Stone & Chalk says the new paradigm is outside-in innovation
It should come as no surprise that Alex Scandurra, chief executive officer Stone & Chalk, is a passionate advocate of collaboration: the raison d’être, justification, objective and mission statement of Stone & Chalk is to help foster and accelerate the development of world-leading fintech start-ups, by leveraging greater collaboration between stakeholders in the fintech eco-system.
Stone & Chalk itself is a collaborative effort between fintech entrepreneurs, venture capital (VC) firms, companies, academia and government, to incubate and nurture financial services-focused tech start-ups in ways not seen in Australia before.
“Collaboration is at the core of what we do, and it’s one of the main reasons why we’ve been able to achieve what we have in a short period of time,” says Scandurra. “But we firmly believe that collaboration is something that every organisation around the world is going to come to realise as integral to their success, and it’s going to be absolutely integral to building the businesses of tomorrow.”
Scandurra believes there is a new paradigm within which the businesses of tomorrow have to work – and will prefer to work – of “outside-in” innovation. “In the 20th century, innovation and competitive advantage was derived internally, organisations would battle for the best resources, the best people, and they would try to do everything in-house and then take it to the market. That was ‘inside-out’ innovation.
“But increasingly – and certainly in the area of technology – that’s long changed, and outside-in innovation is the key to success. That means companies that aren’t encumbered by legacy technology and cultures and processes, which can move at light-speed, and which are highly entrepreneurial, partnering with large organisations that have the inverse advantages of size, customer base and scale.
“The large organisation can focus on what it does really well, and keep doing that, but also partner with start-ups that can collaborate with it on whole new areas to explore.”
While it sounds beautifully symbiotic, Scandurra is under no illusions that larger incumbent companies can be disrupted out of big chunks of their business – and that ambitious start-ups can seek this outcome. Because Stone & Chalk is a fintech hub, the industry that Scandurra has watched most closely is financial services – and there, he says, there have been several “pendulum swings” in favour alternately of the start-ups and the incumbents.
“When fintech kicked off around 2008, about 75 per cent of investment was in payments, and that was all disrupting the banks. It wasn’t enabling them at all. In the post-GFC environment not only did we see the birth of disruptive models like non-bank lending and automated investment advice platforms but we have seen the pendulum moved back towards some very smart people who realised that they could solve a lot of the banks’ problems and sell those solutions to the banks – and we continue to see a lot of fintech startups that are providing enabling solutions to help the banks improve and become more customer-centric.”
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