App review: StatusToday

Artificial Intelligence (‘AI’) has rapidly become yet another buzzword in the tech space and I’m therefore always on the lookout for AI based applications which add actual customer value. StatusToday could that kind of app:

My quick summary of StatusToday before using it – I think Status Today provides software to help manage teams of employees, I suspect this product is geared towards HR people.

How does StatusToday explain itself in the first minute – “Understand your employees” is the strapline that catches my eye. Whilst not being entirely clear on the tangible benefits Status Today delivers on, I do get that it offers employee data. I presume that customers will have access to a data portal and can generate reports.

What does StatusToday do (1)? – StatusToday analyses human behaviour and generates a digital fingerprint for individual employees. The company originally started out with a sole focus on using AI for cyber security, applying designated algorithms to analyse internal online comms, detecting behavioural patterns in comms activity and quickly spotting any abnormal activity or negligence. For example, ‘abnormal file exploration’ and ‘access from unusual locations’ are two behaviours that StatusToday will be tracking for its clients.

What does StatusToday do (2)? -StatusToday has since started offering more generic employee insights services. By plugging into a various online tools companies may use, Google and Microsoft for example, StatusToday will start collecting employee activity data. This will help companies in getting better visibility of employee behaviour as well as making the processes around data access and usage more efficient.

It makes me wonder to what extent there’s a “big brother is watching you element” to StatusToday’s products and services. For example, will the data accessible through StatusToday’s “Live Dashboard” (eventually) make it easier for companies to punish employees if they’re spending too much time on Facebook!?

Main learning point: I can see how StatusToday takes the (manual) pain out of monitoring suspicious online activity and helps companies to preempt data breaches and other ‘anomalies’.

 

Related links for further learning:

  1. https://techcrunch.com/2018/02/20/statustoday/
  2. https://www.youtube.com/watch?v=KhIkx8ZvA-Q
  3. https://techcrunch.com/2015/09/09/ef4/
  4. https://blog.statustoday.com/1nature-is-not-your-friend-but-ai-is-d94aaa13fd2e
  5. https://blog.statustoday.com/1your-small-business-could-be-in-big-trouble-7a34574ab42c

Book review: “The No Asshole Rule”

Do you consider yourself an asshole at times? Can you pinpoint moments where you felt – in retrospect – where you acted like an asshole? Apologies for the profuse use of the word “asshole”, I blame it on a great book I read recently: “The No Asshole Rule” by Bob Sutton. First published in 2007, Sutton describes what makes an asshole and offers tips on how to stop yourself from acting like one!

These are the main things I took away from reading “The No Asshole” book:

  1. What makes an asshole? – Sutton refers to a valuation by Bennett Tepper who studied psychological abuse in the workplace and introduced a useful definition for asshole behaviour: “the sustained display of hostile verbal and non verbal behaviour, excluding physical contact.”
  2. Do the asshole test – In the book, Sutton suggests two ways to test whether there’s an asshole at play or not. Firstly, after talking to the alleged asshole, does the ‘target’ feel oppressed, humiliated, de-energised, or belittled by the person. In other words, does the target feel worse about him or herself as a result? Secondly, does the alleged asshole aim his or her venom at people who are less powerful rather than at people who are more powerful?
  3. “Handle with care!?” – I like how Sutton cites research which shows how constructive arguments over ideas – NOT nasty personal arguments – drives greater performance. In order words, interacting effectively with others doesn’t mean that you’re not allowed to have a constructive debate or pose a constructive challenge. Harvard Business School professor Amy Edmondson talks a lot about how to best create psychologically work space. A strong sense of fear among employees or people feeling uncomfortable to speak up (especially with more senior people) can be signs of work spaces which don’t feel fully safe to the people that work in them.
  4. What to do when facing an asshole? “Small wins” – Research has shown that a feeling of control – even over the smallest aspect of your fate – can have a big impact on your wellbeing. Psychologist Karl Weick contends that aiming for ‘small wins’ is often a more comforting and ultimately more effective strategy than aiming for ‘big wins’. In the case of being exposed to assholes, Sutton suggests looking at small ways to reduce the interaction with assholes or other wise to seize a sense of control.

