2015 Was the Year of Change
- Crowdfunding became mainstream – in the sense that it was accepted as part of the ‘new normal’ and not a fad that’s going to fade away
- In the USA the SEC finally, perhaps reluctantly, followed the Fintech leaders in allowing a limited form of equity Crowdfunding – the limitation will become more and more apparent from May as entrepreneurs actually try to use it and ‘feel the burn’ from all the friction
- The UK’s regulator, the FCA, embraced the Innovation Unit I proposed and, a year on from it’s inauguration expanded it to create a ‘Regulatory Sandbox’ to support and encourage fintech and innovation
There can be little doubt that in the decade or so since Danae Ringelmann started work on what later became Indiegogo, Crowdfunding has been truly instrumental in shaking things up and opening minds as to the possibilities for new models and new tech, hidden in plain sight, as a result of the ongoing digital revolution entering it’s third big wave.
A glance back over 2015’s broader landscape reveals the tectonic forces at play and gives us clues for the rest of the decade and beyond. Some are obvious:
- Markets redesigned: The pace of innovation continues to accelerate, across the board, as more and more people are involved and more and more markets ‘disrupted’ (aka redesigned) as we move from a static (first perfect and then use) to a dynamic (constantly improving, so shifting and changing) world
- Banks dwindling. Laying off tens of thousands, withmore to to follow as they are ‘unbundled’ and seek a new role
Anthony Jenkins, Sacked CEO of Barclays Bank Predicts that “the number of branches and people employed in the financial services sector may decline by as much as 50% over the next ten years”
- Friction, and costs, are plummeting as a result. With the likes of Transferwise and Uphold transforming payments, money becoming mobile, with transfer and transact capabilities built right into the currency
- The rise of entrepreneurship.The ‘roll your own role’ startup increasingly becomes a necessity for some and an opportunity for us all
The Job Crisis: The ILO estimates that more than 34 million workers lost their jobs with the onset of the global recession of 2008, and an additional 185 million workers joined the ranks of the working poor who subsist on under US $2 a day. Despite a moderate pick-up in the output growth expected for 2013-14, the number of unemployed worldwide was projected to rise by 5.1 million last year to more than 202 million and by another three million this year. Six hundred million more jobs are needed over the next fifteen years just to keep unemployment rates at their current level.
On ‘The Job Crisis’ International Growth Centre Public Lecture at The London School of Economics
Some, perhaps, less so
- Western governments increasingly look like quasi-‘Corporate’ businesses, corrupt PR machines, selling to their public, rather than representing them and governing ‘for the people’.
- Once all-powerful regulators are sitting on cracking and fast diminishing ice-floes as it becomes apparent that the environment has changed radically and incremental change, exemptions and accretions, on a basis built for a world that is vanishing, just won’t cut it for much longer
- Democracy is beginning to undergo a transformation as other voices can increasingly be heard above the political and corporate propaganda machines which came to dominate the 20th century.
- Transparency and interconnectedness is increasingly being demanded, and gradually delivered, transforming markets and institutions. Sometimes abolishing the need for them. Often leaving them in need of reform and looking for a new role
In short we are in a new environment – and it was Crowdfunding which laid the groundwork and foundations for fintech and wider ‘disruption’. Although ‘Redesign’ is probably a better word for what’s happening as the former (D-word) is the incumbent suppliers viewpoint. New, better, redesigned services and markets are the outcome – and the viewpoint for everyone else.
Crowdfunding has led the way and power has shifted – from top-down, based on control of the flow of information (enabling divide-and-conquer), to bottom up, from the grassroots, the crowd.
And the crowd has a thousand eyes, as many ears and many more perspectives and insights than any institution, or regulator, can shake a stick at.
So now we finally have an answer to the ancient question: “Quis custodiet ipsos custodes?” (Who guards the guards?).
The ancient question: “Quis custodiet ipsos custodes?” (Who guards the guards?) Now that we are richly interconnected: WE ALL DO!
We, the crowd, are all ‘the new regulators’. Able to see more, think more, span greater perspectives, employ more experts, experience and expertise, do more and, most importantly of all, care more than any regulator that has gone before.could dream of. (Does this mean the end of regulators as we’ve known them? Think banks – not necessarily. The key question is what useful function might they provide in the world-turned-right-way-up? And how they might adapt and transform themselves to find a new role).
Kicking off the redesign of business, commerce, the economy, institutions and society as a whole. It’s underweigh now. It’s architects and builders are the entrepreneurs – with crowdfunding and fintech in the vanguard of what looks like the most positive revolution in the history of mankind.
Kicked off by Crowdfunding. Accelerating through 2015 and into 2016. Hold on tight – there’s plenty more to come!
Barry James is a serial tech entrepreneur and technologist, founder, writer and conference creator Barry created TheCrowdfundingCentre, now a global resource for #Crowdfunding, and VentureFundingHubs an innovation to support entrepreneurs globally. He has a long history in #Fintech stretching back to the late 1970s. Founder of the UK’s first national conference, Crowdfunding:Deep Impact, he has been at the forefront of the development of Fintech and crowdfunding in the UK, and internationally, since its earliest days helping found the UK’s All-Party-Parliamentary-Group on the subject and influencing the nature and direction of regulation. As a pioneering systems and eco-system architect, he and his team remain active in creating new models and new technology, including the creation of more than 70 funding hubs worldwide.