities, even though it had not been possible to fully scope them. For an insider’s view, check out my team-member Nathan’s blog.

We have seen over the past 12-18 months that the hackathon model is being deployed in many different ways to try to stimulate innovation and generate new business ideas. Even government departments and public utilities are getting in on the act, by enabling participants to access data sets, software, technology and APIs to see what they can come up with. Large corporates, who struggle to embed innovation into their organisations, are also holding internal competitions drawing on the experience of meetups, hackathons and pitch nights.

I only see this as a positive development, as long as the energy, enthusiasm and experience can be channelled into meaningful outcomes, which enable in-house talent and external expertise to combine to build great products and services that customers want, and/or identify and deliver significant process improvements and efficiency gains.

However, part of me is sceptical – as someone who is probably much older than the average age of a hackathon participant, I’m still amazed how many of my contemporaries either have no idea or simply don’t “get” the hackathon or meetup concept. They seem astonished that anyone would want to get together with total strangers, and spend their evenings let alone a whole weekend working with them, for “free”. To those of my peers who may see it that way, I would point out that participating in these events is a cheap and effective way of accessing new ideas and skills, meeting talented people, and acquiring new skills and knowledge.

Finally, if your organisation is thinking about running a hackathon or similar event for the first time, I’m more than happy to share my insights – contact me via this blog.

Since the holidays will soon be upon us, Content in Context is taking a short break. Normal service will be resumed on January 5. To my many regular readers and followers, I wish you all a safe and peaceful New Year.

Next: Surrealism, Manifestos and the Art of Juxtaposition

How to Survive a #Startup Weekend

A rite of passage for any startup founder or budding entrepreneur is a weekend hackathon, and a Startup Weekend is probably the best way to throw yourself in at the deep end. As part of Startup Week, the York Butter Factory hosted Melbourne’s first fintech event. Here’s how I managed to survive the ordeal….

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Your correspondent in full flow at the Final Pitch…

Rather than provide an hour-by-hour account of my experience (the schedule is on the website and you can read the Twitter feed), here’s my thoughts on what it takes to participate and get the most out of the experience:

Courage

Take a leap of faith, step up and pitch an idea at the open mike session on the first night. Not only does this force you to craft your message, it also helps overcome any nervousness or awkwardness in joining a room full of total strangers with whom you will be working for the next 54 hours. My idea didn’t get enough votes, but it did spark several interesting conversations with other participants, such that I will probably take it further.

Stamina

Pace yourself. Yes, you could spend every available hour on finishing that customer validation, or refining the pitch, or making sure your demo site is up and running – all of which are important – but you also need to make time for rest, sleep, eating (all catering is laid on) and exercise. Again, 54 hours is a long time to spend on a single activity.

Open Mindedness

I had some idea from the program notes what to expect, but I still didn’t really know what it would it be like. So it was great to just go with the flow, to see what would happen. The format, structure and schedule (as well as the rules and requirements for the Final Pitch competition), pretty much define what goes on. But your attitude and willingness to be open to new ideas determine how much you get out of the experience.

I should also mention the value in having direct access to so many experienced mentors throughout the weekend – although I know from the experience, it’s hard not to get too defensive when mentors find fault with your project, and difficult to remain true to the idea when some of the feedback is contradictory.

Teamwork

Building teams to collaborate on a startup idea forms the basis of the hackathon model. As my own idea did not get enough votes at the open pitch, I looked to join a team that was a good fit in terms of the idea, the mix of skills to complement my own, and the ability to execute. As a “non technical” participant, I was extremely fortunate to be part of team that had a great balance of back-end and front developers, design skills and mobile deployment. Plus, given the theme was fintech, it was fantastic working with people from a banking IT background. (It also helped that several team members were veterans of Startup Weekend.)

Defining Roles

Although we didn’t spend a great deal of time creating or defining roles within the team, each of us played to our strengths, by self-determining what we would work on, and what our contribution would be. The only tricky decision was choosing who would present the Final Pitch to the panel of judges – but a process of elimination, preference and negotiation resulted in yours truly taking on the role.

Tools

In addition to the various software, hosting and domain name resources provided to each team, I was impressed by how many other tools the team plugged into – such as Trello, GoogleForms, Hangouts, ThemeForest, CanvasModel Design and Launchrock – most of which were free. We also spent some time reviewing competing and complementary products as part our MVP validation.

Less Is More

We could have spent a lot of time on customer validation – but we chose instead to talk to 3 or 4 key target customers for the MVP (qualitative), and run an on-line survey (quantitative) which generated around 100 responses overnight (not bad considering it was a weekend…). We also had more content than we actually used: the lean canvas business model was used sparingly, as was a competitor heat map; but it also meant that when we came to developing our pitch presentation, we had the luxury of being able to take stuff out and only focus on the important and most relevant points. Thanks, also, to a presentation template that one of the team had just used at a recent management course!

Practise

Having been chosen to make the Final Pitch on behalf of the team, and despite quite a lot of experience in making business presentations and in public speaking, I was extremely grateful for the coaching, feedback and rehearsals the team put me through. Getting to know the material, understanding the anchor points and how to navigate from topic to topic, helped me to give a presentation that flowed logically and hopefully demonstrated that the team had met the competition brief.

The Result?

Unfortunately our team did not win, nor did it place in the top 3. The judges pinged our presentation for being “too confident”, and for not demoing our prototype (we did briefly put up our beta website) – but given the working prototype mostly comprised some backend coding, it wouldn’t have been that interesting from a visual perspective.

Notwithstanding our disappointment on the night, the team is planning to get together to see how far we can take the idea, and separately I’ve been asked to join a new team at an upcoming hackathon.

(If anyone is interested, we designed a P2P payments tool called PayMee)

Next week: 3 Ways to Fund Your #Startup