Displacing the VCs? Crowdfunding and P2P lending snuggle up.

Alt finance on alt finance… It gets meta.

P2P lending and equity crowdfunding appear to be the darlings of the financial press these days, in part because most of us (journalists included) are gleefully rubbing our hands at the thought of the banks finally regretting their lack of customer care (ie. facing stiff competition in the loans and the savings market), and in part because the concepts are actually game-changers, with potentially profound implications for business in general.

But more on that later. What has caught my attention recently is the apparent increase in financing campaigns carried out on crowdfunding platforms, by P2P lenders. Just last month P2P lending platform Assetz Capital (which channels loans to property developers and SMEs) raised £3.2 million on Seedrs, one of the main UK crowdlending platforms. P2P lending platform Landbay (which lends to buy-to-rent entrepreneurs) recently raised £270,000 on Seedrs, bringing total financing through crowdfunding to over £500,000. Crowdlords, Trillion Fund… The list is growing. And the relationships are not just limited to investment. CircleUp, an equity crowdfunding platform in the US, recently hired Lending Club’s COO to its board of directors.

Assetz Capital P2P lending platform

It totally makes sense, right? Practice what you preach, no? If you are an advocate for alternative finance, obviously it makes sense to turn to alternative finance for your funding. So why aren’t more doing it? Just last week it was announced that UK-based Funding Circle closed a $150m financing round with Russian VC firm DST Global. Also last week German P2P lending platform Smava raised $16 million from Phenomen Ventures, Earlybird and Neuhaus Partners. Earlier this month crowdfunding platform RealtyShares raised $10 million from Menlo Partners.

The obvious answer is: connections, advice, mentors, etc. But, as anyone who has experience with VC investors knows, you need to be pretty lucky for that arrangement to work well. It can, of course, there are many, many examples of that. But, often, the VCs’ and the founders’ priorities end up diverging, and the VCs usually have the power to force a close. There are many examples of that, too.

realtyshares crowdfunding platform

As for the connections: if they’re already working with other big players in the sector, is it worth giving up managerial independence to gain a few more introductions? I would have thought that they could probably get the introductions anyway, without VC funding. Advice? They probably know their sector better than the VCs. Mentors? They’re always useful, yes. And, it’s possible that the conditions offered by the VCs are more favourable than those achievable on a public platform.

And crowdfunding is still relatively new and untested. Never mind that the concept has been operating since 2001. It is relatively new, and while the growth rates are exciting, the alternative finance startups could well have felt more comfortable with solid, stable VC funding.

Also, VC funding is like a “badge” of respectability. It’s a statement that you have solid financial backing, and that some tough and astute judges believe that you’re around to stay. The only way I managed to convince my husband to start using Transferwise was by showing him the company’s list of investors. Significant funding by a reputable investment firm signals to the sector that you’re a player.

But, to state the obvious, things are changing. The “big guys” have competition, and a sullied reputation due to public airings of extravagant frivolities and entrenched prejudice. As far as the public is concerned, they don’t sound like nice people. As with the banks, seeing them brought down a peg or two would be quite satisfying for most. Even prominent venture capitalists have been hinting at strategic problems within their own sector. The sector that preaches disruption is itself now threatened with disruption.

And yet, VC investment and VC investors aren’t going anywhere. The sector will reorganize and regroup, and continue to support innovation and help big ideas reach the success stratosphere. Meanwhile, crowdfunding and crowdlending will continue to expand, and the cross-financing activity among alternative finance cousins will intensify. The use of alternative finance platforms by alternative finance platforms is exciting in that it adds an extra layer of validation to the sector, strengthening relationships and enhancing profiles. New platforms and new ways of doing business will give rise to new ecosystems, new expertise and new relationships. But to become a completely integrated funding solution means also playing with the big guys, the ones who have been around longer. More financing opportunities leads to more financing opportunities. A win-win for everyone.

The Friday five: giraffes, stories, consumer power and flash mobs

The usual Friday roundup of some stuff I found interesting this week. I can count, I know that there are more than five links here, but I’m taking a bit of poetic license. “Friday Seven” just doesn’t sound right, so “Friday Five” it is. Next week I will try to limit it to five. Or think of a new title.