Main learning point: “Assholes are us” is one of the closing comments in Sutton’s book. If you want to create an asshole-free environment, you need start with having a long, hard look at yourself. A good friend of mine once encouraged me to think “how is that true of me?” every time I’d judge someone else or their behaviour. It means being able to stop your ‘inner asshole’ from coming out or you avoiding working at places with lots of assholes 🙂

 

Fig. 1 – “The Dirty Dozen – Common Everyday Actions That Assholes Use” – Taken from: Bob Sutton, “The No Asshole Rule”, p. 10

  1. Personal insults
  2. Invading one’s ‘personal territory’
  3. Uninvited physical contact
  4. Threats and intimidation, both verbal and non verbal
  5. ‘Sarcastic jokes’ and ‘teasing’ used as insult delivery systems
  6. Withering email flames
  7. Status slaps intended to humiliate their victims
  8. Public shaming or ‘status degradation’ rituals
  9. Rude interruptions
  10. Two-faced attacks
  11. Dirty looks
  12. Treating people as if they are invisible

Fig. 2 – What’s your Total Cost of Assholes to Your Organisation; factors to consider when calculating the total cost of assholes to your organisation – Examples taken from: Bob Sutton, “The No Asshole Rule”, pp. 44-46

  • Damage to victims and witnesses – For example: distraction from tasks; reduced psychological safety and climate of fear and loss of motivation;
  • Woes of certified assholes – Victims and witnesses hesitating to help; retaliation from victims and witnesses and long term career damage.
  • Wicked consequences for management – Time spent appeasing, calming, counselling or disciplining assholes; time spent ‘cooling out’ employees who are victimised and managing burnout.
  • Legal and HR management costs – Anger management and other training to reform assholes; legal costs for inside and outside counsel and health-insurance costs.
  • When assholes reign: negative effectives on organisations – Reduced innovation and creativity; reduced ‘discretionary’ effort and and dysfunctional internal cooperation.

 

Related links for further learning:

  1. http://bobsutton.typepad.com/my_weblog/the_no_asshole_rule/
  2. https://hbr.org/2007/03/why-i-wrote-the-no-asshole-rule
  3. http://journals.sagepub.com/doi/abs/10.1177/0149206307300812
  4. https://www.youtube.com/watch?v=4STnZm21–E

App review: Steemit

Steemit.com is one of those products that feels super complex at first sight. I think it’s content platform but I need to give it a much closer look in order to understand how Steemit works:

My quick summary of Steemit (before using it): I reckon Steemit is a content creation and sharing platform, but I’m not sure what technology it’s built on or how it works.

How does the app explain itself in the first minute? “Your voice is worth something” is the first thing I see. When I continue reading above the fold, it says “Get paid for good content. Post and upvote articles on Steemit to get your share of the daily rewards pool.”

Getting started, what’s the process like (1)? The first thing I do is clicking on the “Learn more” button on the Steemit homepage. I then land on a useful FAQ page which covers the typical questions and answers you’d expect. Steemit enables “the crowd to reward the crowd for their content.” The platform is connected with the Steem blockchain, which is decentralised and open. Content contributors to Steemit are rewarded with STEEM, dependent on the attention their content is getting from other Steemit users.

Getting started, what’s the process like (2)? Signing up is very straightforward, nothing out of the ordinary. A nice progress bar, two-factor authentication and I now have to wait for Steemit to validate my sign-up request.

What can I do in the meantime? – I have a little nose around the Steemit platform, to learn about the content people publish. For example, I came across Dan Dicks, who has posted 71 posted on Steemed and has (sofar) received $123.86 for his latest post.

