Once upon a time, in a small and dark country, there was a small bank. Well, actually, it was not such a small bank for this country. It was also an important bank for many people, especially in the countryside, because this bank was also near its customers and the local staff really knew those customers personally and had forged meaningful relationships. 

The leader of the bank had a vision. He saw that banking business would change and that it would be better to act before that change happened. He wanted to drive the change, but he was leading the change from the castle in the heart of the capital, and well away from his customers.

They decided to innovate at the bank. They thought that very basic saving accounts and offering loans with heavy paperwork were not the businesses of the future. They thought it would be a great idea to offer people new services they would really want to use and integrate finance options to those services. People, they thought, weren’t normally looking to them for a finance service so why not to offer them together. They could combine their old strength of knowing customers personally and utilizing modern technology and new services.

They hired many new people. People who had technology competence to build new modern services, people who had created new businesses from scratch, and people who had seen elsewhere that it is better to act before disruption destroys a business.

These people were excited about new opportunities to build a totally new business. They got freedom to develop new ideas and implement them. The bank was to have a new and more important role in its customers’ lives.

However, there was also a group of traditional banking folk inside the bank and in the finance sector. They didn’t really like that the bank was starting to do something that was not ‘traditional’. They felt the bank had broken the rules and it became difficult for them to tolerate this rebellion any longer.

Other people inside the bank also felt they were not in their comfort zone, with all kinds of new things happening. They complained, that it was confusing. From this an ‘empire strikes back’ plan was hatched.

When it came time to get a new leader for the bank, it became an opportunity for the old banking gang to get control back. They started their work to ensure the next leader would take a step, no, many steps, backwards.

Their plan worked. They managed to get a traditional finance wizard to lead the bank. He had the track record of doing things the traditional way. He had also read more traditional business management best sellers than most airport bookshops stock. He was an excellent leader to implement the ‘empire strikes back’ plan.

It didn’t take long time for the plan to start working. The bank decided to stop new activities, and focus on traditional banking. People who came to the bank to do new things, decided to leave. And those who decided to stay, started to repeat the mantra “it is great to have a clear focus, it was so confusing earlier,” although earlier they had been excited about new things. But they were also smart people and they wanted to protect their positions under the new leader.

The new leader wanted to make it clear, that this was another new era in the bank. He wanted to take the bank back to the local social clubs of the bankers in the country. They didn’t want to use modern digital technology, instead keeping their old IT model and developing it further.

By adopting a puritan management and process consultant attitude the bank not only killed off the innovate trial and learn model, but it also managed to get rid of the traditional strengths of the company – the local presence and personnel that really knew their customers personally. They wanted to take the HSBC, Chase, or you name it model and adopt it to this small bank without realizing even the big banks were struggling with fintech and other disruptions that were emerging.

It was a successful ‘revenge’ by the old banking gang and process consultants. The new innovations and businesses were killed off within a couple of years, and not only that, but the personal touch went too. No one can say they were ineffective because peace did come back to the bank and the local finance community. People in HQ were happy in their comfort zones and continued their old activities as if nothing had happened.

They are now living happily ever after, or at least they will be, until the day the disruption wave really comes and changes everything. In some markets, it might have arrived already!

The article first appeared on Disruptive.Asia.

Photo: Sleeping Beauty Castle, Wikipedia.

Being a data scientist has been a hot job for several years. Concurrently, we have more and more questions about ethics and who the industry really develops value for. If you are a data scientist and want to create state of the art things, you probably must work for one of the giant data companies and accept their models to utilize data. Could this change soon?

We still remember the days, when you had to work directly or indirectly with a mobile carrier or Nokia, if you wanted to make an application for a phone. It also had a very small likelihood that your app ever got to consumers and basically you did what some business folk had decided people wanted. Then came Apple’s App Store and overnight everyone in garages or bedrooms around the globe were able to make and publish mobile apps. It became a consumer market.

We also know very well what it’s like to work for a bank and create finance services. You are a part of a huge machine and only work on some small components. No wonder, when blockchain opened the market to finance services, it activated millions of people to develop things. Of course, it hit some hype too, which often happens, and we are still in the early days of how distributed ledgers will change many services.

How could the same happen to data scientists and AI developers? Or is it so that Google, Facebook, Amazon, the NSA and some others dominate the data market so overwhelmingly that no one can challenge them? Or at least so that individual developers or small companies cannot ever compete with them?