New forms of storytelling, weirder than you think – from Wired

I so want to see a VR documentary. And I can’t wait until it gets affordable enough for education.

from VR film "Herders"

from VR film “Herders”

Collectively, these stories signal a shift from passive viewing to something more active. “It’s a relatively recent thing in history that stories became objects,” Melcher says. “These new types of stories are moving us into something more physically interactive, more multisensory, that reawaken our bodies and senses.”


Ad blockers are legal – from BBC and Enrique Dans

I’m not saying that adblockers are good. They are, however, inevitable. Which will force online media to re-think business models, to focus on good content and loyal readers, and to be very, very innovative. It’s going to get interesting (I know, like it hasn’t been already).

Enrique Dans’ take on the subject is well expressed:

“The verdict is based on the logical and inalienable right of self-determination when using the internet, and will be a blow to companies who say that they are suffering as a result of the use of the advertisement blocking service AdBlock Plus offers. The conclusion is clear: if you’re an advertiser and you really want your message to get over, then respect people’s privacy rather than bombarding them with intrusive ads.”


Branded content is not the answer – from Digiday

I’m not convinced that branded content is the answer to the above. But it’s great that we tried it, it will lead to a better idea. And, it has made companies much more focussed on what their customers want.

“Ego is a persistent foil among journalists trying their hand at branded content. Many journalists are attracted to the career because it offers the prospect of being well known and respected for industry expertise and the ability to have one’s name attached to big stories. That possibility doesn’t exist when it comes to branded content, where a creator’s byline is just one in a long list of numbers that includes video producers, product managers and programmers.”

So, where do the journalism refugees go?


New journalism – from Nieman Lab

Maybe to work on some new models of reporting. Jonathan Stray lists in Nieman Lab some possible editorial formats that we’re not producing yet, but that I, for one, would be interested in reading.

“I’ve used the word “editorial” to sidestep discussion of what “news” or “journalism” is. To ask that question misses the point of what it does. And there has been a strange lack of innovation here. Silicon Valley has never been afraid of wild ideas, but the tech world is allergic to any service which requires a lot of humans to deliver. That doesn’t scale, or so the thinking goes. Meanwhile, the journalism world has evolved and finally embraced software and new story forms. Yet the espoused goals of journalism — the fundamental services that journalists provide — seem virtually unchanged. That’s a pity, because there are so many different, useful things you can do by applying humans plus machines to nonfiction information production. We’ve barely scratched the surface.”


Why Internet is dominated by the Big Ones – from The Guardian

One of the many reasons I think that ecommerce startups are in trouble (with notable exceptions, of course), and I say this with a certain amount of sadness, as a former ecommerce entrepreneur.

“Indeed, if you’re trying to sell digital goods in the EU today, there’s really only one cost effective way to do it: use Amazon. Because the rules aimed at weakening Amazon’s unfair market dominance were negotiated with Amazon’s business-case in mind, they can be readily borne by Amazon. Because the rest of us weren’t taken into consideration, we must all now pay rent to Amazon forever, or be bankrupted by the red-tape that it (and only it) can handily dispense with.”

An interesting, business-strategy article by Cory Doctorow, of Boing Boing fame (actually, not really, he’d be famous even without Boing Boing, for everything else that he prolifically gets up to).


The first You-Tube flash mob mega-hit


I love flash mobs. I don’t know why, but they make me feel like weeping with emotion. Something about all those people working together as a team to bring smiles to other people. Videos like this represent, for me, the power of YouTube to spread creativity. It’s not the video technique, it’s the content, and it’s been seen by almost 20 million people all over the world. That is very cool.


Flying, wet giraffes        

You’ve probably already seen this short film viralling around the Internet, but I’m including it here just in case. After the initial sublime silliness, it would get a bit tedious if it weren’t for the brilliance of the animation.


I was in London earlier this week… April is the most beautiful month there. Some pictures:


Have a great weekend!


Love, meaning, solutions and strength

Some good reads from the week, only some of them about tech:

Why we love dogs – from Business Insider

It’s all about eye contact.

via BusinessInsider

via BusinessInsider

“Because dogs don’t otherwise use eye contact as a way to cement bonds with other dogs, the study researchers suggest that man’s best friend may have gotten its prized place in human hearts by tapping into an ancient human bonding pathway.”


How to avoid getting sick – from Mashable

This list of startups barely scratches the surface of what’s going on in the healthcare sector, but it does provide an uplifting look at of the potential impact of the new wearables, apps and services, once their use becomes more widely spread.