 

Main learning point: Steemit feels very similar to Quora and Reddit, but the main difference being the underlying blockchain and cryptocurrency element. Once my signup request has been approved, I’ll no doubt get a better sense of how the platform actually works. Currently, I’m not entirely clear on the dynamics in terms of being rewarded for your Steemit content.

Related links for further learning:

  1. https://steemit.com/steemit/@mindover/steemit-for-dummies-like-me-everything-you-need-know-to-get-started
  2. https://steemit.com/faq.html
  3. https://steemit.com/exploring/@kebin/what-is-steem-and-what-is-sbd
  4. https://steem.io/SteemWhitePaper.pdf

My product management toolkit (25): understanding the “unit economics” of your product

As a product manager it’s important to understand the unit economics of your product, irrespective of whether you’re managing a physical or a digital product. Unit economics are the direct revenues and costs related to a specific business model expressed on a per unit basis. These revenues and costs are the levers that impact the overall financial success of a product. In my view there are a number of reasons why I feel it’s important for product managers to have a good grasp of the unit economics of your product:

  • Helps quantify the value of what we do – Ultimately, product success can be measured in hard metrics such as revenue and profit. Even in cases where our products don’t directly attribute to revenue, they will at least have an impact on operational cost.
  • Customer Value = Business Value – In an ideal world, there’s a perfect equilibrium between customer value and business value. If the customer is happy with your product, buys and uses it, this should result in tangible business value.
  • P&L accountability for product people (1) – Perhaps it’s to do with the fact that product management still is a relatively young discipline, but I’m nevertheless surprised by the limited number of pr0duct people I know who’ve got full P&L responsibility. I believe that having ownership over the profit & loss account helps product decision making and and accountability, not just for product managers but for the product teams that we’re part of.
  • P&L accountability for product people (2) – Understandably, this can be a scary prospect and might impact the ways in which we manage products. However, owning the P&L will (1) make product managers fully accountable for product performance (2) provide clarity and accountability for product decisions, (3) help investments in the product and product marketing and (4) steep product management in data, moving to a more data informed approach to product management.
  • Assessing opportunities based on economics – Let’s move away from assessing new business or product opportunities purely based on “gut feel”. I appreciate that at some point we have to take a leap, especially with new products or problems that haven’t been solved before. At the same time, I do believe it’s critical to use data to help inform your opportunity assessments. Tools like Ash Maurya’s Lean Canvas help to think through and communicate the economics of certain opportunities (see Fig. 1 below). In the “cost structure” part of the lean canvas, for example, you can outline the expected acquisition or distribution cost of a new product.
  • Speaking the same language – It definitely helps the collaboration with stakeholders, the board and investors if you can speak about the unit economics of your product. I know from experience that being able to talk sensibly about unit economics and gross profit, really helps the conversation.

Now that we’ve established the importance of understanding unit economics, let’s look at some of the key components of unit economics  in more detail:

Profit margin per unit = (sales price) – (cost of goods sold + manufacture cost + packaging cost + postage cost + sales cost)

Naturally the exact cost per unit will be dependent on things such as (1) product type (2) point of sale (3) delivery fees and (4) any other ‘cost inputs’.

In a digital context, the user is often the unit. For example, the Lifetime Value (‘LTV’) and Customer Acquisition Cost (‘CAC’) are core metrics for most direct to consumer (B2C) digital products and services. I learned from David Skok and Dave Kellogg about the importance of the ‘CAC to LTV’ ratio.

Granted, Skok and Kellogg apply this ratio to SaaS, but I believe customer acquisition cost (‘CAC’) and customer lifetime value (‘LTV’) are core metrics when you treat the user as a unit; you’ve got a sustainable business model if LTV (significantly) exceeds CAC. In an ideal world, for every £1 it costs to acquire a customer you want to get £3 back in terms of customer lifetime value. Consequently, the LTV:CAC ratio = 3:1.

