xTech – Part 1 – Why I’m fed up with tech


xtech for Sector x

  • Fintech is challenging the Finance sector
  • Insurtech is challenging the Insurance sector
  • Healthtech is challenging the Health sector
  • Will we see Techtech challenging the Tech sector?

And since new technology is developed every month and every year, would we be looking at a Techtechtech sector in a decade?

It’s seems ludicrous to think of it that way and it is indeed ludicrous. The reason it sounds so odd to have a Techtech sector is that we’re allowing ourselves to be focussed on the technology that’s enabling us to replace the older business models.


If you get a nice interface to your banking account and that bank account has a different charging model to the older high street banks, does that make it fintech? According to the hyped world, then yes. But it’s stilll banking. It’s still finance. In reality, the newer entrants are just doing what the incumbents should have been investing in more heavily a few years ago.

In some cases, newer entrants who are smaller are working out how to make a profit without the expectations of having to pay the large salaries of traditional banking, without having to pay large, multiyear leases for high street premises, etc. The main lever they’re using is initially technology, but sometimes it’s other elements of the business model that are being altered. That’s a critical point to realise; it’s not always the technology that is being used as a lever for change.

Customer Channels

Let’s take the example of First Direct, the HSBC bank that had no high street branches and regularly received excellent customer satisfactions scores compared to its high-street cousins. Mint, Smile and Egg all followed with variants of similar business models. They had changed one element of the business model. They had focussed on the channel of interaction, forcing a channel shift from face-to-face to telephone (at the time) and online (later when the technology caught up). Everything else (apart from perhaps some of the branding/marketing) was the same as the high-street.

Business Models

What we’re seeing now is other entrants prepared to look at other components of the business model, such as where the revenue is generated (e.g. subscription versus visible transaction vs bundled transaction cost vs bundled products and so on).

Here’s a simple concept: Take the Business Model Canvas and apply SCAMPER to each section. It’s that easy to generate new ideas and that’s what seems to be happening in every sector.

But this isn’t really fintech. Yes, tech is opening up opportunities and provides the ability to change different elements of the business model that would have been more awkward or at least not cost-effective to change before. But, again, it’s still banking. So let’s just call it finance. The big question for incumbent banks is, rather than relying on their current business working in the future, they’ll have to accept that different models will emerge. And it’s their choice if they want to be delivering those models, enabling others to deliver them on their behalf, or simply be swept away as their market share is eroded by competitors.


Let’s get this straight. I’m not against the concept of Fintech. I’m against the fact that the concept exists separate to the Finance sector (or rather a subset of it). I believe that every sector has a duty to innovate, improve and invent. For sector x, we don’t need xtech.

  • There’s an additional angle to this which I’ll cover in the next article.

Charging Admission as an Example of Changing Strategy


We should all look at the thinking behind this article in Business Of Fashion; there’s a lot we can take away from it. It shows a level of innovation and shines light on so many values that we take for granted.

ticket sign
ticket sign


The Premise

The author writes about the shift of a fashion store to charging customers a fee to enter the store.

The argument is that the store is an entertainment experience and that we expect to pay for other places of entertainment, e.g. theatres, cinemas, etc, so shouldn’t we also expect to pay to go to fashion stores?

So instead, we could charge admission not for the store but for the experience which happens to be in a store. There’s a distinction there in that most stores will not have an experience worth charging. Indeed, as the author mentions “If you never contemplate charging admission, chances are you will never create an experience worth an admission fee”. Turn that around and ask yourself, what is it about the experience that you offer customers that is worth charging for? Not the product, but the experience?

Conditions for use

Charging an admission fee only seems to work under a few conditions;

  1. When the admission fee is parallel to what would be paid for the product itself. Think of any pay-per-play/pay-per-use experience, they have to be close in price to the purchase of the product.
  2. When there are other factors at play (such as scarcity) which enable the promoter to restrict the entrance to those who pay to attend


The example in the article is interesting in that the experience itself is created to be scarce. That is on top of any scarcity of the products involved.  By creating a scarcer resource, we are influencing by way of Cialdini’s Scarcity Principle. In that way, we are creating an environment in which the customers is more likely to rely on the shortcut of knowing “it’s scarce” and hence more likely to buy.

The admission fee is also a conversion filter, in that it will weed out those people who are just browsing at products outside of the range that can afford (which brings to mind the window shoppers outside the Rolls-Royce showroom in Mayfair).


By charging an admission fee, we also see the use of another Cialdini’s Principles; Consistency. The customer has already purchased the right of admission, so they’re more likely to commit to purchasing a product from the store.

The exit

I love the process that the author, B. Joseph Pine II,  and the stores he writes about have gone through to get to the solution they’ve arrived at.

Imagine following-up the last question in the article “what would you do differently if you charged admission?” with a further more design-oriented question: “how may we create a purchase experience worth paying for?”

Further innovations in the musical instrument industry


In a previous article, I wrote about TC Electronic and what we can see from the outside regarding their innovation process. Today, I’m introducing Fender’s approach to reducing churn.


