On Bank Robbers And FinTech

Bob Lefsetz recently gave an impromptu talk at the Capitol Records annual event. His comments about how the music industry dealt with streaming music online had very similar echoes to where the finance industry is today. As only he can, he made an analogy to the westerns he watched on TV as a kid. I’ll paraphrase: remember after the bad guys robbed the bank and went riding off into the desert. Never –  NEVER – did we see the sheriff head up to the roof, grab a megaphone and stand there yelling at them to bring the money back. When streaming exploded via Napster, that’s exactly what the music industry did. As technology continues to disrupt finance (#FinTech), we need to not suffer the same fate. We need to give chase and not be dumb about it.

Lefsetz goes on to explain that tech has put everything on demand. As Derek Thompson said in his book Hitmakers, “Content might be king, but distribution is the kingdom.” When people can, therefore, get anything served up anywhere, costs drop. A distribution strategy that allows us to reach customers in order to explain and/or deliver what they want becomes as much as a survival strategy as one for advancement.  Between Robinhood and Financial Calculator, product-centric content is basically free now. All value is in information-centric content, especially if it is personalized in some way.

Lefsetz used another example that may be helpful here. He points out that hip-hop is the dominant form of music today because it embraced the internet first. For every aspiring rock band, they must realize that in order to be streaming on the internet, they are in direct competition with the also-streaming entire catalog of Led Zeppelin/The Beatles/The Rolling Stones/etc. The distribution playing field has been leveled, and it has at least as many advantages as disadvantages for getting discovered. Hip-hop figured out that by keeping content fresh, they could use distribution to their advantage. From concerts in New York parks to radio, mixtapes, videos, and the internet – the genre evolved around creating highly original content which embraced new distribution channels.

While there’s been much said about consumers (and especially millennials) having increasingly short attention spans, Lefsetz points out that they really just have substantially higher BS detectors than before (he used slightly more colorful language). If we’re going to be good, we have to be really good at understanding the consumer’s preferred methods of distribution, and then creating/communicating/curating “fresh” content through it.

Make no mistake about it, strategy is hard. What the record industry can teach us is that while many incumbents will take to the roof shouting for the money to come back, there will be a new generation of professionals who will at least attempt to give chase.

The robbers have left the bank. If there’s a megaphone in your hand instead of a Colt, you’re probably doing it wrong.

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