I’ve seen companies start with high CAC in order to build scale and then lower the CAC as the business matures and relies more on word of mouth as well as higher LTV. Also, companies like Salesforce are well known for carefully designing additions (“editions”) to increase customer lifetime value (see Fig. 2 below). 

Netflix are another good example in this respect, with their long term LTV view of their customers. Netflix take into account the Netflix subscription model and a viable replacement for another subscription model in cable. The average LTV of Netflix customers is 25 months. As a result, Netflix are happy to initially ‘lose’ money on acquiring customers, through a 1-month free trial, as these costs costs will be recouped very soon after acquiring the customer.

Main learning point: You don’t need to be a financial expert to understand the unit economics of your products. Just knowing what the ‘levers’ are that impact your product, will put you in good stead when it comes to making product decisions and collaborating with stakeholders.

 

 Fig. 1 – Lean Canvas template by Ash Maurya – Taken from: https://blog.leanstack.com/

 

Fig. 2 – Pricing and functionality overview for Salesforce’s New Sales Cloud Lightning Editions:

 

Related links for further learning:

  1. https://soundcloud.com/saastr/saastr-142-why-cac-ltv-is-the
  2. https://inpdcenter.com/blog/understanding-product-economics-improve-product-development-success/
  3. https://people.kth.se/~msmith/ii2300_pdf/product_realization_7_2016.pdf
  4. https://www.quora.com/What-are-unit-economics
  5. https://youtu.be/RG_eyn0fRXs
  6. https://medium.com/@markroberge
  7. https://www.slideshare.net/RaviLakkundi/product-management-pricing-31102059
  8. https://www.inc.com/guides/price-your-products.html
  9. http://accountingexplained.com/managerial/cvp-analysis/cost-plus-pricing
  10. https://www.quora.com/What-are-unit-economics
  11. http://www.forentrepreneurs.com/saas-metrics-2-definitions-2/
  12. http://www.problemio.com/business/business_economics.php
  13. https://www.slideshare.net/austinneudecker/startup-unit-economics-and-financial-model
  14. https://www.linkedin.com/pulse/understanding-saas-business-model-unit-economics-ben-cotton/
  15. https://thepathforward.io/how-to-estimate-your-unit-economics-before-you-have-any-customers/
  16. https://thepathforward.io/unit-economics-by-sam-altman/
  17. http://launchingtechventures.blogspot.co.uk/2014/04/e-commerce-metrics.html
  18. https://medium.com/@parthgohil/understanding-unit-economics-of-e-commerce-9c77042a2874
  19. https://yourstory.com/2017/02/unit-economics-flipkart/
  20. https://www.entrepreneur.com/article/283878
  21. https://hbr.org/2016/08/a-quick-guide-to-value-based-pricing
  22. https://unicornomy.com/netflix-business-strategy-netflix-unit-economics/
  23. https://hbr.org/2017/04/what-most-companies-miss-about-customer-lifetime-value

Book review: “Zero to One”

Whatever you think of Peter Thiel, he’s got a lot of ‘street cred’ in the world of technology and venture capital. We all know how he founded PayPal and turned it into a billion dollar company. As a tech investor, Thiel is widely known for being an early investor in the likes of Facebook and LinkedIn. Listening to a recent interview between Thiel and Reid Hoffman on the latter’s podcast inspired me to read Thiel’s “Zero to One: Notes on Startups or How To Build the Future”. Thiel published “Zero to One” in 2014, based on a course about startups that he taught at Stanford previously.

