Next up in this week’s series of profiles supporting the Innovate Finance Global Summit on April 11th, we are joined by Vinay Jayaram of Lifescale Limited.
Our questions are in bold.
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Who are you and what’s your background?
Richard, Trevor and myself, together with COO Claire Brown, spent a collective 50+ years at a large global financial services firm. One of the coolest things we did in that time was to come up with a completely different way to help people think about their future and make smarter decisions, using the best analytics and data visualisation that was available at the time. That’s how Lifescale Limited got its start.
What is your job title and what are your general responsibilities?
I’m a co‐founder and the CEO. My job is to ensure we attract the best people possible to our vision and we allow them the freedom and resources they need to build our product and our business, while staying true to our vision and mission. On a day‐to‐day basis I do my best to ensure everyone is operating at the intersection of what they enjoy doing and what they are good at doing.
Can you give us an overview of your business?
We are your mobile companion for life’s big decisions.
We deliver our proprietary ‘life analytics’ through a simple, intuitive mobile application that enables individuals and households to design their future and make smarter life decisions. Think Google Maps for your future.
What makes us unique is that we model your life and your future, with all its rich complexity, choices and uncertainties, and we present it to you in a simple way that allows you play around, decide what’s really important to you and see how you can achieve the outcomes you care about. If there’s a risk that you may not, then we help you understand why and what you can do about it. Our experience helps users understand the risks to the future they aspire to (most of which have nothing to do with the “risk” in their investment portfolio that robo‐advisors and IFAs talk about) and what real‐world choices make the biggest difference. And we never tell our users what to do – we just help them figure it out for themselves.
We are neither robo‐advisor, nor budgeting tool, nor advisor software, nor “goals based investing”. We have elements of each of those, and we combine them in a way that engages our users emotionally around designing their future. In our experience, money (and finance, banking, budgeting, insurance, investing, all that stuff) is the “best supporting actor”. What matters to most of us is the life we want to live, the future we aspire to for ourselves and our family. Money is just an enabler of that future, not an end unto itself.
We deliver our user experience to individuals and households via their financial services provider. In that regard we are “B2B2C” (business‐to‐business‐ to‐consumer).
So far, we are fortunate to have been approached by excellent partners in the USA, Europe and Australia, who are amongst the largest and most trusted financial services brands in their countries, and who understand the importance of connecting with their customers around outcomes rather than products. They see a future where financial products are getting more and more commoditised (think what Vanguard has already done to the funds industry) and where what differentiates is the quality of the relationship a financial services firm can build with its customer. That relationship, according to them, is anchored in trust and in helping their customers achieve the future outcomes that they would like to attain for their families. Perhaps as a result, our engagements are led by C‐suite officers in charge of the direction of their company and the industry.
Given we are based in the UK, we are always keen to bring our unique experience to the UK through partners who understand what we are doing and how together we can transform their digital customer experience from a product‐centric to a customer‐centric one.
Partnering with us requires our clients to rethink the delivery of their product or service proposition around the life outcomes their customers care about.
Tell us how you are funded.
We have raised a seed round, investing our own money alongside our eight seed investors, and have generated significant pre‐product revenues while we develop our first release.
Why did you start the company? To solve what problems?
We see an impending train‐wreck caused by a few overlapping social trends:
○ People are living longer, yet saving less for their future
○ Low interest rates and equity returns aren’t helping
○ Despite talk of increasing retirement ages, advances in technology could mean fewer jobs in the future, especially for an older generation
We started Lifescale because we realised that the software we had created had the potential to improve the futures of hundreds of millions of people globally:
1. Life is too complex and uncertain to make joined up choices without the right tools to help. Our approach enables every household to design a better future for itself.
2. Employers and governments will not be able to afford to provide for our future. We address a major social problem that’s taking shape.
3. Most financial firms are just trying to sell their products to their customers.
We help them speak their customers’ language and enable us all to buy what we need.
Who are your target customers? What’s your revenue model?
Our target users span a broad spectrum of wealth and age ‐ people who have life choices to make. Within the Millennial generation, for example, our resonance testing suggests our early adopters tend to be more women than men, in their late 20s to mid 30s, facing a big life event (such as marriage, a first child, buying a home, losing a job, gaining a promotion or deciding whether to be an entrepreneur, etc.) and with a mistrust of the financial industry.
We bring our user experience to people via their banks, insurers, or asset managers, and (over time) through their employer or through educational channels.
Our revenue model does not involve advertising or product‐sale revenues. They undermine user trust in the software and we believe all our users should enjoy what we’ve built for free. So we charge our clients:
(a) an upfront fee,
(b) an annual fee, plus
(c) a usage fee per active user.
Over time we will also be in a position to provide data‐driven insights that can help our financial services clients design financial products that improve their customers’ lives and futures, and price them appropriately.
The usage fee aligns our interests with our clients. Our clients believe we have the ability to increase the lifetime “net present value” of their customers. We may do this by:
1. decreasing their cost of customer acquisition,
2. deepening their understanding of each customer, their means, and the future outcomes they want to achieve,
3. allowing our clients to retain those customers for longer due to the enhanced relationship between financial service provider and customer.
