Orange to Launch Mobile Only Bank in 2017

Orange is moving to launch a mobile-first bank in 2017. People have been harping on about Digital Convergence for ages now. But this is a great example of what it actually means for the end customer. New firms, leveraging their existing technology capability, to launch new services in an adjacent market sector that is not innovating fast enough. A few years ago it would have seemed strange that the company currently offering you a phone contract would potentially replace your bank. But somehow it doesn’t seem that out of place anymore.

Orange will be launching the service in France in 2017, and then begin rolling out to other European markets. They have acquired a 65% stake in Groupama Banque to provide the service, and will focus on delivering using mobile as the channel for customer delivery. The reason for this approach is that mobile technology and smartphone penetration have grown significantly enough on a global scale to make delivery of this service possible. Also. their offering will not simply be more of the same banking services. The aim is to transform users mobiles into a fully functional virtual bank that offers a range of products including insurance, health, loan and savings initiatives.

Thierry Martel, CEO of Groupama said “Orange’s technological leadership and the ubiquity of mobile phones will enable us to move forwards, faster and further, to create a bank that factors in all the possibilities and the fluidity that is inherent in today’s technology”.

Personally I think think this is a great move. Orange has the technology background to offer a good customer centric approach to banking which will be reinforced by their mobile first approach. They can move way ahead of the traditional retail banks that are struggling to drag their legacy business into the digital age.



The Future of Telco: Internet in the Sky!

Telco companies around the world are battling to drive average revenue per user. So forward thinking CEO’s are moving to try and participate in Over The Top (OTT) services. But that may not be enough.
Given how many people own mobile phones, it might seem surprising at first that Telco companies the world around are under pressure to grow revenues. Companies in emerging markets like Beeline, Wind, Kyivstar, Mobilink, Telecom have been suffering with year-on-year declining Average Revenue per User (ARPU) figures for the last 5 years. This is not much better in developed markets. The key challenge across all operators is the costs of licensing spectrum, maintaining physical network infrastructure on the ground, and the declining margins on data sales due to global competition. Match this with massively growing smartphone adoption across the globe, where all services are moved to data channels… and you’ve got a race to the bottom. All the telco’s are offering narrowly differentiated services and competing on… price. Not a good place to be.
So forward thinking CEO’s are moving to try and participate in Over The Top (OTT) services. The timid or risk averse types are going for a partner strategy where they promote What’s App or Facebook messenger and try and keep customers locked into an ecosystem of brands and services through their channel. Not bad but it doesn’t seem to be a long term strategy to solve it all. Braver CEO’s are looking at how they can participate in the OTT space by developing innovative services that they can own. Services to reduce costs through customer self service, drive acquisition through superior offerings, and/or drive revenue through new paid offerings to customers. This looks like a step in the right direction, but comes with quite a few built in challenges. Telco’s are not (yet) well structured for developing innovative services of this nature. So a new organisational operating model is needed along with a lot of new skills.
Vodafone in the UK is starting to hint at some good shifts in their strategy with their latest campaign. Their ‘Powered by Vodafone” could be a very powerful starting point for a new approach that breaks out of the “dumb-pipe” operating model that so many telco businesses are stuck in.

Powered by Vodafone
powered by vodafone

But I’m questioning whether getting into the OTT space is enough. Assuming it’s done right (which I’m doubtful of), and telco’s manage to compete in the tech market alongside Facebook Messenger, music streaming services, and What’s App and so on; the OTT service is only one component of the landscape. The thing I always find interesting about innovation is that it’s not a static event. It’s a whole lot of time horizons, isn’t it. Depending on your industry you may have a different perspective on what “long term” time horizons are. But technology moves pretty fast, so shall we pick a 10 year horizon as being about as far a see want to look to the horizon? I think that’s about right. OK, so the question is: What is going on right now, that in 10 years could be something significant for telco?
So lets look at a few current day technologies in their infancy, and try to picture what they might be like in 10 years when they’ve grown a little. The little infant ideas, the playthings, and pet projects in the tech scene that don’t get much attention… yet. I personally believe there are a few ‘lab test critters’ which might grow much bigger than expected. Bigger hairier and with more teeth than telco’s might like.
Let’s look at Google, Facebook and Space-X. What do all these big hitters in the tech market have in common? They all have projects that want to beam the internet from the sky!!! Crazy right!?

Google Project Loon
Ballons that beam internet from the sky!

Facebook Aquila Project
A giant solar powered unmanned aircraft that beams internet connectivity from the sky!

Space-x Internet by Satellite
4000 low orbit satellites that beam internet from the sky!

internet in the sky

Connecting the Dots: These infancy stage projects are the playthings of large digital mindset companies that telco CEO’s need to be wary of. Three moving parts in the telco landscape are moving to change the market. 1) Mobile services continue to move into the data spectrum 2) smartphone penetration increases every year, and 3) devices get smarter. These three mean it stands to reason that with the addition of ‘The Internet From the Sky’, mobile phone users could to be free of their reliance on a physical ground-based networks for internet connections. So the telco’s physical infrastructure assets will reduce in value proportionately to the adoption of “Internet in the Sky”.
So what are the telco’s going to do to compete here? They are only just catching up on App’s! Many of the telco’s who are aware of these projects (and their agencies) argue that their game is to stay relevant and profitable long enough to even worry about these kind of problems. But it seems to make sense to me that if telco’s are going to try and compete to stay in the game, they should at least start developing their own pet project in this area. Telco’s could partner, buy, invest in these existing three if they have to. They just need to do something so that if they do survive the next 5 years, they at least have some glimmer of hope to survive the 5 after that! Otherwise shareholders should be asking telco CEO’s if they are really acting in their best interests.