Truth be told, some of Thiel’s views and concepts in “Zero to One” didn’t resonate with me, mostly because I struggled to convert them into action points I can apply to my own situation (read: working at a successful but early stage startup, and being based in London and not in Silicon Valley). Perhaps that’s exactly the point of Thiel’s book; to provide readers with a wide range of views, some more visionary and though provoking than others, and leaving it with readers to ‘pick and mix’ as they see fit. Consequently, these are the main learning points that I took away from reading “Zero to One”:

  1. Forget about being the first mover, be the last mover instead (1) – In strategy terms, people often talk about the benefits of being a “first mover”; a company’s ability to have a head start over its competitors as a result of being first to market in a new product category. The Hoover vacuum cleaner or Apple’s iPad are good examples of products which opened up a whole new product category and therefore did enjoy (durable) first mover advantage. Thiel, however, flips this by arguing the benefits of being a last mover.
  2. Forget about being the first mover, be the last mover instead (2) – Thiel argues that “moving first is a tactic, not a goal.” He stresses that the point of any business is to generate future cash flows, so being the first mover doesn’t do you any good if someone else comes along and unseats you. Video streaming app Meerkat is a good example of a product which was first to market, but got quickly overtaken by late(r) entrants Periscope and Facebook Live. Thiel explains “It’s much better to be the last mover – that is, to make the last great development in  a specific market and enjoy years or even decades of monopoly profits.” He advises that in order to get to such a position, companies need to dominate a small niche and scale up from there, constantly moving toward their long-term vision.
  3. The value of long term planning – I really like Thiel’s point about “lean” being a methodology, not a goal in it’s own right. As much as I see the value and importance of learning early and often, I do agree with Thiel’s opinion s about the pointlessness of iterating just for the sake of it. What’s the point of a Minimum Viable Product if you aren’t going to learn from it and iterate accordingly? What’s the value of just releasing ‘stuff’ without reflecting on whether a release got you a step closer to achieving your overall vision and commercial success? Thiel describes how successful companies like Apple and Facebook used long-term planning and business planning to get a position of durable market success.
  4. What to do with the “Power Law”? (1) – Thiel gives readers a good insight into the workings of venture capital (‘VC’) companies when he discusses the “power law”. The power law is based on the Pareto Principle. You might have come across this principle in the form of the 80/20 rule; explaining the unequal relationship between inputs and outputs, with 20% of invested input being responsible for 80% of results obtained. Thiel explains that this uneven pattern exists just as much in the VC world: “The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of of the fund combined.” To optimise for the power law, Thiel recommends focusing on one market, one distribution strategy and, as a consequence, to be cautious about diversification.
  5. What to do with the “Power Law”? (2) – For me, the most valuable bit of “Zero to One” is the part where Thiel covers how to best use the power law when making critical business and product decisions. Going over his questions, I learned the importance of being pretty single minded about your unique proposition and execution (see Fig. 1 below). Thiel’s thinking about these questions is pretty simple: “Whatever your industry, any great business plan must address each every one of them. If you don’t have good answers to these questions, you’ll run into lots of “bad luck” and your business will fail. If you nail all seven you’ll master fortune and succeed.”

Fig. 1 – “Seven questions that every business must answer” – Taken from: Peter Thiel, “Zero to One”, pp. 153-154

  1. The Engineering Question – Can you create breakthrough technology instead of incremental improvements?
  2. The Timing Question – Is now the right time to start your particular business?
  3. The Monopoly Question – Are you starting with a big share of a small market?
  4. The People Question – Do you have the right team?
  5. The Distribution Question – Do you have a way to not just create but deliver your product?
  6. The Durability Question – Will your market position be defensible 10 and 20 years into the future?
  7. The Secret Question – Have you identified a unique opportunity that others don’t see?

Main learning point: You can tell that “Zero to One” is written by someone who’s ‘been there and done that’. Thiel speaks with authority about the need to focus on a single market and busts commonplace myths about ‘lean’, first mover advantage and diversification.

