Comments on: Mobile money start-up, shorter strategic guide http://www.debasil.net/blog/2010/01/26/mobile-money-start-up-shorter-strategic-guide/ Think, work, live Wed, 27 Jan 2010 15:39:15 +0100 http://wordpress.org/?v=2.9.1 hourly 1 By: Basile http://www.debasil.net/blog/2010/01/26/mobile-money-start-up-shorter-strategic-guide/comment-page-1/#comment-16 Basile Wed, 27 Jan 2010 15:39:15 +0000 http://www.debasil.net/blog/?p=219#comment-16 John, thank you for your comment. I agree that trust and liquidity are very important elements. Let's look at them closer. Trust is necessary but insufficient condition. In whole. Customers trust exactly banks with financial services. Startup cannot enjoy financial confidence more than Citibank or Visa. However, in Europe and USA all big banks' MM projects were a failure. Consequently, I think it works like IQ for success: there is no strict coupling, but threshold value. I.e. under some level of trust people do not use a financial service because of trust. But once the trust is above that level, it is no matter how big is it. Relative points: 1. Trust + money = very special. Neuromarketing says that word 'money' itself considerably changes people behaviour and emotions. 2. Trust is matter of considered PR strategy. A lot of interesting approaches. In general: don't be evil, show a good cause. 3. People do not trust banks because of crisis. And not only because of crisis. 4. P2P system architecture is able to be more understandable thus more creditworthy than current financial system that nobody understand. eBay is using p2p trust model successfully. 5. Resembling trust problems existed in e-commerce and electronic money industries. 6. Trust needs permanent observations; Visa spends a lot of money for people trust. 7. Small money doesn’t need a big trust. Start modestly, limit account size. Liquidity is project specific. I posted an article about that: <a href="http://www.debasil.net/blog/2010/02/28/cash-and-mobile-money/" rel="nofollow">Cash and Mobile Money</a> John, thank you for your comment.
I agree that trust and liquidity are very important elements. Let’s look at them closer.
Trust is necessary but insufficient condition.
In whole. Customers trust exactly banks with financial services. Startup cannot enjoy financial confidence more than Citibank or Visa. However, in Europe and USA all big banks’ MM projects were a failure. Consequently, I think it works like IQ for success: there is no strict coupling, but threshold value. I.e. under some level of trust people do not use a financial service because of trust. But once the trust is above that level, it is no matter how big is it.
Relative points:
1. Trust + money = very special. Neuromarketing says that word ‘money’ itself considerably changes people behaviour and emotions.
2. Trust is matter of considered PR strategy. A lot of interesting approaches. In general: don’t be evil, show a good cause.
3. People do not trust banks because of crisis. And not only because of crisis.
4. P2P system architecture is able to be more understandable thus more creditworthy than current financial system that nobody understand. eBay is using p2p trust model successfully.
5. Resembling trust problems existed in e-commerce and electronic money industries.
6. Trust needs permanent observations; Visa spends a lot of money for people trust.
7. Small money doesn’t need a big trust. Start modestly, limit account size.

Liquidity is project specific. I posted an article about that: Cash and Mobile Money

]]> By: John Celms http://www.debasil.net/blog/2010/01/26/mobile-money-start-up-shorter-strategic-guide/comment-page-1/#comment-15 John Celms Tue, 26 Jan 2010 17:53:41 +0000 http://www.debasil.net/blog/?p=219#comment-15 Very clean and succinct description of MM or the alternative movement of money. However, you leave out two very critical elements, I believe, – trust and liquidity. The reason we use Visa or Western Union is the trust factor that the money will get there despite the cost. And, your mobile device full of money is useless at the last mile if there is no liquidity to provide that cash for trade. But I love your simplistic flow and good analysis of the environment. Very clean and succinct description of MM or the alternative movement of money. However, you leave out two very critical elements, I believe, – trust and liquidity. The reason we use Visa or Western Union is the trust factor that the money will get there despite the cost. And, your mobile device full of money is useless at the last mile if there is no liquidity to provide that cash for trade. But I love your simplistic flow and good analysis of the environment.

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