Chat as discovery and world domination

In a recent post by Andreessen Horowitz they unpack how China’s WeChat has driven significant ARPU with their content strategy within Chat. The follow on from this, when viewed alongside Twitter, is that ‘chat’ as a context, is a hugely powerful mechanism for discovery. As long as the UX is done right, there’s nothing to prevent Telco’s from leveraging this kind of thinking to solve their own challenges with ARPU.

How to solve the Telco dumb-pipe challenge? Well, it would seem that chat is part of the solution.

Most notable, however, for anyone in the tech business is WeChat’s average revenue per user or ARPU, which is estimated to be at least $7 USD — that’s 7X the ARPU of WhatsApp, the largest messaging platform in the world. How did WeChat do it?

Source: When One App Rules Them All: The Case of WeChat and Mobile in China | Andreessen Horowitz


What the Stanford Prison Experiment means for your Business.

The Stanford Prison Experiment has shown how quickly a persons mindset adjusts to their context and prescribed social roles. It has a significant implication for how you build or restructure teams in a business context too. Essentially, the person you hire will behave a certain way up until the point that they start work. But once they are in your business, they will be massively influenced, and may display entirely new behaviours as a result of the existing business culture.

It’s an easy concept to understand. Quite informative if you are able to influence a culture top down. An informative view to help adjust your hiring strategy. But pretty challenging to resolve if you find yourself hired into an environment where you cannot exert any significant influence on the culture. The challenge then is to understand what can be done get people to snap out of cruel or self serving behaviour, and move into positive productivity. Instigating this from within an organisation will require some skill, and amazing influence. I wonder if perhaps there are some social levers or short-cuts that will enable this change to occur bottom up?

Viktor Frankl’s book, Man in Search of Meaning( man in search of meaning viktor frankl pdf )provides an interesting perspective to counter this institutional momentum. At it’s core, his message contains profound examples to demonstrate how “you always have a choice”. You can choose how to behave. Even in the face of horror, some individuals find what they need within themselves, and choose to behave in a positive way. Perhaps this is a way to begin.

In the summer of 1971, I created a research project focusing on the psychological effects of prison life, for both the prisoners themselves and the prison guards. My research team and I reproduced a prison environment in a Stanford University basement. We tried to recreate essential features of American prisons in our jail setting. We advertised for volunteers, and assembled a group of 24 healthy, intelligent male college students from all over the nation. A flip of the coin randomly determined which 12 would be guards and which 12 would be prisoners. I took the role of Prison Superintendent, one assistant was the Warden, and two others were Lieutenants. Prisoners lived in this jail 24/7, while guards worked eight-hour shifts in what was to be a two-week intense simulation, where everything and everyone was under observation. The simple premise was to understand what happens when you put only good people in a bad situation.

In short order, the students disappeared into their roles as Prisoners or Guards.

Ordinary guys slipped into doing extraordinarily bad things to other guys — who were actually students just like them, in different costumes.

Full article here:


Personality Insights

An amazing tool from IBM to analyse personality traits based on a persons writing. You can use text from blogs, email, forum posts. A very interesting tool for interviews, or research ahead of meetings. Try it!

Personality Insights – The IBM Watson Personality Insights service uses linguistic analytics to extract a spectrum of cognitive and social characteristics from the text data that a person generates through blogs, tweets, forum posts, and more.


The 7 Rejections Airbnb got from investors.

How to feel better about your fundraising challenges…

On June 26, 2008, our friend Michael Seibel introduced us to 7 prominent investors in Silicon Valley. We were attempting to raise $150,000 at a $1.5M valuation. That means for $150,000 you could have bought 10% of Airbnb. Below you will see 5 rejections. The other 2 did not reply.


PayM: Not the winner in mobile payments

PayM seems to be gaining traction with some of the larger banks including Lloyds and HSBC now actively marketing the use of their service to their customers. Some 400,000 users are reported to have now signed up to use the service. I’ve been asked if they are are the next big thing in mobile payments space. In short, I think they’ll get some traction, but they’re not the endgame. Here’s why…



Mobile payments – as broken as the banks.

Mobile payments have been a hot topic in the tech start-up space for a while now. There have been some great outcomes with companies like Square and Coin taking centre stage amongst a raft of other possibilities. But to be fair, nothing has really hit the ball out the park and transformed the industry just yet. It’s still an opportunity there for the taking.

NFC was touted as being one of the next big steps. At least in terms of the consumer experience. But it requires widespread adoption to become a real success. The fact that Apple didn’t put NFC into the iPhone 5 continues to be a drawback for many ‘fast follower’ innovators waiting to make a decision.

Nice as many of them are, all of these technologies, peripherals, apps and add-on’s are all top tier incremental improvements to an existing market structure. Your bank account, card (or similar), are still at the heart of the transaction process.

Apple have openly commented that they are serious about mobile payments and I for one am hopeful about their potential entry into this space. They have a track record of “integrating the whole widget” into their business process. Which means we would potentially see the first high quality mobile payments service with an end-to-end infrastructure in place. Their whole stack approach to innovation worked well for the music industry.

With all of this going on, it’s surprising there hasn’t been a more robust set of actions taken by the retail banks.