â€œWhich path do you intend to take, Nell?’ said the Constable, sounding very interested. ‘Conformity or rebellion?’
Neither one. Both ways are simple-minded – they are only for people who cannot cope with contradiction and ambiguity.â€
â€• Neal Stephenson, The Diamond Age
At Anthemis Group we believe that the key to (business) success in the Information Age lies in building strong, vibrant, inter-connected networks of smart people and businesses. The digital tools of the 21st century allow us to do this with a depth, breadth and speed hardly imaginable only a decade ago. And yet however powerful, these tools do not replace the value of face-to-face connections.
Every community needs to ask itself, “Who are the people that are going to drive this community forward in the next 10 years?” and figure out how to support them. – Charlie O’Donnell
With this in mind, last week we hosted our 2nd (annual) Anthemis #HackingFinance retreat (#AHFR13) gathering 60+ amazing individuals – startup founders and executives, investors, designers, senior financial services executives, thought leaders and the Anthemis team – in the magical alpine setting of Meribel.* We asked them to take a step back from their busy professional lives and connect. With each other. With the environment. With the future. And for at least a few fleeting hours, think about how this community, this ecosystem might contribute to the re-invention of financial services. Think about how together we can build better business models, create better products and services, shape better regulation. Think about how we can clear a path that takes us from the manifest obsolescence of industrial age finance to a new paradigm for the provision of financial services that is natively aligned to the technological, economic and cultural realities of the 21st century.
Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it – often in the face of people who say it’s impossible or are content with the status quo. – Mark Zuckerberg
Anthemis is still a very young company. The resources and effort – time, money, people – required to organise and host this retreat were material to us. Like a startup company, it’s hard to build a traditional financial model to gauge the value or to try to quantitatively measure the RoI. And yet it is abundantly clear to us that the value created by such an event is very real – not just for Anthemis or our portfolio businesses, but for the wider ecosystem. Value that arises directly from the energy, passion and engagement that each and every participant brought with them. For that I am incredibly grateful. We’ve tried to build Anthemis as a substrate: fertile soil from which wonderful businesses can grow, seeded by talented people who share a common passion and sense the manifest opportunity that exists to create a better financial future.
In the language of flowers, anthemis (chamomile) means patience in adversity. It was known as the herb of humility because, as a lawn plant, the more it was trodden on, the faster it grewâ€¦In Biodynamics, the chamomile preparation promotes a good breakdown of the proteins in the compost to humic plant nutrients, and prevents the protein breaking down to ammonia which would be lost to the atmosphere. It helps soil to retain nitrogen and calcium, keeping them in the living realm and preventing loss to the atmosphere. Chamomile preparation strengthens the plantâ€™s regenerative life activity and reunites this with the physical. This ability has led chamomile to be referred to as the â€œplantâ€™s physicianâ€ in folklore. It has been said that if you have a failing plant, simply plant chamomile next to it and it will revive. (from Chamomile â€“ The Plantâ€™s Physician)
It hasn’t always been easy for us, building a business is hard. Raising capital is hard – especially when you deviate from the status quo in any way. But we knew that going in. I don’t think there are too many things in life that are truly worth doing that aren’t hard. And being surrounded by incredible people who trust and support you** – the entrepreneurs we’ve backed despite our modest resources, the early investors who have backed our vision, the people who have helped us in a thousand different ways just because they thought what we were trying to build was worth building – makes all the tough moments just that, moments. And makes it clear that “the juice is worth the squeeze.”
Over the coming weeks, we will do our best to distill the learnings that emerged from the many conversations that echoed across the alpine meadows and peaks. And where relevant we’ll help encourage and assist with implementing many of the ideas and potential collaborations that arose. And stay tuned to our YouTube channel for a taste of what transpired (and in the meantime you can get a glimpse of last year’s event below.) Although it’s a year away, we’ve already started dreaming about next year’s event, maybe we’ll see you there!
