What can we learn from this failure?
Citi seems to have embraced mobile payments like a bank, trying to force-fit an intriguing technology into existing applications. Organizations often err this way – look, for instance, at large solar energy projects being subsidized to generate power for the electrical grid, rather than in off-grid, small-scale applications. People initially viewed the telephone as competition for messenger boys. The examples are endless.
What the bank found was that people used Obopay to meet other, unmet needs. Up to half of users were parents providing a weekly allowance to their children. Another big source of usage came from small business owners who did not accept electronic payments but wanted to replace cash. These were surprises.
Market research is valuable, but it likely would not have told Citi about allowance payments, or Celpay about how to pay for a truckload of beer. These offerings would probably never have been imagined when the research brief was constructed. The only place to make these discoveries was in doing real business.
So the lesson of Obopay is twofold:
- Do not be entranced by technology. Think foremost about what customers need, and how your offering honestly stacks up along the success criteria that they define. As we came to say at Celpay, "A convenience service actually has to be convenient"
- Bring disruptive innovations to market fast, quietly, and at a small scale. Be extremely open-minded about learnings, and unafraid to quickly re-direct your efforts
Serial innovators come to realize that, as elsewhere in life, humility is a useful thing.
This post was written by Steve Wunker. Click for more thinking on New Markets Advisors' thinking on financial services.