Big companies do struggle against startups as HSBC shuts down Zing: “HSBC, one of the largest banking and financial services institutions in the world, has announced the shutdown of its international payments platform Zing, one year after launch…The closure of Zing highlights the difficulties traditional banks face in developing sustainable fintech ventures. Similar initiatives by other banks, such as NatWest’s digital bank Bó, Santander’s small business bookkeeping app Asto and Barclays’ mobile payments service Pingit, have also been discontinued after brief periods.”
In Tekedia Institute, I have put out a construct to enable why this happens and I have called it Startup Incentive Construct. This is a summary from AI on my construct: “The Startup Incentive Construct by Tekedia, explained by Ndubuisi Ekekwe, discusses why startups often succeed despite challenges from established companies. The key idea is that startups have different incentives compared to older companies, which allows them to solve problems more effectively.
“Older companies often have what Ekekwe calls “Innovation Hangover”, meaning they are reluctant to disrupt their existing revenue streams. Startups, on the other hand, are more agile and can focus on solving problems without being tied to legacy systems or profits. This construct highlights the advantage startups have in being able to innovate and adapt quickly, while established companies may struggle to change due to their existing commitments and structures”.
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And that means, you should not be afraid when those big banks and companies clone your app or product because what they will launch will never be the same. Why should a bank launch a cheap treasury app that will cannibalise the hefty fees they charge clients?
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The hangover is entrenched, not helped by human resistance anyway. How do you convince people that what is working very well must be dismantled in place of what will work in the future to be built? It is never as easy as presented, even among those who regularly yammer ‘change is constant’.
As it is in corporations so also in nation states, citizens always feel that there’s still time to keep enjoying old goodies, so any attempt to change it is fiercely resisted, until everything collapses.