Related links for further learning:

  1. http://www.telegraph.co.uk/technology/11098971/Peter-Thiel-the-billionaire-tech-entrepreneur-on-a-mission-to-cheat-death.html
  2. https://www.theguardian.com/technology/2016/jul/21/peter-thiel-republican-convention-speech
  3. https://art19.com/shows/masters-of-scale/episodes/09f191df-d089-49a3-876d-75c7730a3f94
  4. http://www.reidhoffman.org/
  5. http://zerotoonebook.com/
  6. https://hbr.org/2005/04/the-half-truth-of-first-mover-advantage
  7. https://marketing-insider.eu/categories-of-new-products/
  8. https://medium.com/@RevelX/first-mover-disadvantage-9-reasons-being-the-first-to-market-may-harm-your-business-9ec75a85b1d2
  9. https://www.forbes.com/sites/ralphbenko/2014/10/13/peter-thiel-we-dont-live-in-a-normal-world-we-live-under-a-power-law/#35b4d7fc7a7d
  10. https://en.wikipedia.org/wiki/Pareto_principle

 

App review: ipagoo

“Accounts designed for the 21st century” is the main strapline of ipagoo, a Fintech startup that offers multi-country and cross-currency accounts. I was intrigued by this concept and decided to download ipagoo’s new iOS app and write a quick review:

My quick summary of ipagoo (before using it) – I expect ipagoo to offer services similar to the World Account that World First, the company I work for, launched a few months ago. The World Account makes it easy for customers to open accounts in specific local currencies, making it easy to receive and pay out in difference currencies.

How does the app explain itself in the first minute? – When I open ipagoo’s iOS app, the first screen is a login one. I’m somewhat thrown by this as I don’t have an ipagoo account and the calls to action aren’t as clear as they could have been.

After finding and tapping on “new to ipagoo?” I land on a screen which explains the different services that ipagoo offers:

  • Accounts – Open and manage multiple accounts in different countries from your smartphone.
  • Payments – Keep payments under control and manage counter parties from the app.
  • Money Transfer – Move money between accounts instantly.
  • Currency Exchange – Switch funds between currencies in real time.

Despite looking a bit clunky, the app does a good job in letting its users know at the start of the onboarding process about the documents required for a successful registration. There’s a clear explanation as to how take a geotagged selfie, and that users need to make sure their phones are enabled for geolocation (complete with short videos for both Android and iOS users). The two-factor authentication process ipagoo applies feels relatively straightforward and seamless; I validate my email address on my desktop, after which a “complete my credentials” screen appears on my mobile app.

However, I’m slightly daunted by the 6-step registration process and the proofs of my ID that I need to upload. The look and feel of the form isn’t compelling, and fields like “previous name(s)” make me wonder why these are necessary in the first place. I do upload my passport, but give up on the registration process when asked for a recent proof of address, a picture of myself with my ID and detailed info about my financial status. I realise that I simply don’t know enough about ipagoo and the benefits of using its services, so I decide to explore things further before deciding whether or not sign up.

 

Perceived benefits of ipagoo – I understand that ipagoo uses traditional banking services to provide its users with a single portal to all their bank accounts, standing orders, debit cards, etc. The ease of accessing multiple accounts and data through a single app should make life a lot easier for customers. Currently, people like me – with accounts and debit cards in different countries – are currently constrained in account access, and having to have multiple logins.

Points of differentiation (existing and future) – Whilst I believe the frictionless aspect of ipagoo will soon become a ‘hygiene factor’ (given that the likes of Curve and Varo Money offer a similarly seamless experience) in future, I expect ipagoo become more of a ‘financial hub’ for customers, using APIs and the opportunities that PSD2 offer. I wouldn’t be surprised if ipagoo do more to address cross-border payments, as well as traditional standing orders, bank transfers, etc. I was therefore pleased to see that some of these aspects are represented on ipagoo’s roadmap. What I didn’t see on ipagoo’s roadmap was predictive analytics and recommendations, being able to understand customer profiles and recommend other financial products accordingly.

Main learning point: I really like ipagoo’s proposition and see plenty opportunities for ipagoo to make the (financial) life of their customers easier. However, I do believe there’s a need to improve the onboarding and user experience of the app, before integrating new services. As it stands, there’s scope to simplify the app experience, making ipagoo a truly ‘sticky’ proposition for its customers.

