Another credit card anyone?

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Imagine setting up a convenient and easy to use payment solution, superior to any bank or global credit card network. Making the codes, the API’s and a modern mobile interface with great user-experience is not that challenging. Hosting services are almost for free and a true commodity. A bit tricky with authentication and security but add on solutions are increasingly coming to market. New European PSD2-regulation will also release customer’s bank accounts to third party suppliers making negotiations with banks smoother than ever.

Margins are slim but with volume comes revenue. Revolving revenue models is the most sought after business model amongst entrepreneurs and investors. Add a merchant solution, i.e. a convenient all-inclusive payment solution for stores and for e-commerce, and a value-added offer is created.

Above imaginable tech startup is widely common and for sure an interesting business proposition. Many ventures similar to this has been started already and some have come to grow to respectable size like PayPal and Square originated from the US or like Klarna and iZettle funded in Sweden. Whether any one of those will grow to become the next JP Morgan Chase or Citigroup in the US or the next Nordea or SEB in Europe remains to be seen.

Teenagers are refreshingly hungry with no limits and a challenging but rewarding view on how things shall turn out. Startups are the same, and shall be. Hungry, unconventional, with plenty of energy. Going digital and adopting to new consumer behaviors create opportunities. No doubt is many new businesses created and entrepreneurship is the sought-after career for ambitious professionals. The traditional career at large corporates eventually ending as a manager in the corner glass-room is at danger.

Interesting to follow is how parents act, venture capitalists at the startup end and senior executives at the large incumbent end. VC’s are chasing the next so called Unicorn, the next to be billion-valued startup, fueling the startup community with hope and money. The measure of success amongst many entrepreneurs is how much money A-, B- and C-rounds attract. At the other end of businesses, the large and established incumbents adjust to noisy teenagers and proclaim the spoken word of digital at management conferences, hire global management consultancy firms, appoint innovation managers, start labs while at large continue as before with important issues.

At least for now. The approach to innovation and business development are highly different between the startup and VC community and the large global industry. It’s a healthy sign given that corporate cultures are so vastly different. To make a famous quote: There are many roads to Rome.

An advice to startups would be to solve a need, or make a material improvement to a current offer or process, rather than building variations on the same theme. Another credit card anyone? How many payment overlay offers has not been seen already?

The advice to large established corporates is to think automation, if digital is to abstract. Automation, through-put process improvements and to develop sales-partners and channels are well known to most established industries and may be easier to address than “digital”. The end-result will be quite similar as long as long as great attention is given to them.

A final note: A productive and healthy ecosystem for entrepreneurship has been created. Never before has starting a business been that easy and with such appreciation from society at large and the business community in particular. Startups, VC’s and large established corporations is definitely facing new interesting opportunities (or challenges if one would be the sour type). Each venture needs to find their own road to Rome. That’s how value is created.

Thank you for reading. Please feel free to like, comment, share, tweet, email, etc. Hopefully the Pareto principle, also known as the 80-20 rule, will apply. I.e. 80% agree and 20% challenge me constructively.

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