You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” – Buckminster Fuller
* It’s no coincidence to us that some of the most productive and creative gatherings are hosted in the mountains: Allen & Co.’s Sun Valley conference, the Aspen Ideas Festival (and numerous others), Dialog, Davos (before it jumped the sharkâ€¦) etc. – one can not help but to gain a new perspective and think big thoughts when faced with such a majestic landscape. Also the effort required to get to these locations helps to reinforce the disconnect from one’s day-to-day concerns and routine.
** I cannot thank enough all the #hackers – so many of whom traveled from the furthest reaches of the globe to join us. In particular I’d like to thank Kirsten Dunlop and Suncorp who not only travelled all the way from Sydney to join us but who kindly sponsored our opening dinner. I’d also like to thank the entire Anthemis team for their positive energy and willingness to do whatever was asked of them to make our retreat a success, but in particular would like to thank Simrat and Pascale and my dear wife Sandrine without whom the retreat simply would not have been a success.
The alarm on my iPhone wakes me up each morning and after turning it off, before getting out of bed I often scan my inbox and my twitter stream bringing me up to speed on the hours that I missed. This morning I got the news. Steve Jobs had died. And it shook me. And I am really sad. And I cried a little. And all of this surprised me.
I didn’t know Steve. But he made my life better. And he inspired me to have the courage to give up my safe, well-paid job to do something that is more meaningful to me. To try to change the world, if only a little.
So we started Anthemis with a mission to help build the Apple’s of 21st century finance: to bring elegance, simplicity and deep engineering to create financial services that just work and empower their users.
The world needs more leaders like him. Perhaps his passing will shock some of our other leaders into pulling up their socks and start acting their parts. Or inspire new, better leaders to emerge. I hope so.
And I will stay hungry. And foolish. And I won’t settle.
I woke up reasonably early this morning with a long list of things to do today. Â But given that it’s Saturday, I thought it’d be ok to start slowly with a cup of green tea and a few minutes with one of the many as yet unread books beckoning from the coffee table. Â So I picked up Hugh MacLeod’s“Evil Plans: Having Fun on the Road to World Domination”. Â I first met Hugh about 6 or so years ago via my friend JP, and was immediately charmed by his great cartoons and unique and brutally insightful characterisation of the “corporate world.” Â Sort of a grown-up’s Scott Adams…
About 5 years ago I read Po Bronson‘s “What Should I Do with My Life?” and it made an impact. Â Not too long after I ended up leaving a long and pretty successful career in investment banking to take a new path – one that has led to the creation of Anthemis Group and to moving our family to Geneva. Â If you aren’t sure you are living your life the way you’d like to, as a first step I’d say read this book. Â If nothing else Po is an entertaining and engaging writer and I’m sure you’ll enjoy the stories he tells.
As long as you feel inspired, your life is being well spent.
Hugh’s book took only an hour to read, but it brought back into laser focus the real reasons for which I chose the path I am now on. As he states – and all entrepreneurs know – there are a lot of times when it just seems overwhelming. But he also reminds us that that is where passion and purpose come to our rescue. Without these, we are doomed to fail. With them, we succeed even in failure. Â Buy it. Read it. And keep it close to your desk to lean on in those moments of doubt.
I often, ok sometimes, get asked what I look for in an entrepreneur / company founder / ceo and despite having a very clear vision of the ideal profile in my mind, I used to struggle to articulate it clearly and concisely. Then last fall I read The Snowball: Warren Buffett and the Business of Life and found that the legendary Mr. Buffett (albeit in a very different context – can you guess??) – had done the work for me. With some paraphrasing and adaptation, here is what he said and what I’ve adopted as my “elevator” founders test:
When I invest in an entrepreneur, I’m going into a foxhole with this guy and he has to be the right choice. The question is, who has all the qualities that will provide leadership to the company, cause me not to worry for a second about whether anything was going on that would subsequently embarrass the company, or cause it to fail through lack of ambition or effort. When I talk to entrepreneurs what goes through my mind is essentially the same questions that would go through your mind if you were deciding who you wanted to be a trustee under your will, or who you wanted to have marry your daughter. I look for the kind of person who is going to be able to make decisions as to what should get to me and what could get solved below the line. A person who will tell me all the bad news, because good news always takes care of itself in business.
