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The Financial Mentor with David Boyar: Lifting the lid on business

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Episode 3 - Tech is Dead; Up Banking, Ticketek Restructure

by David Boyar |

Business, Restructuring, The Financial Mentor, Learning, Banking, Artificial intelligence, Growth, Budgeting

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February 06 , 2019

In The Wrap this week, we find out how Ticketek have restructured their company, what the Fyre Festival debacle has to do with your business and some time management inspiration from the professionals.

Futurist, Keran McKezie, talks us through why tech is dead.

Dom Pym, co-founder at Up Banking, takes us through The Pitch.

 

EPISODE TRANSCRIPT

I'm your host, David Boyar, and it's so good to be back for our second episode. Thanks to those who tuned in last week and shared with your mates online. We really love doing the show and I've got an even bigger jam packed one.

This episode we're going to talk about Australian billionaire Anthony Pratt, the massive documentary out on Netflix, Fyre, about the biggest party that never happened about how to hire when you grow about changes a Ticketek.

We've also got an interview from one of Australia's most exciting new banks, UP. I sit down with Dom, their CEO for an episode of The Pitch, and our futurist in residence, Keran from the Futurist Project and I sit down to have a chat about is tech failed? Have we passed peak tech? Is tech just everywhere? What's next for tech? Stay tuned. Here we go for a great show.

THE WRAP

ANTHONY PRATT

 

This week, some of the big power brokers and most influential people went to DevOps to meet at the annual World Economic Forum. Last year it was made famous because Donald Trump and Vladimir Putin squared off in a very public embrace, but this year, those two elites were there. It was, however, filled with some of the big power brokers. Oxfam came out with a start, almost to be critical of the World Economic Forum. 26 people on the earth own as much wealth as the 3.6 billion others.

If you're a business owner, know that you are out there scrambling and fighting and trying to grow your business to build that wealth for yourself and your family. A lot of people like to use this to talk about the income divide, the wealth divide, the rich getting richer and the poor getting poorer. But for me, it makes me think of billionaires. I can't believe I'm saying, I have a favourite billionaire. My favourite billionaire is Australian, Anthony Pratt. Of course, Dick Pratt's son, who now runs the Visy Empire. Visy, one of Australia's great companies.

This guy runs his own social media, and it's brilliant because it's filled with the sort of typos regular people have. His own opinions about business and about society. There's lots of lessons in there. But there's one in particular that I absolutely love, he signed a new customer for Visy and puts a video on Twitter of him almost tap dancing in his expensive suit, in his luxurious looking apartment or palace that it looks like that he is. I just thought, years ago, he's worth $8, $9 billion dollars. He's chairman of a massive global company and he is bold enough to jump on social media and celebrate signing what he equals a big box client.

That sort of leadership would have to be infectious in a company that cares about growth and cares about its customers so much. I thought it was so entertaining because usually when you see billionaires, it's really structured and media managed and PR driven. Jeff Bezos is so rigid. Zuckerberg is always surrounded by lawyers these days. But he's a billionaire just celebrating the greatest thrill of business, signing a new client.

TICKETEK RESTRUCTURE

In other news this week, Ticketek is going through a big, big restructure. You must say, who cares? What's a restructure? Well, if you're Australian, and particularly if you are Victorian, and particularly if you try to buy finals tickets, AFL Finals tickets, you know that experience, Ticketek crashing. In 2016, the Western Bulldogs, my dear beloved Western Bulldogs made the finals. We got unexpectedly deep. Because of delays on Ticketek, my father and I ended up with seats so bad that we ended up rebuying tickets on the secondary market to get better seats, and we're full AFL members. We've been full AFL members since 1994. We're diehard fans and we should have got better tickets.

Ticketek's site keeps crashing and in response, Ticketek has essentially globally restructured to bring the tech team in line with the customer success team. So, these guys are going to be working together. The reason why this matters is because it changes the focus of the business. It puts the people who solve the tech problems closer with the people who are dealing with them as they happen, and there's no doubt that Ticketek have a tech problem because this happens every year. Every year they somehow don't predict the demand of AFL Final tickets.

