Q: I went to a talk a few months ago and there were representatives from Moneybox and Money Dashboard. One of the things they discussed was around security and risk. So effectively giving you access to your bank account and the banks refund you if there is fraud on your account or anything like that. Have you guys done anything around that particular aspect?
VICTOR: Yeah, banks used to have stuff in their terms and conditions that says if you share your data, if something happens to your account we might not refund you, but there’s a new regulation that came out just the other week on January 12th that is basically open banking that puts a framework around sharing your banking data with anyone that is regulated and can hold that data. It puts all of that to rest whether or not if you’re sharing your data you’re exposed as a customer, so now you’re still covered if money goes missing from your account even if you are sharing your data with Plum or Moneybox or whatever.
Q: The only thing I was unsure about was, it gives you access as far as I understand to see people’s trends or how they’re spending money. The thing with money Dashboard was that you have to give them your security code and access to your bank account via that.
VICTOR: When you give your access code, the only access that we get, we can only see your transactions so we can’t move money. As of the 12th of January there’s new regulation where the banks are giving you direct access to the data versus using the technology we were using up until now, which is called scraping. Fundamentally, there’s nothing to really worry about. The banks are authorising companies like ourselves, so there is full knowledge of who is accessing the data. They’re approving that authorization.
Q: Hi, I’m a lawyer and also a disruptor. I was really interested in the points Joe was making. Having to deal with working in a large corporate and having to deal with agile startups just totally becoming unstuck when it comes to finance, risk, all of those sorts of things. I appreciate that and I am 100% behind what you’re doing. Haydn, the question I had for you was about getting involved in an ICO, and I was just wondering how do you? Because I am very much interested in that.
HAYDN: The power of networking is immense. Twelve months ago, I knew a core of about 20 or so people, now I’m up to 500-600 people in terms of my network. I could connect you. Are you in-house or are you with a law firm?
Q (continued): I’m with a disruptor company. I work in-house via a firm that does things totally differently.
HAYDN: Okay, I can put you in touch with either a lawyer or you can work with me or other projects. Stuff is going to come through in time.
Q: Thank you for that. I thought these were four really interesting and different presentations. I wonder whether each of you learned something from the other presentations and if you could say what that might have been and what you might do differently?
LUCY: I was really interested in smart contracts because I have gone through a process within the NHS and I think it’s even worse than potentially in other companies. In terms of payment and procurement and the lengths you have to go through in terms of legal contracts back and forth. So, for me, I am definitely going to put my boss in contact with yourself to learn more about the smart contracts.
VICTOR: For me, we’ve been thinking in our context how we can make money go further for people who are saving and tying that into smart contracts. We’re thinking about how you implement that technology to democratise things around savings and credit. I don’t know too much about it, so it was good to hear.
JOE: So for me, I have read a lot about entrepreneurship, but there was definitely some that Lucy mentioned that I haven’t read, so I will be picking those up. I know a lot of people that would benefit from the psychology of Plum, so I will direct them to that. And then smart contracts – Haydn and I have spoken about this before, but definitely in the context of startups and corporate relationships and using them as a mechanism.
HAYDN: For me, it reinforces all of the conversations. I love these words, ‘immune system’. These conventional organisations have this ‘immune system’ that works against change. And that’s really difficult to deal with. My Friend is a Director of Surgery at Preston Royal Hospital. I see him on a regular basis and I’ve known him for thirty years. He’s a proper surgeon. And we talk about what he does. We were speaking the other week and he wants a consulting room, but they were going to charge him £2m for it. I said that you can build twenty houses for that. Then, the other end of the spectrum, I saw a project this week that was very similar to what Lucy was talking about. It deals with radiology, and the idea is that you publish radiology X-rays and you have AI that runs on top of it that then analyses the imagery and then creates an opinion or diagnosis based on what that image is saying. It’s published back to the doctors at the hospital. That’s a great use of technology. And these guys are doing an ICO. Their way of navigating around that immune system is to just set up an island and start throwing this stuff over there. So this idea of an immune system is what interests me about what other people said today.
Q: Hello, I am a co-founder of a startup in the fitness space. I have a question for Haydn. What do you think are the differences in the ICO space in the UK compared to across the pond? Also, what do you think about the date that 95% of ICOs got funded in July and now it’s about 35%, and what implications does that have?
HAYDN: I’ll take the second question first. As I said, what we saw at the back end of last year in China and Korea. The Chinese basically banned cryptocurrency exchanges and a large part of the market was driven out of China. I think that sent a bit of a shudder through the marketplace and that changes the profile. I think it will shift. We will see more volume coming through. I think the size of the raises will get smaller. I think there is probably a window of 12-18 months before we get formal regulation in place. Philip Hammond today was in Davos. I have a colleague who said Davos is like a blockchain conference. It’s the only thing that people are talking about, blockchain and ICOs and Bitcoin. Phillip Hammond came out and said we need to put laws in place and regulate it, which I think is incredibly positive. In terms of across the pond, and I presume that you mean the US, it’s an interesting question. For me, I don’t see any geographic boundaries. The boundary only comes when it’s a regulatory question. The only reason they exclude the US from a raise is that the SEC get very funny about it. I don’t see any geographical boundaries, and I see projects on a global basis. And they are all exciting and adventurous. I see people in Australia, the US, Japan, all virtually coming together.