And when I look across the founders of our portfolio companies, I would definitely be comfortable with any of them being trustees of my will. As for my daughter, well they’re all too old for her anyway and besides they wouldn’t stand a chance…
And so it’s hard to blame them when they ignore it. Still, call me crazy but I can’t help but being somewhat surprised and disappointed when one of the smartest, most reasoned leaders of the financial world writes that “the signs of a deep transformation in the financial landscape are very visible” and then ascribes this to two main driving forces without once mentioning the impact of changing technology (Mario Draghi from the Financial Times, 17sep10):
The first is a different perception of risk. For many years an optimistic view that underestimated the level of risk and overestimated its dispersion across participants had become the conventional wisdom; that view has been wiped out by the crisis. A re-pricing of risk of all sorts, higher volatility, reduced valuation of certain assets, more careful examination of credit quality and greater attention to the longer-term sustainability of debt positions â€“ as highlighted by the recent sovereign debt crisis in Europe â€“ are all manifestations of this changed perception. Business models are being reassessed according to their ability to manage risk. Complexity and opacity of financial instruments are no longer rewarded; the demand for transparent, complete and accurate information has increased.
The second source of change is policy driven. After Lehman, any remaining doubts on the need profoundly to reform the financial sector were dispelled. It became clear that a common, internationally co-ordinated approach, involving both advanced and emerging economies, was needed.
I’m not taking issue with his two drivers – they are clearly both important and relevant. I just think he should have added a third driver. And the fact that he didn’t, just confirms my conviction that way too many of our leaders – political, economic, financial, industrial – are increasingly disconnected from the world as it is (as opposed to the world as it was.) Which in my opinion can’t be a good thing. Indeed it’s worse that ‘not getting it’ – it’s not even knowing it is there…
Of course this throws up a multitude of opportunities, but it also carries with it the risk of more a more volatile and dangerous transition from old to new paradigm as our leaders remain blithely unaware of the sphere that is about to envelope their plane…
Huge congratulations to Stefan Glaezner and Eileen Burbidge for creating the White Bear Yard space for start-up entrepreneurs in central London. I’ve seen the space and it’s terrific with the only (very small) downside being a reasonably long walk from the nearest tube station.
Since we embarked on our Nauiokas Park adventure, one of the elements of our vision has been to create a common working environment allowing us to be close to the companies we invest in, but more importantly bringing together the hard-to-quantify but very real benefits of having a shared working environment. Having spent 15 years working on trading floors, I know what the advantages (and disadvantages) are and for very early stage start-ups. In particular the benefits of just having some people around are huge.
We have a few different – and hopefully smart, interesting – ideas of how we would do this but they will have to wait until we have the necessary funding. Until then I’m only too happy to heartily recommend that any London based start-ups looking for space (and funding) talk to Stefan and Eileen and try to get a desk or two at White Bear Yard.
To paraphrase Schumpeter, ‘successful business people are always conspiring to preserve the status quo.’ And one of the best ways to do that is to leverage your position in the market to influence, ideally control, the conversation around how the business or sector operates. Yet again it’s an example of everything you need to know, you learned in high school: “anyone who doesn’t do business by our rules is a loser.” Potential dangerous and should be ostracized. Of course this kind of self-interested ass-covering is entirely understandable in the context of human nature and for what it’s worth is fair enough: “I’m on top of the hill and I’ll use all the advantages that affords me to stay here.” Not enormously noble, but fair enough. What is somewhat more stomach-churning is when, in a vain attempt to rationalize their naked self-interest, these same incumbents wrap up their need to protect the status quo with some spurious justification that it is in fact to “protect” the “little guy.” What a load of crap. You want advice? How about running a country mile anytime someone who’s interests are clearly orthogonal to yours tells you they are looking out for you.
