Falling Cats, Black Swans and The Perils of Believing Your Own Hype

June 26th, 2015

We say:

“Our brains are trained to ignore the evidence we can not see. This bias has huge implications for your business.”

This post is adapted from a keynote presentation made by Dominic Pride to D:Health’s Partnering and Opportunity in Digital Health Conference June 9. The Slideshare is here

As I move deeper into life sciences and consulting to health organisations, I’m often challenged on how my experience in music and digital services qualifies me to talk about anything to do with patients.

This onslaught usually gets a double-barrelled response. Firstly, my colleagues and I bring the digital service expertise, not the medical knowledge. Secondly, working with music has allowed me to witness first hand what happens to the canary in the coal mine of digital disruption.

And while every medic has a horror story from their early days in A&E, we’ve seen some very different kinds of casualties along the way. Here ‘s a picture of the place where I came from – the music business. And you don’t have to be a domain expert to tell just how well this particular patient is doing from the chart.

This graph shows US recorded music sales around the turn of the century. It was a story pretty much repeated worldwide and as you can see, this patient has been in terminal decline since Napster arrived on the scene in 1999.
150609 TheSoundHorizon DHealth 03Flat 007
Peer-to-peer file sharing was the single biggest shock to the system that this business had seen in the 100 years since Edison invented the phonograph. It was more disruptive than any other technology which had been used by the business. Today, many executives are still in denial about what happened to their product-based business when digital turned up.

150609 TheSoundHorizon DHealth 03Flat 008The arrival of this disruptive technology was unexpected and catastrophic. It was in fact a classic black swan event.

150609 TheSoundHorizon DHealth 03Flat 009It was the Scottish thinker David Hume who first addressed the challenge of the Black Swan. You can see his exact words are in the illustration here, but to paraphrase his 18th century English, “just because all swans you’ve seen are white, that doesn’t mean that black swans don’t exist.”

This idea of the random, unseen, rare yet possible occurrence was developed and popularised more recently by Nasim Nicholas Taleb in his 2008 book The Black Swan. Taleb looked at the impact of these events on global financial markets and how most were blind to the possibility of

150609 TheSoundHorizon DHealth 03Flat 010We can summarise his conclusions as “just because rare events haven’t happened yet, that doesn’t mean they’re not possible.”

150609 TheSoundHorizon DHealth 03Flat 011Taleb lays out quite clearly why Black Swan events have such a catastrophic impact. It ‘s not the frequency of these events which is important. It’s the magnitude of the outcome.

Yet as humans we heavily discount the possibility of a black swan existing because we have not yet seen one.

Our minds are biased towards what we know and experience, and we discount what we have not experienced.

The effect of these biases features heavily in Taleb’s second book, Fooled by Randomness.

In this,he argues that the stock market traders who remain in position are not necessarily successful because of skill or judgement. They are as lucky as the single ape from the infinite pool of typing monkeys who just happens to clatter out an exact replica of Homer’s Ilead.

150609 TheSoundHorizon DHealth 03Flat 012They are, he argues, Acute Lucky Randomness Fools. These people have survived simply because their trading style happens to have fitted the bent of the market, not through any superior skill or judgment.

In fact, their continued presence in the market represents no more than survivorship bias in action.

What do we mean by survivorship bias, , it’s the the logical error of concentrating on the people or things that “survived” and overlooking those that didn’t because they are no longer visible.

Let me explain the concept with an example. If you’re a cat lover, skip a couple of paragraphs.

150609 TheSoundHorizon DHealth 03Flat 013A study in 1987 found that cats who fall from less than six stories, and are still alive, have greater injuries than cats who fall from higher than six stories. The theory is that cats reach terminal velocity after righting themselves at about five stories, and after this point they relax.

So the higher falling cats have less severe injuries. On the basis of evidene in front of us, it’s simple.

Yet this is a classic case of survivorship bias in action. The cats surveyed are the ones who sustained injuries and survived. Cats which die in falls are unlikely to turn up in a vet’s surgery, so the cats killed in falls from even higher buildings didn’t even show up in the study.

Let’s think about that for a minute. The fact that a cat, or a trader, or a digital health startup makes it through to the statistics means that they’ve survived to be counted and noticed. The ones who didn’t make it aren’t seen or counted.

This is a clear and evident cognitive bias in the way we see things. Our minds are trained to deal with only the information in front of us, and not what we don’t see.

So why is this blindness dangerous ?

Firstly, survivorship bias can lead to over-optimism because we ignore the failure which we can not see.