Structures and re structures are often really boring. You often hear about it when public companies do it. And they add back the one off cost of a restructure to try to come up with a proper figure that they think the market's going to be more palatable with. If you're running your own business, it's a cost, it costs you money. But having the way your team is structured and even sit next to each other inside your business is really important for measuring what's important for sharing your values as a business owner and getting some collaboration in and agility amongst different teams together.

For me, I always say finances should be out in the middle. They should be talking with the business, they should be overhearing what's important to decision makers in the business and that way they can help come up with financial information that helps other people in the business make better decisions. I don't think the financial people should be put in the corner. Nobody puts finance in a corner.

The Ticketek one's really exciting because there's so much noise and attention when their tech fails, but when they're actually doing something internally to manage it and deal with it, well, it doesn't get as much headlines. It's not as sexy, but this is the stuff that makes a great business or just a mediocre business.

FYRE FESTIVAL

You would have to be living under a rock if you did not hear about the five documentaries on Hulu and Netflix over the last couple of weeks. Fyre was a party built to be the party of all parties. It had influencer marketing to the nth degree. The show, one of the documentaries on Netflix says that they paid one of the Kardashians $250,000 for one Instagram, tweet, feed, post. $250,000, that is remarkable.

I watched the Fyre documentary with my wife and we had these jaw dropping moments. I was trying to think the last time I had these jaw dropping moments on a show that's largely about a failed business. I remember when it was. It was when the Enron movie, the smartest guys in the room, where they have one tape two traders talking about deliberately creating a brand out in America so they can jerk up electricity prices to make their budgets. Your jaw drops because you think, how do they think this is okay?

The Fyre documentary is riddled with an entrepreneur who wanted to build something truly great. Had a bold vision or grand vision, had a silver tongue, could talk his way through investors and tried to create this absolutely monstrous party. They spent a fortune on marketing and sales. It sold out, it oversold. They didn't budget a single cent for actually delivering what they said that we're going to do. It turns out to be an absolute debacle and there's so many lessons from it.

In response to Fyre, the concept of influencer marketing really changed. You have to declare, in most instances heavily recommend that if you have a paid post on social media and you are an influencer that you need to declare that you've been paid to talk about it. But I started thinking about this when I thought, well, influencer marketing isn't new. If you're a B2B sales person, if you're a B2B business, you're selling to other businesses, we rely on influencer marketing all the time, because most B2B business deals are done through referrals. Hey, I know someone, you should talk to them. I had a great experience here, go check them out.

Word of mouth marketing is the cheapest and most sustainable way to grow a business. It also means you usually have a good business because people wouldn't be talking about and recommend you if you weren't good. There's lots of examples where you would also use influencer marketing even on average businesses website. Most businesses have customer stories and customer success stories to try to create the illusion that you, a prospective customer should shop with them, should buy with them, most importantly, should trust them.

Now, I must admit, SequelCFO.com, we don't have our customer stories up there yet, but we're working on it. We've got some great ones out there, but we haven't got it yet. So, I know that I need to do it, but just in running a business, I found it really hard to find the time to go and interview our customers and write great copy and tell the story really really well.

But influencer marketing in the B2B space is also conveying, we don't necessarily pay for it because it's all about trust and integrity. I'm not so sure that some of these social media influencers have a lot of integrity because you now have a case where Emily Ratajkowski and some of the key supermodels who promoted the Fyre Festival are now being brought to court because of payments they received promoting an event that didn't happen.

But you go back on companies who have used influencer marketing. SAP has used influencer marketing to try to create great content for their ERP solution. American Express used influencer marketing to try to create this luxurious lifestyle and paying for it all on your Amex, which, I don't know if you like points, you like points but that's usually just a trap to get you to use the card and get you to pay some interest in fees. Your business probably uses influencer marketing if you've ever asked for a referral or if you've asked somebody to refer someone to you, that's what B2B influencer marketing is. Fyre is a phenomenal documentary and I strongly recommend you watch it. Whether it's on Hulu or Netflix. There's just so many business lessons to take from it.