“So, chronic diseases are clearly not only a health but also an economic problem. But, again, these diseases are among the most preventable, and many startups have taken note. From early diagnosis to genetic testing to posture correction, a range of solutions is being pursued by these companies.”


Quality vs clickbait – from Wired

“Consider Medium a case study for quality in the digital age; Williams has been able to achieve this growth entirely by giving both writers and readers more of the tools and the products they want, without yet sullying these efforts with money-making endeavors.”

Wouldn’t it be great if clickbait came with a warning or a label? We’d save so much time. Most of us would probably click anyway.


Strong is the new pretty – from My Modern Met

My 12-year-old daughter has so much character and depth, and is so tough and feminine at the same time, and yet is not at all into being a girl. I couldn’t be prouder. I love these pictures. They remind me of her.

via MyModernMet

via MyModernMet

“I think it is incredibly important to let our daughters and other women know that beauty isn’t just pretty poses or looking perfect, but that beauty can be found in embracing life and celebrating the bumps, the bruises, the imperfections, the strength. We get all these messages from the media of what we need to be to be beautiful, I wanted to show my girls, and others, that being your true self is the most beautiful.”


Knowing isn’t everything – from Brain Pickings

An inspiring article that makes you feel both small and relieved at the same time. An ode to not having the answers.

“What emerges is at once a celebration of human achievement and a gentle reminder that the appropriate reaction to scientific and technological progress is not arrogance over the knowledge conquered, which seems to be our civilizational modus operandi, but humility in the face of what remains to be known and, perhaps above all, what may always remain unknowable.”


Move over TV – the mobile is now the first screen – from The Guardian

“The TV industry will have to work on a mobile-first strategy. Not a digital-first strategy, but a mobile-first strategy, because mobile is now the first screen, and it’s taking time away from the TV.”

I’m not convinced. Most people don’t have amazing phones and tablets. Ok, maybe those with mid-to-high purchasing power do, probably several per household, but TV’s basic market is still huge. And I say this as someone struggling unsuccessfully to get Netflix to work on Chromecast.


Depressing picture of the week:

Beaker wine glasses. Really. I definitely, most definitely, do not want these…

via LikeCool

via LikeCool


Fun tweets:


Too much tech hype:

by Tom Fishburne at The Marketoonist

by Tom Fishburne at The Marketoonist


Have an amazing weekend!

Games, blood and a whole lot of questions

In late 2014, a game aptly called “Hatred” appeared on Steam’s Greenlight track. For those of you not into online games, Steam is the main online digital games store, and its Greenlight track lets gamers have a say in which indie games get put on sale. Hatred shocked even die-hard gamers with its violence and its amoral focus on murdering innocent civilians (with plenty of graphic detail), and it was pulled very shortly after. Sigh of relief. Even the trailer is truly disturbing, so much so that I couldn’t appreciate the graphics, which is always my favourite part of online games. (Okay, I did notice that it was in black and white, except for the blood – of which there was a LOT – and the explosions and the flashing cop lights. But still.)


Two days later, it was back again, and the Managing Director of Steam sent an apologetic email to the creators. Hatred rapidly accumulated enough votes to reach No. 1 on the list, made it onto the sales platform, and should be available for download any day now.

There are a lot of very violent games on Steam. It even has a tag for “violence” and another for “gore”. So where is the line? Why would some games sail through, and others get (temporarily) pulled? Steam isn’t disclosing their criteria. The Greenlight rules state that games “must not contain offensive material”. If Hatred isn’t offensive with its complete disregard for human dignity, I don’t know what is.

Back in 2012, the sexually explicit strategy game “Seduce Me” was removed, because of “offensive” content. So, senseless killing isn’t offensive, but sex is? Really? If the debate really is about what the word “offensive” means, shouldn’t we, the audience, be allowed to have a say in that?

Maybe we already have. When Hatred was removed, it had reached #7 on Greenlight’s list. That’s pretty high. Although it’s a fair bet that any ultra-violent game espousing genocide would probably, lamentably, find a following. Online, it’s not hard to find your niche.

So what, then, is the platform’s responsibility?