Worse still, it can also lead to the false belief that the successes in a particular group can be assigned to some special property rather than just good fortune like our lucky chimp in the typing pool who happened to bang out a classic.

This leads us to look for patterns and traits – maybe an upbringing, an exercise regime or process – which we believe can be extracted and used to our benefit.

150609 TheSoundHorizon DHealth 03Flat 014In doing so we make the common mistake of confusing causation and correlation.

But being neither stock market traders or leaping cats, what does all this mean for everyone in digital health, or in any business today?

It means first of all that when looking at success – whether your own or someone else’s – be aware that there’s an inherent bias present in the way you are looking at the evidence. Like the cats that didn’t survive the fall, the traders who blew up and are now insurance salesmen, the digital health companies who didn’t make it are, by default, not present in the market.

Secondly, the fact that you have been successful so far does not equip you to be successful in the future. Dominant market share and powerful distribution did not equip the leading record companies to deal with Napster.

In digital health we have no excuse. What’s happening to health provision is less random and more predictable than a run on the currency or Napster turning up.

With 16 years of hindsight, we can predict with certainty that digital disruption, which appeared as a black swan event in the music business is going to directly impact health. Quite how, remains to be seen, but it is no longer unexpected.

150609 TheSoundHorizon DHealth 03Flat 015Better still, we can learn from other industries which believed that their success was assured by their ownership of some unique asset such as content, real estate or banking licences. Music was disrupted by Napster then transformed by iTunes and then Spotify. Taxi drivers worldwide are up in arms about Uber, while AirBnB disrupts the accommodation industry. Peer to Peer Lending is disrupting anyone with a banking license. Healthcare will be no different.

So being around in one year or five years time might be less to do with what’s made us successful so far, and more to do with how we are planning to address the uncertainty of the future.

Taleb has some good news for people like us; “The things that come with little help from luck are more resistant to randomness.”

As an organisation you can make your own luck, and set yourself up to be resilient to so called unforeseen events by introducing some behavioural paradigms:
150609 TheSoundHorizon DHealth 03Flat 016

*First of all as we’re doing today partnering, learning and sharing success and failure

*Experience failure by encouraging it internally. Find a sandboxed way to get your own failure in house, acknowledge, confront and learn from it.

*Crucially, above all, don’t ever be prone to the cognitive bias and assume your past performance will guarantee your future success.

In short, we’re all out there pitching and selling. But don’t for one second believe the power of your own hype.

Innovation Hub or a Glimpse of Banking’s Future?

May 21st, 2015

We say:

“For innovation to flourish in a corporate, it requires a delicate combination of access, protection and empowerment. Barclays is setting the right conditions.”

How Barclays London Accelerator is plugging FinTech startups into its mainstream business

What is there to link these three diverse business challenges?

*authenticating diamonds
*sharing virtual construction plans
*anticipating quantum computing-powered fraud

On the face of it, not much.

Yet when you take startups who are working away at these problems, co-locate them with seven other entrepreneurs who are finding and exploiting particular niches, add a global banking player, and throw in a leading accelerator ecosystem to the mix, it becomes a lot clearer.

Blocktrace, Basestone and Postquantum are three of the ten startups on the current Barclays London Accelerator programme who are addressing those challenges. The programme is housed in Mile End, east London, somewhere between the throng of Tech City and Barclays HQ in Canary Wharf. It’s co-manged by Techstars, who provide both VC-backed funding and mentorship from VCs as well as retail and finch entrepreneurs, design and product experts.


Beyond Banking

The diversity of the problems the startups are solving is striking – as is the ambition behind the companies being accelerated.

And once you put these ten together, they begin to build a picture of what the future of a bank might look like in the future.
Ten FinTech Startups find a home for 13 weeks
Rather than a monolithic institution, you get a glimpse of a bank becoming a platform, enabling access to customers and transactions with third parties empowered to provide innovative B2B and B2C services via APIs and marketing collaboration. The bank’s divisions span retail personal and corporate banking, wealth management, card services and investment, enabling a wide range of use cases to be enabled.

Barclays is certainly not playing it safe with its choice of startups. “Our aim is to attract most disruptive and innovative services” says Baljit Bamrah, Director of Partnerships for Barclays. “We want them to change the game with us.” It’s impressive that three out of the current out of 10 are using Bitcoin and Blockchain, which many traditional banks and exchanges are regarding as a potential threat to their existence.