Q (continued): What I mean by that is that the assumption is things can be a little more saturated in the market in the US and things can be a little more fresh over here. So, perhaps there are still more opportunities here?
HAYDN That’s interesting. It could be very concentrated here in the UK. I think we have got such a vibrant entrepreneurial community here. I don’t think we have even grasped what ICOs can do in terms of changing business models and bootstrapping some of these wonderful projects. So I see what you are saying.
Q: Thank you for everyone’s presentations. I was really inspired and eager to learn more about all of this. This is a general question for everyone. What’s the biggest challenge each one of you is facing right now? What’s the first action you take when you are faced with a challenge?
HAYDN: Getting paid. It’s very simple. I think it’s disgusting the way big corporations treat SMEs. I’m owed several multiples of thousand pounds from one organisation and they’ve not paid me. It’s three months overdue. What value does that add? It puts me under pressure and they don’t care. We had a very stern conversation yesterday. Pay me, its very simple. It doesn’t add any value and it erodes trust. So, I think getting paid is a core requirement in the short-term. Also, I was talking to Joe about this. We also need to scale as an organisation. I’ve got lots of fingers in lots of pies and actually I think I need to bring some more people in to help me out in terms of making this bigger. So, scaling for me is one of the most immediate challenges I face.
JOE: On the payment side, the oil company that I work for, for every day that we could extend our creditor payment terms we would make an extra million pounds a year because it was such a high volume cash business. So there is no value in terms of the relationship, but there is a pounds and pence value in organisations, which is why they would prefer 90 days. So, therefore my £5,000 invoice is really nothing, but apply that across the whole organisation. What you’re looking at there is a systemic problem that you have in large organisations. So, do you want a really good supplier that will go out of their way because you pay them on time or do you want to squeeze that supplier and create mistrust? If you look at the overall value in terms of the tangible and the intangible, do you do your company harm by paying them late? That’s the payoff. It’s very easy to identify pounds and pence, but it’s much more difficult to identify the benefits of good relationships.
LULU: I just want to add and build on that. Legacy banks are part of this problem. I had an experience where I was paid via Hong Kong in dollars to Bank of America that came through to Lloyds. I wasn’t told by Lloyds, but my payment had been held up and stopped by Bank of America. I’m not allowed to know why the money is being held up. The client is ringing me and saying can you find out the questions that are being asked because we don’t know how to answer it. Of course, I speak to my bank and say this, and they reply that it’s not protocol and that it’s nothing to do with you. But it has everything to do with me – it’s my money. The first thing I did was to phone Monzo to say can we make international payments, but not yet, they weren’t ready. Because the bank is sitting and making money on my invoice. That’s what it’s really about. Hang on, I also have another question. Between blockchain and ICO, which one is making the other one more famous? It all comes back to transactions. The banks aggregate their data and that is a fundamental problem that we don’t know about. The technology that is coming into place will increase the number of transactions that can take place; hence new regulations around transparency and new startup companies are able to address this, but legacy banks have got so many problems with the software and the technology. It’s basically an upside-down pyramid, spinning badly.
JOE: My challenge personally with Touch Paper is that it’s a major undertaking and plus I have a day job. Apart from the original money that I got to do the research and launch the project, there are no resources in terms of my time or money to move it forward, so now I am working with a lot of corporates to understand how I can perfect the toolkit. I really need more time and resources to move it from the not for profit into a standard, so that’s my challenge. Back to Haydn’s approach to networking, that’s the approach I’m using. The more people you can speak to and raise awareness the more momentum it should gather and some of those answers should start to appear.
VICTOR: For me, it’s making sure that myself and the whole team are working on the most important things that can have the biggest impact the fastest. I always think of it as a diagram, where if you are a company that does the right things at the right point, you go a lot faster. So, we have internal debates about things like taking five days longer to do something and the other guy is already there. So, working on the right things first is massive.