Fender Musical Instruments have released a new training service called Fender Play, which has a different aim to the current Riffstation.

The central idea behind Fender Play is to keep guitarists motivated to learn, by providing shorter lessons based around their favourite songs.

Fast Company have a good introduction to the service, so I won’t repeat what they’ve already written. Instead, I want to highlight a few features that are of significance from a corporate innovation perspective.

Attrition rate

Two phrases from Andy Mooney, CEO of Fender Musical Instruments Corporation really struck home:

  1. “About 45% of the guitars that we sell every year are bought by an absolute beginner”
  2. “Somebody who has never touched the instrument before, 90% of those players abandon it within one year”

Taking the 90% that abandon within one year, that means of the people that start in any one year, of those that are going to give up, only 10% make it through to another year. Fortunately that cohort is complemented by those that have already not give up from previous years.

So at least 40.5% of customers will not return to buy again (90% x 45%). That’s a massive attrition rate. For any business. That also doesn’t include experienced guitarist who switch to another brand or give up at a later date.

So the focus has traditionally been on the longer-term guitarists, those of the 10% that continue beyond the first year. Now let’s look at the effect of that change and the rationale behind the new service.

Repeat purchases

The first guitar sold is usually a cheaper guitar, let’s say a Squier Affinity, possibly in a starter pack so costing between £150 and £250 depending on the pack. A few routes are then available:

  1. If the guitarist quits, then that guitar will stay in a closet, under the bed, in a corner or be sold on as used (which then reduces the number being bought new). That customer will not be a customer again unless circumstances change – and they do – I know a number of people who have given up and then start again, usually picking up a better guitar to learn on due to more leisure income.
  2. The guitarist learns slowly. Then they may stick with this guitar for a few years or it may be the onyl guitar they ever purchase, since their talent doesn’t outgrow the guitar.
  3. The guitarist learns at a quicker pace and then realises they would benefit from a better guitar.

An intermediate guitar such as Fender Standard Stratocaster is £500 upwards. This is where most people who call themselves guitarists stop. These are perfectly giggable guitars and it’s at this stage where the talent of the guitarist makes more of a difference than the guitar itself. However there are still returns to be had by upgrading, even those are diminishing returns.

A more advanced guitar would be Fender USA Strat , starting at £900+, commonly £1500-£2000. These are the guitars that you’d expect a pro guitarist to be playing on stage or in a recording session.

Orders of magnitude

In a lot of organisations, the concept of a regular purchase is based on the repeating purchase being the same product or service over time, potentially with some minor upgrade. So you just multiply the value of the original purchase by the number of repeat purchases and you have your lifetime value of the customer.

Guitars are more similar to cars in that customers are likely to upgrade at the repeat purchase, until they plateau. The difference between cars and guitars is that the price difference in the Fender range is 10X between the initial beginner customer and the experienced guitarist. If we start to discuss the Customer Shop offerings, then we can be into a 20X or 30X price difference.

So the dynamics of keeping someone playing for longer and progressing to the next level becomes incredibly important

The aligned cross-sell

Guitarists need additional equipment to be able to make the sound. An electric guitarist requires an amplifier, cable, strap, picks, tuner as a basic package. For every price point of the guitar, there’s an amplifier at a similar price.

This again reinforces the interest in keeping a customer playing for longer and progressing to the next level sooner.

Where Do I Learn? – Part 1 – Podcasts


I regularly listen to podcasts. If I’m travelling between clients, I’ll usually be listening to a stream of podcasts. Even when taking a shower or eating breakfast, I can have a podcast playing in the background.

I used to listen to a lot of podcasts as I drove between client sites. The podcast format was ideal for the time behind the wheel and expand my thinking for the few hours that I was on the road. So I had a variety of subjects and presenters. Over time, I’ve narrowed the list down to :

1. Podcasts with a focus on sales

I’m not from a sales background, although I have worked on bid teams, and pre and post sales teams. Yet I fully believe that a significant part of a consultant’s job, especially those such involved in innovation, business architecture, business analysis and change management, is to sell the ideas to stakeholders. I don’t think of this as used-car dealer selling, but more ethical selling. More akin to Rob Jolles’ concept that selling is helping a potential client to arrive a decision quicker than they would have without your involvement, even if they decide not to purchase from you. I’ve seen numerous good ideas fail because the consultant didn’t spend enough effort on selling to the stakeholders. So I include 3 sales podcasts in my list.

1.1 The Salesman Podcast

Will Barron’s daily interview podcast, largely focussed on B2B sales. Although the guests are international, there’s often a UK perspective which isn’t present in many other podcasts. You do hear a number of guests that are doing the podcast circuit, but you definitely get a B2B sales focus and usually a different angle to what you may hear on other podcasts.

Link: The Salesman Podcast


1.2 The Sales Podcast

The Sales Podcast with Wes Schaeffer. These are shorter episodes but with a slower, more considered approach. I find the content in this more cerebral than in the Salesman Podcast. More importantly, this has a wider focus, not restricted to B2B sales.

