Posted by & filed under Banking, Collaboration, Featured, Fintech, innovating, Insurance.

The best innovations come from collaboration. Yet most attempts at collaboration fail. Most corporates blame the lack of strategic alignment or maturity. Most startups blame bureaucracy and internal politics.

And they’re both right: most of the time, there’s some building block missing. When you buy furniture, you wouldn’t leave half of the pieces “for later”. But with collaboration, that often happens. Neither startups nor corporations come with an Ikea-like manual.

That’s why we’ve decided to put together the elements of startup-corporation collaboration. After 25+ programs, we’ve seen a lot of what can go well, and a lot of what can go wrong. And many of the pitfalls are predictable, to some extent.

Read more »

Posted by & filed under Accelerator, Banking, Corporations, Featured, General, innovating.

Corporations benefit in many ways from having an accelerator. In our whitepaper, we already analyzed those benefits in depth. But one question that is sometimes tricky for people is: how much?

This is especially relevant when preparing a business case. Should you or should you not do an accelerator? What are the benefits, the costs, what do the numbers say? And sometimes you have to discuss with others in the corporation, why it’s a good idea to engage with startups. For those moments, it’s good to have some figures with you. 

That’s why we decided to build an economic model of the benefits; the Nestholma Business Case Builder. And we’re sharing Read more »

Posted by & filed under Corporations, General, innovating, Investing, Organizational learning, Product development, Startups.

 

Corporate venture capital has been an excellent way for many companies to increase shareholder value. Research shows 30% better increase of share value with companies with strong Corporate Venture capital activities.  And if you look for example at the biggest Chinese giants, most of that valuation increase is because of good investments, not operative business.

But it’s usually done only with later-stage companies.
Read more »

Posted by & filed under Accelerator, Banking, Fintech, innovating, Product development, Startups.

What will the future of banking look like? Just what the innovators will make it be.

Advances in technology, regulatory changes, new entrants to the market… In the past couple of years, banking has gone through big changes and more is to come. They keep saying the ‘future has never been as uncertain as now’ year after year, decade after decade. But in banking, this time it might be true. A lot of things are changing and a lot of things will change. And with it, a lot of challenges are coming. But more importantly: also opportunities. So, what should innovators focus to get the most of it all?

Technology is driving the change

When you talk about the future of banking you just can’t not talk about advances in technology. They are making things possible we couldn’t even imagine just couple years ago. No, even months if not just weeks ago. In fact, behind the success of many fintech startups has been mastering new technologies like AI, big data or blockchain and thus being able to create something completely new and revolutionary for the customers. And that has been one of the key reasons the little and new entrants have been able to challenge the old giants, banks.

For innovators embracing the technological changes and even new technologies is a must. Advances in technology and innovation go hand in hand. Like blockchain and bitcoin. And the first innovation is just the beginning. Just think about the innovations that have come and especially the innovations that are coming because of the blockchain.

While it is impossible to be the master of every single technology, innovators have to keep their eyes open. See what’s out there, what’s up-and-coming. And then use the opportunities that become possible. The players that refuse to adopt the new and/or evolving technologies are the ones who will lose. Just like many banks have noticed.

The future is mobile

It hasn’t been long when computers were huge, the size of rooms. Now they fit in a pocket and can do so much more. So so much more, especially with things related to banking.

Usage of mobiles is growing fast. Incredibly fast. And it is no wonder considering how handy they are, far from just calling and texting. Now we can handle our money usage, savings, investments, pay our bills, transfer money to our friends in an instant, pay for a haircut, do our accounting… and those are just some examples from digital banking. That’s a huge jump from storing our cash under a mattress or going to our banks’ physical location to let the employees do something magical behind the desk. Now the customers have control over everything. We can choose exactly the services we want and exactly how we want to use them, and when we want to use them.

And it is not just about making mobile versions of old services. Smartphones have made completely new things possible. For example, the spread of phones has been the key to fintech’s success in China and India. People who didn’t even have access to any banking services now have a phone, with what they now have access to exactly the kind of banking services they need. Mobile is completely changing the game. And innovators need to remember that.

Technology is driving change

Customer behavior is changing and millennials are ruling

The most hated, loved, talked about generation now is millennials, at least if you read any online news sites. And innovators should take notice.