TIME MANAGEMENT

Next thing that we want to talk about is this concept of time management. I struggle with it. I always think that things take nowhere near as long as what they actually take. I always underestimate how long things take. This has impacted me in the past where I've got scope wrong, budgets wrong or when I've just gotten to the end of the week and thought, jeez, I haven't done anywhere near what I wanted to do this week. It's all my fault. It's because I didn't consider how long things were supposed to take.

This is really popular, this idea was really spoken about on a book from a few years ago called Thinking Fast and Slow. I bought the book, it's a bloody tough read. I bought it when I was in Byron Bay. That's not really the place where I can deeply read and focus on an almost academic book on why my brain works in different ways. That being able to manage our week is really important. Actually, a comment was made on the Serial Podcast, really popular podcast. Serial, Sarah Koenig made the comment that she's continually shocked at her wildly inaccurate estimations of how long things take to do. There is no quick fix for this, but understanding the way your brain's hardwired is a good way to get on top of your week to maybe actually get you over this planning fallacy where we always think the things don't take as long as they do.

The best tip, have a look at how long it takes other people to do it. Because even though we like to think we're better than everybody else, we're not. I think that's a great way to benchmark yourself against other items three out there.

IMPROVE YOUR HIRING PROCESS

Next up this week is a question that we get asked a lot from our clients. I saw an article about it over on Smart Company about how to improve your hiring process. When you're growing, hiring is critical. You have to find and attract the right people. But also you need to manage it so it works really efficiently and quickly. So, I wanted to share this awesome product that we know and we've used called Vervoe. Vervoe allows you to question and engage really multi choice type processes for people to apply for a job that you do.

It almost ticks people out by the fact that they don't pass the tests that you put in their way. Now, it's very easy to say, well, a lot of this stuff's out there, there's always a lot of tests, acumen test, and these sort of stuff, that sort of stuff that's out there. Vervoe’s a Melbourne based startup. They were working at a co-working space, that isn't how I knew about it, but essentially what they say they do is they use AI powered skill testing to hire the best people. It's the skill testing part of this that we think is absolutely brilliant, particularly if the job that you're hiring for is a technical job. Check it out at https://vervoe.com/.

That's it for the wrap this week.

THE PITCH: DOM PYM FROM UP BANK

David Boyar:                 Here for The Pitch with Dom Pym, CEO of Up Bank. If you haven't heard of UP Bank, head over to Twitter and have a look at all your tech savvy mates who are posting pics of their orange debit cards. Dom, let's start. Give us the pitch for what UP bank is.

Dom:                            Well, Up is a digital bank and to be really short and sharp, it was the only next generation digital bank with banking product in market in 2018 in Australia.

David Boyar:                 What problems do you solve? Why aren't you a normal back?

Dom:                            Well, it's interesting, we've been working in the banking industry for about eight years now. We built the fifth largest banking platform in Australia, which is with Bendigo and Adelaide Bank. All the brands under the bank banner, some would be familiar, others not. Like Bendigo Bank or Adelaide Bank or whatever. We have a lot of experience in the banking space and we have partnered with Bendigo in order to ... Officially, we call it a collaboration in order to bring up to market. Bendigo provide the licensed financial product and we are an independent software company here in South Melbourne. We build technology.

Dom:                            I guess from a customer's perspective, they don't really care that much about that sort of stuff. The industry care, you and I care, but what the customer cares about is, is this better than my current banking experience? That's it.

David Boyar:                 I've jumped online, I haven't signed up yet. I tried to, but I was on my computer and it said it was going to send something to my phone and it didn't work. I think I got distracted. So, it's probably my fault. I go online I can have a look at what UP is, is brilliant user experience, your sign up process, I had a bit of trouble I think it was my fault. It happens in seconds. It literally takes seconds to open an account. How have you gone through the process? Your products are pretty simple as well. It's a savings account, it's a savings experience because you in real time tell customers what they're spending money on and where it's going. How did you research what your ideal clients wanted from their banking experience?

