Henry David Thoreau once said: “In entrepreneurship is the preservation of the world.”
Ok, maybe he didn’t say exactly that. But the spirit of distilling corporate structure into only what is essential to nurturing innovation is what has led me to Techstars. In 2014, when Greg Rogers kicked off the Barclays program in London, we discussed how the community can help tear down the barriers to entry in FinTech. In 2015, Jenny Fielding asked me to join a star-studded cast of mentors as she launched the NYC program.
And now in 2016, I’m thrilled to be joining the Techstars family as Entrepreneur-in-Residence for the Barclays Accelerator Powered by Techstars program in New York. The perfect complement to the startup community-building we continue to do at Empire Startups.
Defending and distilling innovation is what first led Lockheed Martin to cordon off dev resources into skunkworks operations away from their primary roadmap. Accelerators and incubators are the modern and scalable skunkworks, and these programs and their startups will save the banks and not just disrupt them.
Are you a bank in need of innovation, courting and keeping top talent, and diversifying your product roadmap? The question to ask is: “How are you embracing the startup community?”
Innovation
Banks are wildly desperate for innovation, but moving fast is simply not their key focus or distinctive competency. Firstly, the comp model of traditional financial services rewards technologists for stability and continuity, which can compete with, if not discourage, innovation.
That’s right, Wall Street technologists are essentially paid to shower customers in mediocrity.
Secondly, traditional banks and asset managers with fiduciary responsibility simply can’t afford to “fail fast.” They don’t have the freedom to be cavalier and take chances by diverting their roadmaps away from longstanding competencies. The net result is that banks must look to the ecosystem to play a major role in building out new businesses, products and features.
Talent Acquisition
Startups are helping to keep top technical talent in FinTech. Young developers demand more than just a strong base salary and the bragging rights of a bulge-bracket firm. They want transparency into the company’s overall strategy, the ability to influence the product roadmap, and a modern software framework to move quickly.
It’s more common in traditional banking to see the decision-making centralized to a few, little optionality in projects to work on, and a frustrating pace dictated by older tools and legacy code. Startups keep employees happy by offering complete transparency, a seat at the table, and the ability to work with a modern stack. (You mean it’s not the hoodies and foosball? Nope.)
Banks who forge close ties with the startup ecosystem can ensure the top technologists are still addressing their greatest challenges.
Product Diversification
Banks don’t always have the luxury of putting a minimally viable product in the wild and leveraging customers feedback to refine their offering. The dynamic regulatory environment and deep subject matter expertise involved in FinTech often results in only mature products being introduced.
Startup companies are able to help banks diversify their product investments, offering the opportunity for the banks to explore and invest in a portfolio of new markets and nascent technologies such as blockchain, social sentiment, artificial intelligence, and gamification.
After 15 years building industry-leading FinTech products for some of the world’s largest investment banks and asset managers, I couldn’t be more excited for this latest challenge – to help entrepreneurs seek out and capitalize on subject matter experts to solve critical problems in finance. Ensuring the curse of the incumbent technologists does not paralyze innovation.
I swear to never rarely launch PowerPoint and pledge to save the banks, not break the banks.
Apply to Barclays Techstars Accelerator in New York. Deadline April 20.
Jon Zanoff, Entrepreneur in Residence | @jonzanoff