Importantly, our clients feel we turn their abstract financial products into a visual sale, where users can quite literally “see” if their future would be any different with or without a certain financial product like a variable‐rate mortgage, a stocks‐and‐shares ISA, an annuity, a life‐insurance or critical illness policy, private health cover, etc. In doing so, we help our clients transition from the current product‐centric approach to a more customer‐centric approach.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
In our view, the collaboration between incumbent financial firms and enabling innovators in the UK needs improvement relative to what we see elsewhere in the world.
The UK has many of the necessary elements to be the fintech capital of the world, and if incumbent financial services firms can rethink the way they partner with enabling innovators, the sector will live up to its potential.
We are well‐placed to have a view on this topic as we are global and our clients are located across the world.
What is your message for the larger players in the Finance industry?
There is very little by way of true customer‐centric innovation coming from any of the largest banks, insurers or asset managers in the UK. That is both a huge threat for incumbents, and a huge opportunity if they get it right.
Two decades ago, the pharmaceutical industry realised it had lost the ability to innovate on a cost‐effective basis. So it seeded innovation at early stages, the equivalent of angel and seed rounds. And it helped startups succeed by providing them the raw materials and lab space that was virtually free to provide. Then it bought out the successful ones. There’s a lesson in there for the UK financial services sector. We’re seeing some of that trend in financial services now, with corporate VCs, accelerators etc. But despite the rhetoric, customer‐facing innovation is not yet as much a core priority at large UK financial services firms as it is elsewhere in the world.
There are two reasons why, in our opinion. The first is risk‐aversion driven by regulation. Large financial firms in the UK are more afraid of the negative consequences of retroactive regulation or disproportionate fines than their counterparts elsewhere in the world. The second is a tragic yet ever‐present “not invented here” mentality, which we rarely see outside the UK.
What phone are you carrying and why?
An iPhone 6, first generation. I carry it because it does the job I need from a phone, because it is marginally easier to use than certain other phones, and because our app is initially for iOS. I tend to hold on to my phones for as long as I can.
Where do you get your industry news from?
My colleagues and I send each other articles we believe are relevant. Well‐wishers in our network keep us in the flow of breaking news. For the most part, by the time we read something in the news, it is already quite dated.
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
Our angel investors and partners have been amazing but none of them are social media types.
We talk to G reg B. Davies (@gregbdavies) for behavioural insights; J on Hocking at Morgan Stanley for insight into the insurance industry; Andrew Carmody for insights into the mobile media space; and Angus McLean (@angusmclean111) for insights into regulation.
Note: In our experience, there is a weak correlation between Twitter activity and people who have been genuinely helpful to us in our journey. This is perhaps why we have focused on building our team, product and business, attracting investors, and acquiring clients and users the old‐fashioned way ‐ in person.
Can you suggest the name of an Angel Investor or VC that might be interested in being profiled?
We would prefer to respect the peace and privacy of our awesome angel investors, but if someone is interested we will happily make a relevant introduction. In terms of the VC community in London, we are too early stage for most of them. We know a few, and of them 1‐2 have been truly helpful, but for the most part they prefer more proven and therefore less risky propositions, it appears.
PS: This gap creates a significant opportunity for a risk‐seeking venture firm to bridge the funding continuum between Angel and Series B, especially for concepts. This is a big gap in the UK startup financing market, which some groups of Angels are beginning to target
What’s the best FinTech product or service you’ve seen recently?
Without the buzz of the so‐called peer‐to‐peer currency exchanges, WorldFirst has built a solid business. I was so disappointed with my experience 18 months ago with one of their competitors – one that has spent a fortune on marketing and has raised substantial VC money – that I moved all my personal and business FX transactions to them. They have a clear proposition and great customer service. I’ve now recommended four corporate clients, each of which has given them more business in the first few weeks than we have in our entire history with WorldFirst. To me, they set the standard, and they have a business that can scale.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
We expect a shakeout over the next 12‐18 months, just like there was in 2001 and in 2009, and the businesses that remain will truly address a customer pain‐point. This time is no different.
Inevitably at this point in the cycle, there is much out there today that is nebulous and/or a slight twist on something else. There is also a lot of hot air masquerading as innovation (see Dilbert on corporate innovation or CB Insights’s “corporate innovation theatre”). True innovation, especially customer‐centric innovation, is quite rare. Those that address a clear and present need are more likely to still be around in 24‐36 months.
In that time, a few incumbents may close down or scale back their digital garages, accelerators, incubators, and corporate VC arms.
This shakeout will affect any business that uses digital or mobile as its sole “shopfront” to gather assets under management: so‐called “robo‐advisors”, for example. The best will be bought (a trend that’s already begun) and the rest will find themselves unable to scale or in direct competition with comparable digital offerings from incumbent asset managers and wealth managers. A price war seems inevitable.
Blockchain will probably not live up to its promise. This is not because Blockchain isn’t promising (it is), but because the hype around it has taken on such surreal dimensions that it cannot possibly live up to its promise. I think of Blockchain as analogous to the evolution from first‐gen music sharing networks (the files sat on centralised databases) to second‐gen (the files sat everywhere, and the network was the database). None of them survived in their original form; they were more or less shut down by the incumbents.
Finally, I’m open to the idea that there are several innovators and innovations that you don’t hear about amidst the incessant noise of social media. I’m certain there’s a great company or two being hatched under the social media’s radar. Separating signal from noise is one of modern life’s great challenges.
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Thanks to Vinay for his answers today.
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