David Boyar:                 Because my Westpac app does most of what I need. Whether I'm paying international fees, I'll put my thumbprint on the back, and it works. How did you go through that process?

Dom:                            Look, I think banking is a solved problem. So, people don't know that they want something new or better or different, until they see it, feel it and touch it. The sign up experience as you mentioned is something we put a lot of energy and effort into. You can sign up for an account, we say in less than three minutes. We have a video of one of our guys here doing it in one minute and 25 seconds or whatever. But you can do it real quick is the point. It's mobile only. That's why when you would have been on a website if you're on a website at all, it'll refer you to the App Store or the Google Play Store.

Dom:                            Being mobile only means that we get some advantages around security, around biometrics, around location, around all sorts of things that you can do in a mobile context that's more difficult to do. But I think, well, I know the last time I checked the reports, there were 55 million customers of Australian banks. That's more than the population. Which means that if you look at just the 18 million adults in Australia, the average adult has three bank accounts, approximately.

Dom:                            So, 85% of those bank accounts sit with the big four banks. It's a solved problem. It's also in Australia, the apps are awesome. The big banks have done a great job of building digital channels and building great apps and the rest of it. I think the bar is very high. Basically, to answer your question, what we did is we had a look at the market, and we had our own frustrations. We also as I said, built the Bendigo and Adelaide Bank platform. The Bendigo Bank platform has 800,000 monthly active users or more.

Dom:                            For us, we know what customers are complaining about, and we've been building this tech for a long time. The technology is one piece and then what the customers want from product is another really interesting piece. You just throw in no international payment fees. For traveling and for younger people that's really really important, and it's just another fee that you can find other ways to make that revenue. You don't have to hit people every single time they want to do some banking.

David Boyar:                 It's also very macro level. I'm looking around your office, you do not have the costs of a big bank. You literally need less revenue to make more money.

Dom:                            True, but we also look at how we can ... I guess that's the pitch of any new or any new bank that comes along says that we can do a cheaper, faster, more efficiently, more effectively, and better for customers. That's a given. That's just basic platform. But actually what we've been able to do and what we continue to fight for is to build a bank that is self-funded and profitable. That's very different than what you'll see in most of the banks overseas and the locals who raise hundreds of millions in venture capital, who then want to do a public listing or want to find rapid growth so they can then convert those customers.

Dom:                            We're about growing, obviously, rapidly, very fast growing, but we're also about making sure that all those engagements affect the balance sheet. We've got to be profitable. One of our key tenants is to hit that probability for each customer.

David Boyar:                 Let's talk about the growth, how fast has it been?

Dom:                            Its been quite extraordinary. Over the Christmas break, it has dawned on the rest of the world, how fast we're growing, but we launched in October, and you can imagine those first few weeks we had a few hundred people, few thousand people or whatever, just ticking along. But over the Christmas break, we started adding about 500 or so people a day. And then the first week of January were between 500 and 1000. We've had a few days now at over 1000 customers a day signing up.

Dom:                            UP would be one of the fastest growing banks if not the fastest growing bank in Australia. You can see on the App store, we did some tweets about, we hit number five on the App Store. The only two banks in front of us were Commonwealth Bank and ANZ. So, it's very fast.

David Boyar:                 To get that fast growth, business has been running for seven, eight years?

Dom:                            We've been around, working in the banking space for about eight years, yeah.

David Boyar:                 What has been some of the really big challenges? Because it's not all the glitz and glam of rapid customer sign up over-

Dom:                            Because of the collaboration with Bendigo, UP in its form actually went to production in 2017. It's back in October 2017 we went to production with UP, and then we tested it with 1500 users for an entire year. It's not an overnight success. That might be from the public's perception, but we've been working on this for years, and a year of operating in production and testing everything and rolling out new features, and da da da, we're at the point now where we had a target to release five customer deployments or software updates a day, which is very fast compared to any company; Google, Facebook, whatever, let alone a bank.