All industries operate within echo chambers; ironically the rise of the web has probably accentuated this as most communities go ‘deep’ rather than ‘broad’ in terms of information flows. Like any good flatlander, after having spent 15 years in institutional capital markets, I was certain that that industry’s echo chamber reverberated loudest. But now having spent a couple years around the fringes of the venture capital industry, I know that isn’t true. Further I suspect every industry and community suffers from this disease more or less equally. I’m not an anthropologist but I bet it has something to do with the evolutionary hard-wired pre-disposition for people to form tribes. I’m not sure why, but naively I expected the venture capital industry to be less political, less petty, less groupthink than the investment banking industry. Well it’s not. In fact it might even be more dysfunctional. And it certainly could use a few more traders within it’s ranks. (Just to be perfectly clear, that last opinion is completely self-interested, possibly self-centered and isn’t trying to help anyone except possibly me, including the poor entrepreneurs.)
I don’t mind the fact that this (or any other) industry is messed up. That’s where the opportunity lies. And being outside an echo chamber looking in is a wonderful – if sometime lonely – vantage point from which to recognize and capture these opportunities. And ifI’m right, just maybe I’ll have an edge. Everyone needs an edge. And if this edge helps me succeed (I mean really succeed) then just perhaps one day the frame of reference will shift. And I’ll be the one out there telling everyone not to rock the boat because, “y’know it’s really helping the little guys.” Not. Well at least I hope not. But I can’t guarantee it. So if this comes to pass, that’s when you should tune out. Find a new prophet…because you know it will just be so much baloney…
Nauiokas Park â€“ which was set up last summer by Amy Nauiokas and Sean Park, a former head of debt syndicate, credit trading and digital markets at Dresdner Kleinwort â€“ has recruited an ex-NYSE Group electronic trading expert and the former global co-head of financial technology advisory at Deutsche Bank as venture partners.
Nauiokas Park was set up by the pair to offer strategic advice, leadership and capital to growth companies with innovative business models at the intersection of financial services, markets and technology. Nauiokas has in the past featured in Financial News’ list of the Top 100 Women in Finance, while Park is a former Financial News Rising Star.
It has now struck a joint venture agreement with Financial Technology Advisors, a new corporate finance and advisory boutique set up by Udayan Goyal after he left Deutsche Bank in February. Goyal has become a venture partner at Nauiokas Park. The two firms share offices in central London.
Also joining as a venture partner is Sam Johnson, a former vice president in equities electronic trading at Goldman Sachs who left in 2000 to found a trading connectivity solutions company that was acquired in 2007 by NYSE Group. Johnson remained at NYSE, most recently as executive vice president and co-chief executive of NYSE Technologies, until his departure earlier this year, according to Nauiokas Park’s website.
Nauiokas Park has made five investments since its creation, but market conditions have put its focus more on advisory work in recent months, according to its founders.
Nauiokas said of Goyal’s arrival: “When we launched it was clearly a very interesting time in the markets, and while our long-term capital raising and investment strategy has not changed we made the decision to focus our efforts more on consulting and advisory work. As Sean and I turn our attention back to capital raising, it makes sense to bring on a partner who can share in and pick up the advisory side of the business. The partnership with FT Advisors offers complementary skills in a similar sector and critical mass for both firms.”
Park also highlighted the complementary skills of the four partners encompassing financial sector experience and knowledge of the start-up technology industry, citing the “technical skills and network contacts” of Johnson, whom he has known since their days playing rugby at the same university.
Nauiokas said the company hopes to turn its attention to fundraising soon, following signs that investors’ risk appetite is returning in the financial sector. Nauiokas Park is weighing several potential investments, while broader plans over the coming months could include expanding the team at analyst and associate level, particularly in New York.
