Mary Meeker

Image credit: Photo: Joe Pugliese

I have been on a plane and airports the whole day yesterday, but caught up on my sleep. I probably slept for 3 hours on the plane from London to Abu Dhabi and in the Shangri-La Hotel got another 3 hours. While I was catching up on my reading came across this @newsycombinator post of a blog about how Software was eating into the Fortune 500 companies. I think we are embarking on a new wave, the President of Iceland called it the 3rd wave of transformation. The world is changing dramatically our old tools don’t seem to work i.e Monetary Policy, Fiscal Policy, the age old job creation story, monetary union blah blah blah I really wish the policy makers would just look at the grassroot level and understand the demographic and economic shift that is happening there. Mary Meeker from KPCB outlines the build up for the change in her presentation in All Things Digital Conference. I like the two bullet points in that particular slide:

  • Fearless (& Connected) Entrepreneurs
  • Fearless (& Connected) Consumers

In my view these two points are game changers, no longer are the young people want to fit the norm and conform, they want to chart their own path. Consumers are pushing the envelop as well, they are asking for better service, for lower cost and ubiquitous always on products and services. Those companies that serve this need will win and those who do not will die. It is as simple as that, some companies that have industry monopoly and resource power will delay the inevitable but it is going to happen it is just a matter of time. So which sectors are ready for disruption, IMHO, Financial Services, I think the Bankers have lost it. They have lost the credibility, their talent to manipulate market making and resourcefulness. Check out the slide again from Mary Meekers

almost 20% of the market capitalization is hogged by Financials, why is that? well it was concentrated because Banks had the “regulatory” right to be lenders and that gave them the right to create wealth with leveraged capital and guess what? they kept most of it to themselves. I think this market is ripe of disruption. I bet small startups will start chipping away at the juggernaut of money making i.e financial services. It is already starting to happen, with network efficiencies and availability of mobile devices, the traditional banking model is changing. With the advent of peer to peer transaction mechanism like Square, Dowalla etc and Internet based capital raise methods using Crowd Funding it is going to be interesting to see the transformation. I think we will see the incumbent fight the entrant with new regulations and rules to stop innovation but it is inevitable. The consumers are fearless and they will vote with their feet.