Access, Story and Traction

The accelerator may be housed at a reassuring distance from the corporate mothership, but the startups get access to relevant teams at Barclays, including C-Suite and domain experts. As well as people, the startups have preferential access to a suite of Barclays APIs, enabling them to build on key banking and trading functions. Greg Rogers, Managing Director of TechStars, says this is a vital component of the mix: “They get mentorship from Barclays and also other successful FinTech company CEOs. They get traction with Barclays which is a huge differentiator. And they get the story, which means telling it in a succinct fashion.”

Startups are accelerated for a 13-week period, and this is the second cohort. Previous alumni include financial wellbeing service Squirrel , credit scoring service Aire and predictive analytics platform Market IQ. The London Accelerator takes startups from anywhere – the current crop includes homegrown startups as well as entrants from Stockholm, San Francisco and New York. Competition is fierce and the number applying speaks volumes about the number of FinTech startups. No less than 550 startups applied in cohort, which was whittled down to 60 and then the final 10.

Plugging into the HQ

It would be easy to dismiss programmes such as the Accelerator as a CSR box-ticking exercise. However, it’s clear that the degree of access the startups appear to be getting and the evident synergies can add clear value to Barclays divisions. Basestone, for example is drastically reducing risk in the construction arena and has a clear value to the insurance and real estate sectors.

At a recent showcase co-hosted by the Mobile Ecosystem Forum, nine out of the 10 startups were present to be able to tell their story in a snappy way and clearly articulate the problem being solved.

Below are the full 10 and a little about the solutions to problems they’ve uncovered. You can read more at the MEF Minute.

Basestone Tablet and web-based collaboration tool for the construction industry. Its founders come from the drawing review industry and were approached by HS2, the UK’s High Speed Rail link being built, and have now moved onto London’s east / west link Crossrail.

Everledger Everledger aims to bring trust & transparently to the worldwide diamond industry where certificates are open to forgery. The platform writes to Blockchain to provide an immutable ledger for diamond identification and transaction verification.

Godesic The founders of Godesic were frustrated by the limitations of delivering large scale projects such as the UK launch of 4G mobile with desktop tools. The company provides project management software for minute-by-minute tracking of transition into operations for large IT programmes, something which has a direct value for Barclays.

LiquidLandscape addresses the challenge of traders being deluged with data and overloaded at the time that critical decisions are made. This company provides “instant replay” for trading, and data visualization engine for creating linked, immersive data exploration environments with live time series data – in 2D, 3D, and VR.

With Origin, Barclays is truly looking to disrupt itself – the founders want to disrupt investment banking by transforming the banks’ involvement in the bond issue process. Origin is a “Lending Club” for large corporations and institutional investors, using technology to facilitate corporate debt issuance.

PQSolutions. The advent of quantum computing to banking operations will create a step change in processing. It will also open up new horizons in fraud. Founder Anderson Cheng is anticipating this world, and Post-Quantum provides cyber security solutions using innovative encryption and authentication techniques to counter quantum computer attacks.

Ravelin
CEO Martin Sweeney and two other of the founders of Ravelin worked at taxi upstart app Hailo and were able to identify the potential for fraud using stolen credit card data. Their solution combines data science and machine learning with a merchant’s fraud profile to deliver pin-point accurate online fraud detection.

Safello The ambition of this startup aims to bridge the 2.2 billion worldwide who hold bank accounts with the 2.7billion unbanked via Bitcoin. The solution is a Europe-focused Bitcoin exchange with plans to expand into Bitcoin payments.

Stockfuse addresses a key recruitment challenge for banks and is aiming to bypass or augment the process of using resumés / cvs. With this gaming platform which uses live stock data, users and potential trading candidates can demonstrate their actual ability to trade the markets.

See also: MEF Minute: The startups of tomorrow.

10 Things you need to know about Barclays Accelerator

For startups and innovators, time can never be money

May 6th, 2015

“Hurry up. Time is money!” We hear the phrase so often in business that we believe it must be true. 

It’s been accepted as true since the industrial revolution transformed work. Until then, in the agrarian economy, work was done when the field was ploughed or the corn was gathered.  Working time was recognised and transacted, but also was bound up with societal and communal obligations.

Does not equal

From the 18th Century, thanks to clockmaker John Harrison, we could effectively measure time, so in the 19th century, industrialists could then pay workers by the hours that they were now able to accurately measure and control. So time became money.

Fast forward to the 21st century and if you’re paying – or being paid – by the hour, then time still equates money. We only have to look at the predictable headlines in the wake of every snowstorm or flood,  bemoaning the loss of productivity measured in millions or billions of pounds or dollars. Lost time equals lost money.