That question opens up the even bigger question of gatekeeping and morality. Valve, the platform’s owner, is a private company, and therefore should be able to set its own rules and enforce them as it sees fit. But, Steam dominates the online game market with a 75% market share, and over 125 million active users. When you reach a certain market share, do you not have a wider responsibility? Especially when you have the power to affect peoples’ psyche, to inure them to the shock of violence?

So, do we insist that Valve enforce moral values, even if it doesn’t want to, just because it’s powerful in its sector? If so, what moral values? Who decides? Who draws the line, and where? Should we insist that Amazon only sell “nice” books?

I find games like Hatred completely distasteful and damaging. But, games are an art form. Just because I don’t like it, or just because it has dubious moral values and a lot of blood, does that mean that it’s not art? Let’s say that Valve removes games because they don’t like them, or they don’t fit in with their values. How is that different from censorship? Should we allow private companies to dabble in censorship?

Personally, I think that widely used platforms should set standards. You could call it moral obligation, or you could call it common sense. Generating too much controversy will attract unwelcome attention from the regulatory authorities, the boycott lobbies and the class action lawyers. Being the “good guy” is generally is much more profitable than promoting bloodshed and pain. Some of us like those games, but the vast majority of us don’t. Extremely violent games will find another outlet. The problem with the Steam/Hatred controversy is that Steam does not have set rules as to what is and what is not acceptable. “Offensive” is way too vague a term. Removal of a game from the platform should be based on definite rules, which should be adjusted as the need arises. Adjusted, and published, so that other developers can also take design decisions based on those criteria. Removed games should be given a chance to tweak their design to comply with Steam’s rules, if they want to. If they don’t, there will be other, less mainstream, outlets. This isn’t censorship. It’s good business sense.

The game has not yet been released. When it is, I imagine that we’ll see even more controversy and outrage. Which will, of course, give it a huge amount of publicity, for free. This could well end up sending the message that, to stand out from the pack in a crowded gaming market, you need to shock. No-one will stop you. You’ll attract attention. You’ll get coveted press coverage. You’ll generate a lot of interest. That is actually even scarier than the game itself.

Swirling sands in a digital dance

Another beautiful human and digital interaction from the artists who created Pixel, which we looked at a few weeks ago. Sable cinétique is a digital table that sends whirls of pixels around any object that touches it, creating a magical choreography and visual experience.


(image from Colossal)

Add the perfection and mysticism of a crystal ball, and the effect is quite stunning. Complement that with more spheres, and the dance gets layered and playful.

Why is it so mesmerising? Maybe because the swarming effect of the light pixels looks both random and choreographed at the same time. Beautiful.

Jokes, quotes, articles and ice cubes

5 articles I found interesting this week (only 5 out of so much stuff? difficult):

The Netflix Watch (TechCrunch)

A late, but excellent, April Fool’s gag…


Ad blocking is every publisher’s problem now (Digiday)

“The global ad-blocking user base has ballooned to 144 million monthly active users, according to a recent report from Adobe and PageFair, which measures ad-blocking rates. That number more than doubled in 2013 alone…

…One solution is to lean more heavily on a sponsor-content model that will see native ad placements blocked but not the content itself. Of course, that means advertisers need to create content people opt to consume.”  [my emphasis]


Did LinkedIn’s aquisition of Lynda just kill the ed-tech space? (Pando)

“For all the hype about the new wave of education a year or so ago, it’s a land largely unicorn-free. (And that’s saying something these days.) If $1.5 billion is what the darling gets… well, education may start to look like a rougher space than ecommerce. (Ouch.)”


Social media needs limitations, not choices (Wired)

“Exceptionalism among apps should be welcomed. People are diverse. Social media should be, too. Different relationships require different tools. Friends, intimate partners, journalists, professionals, political dissidents, and others all use social media in different ways. Given the different needs within these communities, one size will not fit all.”


Are we training our students to be robots? (Medium)

“From crayons to compasses, we’ve learned to incorporate all sorts of different tools into our lives and educational practices. Why, then, do computing and networked devices consistently stump us? Why do we imagine technology to be our educational savior, but also the demon undermining learning through distraction? Why are we so unable to see it as a tool whose value is most notably discovered situated in its context?”


A good tweet:


Oh, and one more link:

Do you take your whisky “3d on the rocks”? (PSFK)

Decadent. Very decadent. I like it.