Dom:                            In November is the latest numbers I had, I'm sure it's still around this level. But in November, we exceeded 10 customer deployments per day. We only launched in October. But we had a year's or 18 months’ worth of momentum behind us.

Dom:                            I think what you'll see is in the first half of this year, a bunch of other competitors coming in the market and UP really releasing a whole bunch of new functionality and features and capability beyond where we are now with just spending and saving.

David Boyar:                 Saving's a big part of the product. When I went on to look through the website, savings to me looked like much more of an experience than a bank account that attracts fees, which is what I get from Westpac at the moment. I'm keen for your thoughts on where you see savings and spending in the market? Big report came out, credit card spending was down after base spending is through the roof effectively. We got all these headlines that millennials are shunning credit cards. What are your thoughts on this and what are you seeing in your customer base?

Dom:                            Well, I think maybe to reel it back a bit. Millennials are shunning cards, like plastic. It doesn't matter whether it's debit or credit or whatever it is, or loyalty or whatever it is. But Millennials are interested in digital technology. That's the first point. The second point is, generally speaking, the subscription economy or the app economy, or whatever you want to call it nowadays is, Gen Y, and beyond are not really that interested in paying fees, but they are happy to subscribe to things they want. That really comes down to customer choice. What we see is that someone's prepared to pay for a Netflix subscription, and the price goes up, they're happy to keep it. But they won't want to pay and they'll be quite grumpy about paying a monthly fee for a bank account.

Dom:                            It doesn't logically makes sense, but it's all in the customer choice. If you're forced to pay a fee, you fight against it. If you choose to pay a fee, you're happy to pay more. I think you can be profitable and you can have models that work in that way. What Afterpay have proven I guess, and not just them but there's EasyPay and Openpay and all the pays, what they've been able to demonstrate is that if you can offer a no fee, no interest and no fee product to consumers you'll achieve rapid growth. You then still need to be profitable and they make profit in the back end from merchants.

Dom:                            I think we will actually see card use and particularly credit card use declining significantly is just the current view, and we're seeing happening now. But what we'll see is that behavior of using other people's money shifting to say digital, which is what we're seeing with say, Afterpay.

David Boyar:                 Part of the big reason for that incredible growth that you've had is really slick branding and marketing. The card jumps off your screen when you see pictures of it. There's been some great articles written about your branding that's gone out there. I jump online now and I occupy a really geeky group of people that have super tech savvy accountants, people who have been using Xero cloud based accounting software since it came on seven, eight years and we're all jumping in their skin to get this. But I go on social media and people take photos of their UP product and share it on social media. This is PR you can't buy. You literally can't buy it.

Dom:                            You can't buy it. We're obviously pleasantly surprised with how excited people are about it, that's awesome. But we also put a lot of energy and effort into building something that people could share. So, simple things like taking the private details off the front of the card. What you'll see with some of the more famous example, globally, whether it's from Bank Simple or others is that they put a ribbon over the front of the thing, or people put their thumb over it, or whatever, to try and hide the details.

Dom:                            I think a lot of thought went into it, and I would just say it worked. It's great. The other thing is, we iterate on physical things, in this case, a welcome pack and a credit card or debit card in this case and a sticker pack and things like that. We iterate those things in the same way that we iterate software. We try something, we do a small run, maybe 10,000 or whatever, and then we see how that resonates with the customer. If customers love it, then obviously we would look to tweak and improve it. But if there's something they don't like, then we'll change it.

Dom:                            You said the colors, right? The colors jump off the page, sure, but we have a really strong and broad color palette. We're using pinks and yellows and oranges, and all sorts of different colors now, whereas when we first started, we really just had the salmony orange and bluey, black. And then over time, we've kept those colors, but we've also added a whole pallet. I think it's made a big difference.

David Boyar:                 Talking about the types of customers you have, we've spoken about bit of customer acquisition, how you found out what they wanted. There's a few newer banks coming to Australia. That's all very exciting because everything new and shiny is exciting. Are you all going after the same market, though?