We are in the Connection Economy

Yet if we believe marketing guru Seth Godin, we are now moving into the connection economy, a post-industrial era when thanks to the internet and the economics of abundance, success is determined by creating  unique offerings and connecting with as many people as possible. Being first to create the new thing is of paramount importance, whether it’s Humans of New York or Uber. 
 
If you’re a startup, an innovator or entrepreneur you’re in that connection economy. You’re in the business of creating something new and connecting. For you, time is not and never can be money – it’s something much more precious.

In his book The Lean Startup, Eric Ries describes a startup as “an organization dedicated to creating something new under conditions of extreme uncertainty.”  The goal for a startup (whether inside a FTSE 100 company or a garage) is to validate that the market exists for a particular service, and the objective is to gain as much validated learning as quickly as possible.

You can’t buy lost opportunity like overtime

So for startups, every hour is a race against time to define and own their niche, and to uncover more about customer needs which are not yet known. Coming second can be catastrophic, and the cost of lost time and delay is far greater than the man hours spent on the team going in the wrong direction. Time lost can never be recovered or made up by buying overtime.

Money is a convenient method of measuring the worth of goods and services. Money flows two ways – a credit here will always equals a debit there.  Transfers of funds go into and out of accounts, lost money can be borrowed and an empty account filled again with funds begged, borrowed or even stolen.

By contrast, time only ever flows one way.  Once the hour, day or month is spent it’s gone forever and can’t be recharged in the same way that a bank account or a mobile top-up can.

Lose the industrial mindset

For entrepreneurs and startups it’s imperative to lose the industrial mindset and ditch the time=money equation.  The goal of a production line is to produce high-quality products at scale. The goal of a startup is to establish product / market fit and do it in the shortest possible time.

Yes, time is valuable and yes, people cost money. But lost time means lost opportunity cost, something which can never be bought back. So if innovation is your business, time can never be money. It’s far more valuable that that.

Image: © Stepan Popov | Dreamstime.com

Data Philanthropy, Faking Omnichannel and the Joys of #brownfielding – Dispatches from the Future (and Present) of Retail

April 24th, 2015

How retailers need to start again if they want to deliver on omnichannel.

We say:
“The survival of UK retail in the 21st Century depends on embracing and being part of consumer-led disruption.  Most UK high street brands are only passively responding to this. Mashing together silo-ed systems to deliver on the marketing promise of ominchannel, rationalising and refurbishing real estate are distractions from the structural changes needed to serve increasingly complex customer needs and expectations.  With exceptions such as John Lewis, All Saints and M&S, most retailers are de-prioritising innovation against the challenge of ongoing flat demand.

Creating a retail park that you pack up after 5 years in an urban wasteland was “such a crazy an idea that it seemed to stack up.” That’s the reflection of Roger Wade, CEO of Boxpark, the “pop-up” mall made up of shipping containers in London’s Shoreditch. “I also have a thing about containers” he admits. 

IStock 000029587410 Small

Wade was speaking at a May 23 event The Future Of Retail organised by KPMG High Technology Growth. Wade knows a thing or two about retail and brands, having founded Boxfresh and brought Carhartt and G-Star to the UK. So it’s little surprise that Boxpark is a neat pile of containers filled with independent retailers and cool brands in a brownfield site in Shoreditch, the epicentre of East London hipsterdom.

“Retail is all about emotions” says Wade, arguing that not seeing, feeling and interacting with merchandise makes “buying online … like watching fireworks on TV.”  The 74% of UK adults who bought online last year might disagree – they are clearly missing out on the experience, or simply focused on price and utility value.

Customers are walking out of stores empty-handed

With notable exceptions such as Apple, says Wade, retail is missing the theatre and excitement needed to tempt people into and to the High Street. And with exceptions such as the U.K.’s department store group John Lewis, few players are truly delivering on the “omnichannel” promise – meeting the needs of the single customer across multiple physical and digital channels.

“In [physical] retail you need the perfect sequence of events” says Wade. “You need time, money in your pocket. You have to hope that the product you want is in store. 90% of the time we at letting the customer walk out of the store.  The reality is we don’t have the technology to embrace the customer.”

From our first-hand knowledge and contacts with retailers, we know that they have been wrestling with the challenge of delivering a true omnichannel experience.  Inter-department rivalries, fear of digital “cannibalisation” of store sales, legacy processes, under-informed staff and crucially, silo-ed information systems have hampered retailers from delivering on the basic expectation customers to buy online or on mobile, and to exchange, refund or complain in store.