Personal control and ownership of data are becoming very important. Privacy regulations, like GDPR in the EU and CCPA in California, are only one part of that. More and more companies are emerging to develop solutions for personal data control and also many big companies are starting to see the benefits from the new model. More companies could better compete against the data giants and they could also decrease their own risks and liabilities, if consumers could keep their own data.

There are also technology needs to make more distributed data and AI solutions. For example, many personal assistant-type services require availability, latency and security where it would be better to have local data that is utilized in analytics and AI. We would move from very centralized massive big data cloud services to distributed data in local devices and consumer’s own repositories.

All this will also change the data application market and how to generate business with them. It opens a market to new actors and also independent developers to offer their applications direct to consumers. When consumers have their own data, they are able to utilize many new services and applications in their daily lives. It is similar to over 10 years ago in the mobile application market.

Of course, this needs many components in the ecosystem until it really works properly. We need a framework to develop these applications, an active developer community and enough parties to orchestrate the ecosystem and services. We already see a lot of development in this area, so there are probably not so many missing components anymore.

Whereas data scientist work has been to develop algorithms, make more or less advanced data mining or develop some ad or sales targeting services, this new development could change job descriptions significantly. Those things are all still needed, but there will be more opportunities to innovate totally new services on data, make new business models for consumer data apps and start to offer AI apps directly to consumers too.

We are approaching a disruption point in data services. It won’t only be about privacy, consumer control or distributed data and AI, but it will also introduce a significant change in how data services and applications are developed. It opens business opportunities to new companies and developers. This is development that has also happened in other software areas, from centralized business management driven systems to more independent services, an open market and individual developers. It gives more freedom to consumers, how they want to use data. And for developers, what kind of data applications they really want to develop and bring to market.

You can explore more at Github: “Liberty. Equality. Data.”

Sign up to Prifina’s Developer API.
​
The article first appeared on Disruptive.Asia.

Fintech progress seems to be as unclear in Asia as most other regions. China is probably the leading fintech market, but as a whole, fintech development is still more like an evolution for launching new services with some more tech than really disrupting anything. Lending is the most important service category, but it is not always what it looks like.

Autumn has again been the time for several fintech events in Asia. For example, I moderated a couple of Horasis think-tank discussions with top level fintech experts and influencers from China and the rest of Asia. The common conclusion was that it is not easy to summarize the status of fintech. There are several interesting new services and technologies, but nothing has really disrupted traditional finance services – yet.

Typical fintech discussions include comments about Chinese money transfer services, several mobile and online lending services, online identification, KYC and AML solutions and importance of data in all new services. We have seen some big success stories in payment and money transfer services globally, like Stripe, TransferWise and Square, but not too many other unicorns have emerged yet.

Several online and mobile lending services are making significant money. One could ask, is it really fintech, alternative finance or loan shark business. For example, Indonesia has closed several P2P lending services, that haven’t been real P2P lending, but more similar to high interest rate lending to poor people. They include some tech, like loan applications with a mobile app, but it is hard to call them disruptive businesses.

We can say new services are often:

1. New applications to handle the customer interface,
2. Expanding the customer base to formerly unbankable people,
3. Collecting and utilizing more data on these people.

All these things are relevant and can be good for those people who were previously outside traditional banking services, exposed to loan shark business that were using these people. But it is not really about forcing the existing Asian banks to change in any significant way. One discussion I participated in included jokes about how terrible some online banking and mobile services are, when banks have just built some new front-ends onto legacy IT systems that make the services even slower than before.

Blockchain and distributed ledger versions have been the candidates to seriously challenge the old finance systems. Now we have suffered the hangover of the ICO hype and it has cast a shadow on all blockchain solutions. It doesn’t mean that distributed ledger solutions couldn’t be the real challenger, but it will take some time and more solutions that can prove their real value, not just selling fancy tokens.

One panelist crystalized the fintech problem in a nice way: “we don’t see a real disruption until we move from fintech to techfin.” This can really illustrate the problem of slow progress. Most fintech solutions haven’t really been able to use technology to totally change existing services, processes and infrastructure. It has been more about using stepping-stones to introduce some more tech and develop services. Many fintech people also come from the finance industry and try to convince others that strong finance competence is necessary to build new services. But they don’t have an understanding and competence of how technology disruption really works.