Dom:                            I think in general, the answer is so yes, when you pull it apart and dig into it, it's basically the Big Four have 85% market share. If you look at the mid-tier, the big mid tiers like the McQuarries or the ING or your Bendigos or whatever, they're all going to lose market share to new players because where's it going? That's not new customers. It's like eating out of the same pie. As I said before, banking is sold. Everyone in Australia has three bank accounts.

Dom:                            What we're trying to do is get people to try something new, experience what it's like to have this new tech or this new security or these new features or this new product or whatever, and then if they love it, that's great. Now, in terms of is everyone else doing the same, it seems like there's a lot of new players that want to do something similar. But I would suggest that each one of them has picked out a niche that they're going after. You can see when you look at the different players, what sort of target market they're going at. I guess for us, we very, very clearly defined to the consumer, the customer, that we wanted to go after, and we haven't offered a broad offering.

Dom:                            Although, what we find is that we've got ... I think our oldest customer is 85 years old. Our younger customers are 16. There is still a broad group of people, but it's definitely skewed between 18 and 25.

David Boyar:                 We spoke about products a little bit. Do you have any product developments in the pipeline, any lending products coming?

Dom:                            Yes, we have heaps in the pipeline. We're looking to publish a bit of a roadmap for people, because we get asked the same questions every day.

David Boyar:                 Sorry, it's interesting.

Dom:                            But the questions we get asked are, what are you doing with Afterpay? We've made a small announcement last year, but we're going to release that product to customers, probably as early as next week. We get asked, what are you doing with home loans? What are you doing with credit cards? What are you doing personal loans, what are you doing with overdrafts? What are you doing with investments? What are you doing with insurance? There's a lot of that, all of those things are on the radar, and there will be bits and pieces rolled out in 2019, but they'll be rolled out eventually.

David Boyar:                 I'm looking out of your podcast for a minute, pretty trendy offers. It was about 30, 40 people in your team.

Dom:                            29.

David Boyar:                 29, not bad. There we go. My spatial relations is increasing as I get older. I failed that in an IQ test when I was 18. That's why I became an accountant. How's your team structured and how do decisions get made in a business that's about to go through tremendous growth?

Dom:                            It's a tricky one. As I said, we've been together for a long, long time. We work on projects that have hundreds of people. We also worked with some of the big banks, the big four banks and so on. Typically, a project would have hundreds of people on it. Our goal with UP was in this office here for us not to grow beyond 30 people in order to bring a new bank to market.

Dom:                            Now, we have the luxury that some of the other competitors don't have on working with Bendigo when we can rely on their risk, compliance, legal, bankers, whatever we need, foreign exchange all this so we can rely on that. We haven't had to grow as quickly as some of the other newer banks have had to. Because we're a software company through and through.

Dom:                            For us, it's a conscious decision. We will automate something, or we will try and solve problems with software rather than just adding new headcount, new people all the time. If a problem is worth solving, and have you, it's worth solving properly, and really automation and software can do that at scale much better than if we added five extra people.

David Boyar:                 Dom thanks very much for coming on the show.

Dom:                            No worries. Happy to be here.

David Boyar:                 Cheers.

Dom:                            All right, keep in touch.

THE FUTURIST: KERAN MCKENZIE - IS TECH DEAD?

David Boyar:                 Joining us again on the show is Keran McKenzie from The Futurist Project. We are here to talk about, get behind some of the big tech issues of the week and work out how they relate to our small and medium business or if they do it all. Mate, you've picked up a cracker of an article this week to have a chat about.

Keran McKenzie:           Absolutely. Technology is dead. How's that for a start, right?

David Boyar:                 I find that very hard to believe. We've got our show running on Google Notes. We're in different locations, we're recording on a Zoom call. Surely, technology is not dead. Talk me through it.

Keran McKenzie:           Now, look, it's really really fascinating. This article in The Atlantic came out this week around technology is dead. Almost needs the tagline of, but long live technology. What they're getting to is this idea of if technology is everywhere, then does the tech sector really exist? That comment in itself is fascinating. You think about the fact that we've got med-tech, reg-tech, eg-tech, bank-tech, fintech, insurance tech, everything's a tech thing.