The joy of building on a greenfield – or rather a brownfield – site was the opportunity to build systems from the ground up. “Boxpark did not inherit any systems” Says Wade: “Most systems used by major high street retailers should be thrown out” citing examples of replay turning up with a £20,000 ($30,000) EPOS system, but which barely mirrored the function of low-cost iPads and cloud-based system is used throughout the mall.

Rip it Up and Start Again

“It’s a long hard route but you’re really best starting with white piece of paper. ”

For an industry which was for the most part caught napping by the arrival of online sales, most retail brands have narrowly avoided the oblivion of, say, the established players in the travel business.  A process of incremental innovation, bolting on and desperately mashing together operations behind the scenes as enable them to at least to market the promise of, if not deliver on, a converged experience between physical and different digital touch points. 

But as a survey by Digitas LBI today shows, the journey to purchase across digital and social is becoming ever more complex, with customers using on average five connected devices before they make a purchase.

In a panel discussion at the KPMG event there was a pragmatism, even pessimism and about retailers approach to embracing innovation. 

Retailers should take risks and embrace failure

Helen Dickinson, Director General of the British Retail Consortium provides a unique purview from across the entirety of the retail spectrum.  “Retailers need to embrace failure” says Dickinson, noting that “customers don’t think in channels.”

“Innovation is definitely on the back burner” agrees David Bailey founder of consultancy CRUX and former developer of Apple’s retail programmes, noting that the financial climate mitigates against risk taking. “CEOs are engaged in risk management right now” 

Stuart Marks is chairman of L Marks, and also co-invests in JLab, the accelerator program set up by John Lewis, one of few notable exceptions for engaging with innovators, noted that conversations between digital startups and retailers do not always go smoothly.  He advises startups who want to get started too fast: “You need to respect [retailers] You need to find a balance between pushing them to do something and respecting that they have processes in place.” Those which succeed will be the ones which find and solve the pain points the retailers have, says Marks.

JLab is one of a handful of innovation projects. Clothing retailer All Saints sponsors hackathons such as last year’s at Decoded Fashion with CEO William Kim actively involved and participating in the events, while clothing and food specialist Marks & Spencer has founded its own ventures and innovation lab.

Data, once heralded as the panacea for retailers to predict and personalise shopping, is only as useful as the ability to make meaning from it, and the high street can learn from other less glamorous players.  “The catalogue retailers who are now on online for have years been perfecting data. The big challenge is extracting and harnessing data.” 

Adds Bailey: “Many retailers need to be braver with data. Many don’t realise that customers are data philanthropists. They are happy for data to be used.”
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The event took place in a week when British retailing was overshadowed by the biggest loss in the sector’s history,  with supermarket chain Tesco posting a loss of £6.4 billion. It was roundly criticised by many including industrialist Lord Haskins, for failure to innovate at all levels.

There has never been a clearer sign that retail in the UK is a sector which needs radical root and branch re-tooling, in much the same way mobile operator Vodafone is moving operations to its “NewCo” system for rather than patching its legacy systems once again. As Wade says, a clean sheet of paper may be just what it takes.

Crucially, established retail brands need to find new, culturally relevant ways of enabling, facilitating and embracing the innovation which will be necessary to ensure their very survival.

Flat Whites and Finance – Disruption on the Doorstep of London’s City

April 15th, 2015

Why Financial Services in London are over-ripe for disruption.

We say: The financial services sector – from huge exchange providers to personal lending – is overdue for disruption because there are inefficiencies from legacy practices, no unique asset or resource at the heart of the business and massive latent demand for cheaper access to the services on the part of the public. Regulatory and compliance issues will not prevent this taking place.

Step out of the London Underground at Old Street and two distinct and separate worlds meet your eye. 

Look southwards down City Road and you’ll see the gleaming towers of the City of London, the traditional centre of financial services for the UK. Cast your gaze a little further East to Shoreditch and you’re looking at a very different world, one populated by a tight network of digital startups, design companies and grass-roots entrepreneurs.

IMG 5922It’s taken for granted that the City and its legions of suited traders, financiers and insurers are a major driver of the UK economy. However according to one of the UK’s leading economists, it’s the bearded, exotic coffee and craft beer drinkers who run the country’s startups who are now massively transforming the economy right now.

And the two worlds which previously rubbed up against each other but remained separate ,are about to collide and unleash a wave of disruption on the economy, argues Anthony Hilton, journalist and commentator. 