Some components that are typically important for faster technology disruption:

I have sometimes summarized those points by saying, when we have the ‘Uber of finance services,’ meaning a company that has resources to make an excellent service, push it to the market and also challenge incumbent players and the old regulation.

It is easy to see that finance services will encounter a significant disruption. The difficult question is, as always, how and when it will happen. Let’s be frank, we are still in the very early phase of fintech and most fintech companies have a hard time to find their purpose and business model. The main reason is that they still simply try to be upgrades to existing finance services and not create new, disruptive and totally digital finance services. Maybe we will never see the big breakthrough to techfin while fintech continues to change finance services.

The article first appeared on Disruptive.Asia.

There are many ways, companies analyze and monitor consumers. They know what you buy, how much money you spend, where you move, what products you search for, what your preferences are and many other things. If we compare this to the military world, it is like one party spying and using sophisticated intelligence to monitor another party in order to identify them, determine what to do next, what is the right timing to do something and what are the strengths and weaknesses of the other party.

But in the military world it is normal that both parties try to collect information, gather intelligence and also have counter-intelligence, otherwise the situation significantly favors the party that dominates information. In the consumer market it is very much that only one other party uses sophisticated intelligence and benefits. How could we change that?

Based on customer data, businesses typically try to understand, for example, the following aspects:

• Who are the best targets for a marketing campaign?
• What is the best next offer and action for each customer?
• How to keep the existing customers and prevent churn?
• What is the price sensitivity for different products for different customer segments?
• Who are the most relevant customers for a company or product to get the best value from the business?

At the same time consumers have many questions too, how they should buy products and services and where, for example:

• Where do I get a product for the best price?
• Which product is the best value for my needs and preferences?
• When should I leave an existing service provider and change to another one?
• What is the best time to buy a product or service?
• Does a loyalty program make sense to me?

Consumers think of these questions quite often and try to find answers to them, but it is typically based on very limited data, analytics and processing capacity. They might have seen a few offers, don’t have all details, then quickly try to make some conclusions in their heads. At the same time, the other side, businesses, use smart algorithms, a lot of collected and purchased data and a lot of cloud computing power to get a consumer ‘on the hook’.

It sounds like an unfair situation. Isn’t it also against a main principle of free markets, that each party should have all relevant information, otherwise the market cannot function properly? At least, if we think of the military example, a military organization would quickly spring to action if the other party dominated the intelligence frontier.

Fortunately, we have now arrived at a situation where consumers could really start their own counter-intelligence action. Only 5 to 10 years ago this would have been very difficult. Technology, regulation and business changes have enabled this, for example:

1. Consumers can now get enough storage and computing capacity for a reasonable price to analyze data.
2. Data and finance regulation (e.g. GDPR, CCPA, PSD2) have entitled consumers to collect their own data from many services.
3. More business and information available online, e.g., product prices with product details. 
4. Machine-to-machine type buying and transactions are becoming possible.
5. Many businesses also see opportunities in more balanced data and analytics models, when now the data giants can easily start to dominate the market.

But we are not there yet. There are some missing components and this is still too complex for consumers. They need better services and user experiences to really achieve it, because it currently requires too much proprietary data collection and technology building.

They need better tools to collect the data from multiple sources and tools consumers can use to manage their own data and find relevant information from businesses. They also need data models that can interface with businesses and better algorithms, especially to fight for consumer’s interests. And we are very close to seeing these tools. 

The last 15 years have made data the epicenter of business, but it hasn’t been balanced development. It has meant the dominance of businesses over consumers, but also on the business side it has been dominance of some companies that have got much more data than others. When enough parties that don’t like that dominance get together things start to change and technology and services are developed to challenge the dominance. We are now at that point – it is the time of consumer counter-intelligence.

The articles first appeared on Disruptive.Asia.

We are stepping into a new decade, and it is also a new decade for the Grow VC Group. Our journey since 2009 has been in the middle of digitization, fintech and data disruptions. Now is a good time to look a little bit back and especially forward.

We started with the world's first equity crowdfunding service. Quite rapidly we realized that the startup equity crowdfunding market is not a huge business, especially it was not as scalable as we expected. Now 10 years later we can see, it is still a small business and not many platforms can really make money in that market.