Keran McKenzie:           At that point, is it really technology? One of the big things they called out in this is that if the tech sector no longer exists, then its premium is no longer justified. I think we're starting to see that coming through in the valuation of businesses, and the activities going on that space. So, yeah, maybe we're saying it.

David Boyar:                 I always get so suspicious when the media come out and say something's dead, because it's never dead. I've been told that the accounting profession's been dead for the last 15 years, and we're all thriving. So, that's just impossible to believe. I think when media says something's dead, usually what they mean is the era of something going super or supercharged growth is dead, or the way it currently works is dead.

David Boyar:                 Tech tech isn't dead. As I said, we're using a lot of technology right now just to produce our show. But the way in which the business models of technology have worked, it's almost like it's not innovative anymore. It's worked and it's now common place. So, what else?

Keran McKenzie:           Exactly. I think the reality is, and I've run this before, and I think you and I have talked about it before is that people are jaded. We're tired of hearing about the tech, we want to hear about the value. I want to hear about the impact in my life. I'll get really passionate talking about med-tech, but it's not that I'm passionate about the AI or the machine learning behind it. I'm passionate that it's impacting a human life. It is giving something back to a person.

Keran McKenzie:           I think that's where societies got us to a point of going, we're tired of hearing all about Bluetooth and artificial intelligence and Wi-Fi and things. Now we're just going, I want a bank easier, I want to buy my stuff simpler. I want to run faster. I want to be healthier, right? And that's where yeah, technology is dead. The age or the value or the impact of the customer has starting to come to the fore.

David Boyar:                 Always believed that as an accountant, as a financial mentor, I don't need to worry about artificial intelligence. It will just be in the products that I start using for my clients. It'll just come through and we'll start already getting in place. Things like robotic process automation have been around finance teams for 20, 30 years now. The advent of machine learning and technology isn't really changing the pace of which robotic process automation is being implemented in finance teams.

David Boyar:                 The big part of this article though is that, unlike you thoughts mate, publicly traded tech companies the super profits aren't there and the super evaluations aren't there anymore.

Keran McKenzie:           I think we're starting to see that change. We talk about bubbles all the time in this space. We talk about over hype, overvaluation. There's some classic examples. We've only got to look at Snap. A wonderful company behind Snapchat and such like, they launched March 2017 at something like $27 US evaluation today. They are at $6 US. That's not enough to be just a tech company doing something in the tech space. You've got to have value and purpose.

Keran McKenzie:           We've seen Apple, Facebook, Google, all go for record valuations this year. Apple was the first company to hit a trillion dollars, and yet now they've all fallen massively in the last few months because there's pressure on them, there's frustrations on them. People are just getting exhausted with the tech talk and going, well, what is this actually adding in my life?

David Boyar:                 As people say, what does it add in my life, they're saying, what am I willing to pay with and part with? What value is ... You say the company needs to create value, I say, yeah, it also needs to capture it and produce financial results that stand up long term. You've still got a case at the moment where Afterpay, a new darling of startup in the tech scene is trading at 100 times their 2020 earnings. Right now though it's making a loss. Is that company still getting a tip, or 100% that's getting a tip premium?

Keran McKenzie:           Absolutely and you'll always have standouts. You'll always have exceptions to the rule that are out there. But, I think a couple of things that have changed on this way through, is that people are becoming much more aware of what's going on. One of the things that's driving some of this, and this comes to focus that's going to happen within the Afterpay space, in fact, has already starting to happen, but with Facebook and others, customers are aware that when a platform or a product or something is out there and you're not paying for it, then you are the product, right?

Keran McKenzie:           That speaks to data. What is Facebook doing with my data? Where's that money coming from? How's that being driven in that respect, and who's making money on my data? There I think the implication of what's happening in those big platform places.

David Boyar:                 These platforms, you're suggesting the ad model, the ad business model is now just considered to be normal for platforms, it's going to be price normal and that's just what business is now.