Related links for further learning:

  1. https://www.ipagoo.com/services
  2. https://moven.com/solutions/
  3. https://about.holvi.com/
  4. http://www.bankingtech.com/277222/new-entrant-ipagoo-targets-businesses-with-pan-european-current-account/
  5. https://marcabraham.com/2017/05/22/how-psd2-is-set-to-change-banking-up-as-we-know-it/
  6. https://ibsintelligence.com/ipagoo-brings-borderless-banking-app-uk/
  7. http://www.thebanker.com/Techvision/Ipagoo-joins-the-EU-dots-to-beat-the-regulators

App review: Receipt Bank

It isn’t often that one of the apps that I use on a regular basis attracts a large round of funding but it happened recently with Receipt Bank, a London based started which “makes your bookkeeping, faster, easier and more efficient.” Last month, Receipt Bank received a Series B investment worth $50 million from New York based Insight Venture Partners.

Receipt Bank, which started in 2010, targets accountants, bookkeepers and small businesses. It offers them an online platform through which users can submit their invoices, receipts, and bills by taking a picture and uploading it through Receipt Bank’s mobile app (see Fig. 1), desktop app (see Fig. 2), or an email submission. Receipt Bank’s system then automatically extracts relevant data, sorts and categorises it. Apart from viewing your processed expenses online, Receipt Bank also publishes everything to the user’s accounting software of choice, FreshBooks or Xero for example.

Fig. 1 – Screenshot of Receipt Bank iOS app

 

 

Fig. 2 – The entry in Receipt Bank for one of my receipts

Given that I’ve been using Receipt Bank for a while now; instead of just reviewing existing functionality, I’ve also had a think about how I’d use a $50m war chest to further build out the Receipt Bank product:

  1. Faster! Faster! Faster! – When I started using Receipt Bank last year, I emailed the customer support team enquiring about the wait between submitting a picture of a receipt and it being “ready for export”. I got a friendly reply explaining that “we ask for a maximum of 24 hours to process items, but we are usually much faster than that.” The customer support adviser also explained that “the turnaround time also depends on the number of items waiting to be processed by the software and also their quality.” I’m sure Receipt Bank uses some form of machine-learning, algorithms to automatically interpret and categorise the key data fields from the picture of a receipt. As the field of Artificial Intelligence continues to evolve, I expect Receipt Bank to be able to – eventually – process receipts and invoices within seconds, with no need for the user to add or edit any info processed. Because I envisage machine learning to be the core driver of Receipt Bank’s proposition, I suggest spending at least half of its latest investment on AI technology and engineers specialised in machine learning.
  2. Not just tracking my bills and invoices – Yes, everybody is jumping on the chatbot wagon (and some of the results are frankly laughable). However, I do believe that if Receipt Bank can learn a sufficient amount about its customers and their spending and accounting behaviours, it will be able to provide them with tailored advice and predictions. For example, if I pay my supplier in China a fixed amount per month to keep my stock up, I’d like to ask Receipt Bank’s future “Expense Assistant” how my supplier payments will be affected if there’s massive volatility in the exchange rate between the British Pound and the Chinese Yuan. Similarly, when I look at most of today’s finance departments, the people in these teams seem to spend on matching the right payments received to the relevant invoice(s) sent out. I realise that the machine learning around multiple invoices wrapped into a single payment is easier said than done, but I don’t think it will be impossible and the $25m investment into AI (see point 1. above) should help massively.
  3. What if the days of paper bills are numbered!? – Now that I’ve effectively spent $25m on AI technology, I’ve got $25m left. The first thing I’d do with this remaining money is to prepare for scenarios where invoices or receipts are no longer issued on paper but provided orally. At the moment, capability like Alexa Expense Tracker is mostly used for personal expenses, but I do envisage a future where people use Alexa or Siri to add and track their expenses. Given that voice technology is still very much in its infancy, I suggest restricting Receipt Bank’s investment into this area to a no more than $1m.
  4. Integrate more (and please don’t forget about Asia) – If I were Receipt Bank I’d probably use about $10m of the remaining fund to enter new geographies and integrate with additional systems. For example, I like how Sage’s Pegg hooks into any expenses you record on your mobile, whether it’s via Slack, Facebook, Skype, WhatsApp, etc. I don’t know whether Receipt Bank is looking to enter the Asian market, but I feel there’s great opportunity to integrate with messenger apps like WeChat and Hike, without spending more than $2m on development and marketing. Also, integrating with payment processors, like Finsync did recently with Worldpay, is an integration avenue worth considering! 
  5. But don’t forget about the current product! – I feel Receipt bank would be remiss if it were to forget about improving its current platform, both in terms of functionality and user experience. For example, I can’t judge how well Receipt Bank does in retaining its customers, but I feel there are a number of ways in which it can make the existing product ‘work harder’ (see Fig. 3 below). In my experience, some of my proposed improvements and features shouldn’t break the bank. By spending about $1m on continuous improvements over a number of years, Receipt Bank should have at least $20m left in the bank, as a buffer for difficult times and any new opportunities that might arise during the product lifecycle.

