Success in fintech or telecoms is about timing, not tech

Image credit: alphaspirit /

In the recent snippet we published on fintech and whether it makes sense to be first, a fast follower or even a slow follower, the linked article was a very worthwhile read.

In it, Ron Shevlin debunks the idea that you should be a leader, a fast follower or a slower follower. The reason, at least in fintech, is that the most important element of when you go to market is understanding (like, really understanding, not just nodding at powerpoint slides understanding) what customers actually want (and like and think is cool). Many of the bankers that he speaks to say they are fast followers, which is, to paraphrase, mindless sound bite material.

The article cites many examples in the banking and financial worlds where being a late follower made the best sense and others where being a fast follower worked out well.

The same could be said of many industries, including telecoms.

When telecoms was liberalised and suddenly open to competition, the result was not universal chaos, price wars and wall to wall innovation. Telecoms companies and particularly their new competitors knew their markets well and played to the things that would appeal to customers. So, the day after competition was introduced in the US, for example, almost every household in various States got a mailer offering cheap long distance (inter-state) calls. Why? Because long distance was then the cash cow of AT&T and an irritant or opportunity to, well, everyone else.

What happened? After a real shake-up and price war, AT&T and a small number of others began to buy back the start-ups, once the shine had worn off and, as the wife of one industry observer put it, “Why have you spent the last 10 years splitting it all up just to put it back together again?”

In Scandinavia, the incumbent lost 50% of its customers overnight.

In Hong Kong, telecoms companies would employ people to keep an eye on competitors’ shops (particularly on Friday evenings) so as not to lose out on some sneaky weekend offer.

In the UK, nothing much happened.  

Different things happened in different markets and companies succeed or fail on much more than cool technology. More tech start-ups go bust because they are too far ahead of the market than too far behind, whether that is a technology partner being unable to deliver what it promised or whether customers just do not ‘get’ what you are offering.

As Shevlin quotes from a report in his article ‘with early pioneers crossing the American plains, first movers have to create their own wagon trails, but later movers can follow in the ruts’.

What it comes down to, whether in fintech or telecoms or other disruptive markets is having agile and clear thinking at the top, or advising the top.

Sometimes it is best to lead and some of the largest companies on the planet prove that point, sometimes it is best to pile in quickly as customers catch on fast and sometimes it is better to wait and watch and come in late with a well thought through and considered play – or buy a company that has done the ground work for you.

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