Ep 31: On Schlep blindness, innovation trap and fintech – with Mark Makdad

mark makdadWhile some industries are able to radically change in a short span of time, some others seem stuck and unable to innovate. That’s the case of the banking and finance sector in Japan. From websites that look like they were designed in the 80’s to ATMs resting on weekends, it seems that it is not on a par with the high-tech image that Japan usually conveys. Why can some industries embrace innovation while other seem trapped? That’s a question I’m trying to answer with my guest this week.

Mark Makdad is the co-founder and Chief of Sales at Moneytree. Feeling frustrated about the poor user experience of such outdated services, he and his 2 partners, all foreigners, decided to make personal finance easy. Moneytree allows you to access and display all your financial information data by simply connecting the Moneytree app to your bank accounts, credit cards, and e-wallets etc. It also uses artificial intelligence to categorize your spendings and sends you alerts in case of unusual activity.

Mark explains that Moneytree was built on Paul Graham’s “Schlep Blindness” concept. It says that many great startup ideas are not considered by anyone because they are too tedious to implement and that most founders usually prefer being clever than practical. Moneytree’s team built their own aggregation platform through automated browser. Basically, it connects manually to the web interface of your bank, on your behalf. This may not be the sexiest piece of code, but surely, it is very practical. As a result, Moneytree has done extremely well. In just about three years, they’ve raised $1.6 million and accumulated over 800,000 downloads in Japan.

Mark, who also has a technical background, explains why some companies, due to their size, remain in some innovation trap. Japan’s aversion for failure seem to be part of the explanation. Many companies would indeed prefer having a mediocre product that works 100% of the time than an innovative product that might fail once in a while.

In this interview, we discuss about Fin-techs and market evolutions. From robo-advisors to e-wallets, this space seems really exciting with many opportunities to take.

Questions: What broken industry would you like to change? How to get out from innovation traps? (reply in the comments)

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  • (4:33) Introduction of Mark Makdad
  • (7:07) From Lifestyle business to a product
  • (14:57) Birth of Moneytree
  • (18:26) Why some industries in Japan stop innovating?
  • (22:27) Presentation of Moneytree features
  • (24:28) e-wallet in Japan and privacy
  • (28:36) Handling financial data
  • (32:47) Business model
  • (34:36) Long term vision
  • (36:47) Fin-tech opportunities
  • (39:27) Regulatory changes
  • (42:25) Quick-fire questions

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