We had a portfolio of online finance, crowdfunding and finance platforms. During the last five years we have sold or closed down most of those companies and now prepare to close down the whole portfolio that comes from the crowdfunding roots. The only company in that portfolio is now Difitek that is also more a tech company, offering an open API platform to implement digital investing and lending services.

At the same time, we have built new portfolios of companies. We are still active in some finance technology areas, but we would like to see a transformation from fintech to techfin, i.e. to have services where technology really disrupts finance services or creates new categories of services. Now too many fintech services have been only new tools or channels to offer very old services and we haven’t seen, for example, really new business models or concepts to develop new services.

We see digitization and data are really in key roles to change all businesses. Our new company portfolios include, for example, the following companies:

• Prifina develops new models to control and use personal data. It offers tools to own and control personal data, but take it beyond ownership and really offer tools, how individuals can leverage their personal profiles to get better services, prices and usability.
• Robocorp develops Robotic Process Automation (RPA) solutions based on the cloud-first open source model. RPA has been a fast-growing market, but the open source model and cloud-based orchestration will take the whole market to a new level, and can expand the market from a few billion to hundreds of billions. RPA is the basis also for the future AI solutions, enables digitization of many services, enables to outsource work for robots (robosourcing) and creates a new developer category, Software Robot Developers.
• Startup Commons develops services and models to better measure, digitize and systematically develop startup ecosystems. Startups have become a fundamental part of the economy in most countries, regions and cities, but investments and development are still often done without systematic processes and metrics. Startup Commons makes this development much more systematic.

Although we have had changes with our focus and companies, we still have the same principles as a decade ago: we build global business from day #1, we are very entrepreneurship driven and we are always willing to challenge existing models and businesses. We want to work with people and companies that share the same principles.

We don’t know what changes will happen in business during the next decade. We believe there will be a lot of changes, new challenges and opportunities. Anyway, there are always opportunities for entrepreneurs that are willing to create new and better services. It just needs the right attitude to see the opportunities and make them happen.

To all our companies, people, partners and entrepreneurs around the world, we wish a successful New Year and start of the new decade.

​How many times you have heard said that you must find your passion? Especially nowadays, it’s popular talk that you must find a job you feel passionate about, or you must find a company that helps you pursue your passion? But is it really a good idea to follow that passion, and does that make you a better employee or entrepreneur? There might be much more important qualities to realize your dreams.

It has become trendy to find a startup; one could say almost like a hype. Of course, most people don’t do it, but they talk about it and dream about it. I cannot count how many people have talked to me about how they would like to start their own company and even shared their business plan with me. Then they have got to a point where they realize that “this is really my passion, and now I waste my time in this boring job, where I cannot implement my own dreams.”

It is, of course, nice that people have dreams and even better if they can implement them. But if you are not committed to realizing them it could just be a waste of time, although it’s still nice to dream. Many of these passionate business ideas also sound naïve or not that concrete. Because I’m not such a polite person, I often also say this to people. Some people answer that they respect my honest feedback, but some don’t like it very much.

I have personally participated in building many companies from scratch. Some of them have been more successful than others. I have also done something similar in other areas, like helping a person to start a political career and create some non-profit movements. Of course, the start needs some passion, but at the same time I haven’t seen many ideas fly very far with passion alone.

Especially, I have felt that success needs hard work. It also requires that you have luck (e.g. with timing and sometimes to meet the right customer or investor), but the more you try and work, the higher probability you have to be lucky one day. It is also extremely important to listen to feedback, learn from the market and to be able to adjust your offering and business all the time.

The last point, amend your business, is easily in conflict with your passion. You might have an idea to offer a certain type product, run one type restaurant or serve some customer segments, but the reality might be that that model doesn’t work, and you should change your concept. Then you must, at least, decide, if your passion is to create a good business or implement your original dream.

I have also seen wannabe entrepreneurs, who have read about great funding deals and big exits in a few years. Then they have, for example, proposed cooperation to start a company. Each time I become more skeptical about these, if the person has no experience to start and run companies. I have often seen that after two months they start to cry that their severance package runway ends soon, and someone must organize funding that they don’t need to take a hit to their living standards. Personally, they don’t necessarily see that it should be them who organizes the funding, because they have read from TechCrunch and Forbes, that the funding just comes to the company.