Keran McKenzie:           It is, but the revolution right now is that I don't want to see ads. Think of TV, I don't see ads on TV because I'm on Netflix. I don't listen to radio ads because I'm on Spotify. I don't see ads on my computer anymore because I've got an ad blocker installed. So, that's changing the model. The ad revenue is vaporizing for these businesses.

David Boyar:                 We'll also get in trouble because there's only so much attention that we have. You've got a TV fan, say that we're in an era of paid TV. Maybe they can keep producing quality TV shows, there's only so many eyeballs to watch. When the people talk about tech things, they're talking about platform based technologies that rely on attention. It doesn't matter what you're selling your business, somebody is deciding to spend their time with you. Which means you have to be damn good because there's just getting more and more and more of them. But is there a solution for this? "If tech is dead" in inverted commas because we just defined what dead is, is there a solution? Because you also ended this with long live tech?

Keran McKenzie:           Well, yeah exactly. I like what Andreessen Horowitz phrased this as saying, perhaps it's not the end of tech. Perhaps it's the end of the beginning. People like you and I, we've been 20, 30 years in this tech online space building businesses here. But it's still very much just the beginning of technology. We're talking about things like quantum computing coming rapidly into the space. We haven't even scratched the surface of what that technology will mean for medical, or for insurance, or for fintech.

Keran McKenzie:           I think we're very much at the emergence of a new norm. I think technology itself, the language of, "Hey, I'm a tech business will become BAU." Every business should be digital and be technically minded, but in the application of that for your client. So, we'll get back to I'm passionate about solving this problem, and I go out and do that leveraging technology, leveraging that stuff, but I don't need to talk about it all the time. I'm just a keen business person trying to solve a problem for you.

David Boyar:                 For me, this is when they are going back to business as usual, the hype of the whole world's going to change is now over. It's not going to become like Arnold Schwarzenegger in Total Recall, all of a sudden. We're not suddenly living on Mars straightaway. You have a few entrepreneurs who are trying to change that. This is just business as usual for me. You've got the article and check out our show notes to get a copy of the article, it talks about Nike acquiring a health tech company or collaborating with an insurance company, even owning an insurance company because the health insurance company because its job is to just help you run. This is what conglomerates do. In the old world, this is just what industrials and financial stocks did. They would buy an acquire companies so they could then cross sell and cross market to the same customer base.

David Boyar:                 It's almost been paroding 30 Rock with Alec Baldwin who his job as an NBC executive is just to push more JA product through the NBC audience as he can. It's the same business playbook. It's just maybe a bit more customer centric now, because you can identify customers in a more nuanced way than you used to be able to.

Keran McKenzie:           Absolutely. There are so many different ways now of reaching that customer engagement with that customer and understanding what that customer's feeling at a point in time. Of course, we're getting data from them, we're getting feedback from them. We're knowing where they are, we're tracking them. So, you can really build at scale that customized, personalized feeling for that customer, leveraging all the sort of technology. I think you're right there. We're going to see there's change in some ways, but I think it's just the reality of going back to business as normal. It's going back to just being really there and caring for your customers.

David Boyar:                 I think the lesson for business owners out there is really simple, it's customers love what you do and what you provide them with. What else can you give them?

Keran McKenzie:           I think the other part is, don't get distracted. Understand what your customers are. Focus in on it. And constantly, when you're exploring new technology or new tools or new gadgets or gizmos constantly ask, just like you would about a chair or a car, is this adding value to my business? Is this really helping my customer? Or is it a distraction?

Keran McKenzie:           You and I were talking earlier, sometimes these things are nice to know because you just need to be across them. Other times they're great to know because they're going to make a tangible impact in your business.

David Boyar:                 Keran, thanks for coming on the show, mate. How can listeners get in touch with you?

Keran McKenzie:           Well, they can find me on Twitter, that's @keranm. No i's or y's or anything else in there. Or https://thefuturistproject.com/

David Boyar:                 Brilliant, mate. We'll chat soon.

Keran McKenzie:           We will indeed. Cheers, mate.

Announcer:                   The Financial Mentor, with David Boyar.

 

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