LUCY: My biggest challenge at the moment is time management. I just left the NHS where you leave work at 5 o’clock, which is great because I go home. Trying to fit everything in is the hardest thing. So, I actually for the first time bought a year business goal planner, which seems a bit rubbish. But actually, when you write your goals down and then break them down into months and then look at the ones that are going to make you financially free, which are going to help you grow personally and are going to take you to your ten-year goal, it’s much easier to determine on a day-to-day basis what you are going to do. So, every day I put my ‘three musts’ that will drive me for personal development, financial development and my end goal, and it then structures your day. Someone taught me something recently in regards to emails, that you should do emails in batches. Never have is openly streaming in your account. Do an hour of emails and that batch is done. Otherwise, you spend so much time filtering back and forth between chats and if you check tomorrow that’s already solved and you didn’t need to waste any time on that. If we’re talking about emails, think about your clothes closet. If you’ve just had a spring clean and it’s looking really nice, when you close those closet doors it falls in with everyone else’s rubbish. Don’t keep opening the closet doors, don’t keep checking your emails.
VICTOR : Sometimes I don’t respond to emails for two days.
HAYDN: I think emails are an interesting one. In my previous jobs, I would get around 300 emails a day. What’s interesting is that if you’re effective within an organisation, I used to find that I knew pretty much what every one of them was about. That’s a measure of you as an effective leader within your own organisation. I think email is complete rubbish. If you work with lots of teams we have Slack, Discord, email, WhatsApp, SMS, LinkedIn. I have random people who want to get in touch with me and they do it through LinkedIn. That’s fine, but it gives me another thing that I then need to coordinate through. If it matters, people will find you. The emails that people write, they go on for pages. Has anyone heard of Parkinson’s Law? What happens is that work expands to fill available time. People will find stuff to do within their organisation because they have run out of things to do, and they fill that gap by creating noise.
Q:My name is Steve Kelsey and I have a question for Victor. First of all, thank you for the presentations. I always find at these events there are always a few points that set my mind spinning and Victor you delivered one today. It’s the ability to nudge people from credit into saving, so borrowing money or having to service debt. Moving them into saving money. With the entire Western consumer world built around debt and credit, if you achieve your goal that for me redefines disruptive and transformational. I would like to ask you and the panel to speculate on what you think that world might look like because I’m having difficulty envisaging the scale of the impact. In that environment what would the existing creditors do? What would the banks do? The credit card companies? What’s going to happen to this huge financial infrastructure?
VICTOR: I think credit will always be there. I just think it will come at a much lower cost. The people that are controlling the flow of money, that are putting taxation on it, their fees will be massively reduced. But credit is good in the sense that you can have something now that you don’t have to save up for ten years. There’s nothing wrong with credit, but I think we could have a more efficient cheaper system. All the taxation that goes to banks and intermediaries would just go down. Some people get completely ripped off on credit because they have no alternatives, so hopefully that will cease.
JOE: I would look at it the same way that you’ve seen energy markets moving towards that world. It’s almost a democratisation of that service. If you look at some of the payday loan companies charging X thousand % that’s not cool. If there is a way that a person who is not particularly creditworthy can borrow that money in a much more simple fashion with transparency and open data, then those payday lenders will either have to provide value for what they charge or it will standardise the charges for payday loans for those people who are at risk borrowing. I think the service could become so standardised that the margins you see will be similar to what you see in the energy markets.
HAYDN: The banks exist as frameworks for people to safely store value. Economists will tell you that the idea of debt is to allow economies to grow, so we’re taking value from people who have got it and we’re moving it to people who haven’t got it so that people can make money in-between. The problem we have got is the banks introducing frictional cost because they have layers and layers of ledger systems and lovely buildings in Canary Wharf that cost hundreds of millions of pounds a year to run and build. I think the opportunity with blockchain technology is that it allows you to create digital asset types that actually reflect the generation of real economic value and they become a store of value of themselves. What’s more interesting is that you can get to a place where you actually swap those stores of value, so you’re kind of in the territory of barter economics for digital assets. You then don’t need to go through existing monetary frameworks. No banks and no central banks. That really questions the role of the bank. We then get to a place where we ask how do you have a purely tokenised digital economy? There will obviously be people who have digital assets and they lend it to people who don’t have them. That’s how it grows. There are two boundaries there: where we are now and a most extreme utopian view of where this could go. Will we get there? One hundred and twenty-five years ago, Marconi invented radio. He removed cables and wires. Nobody knew what to do with it. Now in this room now there are probably around 500 transmitters and receivers in mobile phones and that kind of stuff. The funny thing is that I raised Marconi at another presentation a few weeks ago and someone said they thought I said Mark Carney. I said that he is responsible for many wonderful things, but radio is not one of them. But yes, that’s the way I perceive it.
LUCY: From a non-financial person, the way I see it is that if these guys are doing clever stuff to allow me to come out of debt and save money, then I can spend more time doing the things I want to do. That’s how I would picture that because I’m all about Plum, but I don’t want to spend time at night looking at spreadsheets of where my money goes and if you’re going to do that for me then brilliant. So, for the uneducated financial people, these things mean that we can apply ourselves in a skillset that we are designed and want to do.
Rip It Up, Start Again
Lulu Laidlaw-Smith presents Rip It Up, Start Again - a series of events showcasing the best innovative start-ups.