Most Investments in FinTech are a Waste of Money
75 percent of FinTech start-ups go bust, because they do not focus on reading people, and only have an eye for their own technology, said Chris Colbert, former head of the Harvard Innovation Lab, in a key speech for Copenhagen FinTech Week.
"Technology is dead", it read on the first slide when Chris Colbert went on stage on Tuesday 18 June at the main conference at Copenhagen FinTech Week. For the past 20 years, the US innovation expert has advised companies on the implementation of new technology, and until recently, he was the CEO of the Harvard Innovation Lab in Boston. His speech to an audience of several hundred at the conference was far from a tribute to the FinTech industry, however.
"75 percent of start-up companies fail, and 84 percent of digital transformation projects fail. Assuming that $1.3 trillion is invested in FinTech companies, $900 billion is wasted", said Chris Colbert.
The reason why so many start-up FinTech companies fail to successfully realise their business model is that they do not focus enough on people.
"If you want to be successful, spend more time reading people and their behaviour than developing your technology. Successful innovation is about asking the right questions," said the US innovation expert, before rhetorically asking the audience:
"Do we ask the right questions?"
Chris Colbert substantiated his points with Maslow's hierarchy of needs. In 1943, Russian-American psychologist Abraham Maslow presented a graphical representation of human needs and a thesis that basic human physical needs (bottom of the pyramid) must be fulfilled before meeting the need for security, social needs, the need for respect, and the need for self-realisation.
According to Chris Colbert, the Uber ride-sharing app is a success because the app not only meets the user's basic need to be transported from one place to other, but also gives the user a sense of control and empowerment.
The gain must outweigh the costs
But what is the reason why 84 percent of the digital transformations launched in companies fail?
"The answer is that the gain does not outweigh the costs," noted Chris Colbert and rounded off his speech with an invitation to the audience.
"You have the ability to develop as a human being - remember to see the world through the lens of another human being."