Reinventure / Danny Gilligan

1. reinventure.com.au
Spotlight on Innovation
in Technology
May 2017
Danny Gilligan
@dannygilligan

2. 2
The Innovators Dilemma - Two distinct kinds of innovation
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Incumbents win at sustaining
Incumbents overserve
mainstream
Disruptors take the
underserved low end or non
customers
Product
Performance
Time
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1
4
4 Disruptors attack from low end
through their own sustaining
innovation
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ASFA Spotlight on Innovation

3. Further, unbundling erodes core advantages financial services have
relied upon
- Centralised, direct relationships
with customers, being replaced by
peer enabled technology networks
- Proprietary data advantage being
eroded by increasing pools of
accessible, liquid and mobile data
- Business intelligence and
processes rely heavily on human
resources replaced by algorithms
Relationships
Information
Intelligence
- Trust embedded in brand and
broadcast message replaced with
trust embedded in digital
experience and peer rating
Trust
NETWORKS
DATA
AI
EXPERIENCE
TRADITIONAL ADVANTAGE FINTECH ADVANTAGE
As digital experience penetrates financial services offerings
further, this risk accelerates
ASFA Spotlight on Innovation
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4. 4
• When the digital camera disrupted
film business rivals, Kodak and
Fuji, Fuji successfully diversified
into adjacencies like silicon chips
and cosmetics
There are four main ways to deal with disruptive forces in the market
Disrupt adjacenciesDiversify geographically Own the core disruptors
Disruption collapses markets either partially or completely.
The four possible responses are:
• Facebook has used its growth and
competitive position to acquire key
disruptors to its business such as
Instagram and Whatsapp
• Other technology leaders such as
Amazon also purse this strategy
• CBA acquired TYME, a start-up in
South Africa that bring mobile
banking to developing worlds. It
provide CBA an entry into these
geographies
Sustain and improve the core
• Westpac Service Revolution will
utilise digital technologies to create
personalised experiences, drive
efficiencies and reduce complexity
Industry examples
Service Revolution
Business Development, Innovation and M&A focus Reinventure focus
ASFA Spotlight on Innovation

5. 5
Reinventure Fund provides Westpac the optionality to own the disruptors and
grow into adjacencies
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Proven model
Proven Entrepreneur
Inherently regional
Westpac can deliver an unfair advantage
Investment strategy
Fund Size
2x $50m
(10-15 investments)
Time horizon
Investments will take 7-10
years to reach maturity
Team
Small and nimble team that
can keep pace with the
speed of start-ups
Independence
Fund’s independent
structure has been crucial
to attractive successful
entrepreneurs
Fund structure
ASFA Spotlight on Innovation

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