Archive for the ‘Innovation’ Category

The Sound Horizon and Newsquare Team up for Groundbreaking Diabetes Innovation Programme

Tuesday, July 12th, 2016

We say: “Effective solutions to global health challenges such as Diabetes need cross-industry collaboration and innovation. We’re aiming to play a part in driving that forward.”

Diabetes is a growing and undeniable threat to the world’s health.
Some 422 million adults across the world have diabetes. In the UK alone, the cost to the NHGlucofocus 7-7-16S is £10 billion per year, accounting for 10% of the total NHS budget.

Consensus is building that this growing threat can only be addressed through sustained and integrated treatment and prevention programmes. Efforts to address the crisis have been ambitious, but remain sporadic, fragmented, localised and disconnected.

That’s why we’re partnering with innovation agency Newsquare and their partners Food Tech Week London and Dotforge to deliver GlucoFocus, a multi-strand innovation programme which will bring together payers, clinicians, patients, entrepreneurs, corporations and academics to address the challenge.

DP_2009-12-19-4 copy 3really really lowDominic Pride, CEO and Client Partner of The Sound Horizon says “through our consulting work for life sciences clients, we’ve seen a wide range of initiatives from plucky startups, health authorities, pharmaceutical giants and stakeholders in food, retail and wellness. While each of these initiatives can make an impact, we believe there is more to be gained by collaborating and sharing viewpoints, insights and ideas around this complex health challenge.”

Tobias Stone, CEO of Newsquare says: “we’ve partnered with The Sound Horizon because of their deep understanding of healthcare innovation and the associated business models emerging around Toby Stonechronic conditions. Their work at both ends of the scale – from pharma giants to seed funded startups – gives them an unrivalled viewpoint from which to deliver the kind of programme which is needed to innovate around diabetes.”

Newsquare has already initiated and delivered EyeFocus, a successful innovation programme around eye care, bringing in a wide range of stakeholders such as Bayer, Zeiss and Bosch to address complex challenges within eye disease and blindness. Newsquare will bring learnings and methodology such as Idea Hacks, early and late stage accelerators from this successful programme to GlucoFocus, while The Sound Horizon will bring knowledge of digital services and business model innovation to the programme.

GlucoFocus is recruiting foundation partners by September 1 2016 for a nine-month programme which will begin during early 2017. To find out more, please get in touch.

Dispatches from the Innovation Frontline – Rewiring Insurance with Armin Molla

Wednesday, July 6th, 2016


This is the first in an occasional series of interviews, “Dispatches From the Innovation Frontline” where we speak to individuals or organisations driving forward new business and service models within start-ups, scale-ups and corporates.  This week we profile Armin Molla of Virado and talk about innovation inside and outside of an insurance behemoth.

If ever there was a sector where there’s hidden value to be unlocked through rewiring business models
Virado_Armin-Molla_Printit’s in insurance. On the supply side there are archaic legacy practices dating back centuries and monolithic IT systems. Meanwhile there’s strong demand from buyers for cost reductions.  So it’s no surprise that the insurance business is an easy target for disruptive startups.

Yet what happens when you try and disrupt such a sector from the inside? Corporate innovation programmes are always challenging, with the status quo and the inevitability of business as usual hanging like a Sword of Damocles over them. In such a conservative and heavily regulated business as insurance, it’s even more challenging.

These were some of the challenges faced by Armin Molla as he set about delivering products in one of Germany’s largest insurers, Ergo.  Armin is now founder and CEO of Virado, a platform enabling brokers to sell relatively low-ticket policies through tablets and smartphones.  We caught up with him after his presentation at the Lean Startup Summit in London and talked to him about his experiences innovating inside and outside a corporate.

Armin, tell us about Virado

It’s a service which enables insurance brokers to offer a section of insurance products on one platform. There are around 120 different products, mainly for niche policies, for example smartphones and bikes. The kind of premiums for these products are around €50 per year. They’re the kind of policy that don’t really provide a profit but are great for brokers to build relationships with clients that can grow.

They were the kind of policy which has previously been sold through retailers. No-one has brought this together before.

Where did you get the idea from? 

I saw the problem when I was working at Ergo [one of Germany’s largest health and legal expense insurers and part of Munich Re].  If a small partner comes with an innovative idea such as this, then the big insurers can’t co-operate with them.

If they want to integrate these kind of products, then IT and portfolio management would need between two and four years. Two years would be fast! And there is no difference between the large insurance companies in terms of speed here. There is market potential for a lot of products but no underwriters for many of them.

That’s not such a great environment for innovation, who’s doing well in this space? 