Millennials are not only the cat video and selfie-loving generation: for example in America millennials will make more than 1 out of 3 adults by 2020 and 75% of the workforce by 2025. And America is not a unicorn. In just few years millennials will be the ones with the biggest consumption power and the ones making making decisions in corporations. If innovators ever want people and companies to buy their solutions, they need to know how millennials work. How they consume, how they make decisions, and especially, how they are different from the previous consumer majorities.

For example, millennials don’t share the previous generations’ love for owning things like houses and cars. They like to share them. And when they do want to own them, it’s usually later than the previous generations wanted. Millenials are diginative and put huge emphasis on companies’ presence online, especially in social media. And unlike the previous generations, millennials are obsessed with corporate social responsibility. In fact, 75% said that it’s either fairly or very important that a company gives back to society instead of just making a profit. In short, they are critically different from the previous generations.

Millennials and their quirks should be in the minds of innovators when planning, when creating, and when selling – throughout the whole journey of innovation.

Collaboration is a must – know how to do it

In banking the past years have been dominated by fierce competition between banks and fintech startups – the old rulers and the new challengers. But now the fierce competition has had to give space for fierce collaboration. Banks and startups have realized joining forces makes a lot of sense. Collaboration is now a must – for all innovators.

But just the willingness to collaborate isn’t enough. Innovators on both sides also need to know how to collaborate. Startups and corporations are after like two completely different creatures – the differences in their pros and cons and how they are complementary are, after all, why collaboration between the two makes sense. But that also poses many challenges to collaborating.

There are countless articles about how banks need to collaborate with startups and especially how they need to change to be able to do that. To not to smother the startups with their processes. But likewise, the startups need to know how to collaborate with the corporation. Many deals have been lost for stupid reasons, in essence, not understanding the other party.

For example, where is the user data stored is a question many bank and startups approach differently. The answer from some startups is ”Not sure, somewhere. Probably in some kind of a cloud. My co-founder might know…”. But for banks where and how data is stored and protected is one of the big things that keep them awake at night.


These are some of the big themes visible in banking now that innovators need to keep in mind. That is why they are also themes in the Yes Fintech accelerator by our Global Fintech Accelerator partner YES BANK. Take a more detailed look here, and see what kind of innovations banks are really looking for. And if you already happen to have an innovation that matches those themes, apply to the accelerator.

 

YES BANK

YES BANK is one of the strongest players in one of the hottest fintech markets; India, and the Yes Fintech accelerator also shows that. The perks will make the participating startups giddy (straight access to the huge customer base and YES BANK’s extensive market knowledge, huge number of APIs, investment opportunities, global fintech market access, coaching…. just to name few), as were the results from the last accelerator (e.g. 9/10 solutions from the accelerator were taken up by YES BANK. 90%! Not many bank accelerators can say the same!). 

YES BANK has adopted a new approach to Banking, called A.R.T – Alliances, Relationships & Technology (A.R.T) approach to Digitized Banking. They are a good example of a major player in banking who has really taken on the collaboration part as they have already partnered with over 100+ fintechs to deliver best services to their customers. And thus the selected startups in Yes Fintech accelerator will be in good, no: great hands! Read more about the accelerator benefits for startups here.

Finding opportunities instead of threats

What differentiates innovators from the others is that innovators see opportunities where others see threats. Instead of shivering in fear and hiding under their blankets when someone mentions new technologies, changes in regulations or any of the usual commonly mentioned boogie men, they start looking for the opportunities in them. What could we do with this new technology? How could this new regulation be used to create new and serve our customers better?

The future of banking is made by the innovators. The startups, the banks and the ones who take on the opportunities instead of hiding from the threats. And that’s why innovators will also be the winners of the future.

Read more about the YES FINTECH accelerator here and apply now! Deadline the 14th of October 2017!

 

Posted by & filed under Accelerator, Corporations, Human Resources, innovating, Innovation, Marketing, Product development.

How to renew corporations with startups

A whitepaper by Nestholma

Corporations need to renew themselves, and one of the best ways to do that is by working with startups. But that’s easier said than done. Corporations need to understand what they want to get out of the collaboration. They need to understand what they’re getting into. And they need to understand what their options are.