Fig. 3 – Suggestions to make Receipt Bank’s existing product work harder:

  1. Some touches of gamification – I’d argue that the longevity of the relationship between Receipt Bank and an individual user is determined by how often the users uploads bills onto the platform. I assume that most users will most probably not view managing their expenses as fun, I think it would be good to look at ways to make the experience more fun. For example, I could get a gold star from my accountant once I’ve successfully synced my month’s expenses into my accounting system. I feel that there’s plenty of room to reinforce the current gamification elements that Receipt Bank uses. For example, the message that Receipt Bank managed to save 27 minutes of my time doesn’t really do it for me (see Fig. 4 below). Instead, the focus could be on the productivity gain that I’ve made for billable work (if I’m a freelancer for example).
  2. Better progress and status updates – Even if it does continue to take up to 24 hours. to categorise and process my expenses, it would be great if Receipt Bank could make its “in progress” status more intuitive and informative.
  3. Clearer and stronger calls to action – For example, I can see that I’m not making the best use of my Receipt Bank subscription (see Fig. 5 below). However, there are no suggestions on specific actions I can take to get more value from my Receipt Bank plan.

Fig. 4 – Screenshot my Receipt Bank usage

Fig. 5 – Screenshot of my Receipt Bank “Usage summary”

Main learning point: Having thought about Receipt Bank’s current product offering, and my understanding of their target market, I suggest investing a good chunk of the recent investment into optimising the machine learning algorithms in such a way that both processing speed and accuracy are significantly increased. By doing this, the customer profile and behavioural data generated, will create additional opportunities to further retain customers and offer adjacent products and services.

Related links for further learning:

  1. http://uk.businessinsider.com/receipt-bank-raises-50-million-from-insight-venture-partners-2017-7
  2. https://venturebeat.com/2017/07/20/receipt-bank-raises-50-million-insight-venture-partners/
  3. https://itunes.apple.com/gb/app/receipt-bank-business-expense-scanner-tracker/id418327708?mt=8
  4. https://play.google.com/store/apps/details?id=com.receiptbank.android&hl=en_GB 
  5. https://www.forbes.com/sites/bernardmarr/2017/07/07/machine-learning-artificial-intelligence-and-the-future-of-accounting/#49bb42ac2dd1
  6. https://hellopegg.io/
  7. http://uk.pcmag.com/cloud-services/87846/feature/23-must-have-alexa-skills-for-your-small-business
  8. https://www.accountingweb.co.uk/tech/accounting-software/case-study-receipt-banks-rapid-growth
  9. https://www.finextra.com/pressarticle/70263/finsync-connects-with-worldpay-us
  10. http://www.bankingtech.com/520502/symitars-episys-core-system-integrated-with-amazon-echo-baxter-cu-an-early-taker/