Hartford Steam Boiler (US-based B2B insurer, also part of Munich Re) is doing great here. They are working iteratively and developing projects  [The company has a number of innovation strands including the “plug and play” incubator in San Francisco and a Venture Fund which invested $500,000 in IOT app Waygum last year]

You have experience of innovation in Germany, a landscape dominated by corporates. What innovation strategies are you seeing there? 

It’s difficult to go fast in a corporate. Bayer and others are building lots of “speedboat” opportunities. That enables them to go faster to solve a problem, but they are not receiving direct investment. We see a lot of “labs, incubators, speedboat” type operations with multiple strategies.  No-one is then executing on these opportunities at the level of, say $1bn. Instead they are buying startups or launching their own projects.

What’s the culture of the insurance business and how does it handle innovation? 

The culture is still very much driven by the business side, driven by the numbers. The technocrats are still in power. When they talk about cultural change, they are going to Shoreditch, or Silicon Valley or Berlin and going to the new innovation hubs – they’re seen by management as “a lot of fun.” It’s the start of culture change. But realistically, with labs and incubators you’re talking about 3-7 years to see the results.  It’s really a marathon effort to change culture.

And then, at the end of the day they have to do M&A to get the companies they need. To get the speed and numbers they simply have to do acquisitions.

Who’s doing innovation right in Germany? 

Outside of insurance, Axel Springer has a fantastic approach. For example, they bought [international job portal] Stepstone and now can spend €1bn or more per year on acquisition fund. They’ve been doing that now for ten years  – most of the other media companies did not learn [Springer last year acquired US digital news site Business Insider]. Contrast that with Neckermann [catalogue company which become insolvent in 2014} which could not change its business model in response to Amazon. When a big traditional company like that from the “Wirtschaftswunder” [Germany’s post-war economic miracle] disappears it sends shockwaves. Yet in other businesses keep on saying “we see the change but we’re still doing good numbers. If they get too big we’ll buy them”

But once the patterns of digital disruption touch your business, even if you’re losing just 1% of your sales to those forces that’s too late to react. In Germany now there are 150 companies targeting insurance.

Acquisition seems to be a very defensive tactic. Is there another way? What did you learn at Ergo?

Growing through M&A is defensive and also takes time to see results. If you want the company you buy to survive, you need to have the follow-up. You have to slow down to integrate it.

There is a different way.  You can build a privileged project inside the organisation.  That has to run on different KPIs from the standard ones which are usually around efficiency. You simply can’t operate at maximum efficiency in innovation.

Unlike the labs or incubators, you should be running maximum three projects, ideally two. You also need to deliver very fast results. In a standard organisation you can expect to deliver in two years. We needed to show that inside 9 months.

It’s about hiring the right people, and engaging the gatekeepers and stakeholders. You have to have C-level support, otherwise it won’t work.

You also need to have budget and the ability to spend it. Normally when it’s outside “business as usual” the CFO is told “if he tries to spend it, question it”  You need to be able to spend as you need to. Quite often you see the shareholders want a digital strategy, the major stakeholders want one but in the end you can’t execute because of this.

And, above all, be positive. You are selling internally like a startup. It’s a new business and needs your energy and positivity.

Lastly, tell us about failing. You can’t innovate without it. Where have you failed? 

When we were looking at selling bike insurance , we looked at high-end customers. We assumed that the owners with bikes costing €2,000-10,000 would want the full insurance with GPS trackers, so we geared our site to these customers. We found they were not taking the insurance because the tracker spoiled the look and feel of the bike. Looks were more important to them than tracking. Instead we learned and focused on those with bikes costing €700-€1,500.

We had another fail with printers at Virado for our POS solution. We thought that we would provide a tablet interface and also a printer, so we provided high-end printers to be able to print and sign contracts at retail. We realised that they already had a printer and didn’t have room for a second one.

The only way you can learn these things is by talking to people and learning.


In a Nutshell

  • Insurance is mainly being disrupted by forces outside the traditional business such as customer enablement through smart devices.
  • Core operations pursuit of “business as usual” and technocracy stifle new ideas and innovation
  • Internal innovation can provide a valuable alternative to both M&A and incubators
  • Different metrics must apply to the unit
  • It needs engagement, focus on 2-3 projects only, hiring smart, internal sales and top-level sponsorship
  • Failure is part of the process and needs to be embraced
  • (more…)

Five (and a half) Things We Learned About Starting Up – From Wahanda’s CEO

Thursday, January 21st, 2016

Failure, money, people and self-disruption are just part of the daily diet of a startup CEO. That was the message from the founder of Wahanda, the European startup which has established and dominated the market for online booking of hair and beauty appointments, now rebranded as Treatwell as of this week.