At Nestholma we discuss with many people from corporations. And very often we end up in the same discussions. Those are great conversations: we get to understand the concerns that people have. We also get to see what gaps they have, when it comes to working with startups.

That’s why we decided to put together this whitepaper. In it

  • I dive into what makes working with startups worthwhile for corporations.
  • Take a look beyond the flashy surface: corporations can benefit in branding, innovation and learning.
  • I also explore different ways that corporations engage with startups.
  • I finally dwell into what makes some accelerators more successful, for a particular corporation.

The whitepaper is packed with insights. You can skim through it quickly, and discover new angles for your collaborations. Or you can peruse it. In that case, prepare for a lot of content. You’ll understand what makes some collaborations successful. You’ll also understand why others end up a mere stunt.

Download the Nestholma whitepaper

Corporations need to renew themselves. One of the best ways to do it is by working with startups. This white paper explores the benefits of branding, innovation and learning. It also reviews alternatives and best practices on collaboration.

Click here to download the whitepaper.

This text is born of many discussion. Many of them within Nestholma, and many with our customers and potential customers. But publishing a whitepaper is not the end of a discussion, but the beginning of many others. I would love to hear from you! Feel free to drop me a line at [email protected] and let’s talk!

 

Related post: 4 ways working with startups can make your organization more agile and innovative

Posted by & filed under Accelerator, Banking, innovating, Product development.

Collaboration. That’s a buzzword that you can not avoid hearing nowadays. But it’s a buzzword that talks about a real need: collaboration between startups and banks. That’s what is needed in banking, both for the banks’ and startups’ sake, but especially for the sake of the customers. But to be successful, collaboration has to be done right.

We at Nestholma engage banks and startups to collaborate. We have done 20 startup accelerator programs so far with companies such as Nokia, BT, Microsoft, Telecom Italia… During the last couple of years, we’ve been working closely with Nordea bank and have run three accelerator programs with them so far. It has been a great learning experience for them….

…but also for us. Here is what else we and our partners have learned about how to get the results you want from collaborating with startups

 

Have the best startups to work with

You achieve the best results when you have the best startups to work with. Now that is quite obvious. But finding the high-quality startups is a problem. A big problem. And an even bigger problem is attracting them to work with you.  

 

Innovations are global

Most likely the best innovations don’t come from the startups closest to you. And this is for the most local and regional banks a huge issue. How to attract the best startups and their innovations from other places to Helsinki or even to Milan.

 

How to work with startups in practice

Once you have managed to lure a startup or startups to start working with them how to do that in practice. Are your processes, your people, and your company culture ready to work with them?

As one bank executive said, ”it takes only one bank to kill a startup”! Banks and startups are like two different creatures. And almost nothing is easier than for an unprepared bank to smother the startup with its processes and ways of working.

 

Work close enough with the startups

Our customer experience tells that the proximity is one of the key things. You really need to work with the startups, not just take quick peeks at what they are doing. Like taking a look at a lion won’t make you one, just looking at startups won’t help you much. And to get your organization to learn, you need to get as many people as possible involved. That is how you will re-energize your people and get them to learn, to learn how to become agile fast accepting failure and capable of pivoting when needed.

When you have enough people who know how to do that, your whole organization has learned and become agiler, startup like. That is why it is so important to really work together with the startups, get involved and have enough of your people involved.

Those are the things we have learned to be key in working with startups successfully. I don’t claim it is easy, but that’s why we created the Global Fintech Accelerator. To tackle these 3 challenges: to get the best startups, access innovations globally, to work with them but not killing them we have designed Global Fintech Accelerator. It is the perfect solution for preparing for the future.

Startup accelerator program for non-competing banks

 

What is it?

It is a program for non-competing banks. To join forces with other banks, to enjoy benefits of global presence and brand but still to have your own local program for new products. Maximal learning and branding benefits.

 

Access to the most disruptive innovators in the industry, globally. Better and stronger startups.

By combining the brands of the 5 banks we’ll be able to attract far more startups than any one single bank could do. From all over the world. They’ll apply to the locations they want and you decide which startups you want.

 

Learning, sharing the common needs and solving them together 

Banks share many similar or completely same challenges. Thus it makes sense for non-competing banks to collaborate. Trying to reinvent the wheel while others are wrestling the same challenges is a complete waste of time. That is why banks learning from other banks is also a key part of the Global Fintech Accelerator.