What university is for…

This past weekend a couple of my 12-year-old daughter’s friends came to stay. Yes, a weekend-long pyjama party. There were cupcakes, roasted marshmallows, popcorn and a Buffy the Vampire Slayer marathon. I wasn’t invited to join them, of course (sulk), but I had fun lurking on the sidelines. I mean, it’s not like I haven’t already seen the Lego Movie three times. On Saturday, over dinner, Sophie asked: “Is it true that at university, you don’t have to go to class?”. Which inevitably lead to me launching into a long explanation of higher education and where I think it’s going (“No, hon, the idea is you don’t go to university unless you really want to”). Since I’ve been writing about it recently, and since once I launch on a topic it’s difficult to get me to shut up, I soon had them enthralled with my views on the future of college.

Here’s a (very) brief summary of what I told them: I do believe that a traditional undergraduate option will before long not be the “standard” path. I am certain that today’s young will have much more influence over the education they receive than my generation did. And I regard the Internet as an astonishing channel of access to information and sources, which allow for custom learning, creative thinking and meaningful work. The “typical” curriculum that lands on the desks of the big-company recruiters will very soon be a thing of the past. What you do with your life is more important than what job titles you hold. Creativity, persistence, a thick skin, hard work and strong values will take you places. A good degree does not guarantee you happiness, or even job security.

image from The Guardian

image via The Guardian

But, if you can afford it, I do recommend going to the best university you can, preferably in a different country than the one you grew up in. Why? For the life experience. Leaving home, fending for yourself, making mistakes, learning, doing so many things you’ve never done before, becoming who you want to be… An online education, accessible and beneficial as it may be, can’t create those sort of memories and personal growth. Sure, university isn’t the only place where you can learn about life, of course not. But it is one of the most intense, condensed, friendly opportunities to combine really growing up with valuable brain-stretching and soul-searching.

This morning I was reading the Knight Foundation’s report “Above and Beyond: Looking at the Future of Journalism Education”, when I came across a paragraph that for me beautifully laid out the advantages of the immersive experience and the breadth of subjects. Bradley Hamm at Medill/Northwestern University was talking about the Journalism degree:

“I don’t believe an educated person can leave a journalism program and not know about journalism history. … if I were to say that you brought in a Medill student and said they’ve had law, ethics, history … the ability to understand the skills of writing and visual communication. … You match that with professional experience, internships, student media, with study abroad and other leadership opportunities, and in an accredited world with a second major or minor or special emphasis, I think it’s as good a degree as you could possibly get, whether you choose to go into journalism or not.”

The implication that breadth of study and experience make for a useful education made me think of an interview I heard over the weekend of Fareed Zakaria, about his new book “In Defense of a Liberal Education”. Fareed is upset about the increasing emphasis on the need for trade-based skills and focussed, technical studies.

“…traditionally America has always believed … that a broad-based education is the best thing you can do because you teach people how to think, read, study, write and that those broad skills … teach them to follow their curiosity and to kind of love learning. That those broad skills are actually much more useful in the long run.

The president of Harvard once said that the purpose of a degree from a liberal education is not to train you for your first job but for your sixth job because what you need are these basic skills.

Of course if you want to do science and you love science, that’s part of a liberal education, but don’t just do stuff because you think you’ll learn the skills for that first job because life is going to change. You’re going to be working for 40 or 50 years.”

Fareed stresses, rightly so, the need for critical thinking and thoughtful communication. It may be more difficult to get a well-paying job with a liberal arts degree right out of college. But that isn’t necessarily everyone’s priority. The ability to ask the right questions establishes paths and doorways. The practice of cross-referencing areas of study generates innovation. Big-picture insight helps to hone life goals.

All of which are difficult to master with online education. Without the dialogue and the arguments, without the group interaction and the exposure to differing ideas, without the life experience of sharing and working together and supporting your peers that the immersive, residential university experience allows, we miss out on valuable personal skills. We miss out on cross-cultural experiences, on stumbling across eye-opening concepts, on seeing huge possibilities through the lens of connections and subtleties. Whether it’s a science degree or liberal arts, the opportunities that the “traditional” universities can offer still outweigh those of the efficient, focussed online versions.

monsters university

I am a huge fan of online education, and will encourage my daughter to think objectively about what she wants from her education and her early work experience. But as a mother, I would like her to enjoy the human experience of campus life. University should not just be about imparting knowledge. It’s about getting ready for what’s next.