My presentation for Finorum 2014, http://www.farakademi.se/Finforum.aspx in November 2014.

1. A rapidly changing
financial landscape
November 2014

2. If the rate of change on the
outside (of an organization)
exceeds the rate of change on
the inside, the end is near....
-Jack Welch

3. Then…
Thx to R. Wieselfors, Ericsson for photos

4. …Now
Thx to R. Wieselfors, Ericsson for photos

5. Accelerating pace of change
Ray Kurzweil, Singularity Institute

6. People
• High internet penetration
• “Net generation”
• 24x7 “mobile” workforce
• Knowledge via MOOCs
• Sharing not consuming
Technology
• Broadband access
• The cloud
• Mobile phones
• Internet of Things
• Big data
• 3D printing
• Robotics/AI
• VR/AR
Open Source
• Software
• Hardware
• Physibles
Convergence of…..
Finance
• Microlending/microfinance
• Crowdfunding/equity/P2P
• Non-fiat cryptocurrencies
• Mobile money/payments

7. In just a few years in Sweden…
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies

8. The genie is
out of the bottle….

9. New developments like crowdfunding
and cryptocurrencies (e.g., Bitcoin)
have let the genie out of the bottle…..
All our basic assumptions about
money and financial services are now
being questioned.

10. What is Crowdfunding?
Accumulation of small investments in individual
projects by large number of individuals (the
“crowd”) via or with help of Internet and social
networks (De Buysere et al., 2012)
Picture: FundedByMe

11. Local Stockholm success story:
Flippin’ Burgers
Money raised:
SEK 36,502 /
€4,000
Number of
investors: 186
Date funded:
September 2011
Sector: Food

12. Enabling local, small-scale solutions
http://travel.cnn.com/best-americana-restaurants-europe-023346

16. How big is crowdfunding?
FundedByMe raised USD 10.5 mln to date
Swedish market to be SEK 100 mln in 2014
Global crowdfunding almost doubled 2012 to 2013
to USD 5.1 bln
March 2014 Kickstarter passed USD 1 bln in total
pledges
By 2025 global crowdfunding could reach USD 90
to 96 bln (1.8 times today’s global VC industry)
Growth potential greatest in emerging markets?
USD 50 bln in China by 2025?

17. Four forms of crowdfunding
Form Benefits for funders
Donation-based Donation Intangible benefits.
Reward-based
Donation or pre-purchase
Rewards in addition to intangible benefits.
Equity-based Investment
Return on investment if company does
well. Rewards sometimes also offered and
intangible benefits may motivate too.
Debt-based Loan
Repayment of loan with interest.
Alternatively intangible benefits if loan
given interest-free.
Ingram & Teigland 2013

18. Crowd equity taking off

20. Toborrow.se

21. One step in the financing chain

22. Nesta

23. Democratizing innovation
through access to capital
Women in USA
<30% of business owners
<15% of angel investors
<10% of venture capitalists
But…
Women on Kickstarter
35% of project leaders
44% of investors on platform
>40% of projects women invested in had
female project leaders
Marom, Robb and Sade 2014

24. “Made in Africa” 3D printer (Togo)
Winner of International
Space Apps Challenge
http://www.engineering.com/3DPrinting/3DPrintingArticles/ArticleID/5712/E-Waste-3D-Printer-to-Mars.aspx

25. In just a few years in Sweden…
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies

26. Cryptocurrency mining equipment
http://techcrunch.com/2014/09/04/kncminer-raises-14-million-to-take-bitcoin-mining-to-the-moon/

27. Bitcoin = The power of community +
open source + internet + CPU
Developed by self-organizing community of thousands of
“strangers” across globe
Not one but many motivations (intrinsic, extrinsic)
SEK 91 bln in circulation vs SEK 38 bln of Bitcoin in five years
Approx USD 5.2 bln in circulation (Nov 2014) and 70,000 daily
transactions
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707

28. What is a cryptocurrency?
Digital
Decentralized, peer-to-peer (P2P), i.e.,
no central, third party
Uses cryptography to validate
transactions
Also uses cryptography to generate
currency itself

29. How does Bitcoin work?
Block chain
• Shared public ledger
• All transactions ever
made available
• Chronology and
integrity enforced by
cryptography
Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor”

30. Mycelium Bitcoin Wallet

31. Bitcoin – one of many
cryptocurrencies
Currency Code
Year
Est.
Founder(s) Active Website PoW PoS
Bitcoin BTC or XBT 2009
Satoshi
Nakamoto
(pseudonym)
Yes N/A Yes No
Ripple XRP 2013
Chris Larsen &
Jed McCaleb
Yes ripple.com No No
Litecoin LTC 2011 Charles Lee Yes litecoin.org Yes No
Peercoin PPC 2012
Sunny King
(pseudonym)
Yes peercoin.net Yes Yes
Dogecoin DOGE 2013
Jackson
Palmer
& Billy Markus
Yes dogecoin.com Yes No
Namecoin NMC 2011 N/A Yes dot-bit.org Yes No
Mastercoin MSC 2013 J. R. Willett Yes
mastercoin.or
g
No No
Primecoin XPM 2013
Sunny King
(pseudonym)
Yes primecoin.org Yes No

33. Rise of local currencies

34. A vocabulary list of currencies
Fiat currency
National currency
Alternative/complementary currency
Bonus points/vouchers, e.g., frequent flyer
miles
Digital currency
In-game currencies, e.g., Stardollars, Farmville cash
Virtual world currencies, e.g., Linden dollars, PEDs
Mobile currency, e.g., M-pesa
Cryptocurrency, e.g., Bitcoin

35. From Africa to Eastern Europe to ?

36. Real cash economy in Entropia Universe
http://blogs.forbes.com/oliverchiang/2010/11/13/meet-the-man-who-just-made-
a-cool-half-million-from-the-sale-of-virtual-property/
•GDP >USD 440 mln
•PEDs <--> USD, Euro
•Record virtual good:
USD 625,000

37. The future?
Facebook + banking license?

38. What does the future hold?
• Will we see a parallel to other industries,
e.g., music, software, newspaper, books?
• Will “trusted” third parties no longer be
needed since trust can be mediated through
networks, which are self-regulating?
• What basic assumptions will no longer hold,
e.g., do we need money?

39. ”The future is already here,
it’s just not very evenly
distributed."
- William Gibson

40. If you love knowledge,
set it free…
Robin Teigland
robin.teigland@hhs.se
www.knowledgenetworking.org
www.slideshare.net/eteigland
www.nordicworlds.net
@RobinTeigland
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