 

Share, learn, be more competitive. And help the startups to get better and stronger.

 

There will be 50+ bank approved startups graduating from the program. Capable of solving problems that you might have and what the PSD2 might bring. 10-15 is already a huge number,  but it is only the beginning. You’ll also benefit when the other participating banks make their startups better.

It’s about sharing the learnings in a structured way without any unnecessary hassle. We know what fits for your needs, and how to make it all bump-free.

Global Fintech Accelerator in short:

  • Join forces with the other banks
  • Share the pool of the startups & innovations
  • Learning and sharing from the other banks
  • Test your processes, assumptions, business models in a safe environment to be ready for the PDS2 ERA.

Collaboration with startups has become a must now. But a lot of collaboration, if not even most don’t bring the results banks and corporations want. That’s because collaboration isn’t done right.

That’s why we have worked hard with our partners to find out what exactly causes the hiccups. And we used all the knowledge and experience we have gotten from working with startups and big corporations and facilitating the collaboration of the two. Global Fintech Accelerator is the result of all that. It is what is needed to bring banks to the 21st century.

If you would like to get into the Global Fintech Accelerator or hear more about it, feel free to contact me at [email protected] or +358 40 3433352.

 

Related post: Nordea fintech accelerator successful

 

Posted by & filed under Customer development, Entrepreneurship, innovating, Product development, Startups.

How to be a successful entrepreneur? How to create the next Airbnb/Uber/Dropbox/startup unicorn? Hands up, who hasn’t googled something like that even once? Or at least clicked once on those millions and millions of articles about creating the ‘next big thing’.

But if that’s what you are asking you won’t succeed. Might sound harsh but it’s true. Hey, I do understand; who wouldn’t want to be the founder of the next SpaceX. But the thing is that if you just want to have a successful startup for the sake of having a successful startup, you are focusing one the wrong things. You are focusing on the fame, money or whatever fancy thing you are imagining, not on what can get you there. And that is having a startup that is actually worth it.

All successful startups give people something they are dying to get. They are solving a problem, a crucial need people have. The more people your startup can help, the more desperate they are to get that problem solved, and the better you solve it the bigger your success will be.

So, how do you create a successful startup then?

Didn’t I just tell you to stop thinking about it!?!? …juuust kidding. In all seriousness:

 

Have an idea (well, duh)

Often what happens is that the founder(s) sees a need. That something could be done better and figure out a solution for it. They start thinking ”why is it like this. Why can’t it be like that.” Boom: an idea is born! (in a very very simplified form).

 

Validate that idea

Ideas are an essential part of founding a startup. But we all have ideas and only a few of us are successful entrepreneurs because of them. That’s because not all brilliant ideas really are brilliant. You need to validate your idea. Is it something that would make only your life better? Is it crucial enough and for enough people? Or just ’nice to have’?

Is the need big & crucial enough?

I.e. are people actually willing to pay for you solution and are they enough of them. If they want your solution but not to pay for it (=the need isn’t crucial enough for them), you won’t make any money and your business will die. Or if only a few want your solution (=the need isn’t big enough), you won’t make enough money and again: your business will die.

 

”But everyone needs my solution…”

 

Stop you fool!

 

If that’s what you think, stop! Stop, sit down and think again. You might still be able to save your startup.

Unless you have found a way to capitalize air, there is nothing everyone needs. ”Everyone” is the easy answer many go for, and the answer that will ruin their all chances of success. When you think that everyone will be your customers, you try to please everyone. And that doesn’t work. You will end up doing compromise after compromise and then your solution fits no-one. Or you just don’t even try and create a solution that only solves your problem and nobody else’s.

Bad validation is one of the most common reasons startups fail. They get so blinded by their ’brilliant solution that everyone in this world will buy’ that they forget to check the facts. Don’t be like them. Validate, and do it properly. Here’s an excellent post from Startupgrind to help you with that.

The best case is when your product is not just a ’nice to have’, but a must to have.

 

Execute it awesomely

”Ideas don’t matter, only execution does.” – pretty much every successful entrepreneur.

