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The FinTech Startup Ecosystem

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My Perspective on FinTech + BlockTech-Centric Investment Thesis

Published in: Economy & Finance

The FinTech Startup Ecosystem

  1. 1. “The FinTech Startup Ecosystem” By: John F. C. Cheong, Ph.D. Feedback and comments to: johnc@spacemachine.net.Rev.2016.0413
  2. 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. 3. Building A New Business: “The Business of Startups” “I’m starting a startup that helps other startups start up.”
  4. 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. 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. 6. An Iterative “Build-Measure-Learn” Methodology: Ideas to Code to Data … Until “Product-Market Fit”.
  7. 7. “Disruption by a Thousand Arrows”: FinTech Startups Unbundling Wells Fargo, Citi and Bank of America.
  8. 8. Hundreds of Companies Across A Dozen Categories (Global Funding: $3B 2013, $12B 2014, …, $__B 2018):
  9. 9. Making Sense of The FinTech Startup Space: How Capital Markets Make the World Go Round …and Around? Payments & Remittances Lending & Personal Finance Asset/Wealth Mgmt & Trading (Basic Income?) Equity Financing & Capital Markets Crowd Funding Insurance & Payroll Banking Infrastructure
  10. 10. FinTech’s Wheel of Disruption: Six Clusters of Financial Services Innovation?
  11. 11. “BlockTech”: Blockchain-based Startups (within FinTech)
  12. 12. Blockchain Activities of Financial Intermediaries & Banks
  13. 13. Blockchain: A Fundamental Technology That Impacts Other Technologies (i.e., BlockTech Disrupting Tech!)
  14. 14. Feedback and comments to: johnc@spacemachine.net. My Approach: “Industry Model Canvas” for Assessing BlockTech Opportunities in and around Value Creation and Value Capture.
  15. 15. How Might A BlockTech Stack Be Organized?
  16. 16. Keep It Super Simple: A Fully Configurable Modular 4-Layer Stack for BlockTech? Smart Contracts Blockchain Mediation Proof-of-X Algorithm Network Topology Business logic layer where smart contracts are coded using high level languages. Distributed ledger layer where inconsistencies and conflicts are resolved. Transaction verification layer where proofs are computed and communicated. Underlying network layer that determines how the nodes are connected together. Could this be BlockTech’s “signature stack”? Identity Keys Storage Messaging Languages Transaction Ledger Consensus Method Tokens Mining Nodes P2P
  17. 17. Let’s Not Forget: Demographics is What’s Driving Major Disruptive Changes in the World Today! KP KA VP CR CS C$ 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. 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. 19. “Great Ideas can be Realized from Real Insight into the Way the World Spends Its Money.”
  20. 20. Thank You! “FinTech”

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