Quite often those people have also felt they have a passion to do something else than their daily boring corporate work. Then they are really surprised that to build your own company is not only to implement personal passion projects, but actually run many daily tasks to keep the company up and running and quite hard things too, including talking to dozens of customers and investors that say no to your passion.

My point is not to criticize dreams to start your own business, pursue things you like or first-time entrepreneurs that have a lot of things to learn. It is something that I have done, too, and made many mistakes. I want to criticize the recommendation to “follow your passion.” It is more difficult to really achieve something. I would say commitment is much more important than passion. It means that in order to do things to take you closer to your dream, you really are ready to go thru difficulties and find a way that works. Whatever you do, it has more and less motivating parts to it.

It is great and important to get more people who are ready to make the world better, change old businesses and also other things in the world and society. It is definitely OK to indulge in your passions, but don’t think that following them automatically creates results or success. If you want to achieve something, you must get it to happen, whatever it takes. And you definitely need commitment to get things to happen.

The article first appeared at Disruptive.Asia.

One could easily think that IT and digitization are somehow the same thing – or at least support one other. The corporate reality is that it is sometimes the opposite. It is often the legacy IT and the IT department that are the obstacle to new digital models. Is there any way to get traditional IT and digitization to work together or do we need total disruption to change things?

Legacy IT systems have been built to support processes and operating models that were dominant when the original systems or architectures were designed. It generally happened before truly digital companies began to emerge. By digital companies I mean companies that are built on digital data, data-oriented processes and models built on digital customer experience. We can see that companies such as Google, Uber and Amazon are examples of really digital companies.

A former bank executive said to me recently that “he hasn’t invested in bank shares for years and at the bank he felt like he was sitting on a time bomb with core legacy IT systems.” He said that everyone knows they cannot continue like that for long, but it is scary to start to replace systems where most people have their money. New systems might offer better services for lower costs but he is not brave enough to take those steps, because something might go wrong.

New regulation, for example GDPR and PSD2 in Europe, have demonstrated how hard it is to live in the digital era with legacy IT systems. For example, banks should be able to provide data to their customers, but how they do it is not very modern. An executive from another bank told me how they employ someone to manually collect data on an Excel sheet, when someone asks to get his or her data, and then email it to the client.

This is very different from the big public talks about open API banking.

In practice we have also seen that IT departments are typically very skeptical about accepting any new systems, even though top management and business leaders would like them to. Someone could say they are conservative and against change but there are also very practical reasons for this. They have a hard time managing the existing systems and typically it has been hard to get the legacy systems to talk to each other. Each new system has meant expensive system integration projects.

Generally, it is hard for incumbent companies to change and change their operating models. That’s why disruption has happened in many industries and new companies have emerged to kill the old companies. In some cases, the old companies have survived, but most of the new business has gone to the new players (for example media companies, telco carriers and bricks and mortar retailers).

But are there some ways to make the transition. There are no simple solutions, certainly no miracles, but we can suggest some things that can help:

1. The top management must understand technology, digital business models and be brave enough to make mandatory changes early enough,
2. The starting point for new services and processes must be the customer value and customer experience, not technology or internal processes,
3. There are technology solutions, e.g. RPA (robotic process automation) that help to make the transition and enable digital processes on the top of legacy systems, thus getting old and new systems to talk each other and at the same time enable significant information work automatization.
4. Everyone in the organization must be ready and open minded to look for better solutions to serve the customers and offer them value. It means people must go outside their comfort zone and admit their old routines don’t always make sense. It is better to proactive than reactive.
5. Find real facts and not just trust beliefs you like. For example, cloud, automation tools and Machine Learning are not security risks compared to the old in-house system. All systems have risks, and it is important to implement and manage them right. The devil is in the detail.

We will see more significant digitization in most industries. It will kill many big companies and create new significant companies. We will definitely see significant changes in the models to manage and use customer data, build digital processes on that customer data and make all operations be based on that data. Management must have the courage to drive those changes, including a complete transition from legacy IT to totally new systems and models.

That said, there are some softer ways to handle the technological change, but even with those models it is fundamental to keep the focus on customer value, not on internal development.

Your focus must not be to develop IT, but your customer value and experience.

The articles first appeared on Disruptive.Asia.