Lopo Champalimaud, Wahanda’s founder and CEO spoke to an audience of startup founders at an event organised by investor and accelerator Forward Partners, and touched on his success and failure in his diverse career. It’s one which includes doing online market research back in the dial-up of days of the mid-90s and crystallising the hair and beauty opportunity while working at Chances are you weren’t at the talk in London’s Old Street, so here are 5 just 1/2 things for startups which we think are worth writing home about.

1. It’s about people, people, people

The old retail maxim is that it’s all about location, location location. For start-ups, replace “location” with “people” and you’re pretty much on the money. “90% of an entrepreneurs job is to get better people around you. And keep them there” says Lopo.

2. Money is more than just money

When you’re bootstrapping an idea, it’s tempting to think that any money is good money. However the value of investors and the knowledge and contacts they bring is probably more important than the Dollars or Yen they bring to the table. “Money is not all the same colour” he said, explaining the majority sale to Japan’s Recruit Holdings last year.

3. Investors can be blind. Like really, really blind

WahandaOpportunity2 Once the market had been built, it was easy to see why Wahanda was an opportunity waiting to be capitalised on. Underused inventory in suppliers, strong and regular customer purchase patterns and a marked absence of digital tech facilitating transactions were key drivers for a market waiting to be disrupted. Investors, with biases towards what they knew, had a hard time getting it. “This was a 100bn Euro market but investors couldn’t see it. In music, billions have gone into it but the market is shrinking.

4. You can disrupt yourself while you’re disrupting others

Wahanda underwent three pivots in four years. The biggest change came in 2012 when the daily deals market, which had powered the company to growth since 2009 was in danger of running out with both suppliers and customers being promiscuous among different deal brands. Lopo convince the board that they needed to exit deals and move to a booking engine based product which he had been developing quietly in the background.

“We were killing 80% of our business” he says. “We did not have a booking business at that time. “ After a wholesale revamp of the management and operations, the revenue returned to where it was after eight months or so.

5. Market place businesses are difficult to build

While everyone chases “the next Uber or Airbnb” across beauty, health sport leisure and fitness, they need to understand the complexities and challenges of building a marketplace” business which he says is “almost always driven by supply.” Customer acquisition, merchant acquisition, tech and brand and among the key challenges these businesses face at the same time.

5 (1/2) People Again – A No “A**holes policy”

And lastly back to where we started, It’s about people but also how you treat them. Paraphrasing Jack Welch, “the worst people in (mainstream) businesses are the people who make the numbers but have the wrong attitude. They never get fired.” He has a strong no assholes hiring policy and empowers his hires. “if you hire people as adults you have to treat them like adults.”

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

Wednesday, 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.

Orientate First, Then Navigate

Saturday, April 11th, 2015

It has to be one of the most frustrating moments of the digital age.

Orientate firstImagine you need to get somewhere, fast. You fire up your GPS-enabled smartphone and open your favourite mapping app.  Yet while you wait for the details of your immediate surroundings to load, all that appears is a tiny blue dot on an empty screen. Right now all you know is you’re….somewhere. You might as well be nowhere.

Frustrating isn’t it? There are strong parallels with the sense of bewilderment felt by organisations who are about to launch into transformative change.  It doesn’t matter whether they’re spurred into action by competitive threats, regulation, disruption from digital upstarts or a spontaneous and genuine desire to innovate. Suddenly, there’s a desire to get somewhere fast. 

But without the immediate context of where you currently are, how can you tell if you’re taking the right or wrong path?

I recently had the privilege of working with a behavioural psychologist who used the phrase “orientate to navigate ” in the context of helping service users to achieve specific goals. It stuck me as a great guidance for the first steps around that desire to launch into transformation.Navigate to your goal

Whether we’re talking metaphorically about moving towards a distant personal goal, finding your way though the innovation maze, or literally about the real world challenge of getting to your next meeting, the idea is are the same. Setting a goal is only as useful as knowing the starting point of your journey. 

So what how can you load your own map of where you are? 

You might want to achieve a transformational goal, but how do you navigate the realities of you corporate culture? What is the degree of risk aversion in your organisation ?  What are the skill sets you have in house and how will you use them to your advantage ? Do you have the time, budget and support you need from top down and bottom up?  By framing these questions at the start of this journey you can begin to build up a picture of your surroundings.

By learning to orientate before you navigate, you can set realistic and achievable timescales for reaching your goal.