My Perspective on FinTech + BlockTech-Centric Investment Thesis

1. “The FinTech Startup Ecosystem”
By: John F. C. Cheong, Ph.D.
Feedback and comments to: johnc@spacemachine.net.Rev.2016.0413

2. “The FinTech Startup Ecosystem”
By: John F. C. Cheong, Ph.D.
1. The Business of Startups
2. The “Big Question”
3. “Small” is the New “Big”
4. Iterating to “Product-Market Fit”
5. Disruption by a Thousand Arrows
6. The FinTech Startup Space
7. BlockTech and Recent Activities
8. My Approach to BlockTech
9. What Does a BlockTech Stack Look Like?
10. Demographics Trumps Technology
11. Vertical Networked Community
12. A BlockTech-Centric Investment Thesis
Feedback and comments to: johnc@spacemachine.net.

3. Building A New Business: “The Business of Startups”
“I’m starting a startup that helps other startups start up.”

4. The “Big Question” for Entrepreneurs and Investors:
How Best to Launch and Accelerate New FinTech Ventures?
Huff!
Puff!
“We can do it all by ourselves!”
— Atlas
vs.
“Give me a place to stand, a lever long
enough and a fulcrum, and I shall move
the World.” — Archimedes
Now, isn’t this a
much better way…?

5. “Small” is the New “Big”: How Startups
Co-Evolve with Platforms and Ecosystems.
Suite Platform
Multi-Platform Bus
“There is a new breed of “big” on whom the coming age of “small” is built: the platform players
(like eBay, Etsy, Amazon, Apple, and Google) on whose platforms smaller businesses blossom.”
— Nicco Mele

6. An Iterative “Build-Measure-Learn” Methodology:
Ideas to Code to Data … Until “Product-Market Fit”.

7. “Disruption by a Thousand Arrows”: FinTech Startups
Unbundling Wells Fargo, Citi and Bank of America.

8. Hundreds of Companies Across A Dozen Categories
(Global Funding: $3B 2013, $12B 2014, …, $__B 2018):

9. Making Sense of The FinTech Startup Space:
How Capital Markets Make the World Go Round …and Around?
Payments &
Remittances
Lending &
Personal Finance
Asset/Wealth
Mgmt & Trading
(Basic Income?)
Equity Financing
& Capital Markets
Crowd Funding
Insurance
& Payroll
Banking
Infrastructure

10. FinTech’s Wheel of Disruption:
Six Clusters of Financial Services Innovation?

11. “BlockTech”: Blockchain-based Startups (within FinTech)

12. Blockchain Activities of Financial Intermediaries & Banks

13. Blockchain: A Fundamental Technology That Impacts
Other Technologies (i.e., BlockTech Disrupting Tech!)

14. Feedback and comments to: johnc@spacemachine.net.
My Approach: “Industry Model Canvas” for Assessing BlockTech
Opportunities in and around Value Creation and Value Capture.

15. How Might A BlockTech Stack Be Organized?

16. Keep It Super Simple: A Fully Configurable
Modular 4-Layer Stack for BlockTech?
Smart Contracts
Blockchain Mediation
Proof-of-X Algorithm
Network Topology
Business logic layer where
smart contracts are coded
using high level languages.
Distributed ledger layer
where inconsistencies and
conflicts are resolved.
Transaction verification
layer where proofs are
computed and communicated.
Underlying network layer that
determines how the nodes are
connected together.
Could this be BlockTech’s “signature stack”?
Identity
Keys
Storage
Messaging
Languages
Transaction Ledger
Consensus Method
Tokens
Mining
Nodes
P2P

17. Let’s Not Forget: Demographics is What’s Driving
Major Disruptive Changes in the World Today!
KP KA VP CR CS
C$ R$
CHKR
Business models are designed and executed in specific environments.
So the external environment is like a “design space” for business
models. And business models evolve to adapt to changing environments.
MACRO-
ECONOMIC
FORCES
MARKET
FORCES
INDUSTRY
FORCES
KEY
TRENDS
New Digital Technologies
Clobbered by Regulation Millennial Demographic Shift Underway
Changing Consumer/Enterprise
Behaviors and Expectations
Suppliers & Value
Chain Actors
Stakeholders
Incumbents’
Legacy IT
Infrastructure
New Entrants’
Lower Startup Costs
Bitcoin & Blockchain Substitutes
Baby Boomers
and Millennials
New Preferences
for Banking
Confusing
Choices
Lower
Switching Costs
Less Attractive Revenue
Zero Interest Rate World
Recovering from Great Recession Increasing Rates of Changes
The World Awash in Capital

18. Geographic Proximity Has Been Eclipsed by Networks:
“Vertical Networked Community is the New Marketplace”
“The competitive advantages of scale are being commoditized. Minimum
efficient scale is getting smaller and smaller.” — Maxwell Wessel

19. “Great Ideas can be Realized from Real Insight
into the Way the World Spends Its Money.”

20. Thank You!
“FinTech”