No matter how brilliant your idea is, the idea that is executed the best will win. After all brilliant idea is just an idea, still a long way from becoming reality. And rarely there are any truly unique ideas (there have been search engines before Google, social networks before Facebook and so on). We now ’google’ things because Google had the best execution of the idea, same with Facebook and many many other businesses.

No-one will see the brilliance of your idea if the reality of it just screams bad execution.

And a key thing to remember is that execution is 100% up to your team. It’s about their skills, experience, connections, everything. Many entrepreneurs just hire their relatives, friends, old acquaintances who need a job. That’s very noble of them but only works if they have the qualities needed to make that brilliant idea into reality. And if you ever dream of getting investments, you better have the kind of team that gets them. After all, investors usually look at the team even more than the idea itself. More about that here.

Learn from the unicorns – real-life examples

Let’s look at Airbnb. The economy was (and unfortunately is) tough, and many were looking for extra income. They also had empty space in their homes. Unused rooms, or whole apartments due to traveling. At the same time, people wanted to travel but not spend that much money on their accommodation. There was a demand and then there was a solution: Airbnb.

Or Uber. Again tough times. People need an extra income and they have an idle car. At the same time, others need convenient transportation, like taxis but without the price tag. Again: big need many really want to get solved.

In short: they had a great idea, an idea crucial for many and they knew how to execute it well. And now Airbnb is worth 31 billion dollars. Uber 62,5 billion dollars (as of March & April of 2017).

 

Related post: Startup mistakes to avoid

 

Posted by & filed under Banking, Customer development, Customers, Fintech, innovating, Startups.

The digital revolution has happened. And now it’s banking’s turn. Fintech are here and banks can lose up to 60% of their retail profits in the next decade. But will they? And why would they? What is going to happen in banking and fintech?

About a week ago I attended MoneyFintech-seminar and got to listen to the brightest minds of fintech and banking. Here are the four big things that are hot now and in the future of fintech and banking.

New regulations

When talking about banking and fintech, regulations are a topic you just cannot ignore. The hot potatoes of the industry: PSD2, open banking, and many others are wreaking havoc in banking.

PSD2, open banking – new regulations level they playing field for fintechs

One key goal of the new regulations is to level the playing field between fintechs and banks. It means more opportunities for more new fintechs. And that means new opportunities, new companies, new jobs and so on. The industry has been booming and the new regulations don’t seem to make it any slower, the opposite.

 

Bad news for banks: half of consumers are open to 3rd party providers

Source: Kevin Poe, CGI

Consumers don’t feel connected to their banks and half of consumers are already ready to try 3rd party service providers. While consumers still prefer their current bank to provide new services it is greatly declining. All this is great news for fintechs but not so good for banks. Banks can no longer just sit on their asses and wait to see what happens.

 

It’s up to banks to decide the role of fintechs in the ecosystem

An interesting point in the speeches was that in the end, it is up to the old masters of the industry, banks, to decide what kind of role fintechs will take. Will banks refuse to change with the industry and let fintechs take over? Will they re-invent themselves and fight back? Or maybe the most beneficial for all: will they learn to collaborate with the other players in the ecosystem?

Not everyone can nor should do everything. Instead of wasting time on trying to win everyone on every battleground, banks should collaborate with the ones that would give complementary value to your offering.

“Fintech will bring lots of opportunities for everyone. But it is true only IF collaboration happens.” -Annukka Paloheimo

Like Lars Markull said: “PSD2 is not THE solution for banks, but something that pushes them to the right directions.” It forces them to act instead of just watching passively in their ivory towers till they have become completely obsolete.

 

Customer focus

The regulations are changing and fintechs have the opportunity of a lifetime. But the biggest winners will be the customers. They are the ones who will have all new kinds of financial products, their old services will be much simpler, and for every product and service they have been forced to get from one provider, now they will have an excess of options. And as we know, options is never bad for the customers. But for banks and fintechs it means fiery competition.

“Thanks to fintechs and technology houses customers are aware of their options, that there even are options. That has shifted the power from the banks to the customers. Now customers are in the driver’s seat.” – Kirsi Larkiala

The winners will be the ones who serve the customers the best. The ones who don’t just focus on the customer but what the customer is focusing on. If you can bring something great to the things matter most to the customers, that’s the recipe for success. Or like Jarle Holm put it: “If it’s going to increase your customer’s equity, it’s going to grow your equity.” And the key to that is to stop thinking about customers as customers and start thinking about them as humans.