Link: The Sales Podcast

1.3 The Sale Evangelist

These are usually short sessions with a few common themes across the podcasts. The Podcast series is hosted by Donald C Kelly, with short 5 minutes episodes, mixed with more in-depth interview episodes. The mix is refreshing and motivational. The only problem I have is keeping up with them so invariably I miss a few.

Link: the Sales Evangelist

2. Innovation

2.1 The Innovation Ecosystem

This is the only pure innovation podcast that’s remained in my list. I introduced it to my list as I found that the rest of the podcasts had a skewed bias and I still wanted to keep up-to-date with innovation within larger corporations. I like that the interviews are with the people who are introducing innovation within larger organisations, rather than just the standard series of podcast guests appearing on other podcasts.

Link: the Innovation Ecosystem

2.2 The Twenty Minute VC

Not purely about innovation, but about investment, specifically venture capital. This ties together the themes for me of innovation and startups. It’s short (designed to be short enough for a commute) and full of information with a high calibre of guests. In listening to it, I gain further insight into the world of less-mature organisations and advice given to them.

Link: The Twenty Minute VC

3. General

3.1 The Jocko Podcast

This was the first podcast I listened to, well actually I’d heard about Jocko Willink and listened to his interview of Steve Austin’s podcast (so that was the first one), but Jocko is the first host that made me click ‘subscribe’.

Jocko Willink is an ex-Navy Seal commander, now martial arts gym owner, public speaker, author, business consultant and seller of tea. His episodes typically include him reading excerpts from military books (usually military history and first-hand writing where possible), commenting on them and then a question and answer slot at the end. More commonly the Q&A is appearing in a following episode. These are long episodes, easily over an hour.

I continue to listen to these because I agree with 80-90% of his business perspective and I find that he has a clear insight into how to resolve problems. Often that takes the form of reframing the problem from the original question. It’s a similar approach to what I take and it’s good to hear someone from a massively different background doing similar.

Link: The Jocko Podcast

3.2 Ted Talks

They’re short (designed at less than 18 minutes) across a number of themes. Easy to digest and easy to listen to at an increased speed.

Link: Ted Talk Audio

Examples of Innovation in The Musical Instrument Industry

That Pedal Show

I’ve embedded a video below of an interview on That Pedal Show with Tore from TC Electronic. The video includes several good examples of some parts of the corporation innovation process at TC Electronic. What I like about the video is that it’s a natural conversation. It’s not a presentation of how they’ve innovated, or what their innovation process is such as we normally see with Power Point presentations at conferences. Instead, we get to watch a conversation between the 3 speakers that starts with stories, then progresses onto product demonstration with some further stories and explanations thrown in.

We get to hear Tore’s tales about how he introduced new concepts such as how he developed the Toneprint feature (where the signal to the pedal is passed from phone through guitar pickup) and the mash feature on the newly-released pedals.

I like the idea that he’s innovating by introducing features, even when those features have potential to subtly change the business model. Notice how the presenter on the left mentions that people won’t need as many pedals anymore and he guessed that Tore would have had to go to the board at TC Electronic to gain agreement to proceed with these new features. You can imagine the business case angle there.

We also hear clearly how the ideas and concepts were developed separately from the implementation of those concepts (think of it as separation of ideation from prototyping/development). That’s a good thing.

Just how innovative is the innovation?

TC Electronic have been pushing the boundaries and you can tell from the reaction of the two presenters that the boundaries have well and truly been pushed in this case. To save you from watching all the other episodes, I’ve never seen that reaction in them before. You can hear the first reaction around 21:30 into this video.

From my own experience as a guitarist, I’m now looking at the option of clearing up my own pedal board with a few TC Electronic products. The new features do open up possibilities that weren’t there before.

If this were any industry other than musical instruments, specifically guitar accessories, then I’d probably categorise the changes as just being improvement on existing products. But because guitarists are still mostly using old technology, what I’m seeing in these advances are more innovative than most. The new features are not just a new sound or an extra knob, or more commonly nowadays, an artist-endorsed model.

Stuck in the 1950s/60s

Guitarists, on the whole, are very resistant to change. We see largely the same technology as we did 60 years ago. There are technology advances but those advances are mostly used to emulate the sound of the 1950s and 1960s. Guitarists aim for the sound of a solid wood guitar, with 6 strings, going through magnetic pickups, on a cable through an amplifier which has valves (or tubes) in them, through to a speaker cabinet featuring inefficient drivers that are incapable of reproducing the sound put into them. Many companies have tried (usually with little success) to change the mindset of  guitarists. We’ve seen carbon-fibre bodies, 7, 8 and 9 strings, baritone necks, different types of pickups, etc. Yet consistently the majority of guitarists aim for the 60 year old recipe because that’s the sound we’ve been trained to recognise as good.

The Video

It’s a long video, the clip starts part-way in where he starts to talk about the innovations he’s been involved in.