In a recent business briefing, Hilton argues that the existing growth figures on which we base our  preconceptions are hopeless for understanding the size and scale of the transformation going on before our eyes. Hilton draws on the ideas put forward in The Flat White Economy, a recently published book by controversial economist Douglas McWilliams (1),currently on sabbatical from his job as chairman of the Centre for Economic and Business Research.

“The Growth figures are wrong.” says Hilton, pointing instead to the yearly double-digit surge in travellers using Old Street station and the 32,000 companies registered in the EC1 postcode since the 2012 Olympics.  

“In and around Old Street you have the most colossal dynamic digital economy right now, says Hilton.”More jobs have been created in EC1V than in the whole of Leeds.”  Digital is already the 5th largest sector in UK, larger in revenue terms than the oil and gas or motor industries and will represent more than 15% of GDP by 2025.

“The UK has embraced internet in a way no other country has,” noting 14% of retail sales now come from digital channels.  Hilton used a convenient shorthand to conflate digital activity with Old Street – the economic growth is driven by digital activity in regions across the country. But it’s not for nothing that the area around Old Street is called Silicon Roundabout, and Google Campus and Tech City have offices on or within a stone’s throw of the unlovely traffic island. 

Only in London

The digital economy has taken root in London for a number of reasons, argues Hilton, citing McWilliams. Eurozone stagnation and lack of opportunity in Southern and Eastern Europe has led to an Influx of digital  talent from the continent.  More than half of those employed in the digital economy are are non-British. 

It happened around Old St, Shoreditch and Hackney, due to the cheap accommodation close to centre of town, where young unattached talent can live the outdoor life in exotic coffee shops and workspaces. Thus is borne the flat white economy, where techies fuse work and play. 

In a smaller tighter and more networked version of the Bay Area in California, demand and skills come together, and the network effect of physical proximity creates a critical mass of digital activity.  

What does this mean for the rest of the UK economy? 

Firstly, it means that the exponential speed at which the entrepreneurial digital sector can grow is leaving larger, linear companies behind. Established players take a long time to innovate – they have a vested interest in status quo, argues Hilton – and within their structures, innovators and innovation get squashed. 

And for FS?

Zooming further in, the implications are most acute for the financial services industry. According to Tomas Philippon, professor at at Stern Business School in New York, this sector has seen no improvement in efficiency for the last 100 years.  Philippon argues that despite domain specialisation and the expected gains from massive IT investments, the FS sector has continued to take around 2% of all net flows into and out of the business over the last century.  Low rent accommodation for startups butts up against the City's glass skyscrapers

“When flows double financial services fees go up pro rata. All increases are captured internally.” says Hilton, arguing that the increasing burden of regulation and the $10bn annual cost of compliance has taken a significant proportion of this. 

Financial Services – You’re Next

Given that digital has disrupted media, personal banking, personal fitness, retail and just about any other sector you can name, and Financial services have remained relatively untouched by the digital revolution “it’s only a matter of time until financial services get disrupted, says Hilton. “We can expect that  flows will shrink.  Banking is a essential a high cost way of getting money from a to b.  There’s no reason that the entire stock exchange can’t be on something like eBay.” 

In fact the disruption has already begun. Tech accelerator Seedcamp is seeing an upsurge in applications from startups looking to disrupt an area of FS, from solving the challenges of Bitcoin liquidity to enabling customers to manage their own Exchange Traded Funds (ETFs). In Canary Wharf, where many FS giants now house their operation, accelerator Level 39 is an accepted part of the FS innovation landscape.

And this clash is likely to be the focus of Disrupt Finance, taking place on the borderline between Shoreditch and the City on April 15.

In every industry which has been disrupted, incumbents have consoled themselves with the fact that they have a unique asset which protects their market position. Music producers took refuge in their copyright laws in the fight against Napster; travel operators consoled themselves with superior advice and knowledge in the face of internet search, now taxi drivers are feeling smug about their “knowledge” while Uber erodes their business. Regulation and customer trust are now the twin factors which the FS business believes can save it.

Given the history of digital for destroying traditional structures, it’s a given that the impact of the flat white economy will be felt in the towers and streets of the neighbouring City. Those existing players which recognise embrace and co-operate with the inevitable disruption will stand to gain most. But for all involved it’s going to be the next chapter in how software ate the world.

(1) At the time of launch of his book, McWilliams was due to face trial over allegations of assault and stood down from his role at the CEBR.