 

Illogical, obsessed with social relationships, i.e. your customers 

The biggest winners will be the companies that understand what customers essentially are – humans. Beings who think they are rational, but in reality are far from it. Beings to whom social relationships are more important than almost anything else. That’s why customers’ losing the feeling of personal connection to their banks is such a big deal. And that’s why the companies who also serve the social relationship needs of their customers will succeed. Companies need to understand how their customers make their decisions (not as rationally as you’d think), and how to build strong relationships with their customers. And to think about their future customers already today. For example by 2025 millennials will make 75% of the workforce. The ones who will start building relationships with them then are way too late.

Collaboration

The future is not ‘ready’. It needs to be innovated together with the whole ecosystem.” – Kirsi Larkiala

In fintech, one as often mentioned topic as the new regulations is collaboration. In fact, 82% of financial institutions expect to work with startups in 3-5 years.

 

82% of financial institutions expect to to work with startups in the next three to five years.

Source: PwC

1 in 2 banks expects to partner with fintechs later than in two years, which is pretty slow (even too slow?). They see the benefits, but at the same time they have a huge responsibility. Banks spend on regulation and compliance 321Bn (inc fines). Having customers’ trust is more important than pretty much any other industry. And if something happens because of the 3rd party, the bank’s partner, that trust is lost. The customers see that the bank is responsible of their partners. But regardless banks know they can’t not collaborate with startups. Why? They need the innovations & to learn.

“Innovative companies seeking aggressive growth are the future of Finland and Europe.” – Eeva Grannenfelt

Working with startups to get innovations

There are many reasons corporations aren’t the kind of innovation powerhouses startups are. One of those is the fear of failure or losing their reputation by putting out something that is not ’perfect’. That is why the startup-like use of MVPs might sound absolutely horrifying. And they do have a point. Like Pekka Puustinen from insurer Ilmarinen said, corporations have a whole different kind of reputation to keep than startups. Putting out ‘almost ready’ products is not as easy for big corporations like it is for startups. ”Porsche can’t put out a car that almost works”, he said.

As banks have their constraints they go for startups for innovations. And it makes sense. Startups are innovation powerhouses without the constraints they have. They don’t have such a big reputation to upkeep, and they are the masters of using failing as an innovation tool. Eeva Grannenfelt even said large companies have outsourced the R&D partly to growth companies. Startups definitely can be a tool for banks to meet the new expectations of their customers and do so without risking their reputation.

 

Working with startups to learn

But none of the above means the banks can just sit around. While startups can be an amazing way to find the much-needed innovations, they themselves need to change for the future. While Porche can’t necessarily put out ‘almost ready’ cars, there are multiple ways more ‘startup like’ approach would work wonders for corporations. That’s why they should learn from startups. Learn to be faster, agiler, more innovative. And even fail. Like Topi Järvinen said: “Failing isn’t necessarily bad. You can learn a lot from it and thus do better the next time.” Failing (the right way) is an essential part of innovating and by no means automatically means PR disasters.

Based on the talks banks gave that’s exactly what they are looking for. Most of them talked about how they need to reinvent themselves and learn from the startups. That’s why banks should use accelerators and startups just for innovations, but as something to change their entire organization. The ideal situation would be getting innovations from outside the house (startups) but also being able to innovate in-house. And at the same time be more agile, fast, more startup-like and less stiff like corporations usually are.

 

Accelerators shouldn’t be just tools to get innovations, but tools to change the whole organization

Source: Topi Järvinen, Nestholma

 

China: the promised land of fintech

An old Chinese professor of mine joked that in China copyright actually means the right to copy. China definitely has been an excellent copier of all innovations big and small. But now China has gotten far from that: they have changed from copycats to copy tigers. In China, fintech is booming.

China is a great breeding ground for fintech. The country is going through rapid urbanization, they have regulations that support the growth of inland fintech innovations, a massive and underserved SME market, rapidly growing of e-commerce and also explosive growth in online and mobile penetration (read more here). Technology is changing so rapidly that they are skipping many of the unnecessary steps like landlines, dial-up internet and so on, and going straight to mobile payments innovations like that. And the people are more than willing to do so. For example, 40% of Chinese consumers have adopted mobile payments, which is massive. China truly is the perfect breeding ground for fintech innovations.