Nauiokas and Johnson are based in New York, where the company does not yet have offices, while Park and Goyal are London-based, and Park believes the rare approach of having twin bases spanning the Atlantic can yield benefits because the London and New York markets are very different and yet equally important in terms of understanding and investing in emerging opportunities for disruption and innovation in financial services.
— Write to Vivek Ahuja at firstname.lastname@example.org
Aren’t sure what kind of overlap there is between Financial News and Park Paradigm subscribers so hope they don’t mind me posting this here.
I then had the good fortune to see her speak again at TED Global in 2007, this time in Arusha, Tanzania.
And although there are many differences between Nauiokas Park and the Acumen Fund, I think it is fair to say that in shaping our vision for our firm, and even in planting the initial ideas as to the relevance of bringing a fresh approach to the business of investing in ideas and people, Acumen and Jacqueline have been an inspiration to Amy and I. And so it was great to see her get an excellent and well-deserved write up in the Economist recently. One passage in particular resonated with me as I sincerely hope one day as much can be said of Nauiokas Park in terms of having an impact that goes far beyond our capital resources and reflects a success in building an ideal and a community around the change we are trying to catalyze:
Her firm runs highly coveted fellowship and mentoring schemes, and its alumni are spreading its ideas throughout the development field. The firmâ€™s influence in poor countries is also bigger than it first appears. By leveraging Acumenâ€™s funds to obtain other financing, recipients are able to magnify their impact. Even more important, perhaps, is the firmâ€™s catalytic role in sparking entrepreneurship in developing countries. Acumen devotes much time and money to training local managers, rotating experts from the developed world through its recipient firms and disseminating successful ideas.
In case anyone on Wall Street or Westminster is interested, this is what a leader looks like. We need more people like her in our Board and State rooms.
It’s lovely that you have a website and that you even allow Companies to file (some) documents online. And wait until Google and others find out about your revolutionary business model of paid search! (Imagine if Google caught on and started charging a pound for every search! I can’t believe they didn’t think of this, but think I should buy some shares in case they see this. Just imagine – they would make billions!) Isn’t modern technology wonderful? But although you do seem to be quite ‘au fait’ with this whole internet thingy, there are a couple really neat newfangled things that could make your site even better. Things like relational databases for example. And if you really want to live on the edge, check out what the crazy kids at places like LinkedIn and Facebook have done. And then there’s this stuff called UI and UX, but I understand if you think this is perhaps a step to far. Maybe in 2015. In any event, the blue is very nice. Most people like blue. Very clever! Best regards, – A. Director
Say you are a Director of a UK limited company. Say you are a Director of many UK limited companies. You would think that in 2009, you’d be able to go to the Companies House website and ‘manage your profile’, no? (Address, contact details, present and former Directorships, qualifications, etc.) Well, you’d be wrong. You can’t even search on a person. Only on Companies. God help the poor bastard who is Director of 50 companies and has the stupidity to move: 50 change of address forms to fill in and submit. Online. Sort of. (Only for Limited companies, by post for LLP’s.) Aaaarrgh! I mean c’mon! WTF?!? Just because it is a government organization doesn’t mean it needs to be devoid of innovation, especially since:
The Minister responsible for Companies House is Ian Pearson MP, Minister of State for Science and Innovation. The agency also has Trading Fund status which allows the agency to directly manage its own finances.
Maybe next time he’s in the UK, Reid Hoffman might want to spend an hour with the Companies House Board…(could be mistaken but a cursory google search would suggest that none of the Companies House directors are on LinkedIn so perhaps they do think they are on top of their game…)
In the ten minutes I’ve taken to write this one could sketch out the business model for Companies House 2.0 and given it’s key monopoly status, I’m sure you could build a killer revenue model (without fleecing your customers.) Better service. More revenues. Smarter business.