Over the past year, Robocorp has been quietly building open-source tools and a cloud-native platform with the vision of making Robotic Process Automation (RPA) more easily accessible to any company and not just the giant corporations on the Fortune 1000 who benefit from it today.

Today, Robocorp announced it has raised $5.6 million in our first round of institutional funding, led by Benchmark, with participation from Slow Ventures, firstminute Capital, Bret Taylor, President and Chief Product Officer of Salesforce and co-creator of Google Maps, and Rob Bearden, CEO of Docker. Additionally, Benchmark’s Peter Fenton – who has backed numerous successful open source companies from JBoss (acquired by Red Hat), to SpringSource & Zimbra (both acquired by VMware), to Elastic (IPO'd last year) – is joining the board of directors.

With the new funding, Robocorp is now ready to accelerate its growth and take the next step toward democratizing RPA. The RPA industry has seen incredible growth in just the past 2-3 years, with large corporations already benefiting from the automation of millions of routine business tasks, ranging from onboarding new employees to processing insurance claims. But for all the benefits RPA has brought to businesses, it has only been able to help a sliver of the market due to the prohibitively high costs associated with these proprietary tools and the lack of a proper developer ecosystem. 

Ultimately, Robocorp's goal isn’t to just disrupt the RPA tool market, but instead it wants to create a whole new industry that they call robosourcing. Currently, companies looking to gain efficiency and cut costs outsource functions to low-cost regions around the world. In the near future, what will happen is that instead of transferring this work to remote regions, companies will employ robot developers who will automate the work in-house instead. Outsourcing work to robots, or robosourcing, will be a driving force to increase efficiency, reduce errors, improve employee satisfaction, and deliver better customer experience.

Looking ahead to what’s next, with this new funding the company is expanding its operations by tripling its workforce to scale the vision of an open-source RPA ecosystem by creating tools that developers across the world will use to automate tasks. This is a great opportunity to participate in one of the most interesting and fastest-growing enterprise software market at the moment. Robocorp is also hiring people to help it grow the developer ecosystem and create content around the open-source RPA ecosystem.

Read more at Robocorp web site.

See open positions at Robocorp.

Robocorp is set out to change Robotic Process Automation. RPA has the potential to change how millions of people work every day and Robocorp is making it accessible to everyone through open-source technologies, delivered through a cloud platform.

RPA is the fastest-growing segment of the global enterprise software market and we are disrupting it in technology, business model, and ecosystem.

Robocorp is based in San Francisco and Finland. We are actively hiring top software engineering talent to work with us on remote-first basis.

Read more on Robocorp career site.

San Francisco, October 15 2019 – Difitek has appointed Ronald J. Buschur as Chief Executive Officer of the company. Mr. Buschur will work directly with Jouko Ahvenainen, Chairman of the Board and other senior management of the company. Mr. Buschur is an experienced leader, having lead Powerwave Technologies (Nasdaq) global operations and thousands of employees around the world and an experienced entrepreneur, having taken companies from initial stages to the public markets. Mr. Buschur has been an executive advisor to Difitek Inc. since 2016 in its growth in digital finance.

Mr. Buschur comments the new position: “Having seen the growth and working with the company in the digital finance market since an early stage, I’m honored to lead the company to its next phase. The market demand is strong and the company has significant, technology and expertise in the global fintech market and as the industry matures and customers expect better digital finance services, we’re looking forward to offering cloud based finance back office and engine to the market.” 

Mr. Ahvenainen comments: “I’ve worked with Ron in different roles and have seen firsthand his expertise and business acumen. Global fintech adoption is at a key moment, where solutions to drive customer value are being taken to market. Finance institutions are looking for more cost-effective solutions to offer better services to customers. We’re excited about supporting our customers and partners seize these opportunities in the financial markets.”


About Difitek Inc. 

Difitek provides the leading finance engine for digital finance services. It has powered many financial marketplaces in real estate in the US and Europe, in access to capital for individuals and small businesses in South East Asia and new forms of financing in South America. 

More information is available at the company website: www.difitek.com 

For further information, please contact:
Ronald Buschur, CEO 
ron.buschur@difitek.com  
+1 714 414 9820

Photo (from left): Markus Lampinen, Co-founder & Board Member, Jouko Ahvenainen, Chairman, Ron Buschur, CEO.