“Fintech in China is delivering the promise of fintech – making changes of unimaginable size” – Ronit Ghose

China is coming and the West better listen

China’s policy has been to forbid Western services like Google, Facebook, Youtube, and many more to have their own versions instead. There are multiple reasons why, one of them being giving the business opportunities to Chinese companies. The Chinese not only copied the service but also evolved them further (e.g. mobile wallet in their social media services like WeChat). Before you could just think ”oh well, the Chinese have their own versions, so?” and move on with your day (unless, of course, the Chinese market was important to your business). But now that is not possible anymore.

The Chinese consumers are the fastest growing segment in the world. Now there are 300 million Chinese consumers and by 2022 there will be 600 million. And it’s not just the massive amount of them, but also their great purchasing power. McKinsey estimates that by 2022 the upper middle class will account for even 54% of urban households.

 

The upper middle class will account for even 54% of urban Chinese households

Source: McKinsey & company

In short, there is an ever growing amount of wealthy Chinese who want to spend. And they don’t just want to spend it all at home. They want to travel and spend it on foreign (premium) goods.

 

Chinese outbound tourism growing strongly

Source: Johan Andrén, Handelsbanken

It may sound like the Chinese are taking over the world (and maybe they are), but in our current interconnected world, all that spending is going to mean more jobs all over the world. And that’s great (if you are not an avid tinfoil wearer ;))! But that also means the so-called Chinese versions of everything are now also relevant here. Or they should be. Like Ronit Ghose said: “When the mass of wealthy Chinese tourists come, Western companies have to accept Chinese payment methods or they get nothing.” On the streets of my home city Helsinki, there are more and more signs in Chinese. Talking about the Chinese payment methods the shops now accept, wishing happy Chinese new year and so on. The Chinese are coming and you should be ready.

…or should I say Asia is coming instead? China definitely is ahead, but other countries like India are catching up fast. You should keep your eyes peeled.

 

Antti Kosunen ended his portion with the following quote, and it seems like the perfect quote to end this post: “If the rate of change outside your organization exceeds the rate of change inside, the end is near.” – Jack Welch

 

Posted by & filed under Corporations, innovating, Startups.

Go f.... disrupt yourself!

Many startups say they are disrupting something. And they might, we live in one of the most uncertain times in history. But how can corporations know what to expect? How can they know what the big changes in the industry will be?

The bad news: you’re not as good as you think figuring it out on your own.

People love talking about “disruption”. Fintech startups with the banking industry. Autonomous and electric with the automotive industry. Peer-to-peer with real estate. TechCrunch has even named its conferences “Disrupt”. Welcome buzzword, let’s all go disrupt something! And is disruption even a good thing for startups? According to Peter Thiel, not at all. It doesn’t say much about your business if the biggest thing about it is what it displaces. Tweet this

Disruption is what the big players call an innovation that they didn’t see coming. Tweet this

A hammer is not a disruption to a video casette. A streaming service is.

And why would you not see it coming? It turns out it’s more difficult than most people expect. I’ll give you one example. A technology that is getting a lot of buzz lately is Artificial Intelligence. We have a few startups in that field in our portfolio. I’m sure you’ve also heard claims about how it’s going to displace a lot of jobs.

What was your answer to that?

Let me guess… was it close to “poor guys, I’m so lucky it won’t displace my job though”?

I’ve been talking with a lot of people about this topic, and let me break out a sad truth to you: everybody thinks that. Tweet this. Doctors, consultants, teachers, drivers! “Oh, it’s going to get a lot of people out of their jobs. But for sure not in my area. We do different stuff. There’s still a lot of things they don’t understand about what we do.”

And there’re two reasons (at least) for that.

The first and most obvious is that the closer we are to something, the more assumptions we have about it. Tweet this. You have assumptions about how your job “should be”, based on how it is. You have the assumption that everything that you currently do is necessary.

The second one is that what disrupts a market is not an improved version of what you currently have. Tweet this. What will displace your industry is no necessarily a substitute of your current offering. It will be something that makes your current offering irrelevant. But by definition, it will be very different.

