by Steve Upham : altspace Coworking Office
Manchester has a thriving digital economy courtesy of an innovative talent base, supportive eco-system and a coordinated approach within the private and public sectors. Last Friday I attended an event hosted by Manchester Digital focused around Fintech. The sector can be defined as firms and services that facilitate and ease financial transactions via technology. The morning panel Q n A was entitled ‘ Fintech – Beyond the Hype’ and this felt highly relevant when reflecting on the debate that followed.
Despite being a new sector the challenges that startups face are actually very traditional and universal to all businesses. The senior managers present all cited that there were a lot of developers and small businesses seeking to use their technology and systems to improve processes in a chosen field. In other words they were looking for industries to disrupt. This commonly involved building a business plan around a sector that might appear to need automation or more streamlined practices and payments.
This reverse engineering feels contrived and goes against how many of us start out. The traditional approach is to know your industry inside out before you feel qualified to compete or offer a new service or enhancement. By creating value you will ( if you’re lucky ) forge something viable that can compete with existing services or products. There’s a lot of risk in creating something brand new or gamble on an unknown offering unless you’re supremely confident that it’ll be appreciated by a market. If you watch Dragon’s Den you’ll appreciate the naivety of presenting a half baked idea to four experienced investors.
The sentiment in the room confirmed that Fintech firms and investors need to show caution and not get carried away about the Emperor’s New Clothes. Put simply if it’s not needed or wanted it won’t work. The stories of unicorn companies and Silicon Valley successes have created bias amongst the tech community. They shouldn’t blind us from traditional business logic and sound market research.