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meaning "rapid and tumultuous change," which will "pass
by cautious, short-term thinkers. … This is an amazing
time to be an innovator – a disruptive, adaptive, innovator
in fintech."
Sculley added that the next five years is the right time for
machine learning and artificial intelligence, which will
unlock the potential creditworthiness of middle income
Americans and disrupt existing bank loan systems to
create credit for consumers and businesses that is lacking
today.
Sculley also said he was "pushed out" of Apple because
he "refused to license the Mac technology," and today he
"works with talented entrepreneurs to help them build a
company, work on strategy and be a rainmaker." At the
conference there were approximately 5,642 other people
who would describe themselves the same way, so this
space is getting crowded. It reminds me of the definition
of inflation as "too much money chasing too few goods."
Not all of the entrepreneurs at this conference will be
successful. Some will have a product that is designed to
be a part of the core infrastructure of another company,
such as a bank. Examples would be startups in the areas
of banking technology, fraud detection, analytics, credit
scoring, machine learning, open-source, etc. A few years
ago, these entrepreneurs were heard to say, "We'll beat
the banks," which became "We'll work with the banks,"
which became, "We want to be acquired by a big bank."
A large bank with a next-generation technology can gain
market share and brand recognition quickly with the right
acquisition.
Then there is the other kind of startup, which stands
independently (for example in the areas of regtech,
insurtech, wealth management, alternative lending, and
payment and remittance processors). These are services-
oriented firms with advanced technology not available
elsewhere. There are some early stage success stories
here, such as PayPal and Uber and Airbnb, which solved a
pain point for consumers and made payments easier too.
Everybody wants to be the next one of these.
Multiple highlights
One person couldn't possibly see everything at the show,
but here are some interesting things I observed. I liked:
• The 10-minute "elevator pitch" presentations and
the excitement of watching closely just to see if
presenters would finish by the time the buzzer
sounded.
• Some famous and respected payment veterans
speaking, such as Bill Melton, founder of Verifone. and Accredited ACH Professional, Brandes has a Master's in Business
• Startup Row in the exhibit hall, where you could
talk to a real entrepreneur who has a great idea
and probably another three months to go before
the cash runs out.
• The candor of some of the speakers, who freely
admitted they didn't get it right the first time, and
in fact nobody gets it right the first time!
I also liked that I was able to finally meet a potential
partner I had been wanting to meet for a few months; I
also met other interesting people there just by sitting next
to them at lunch or during a session.
Fortunately, there was minimal focus on bitcoin, which I
describe as "not a currency, but a speculative commodity."
As you remember, bitcoin went from $1 to $1,200 in one
year, then, post the Mt. Gox bubble, went to $200, and
is now around $600. Incidentally, there are hundreds of
digital currencies. If you don't think this is a speculative
commodity, I have a bridge to sell you.
More surprises in store
At about $3,000 a ticket, plus the cost of staying in Vegas
for three nights, this is a significant expense. If you want
to attend next year, submit your request to your boss
now for next year's travel budget. My guess is that this
entrepreneurial space is going to grow more next year,
even beyond the $12+ billion dollars in venture capital
investment last year. This is about solving pain points
for the consumer, not necessarily pain points that are
focused on the payment per se, but where the payment is
an important part of the experience or transaction.
We have a pretty efficient market in many respects today.
Swiping a card at the POS is pretty darn efficient, EMV
notwithstanding. Writing and mailing a check with a stub
is pretty darn efficient, and I definitely don't want at least
a dozen monthly payments to be ACH debited by someone
else from my bank account at their convenience – I want to
pay when I want to pay.
How many new ways do we need friends to send money
to each other, beyond the dozen or so that we already
have? But there are some markets that are still inefficient,
the medical business being an obvious one. There is room
for improvement. Some big successes will take us by
surprise, as many of the early adopters did; they seem so
obvious now we ask, "Why didn't I think of that?" That is
the exciting entrepreneurial spirit of our economy, thank
goodness, and that is why people attend Money20/20.
Brandes Elitch, Director of Partner Acquisition for CrossCheck Inc., has
been a cash management practitioner for several Fortune 500 com-
panies, sold cash management services for major banks and served
as a consultant to bankcard acquirers. A Certified Cash Manager
Administration from New York University and a Juris Doctor from Santa
Clara University. He can be reached at brandese@cross-check.com.
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