 

Sometimes new innovations don't seem like they could replace the old thing because they seem so different.

 

Take the case of the ice factories in the 1920’s. It was one of the biggest industries at the time. On 1927 came the refrigerator. Many people in that industry though “oh, sure, but that’s not the same thing”. Still, most ice factories closed down. The disruption didn’t come from better ice. It came from something else, that made selling ice almost irrelevant. And they didn’t know how to renew themselves.

Let’s bring the example to the present time:

  • Think about the automotive industry. Will the biggest disruption be better or more efficient cars? Probably not. We will move towards something that will make cars less relevant. It might be advances in shared economy, better-shared transportation or communications. It might be all the above.
  • Think about fintech and banks. Will the biggest disruption be a startup that is a better version of your bank? Probably not. It might be a swarm of little startups. An open architecture. A different way to deal with information. It might be all the above.

The good news: working with startups will help you.

A couple of weeks ago the Nestholma coaches took part in Tony Robbin’s seminar Unleash the Power Within. We heard much about human nature and about beliefs. In particular, we heard about how self-limiting some of them can be. To get rid of those beliefs, you need to break existing patterns and create new ones.

If you want to understand what’s coming, you need to do more than knowing the context. You need to be ready for change and renewal. Need to be agile. You need to know how to work with the change. You need to know how to work with startups.

You even need to be part of the change. You need to disrupt your own business. If you don’t, somebody else will. You need to be working on the things that will make you obsolete before somebody else does. Tweet this.

This can be scary. But instead of fearing those changes, you need to embrace them and turn them into actions. The world is going to change anyways. If you renew yourself, you’ll stay on top, and the change will be good for your business. Tweet this. If you use startups only as an innovation band aid, you might see it coming… or not.

 

Working with startups will help the people in your organization in many ways:

  • It will make them think bigger, and raise their standards towards innovation. If working with startups becomes part of their DNA, they will be more likely to think innovatively, expect shifts in the market… and dare be part of those shifts!
  • It will make them think in a sharper way. Tony Robbins says that complexity is the enemy of execution, and any lean startup will agree. In corporations, things can become complex very fast. Even when things are not complex, they are sometimes made complex. Startups are good at cutting through the clutter. They can’t afford to make things too complicated. They have to be sharp and lean.
  • It will make them think like intrapreneur change agents. Change requires champions. Entrepreneurial thinking is a great tool to plan for uncertainty. It’s a great tool to even understand that uncertainty. It’s a tool for making things happen.

In short: be ready to renew your organization by working with startups… or somebody else will! Tweet this

Dr. Daniel Collado-Ruiz, @ErCollao

Do you like the content? Do you disagree? Are you interested in hearing more about other related stuff? Drop us a line in the comments or on Twitter, and let’s chat!

 

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Let’s talk how Nestholma can help to renew your entire company and find new businesses with startups and beyond.

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You might also be interested in: Why are big corporations so bad at innovating?

 

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Renewal of the companies is on the mind of every CEO. Not to learn more but to break the patterns. It´s easy to learn new stuff, but difficult to unlearn. We go back to our habits unless something becomes a habit.

Break the patterns

All Nestholma coaches took part of Tony Robbins 4-day seminar in London. We are here to learn how to become better coaches. Tony Robbins made us experience. He made us repeat. Breaking our patterns and repeating new ones, so it becomes us. And that´s what corporations also need.

Active waiting

I also had a pleasure to listen to professor Liisa Välikangas earlier this week. She talked about “active waiting”. It means that people have to be learning to be ready for the unknown future. When I listened to her I realized that a startup accelerator is an active waiting tool. You don´t learn how to play soccer by analyzing it from the distance. You have to play it. And you have to play it when the game starts. Most of the times organizations don´t understand that the new game has already started. Some key players understand the importance and the urgency to change, but most of the people don´t.

Fast

Nordea`s CDO Ewan Mcleod answered with one word why startups are good for learning purposes: “FAST” and he continues: “we have to be fast”. And that happens only if the patterns of the old behavior has changed. And when people have been “actively waiting” they can act when needed.

 

Happy labor day! Let´s change the patterns of the labor, wait actively and act fast.