Insights & Cases

ECB has no institutional view on Bitcoins

Last month, the European Parliament Committee on Economic and Monetary Affairs received Mario Draghi, the president of the European Central Bank (ECB). Crypto currencies were a very hot topic, following China’s announcement that it would prohibit initial coin offerings and exchanges of Bitcoins. It caused stress on the international markets (1). At the same time, ECB Vice-President, Vítor Constâncio (2), has called crypto currencies an instrument of speculation and compared the sharp volatility in exchange rates to the Dutch tulip Mania (in 1637 prices of tulip reached extraordinarily high levels and then dramatically collapsed). In addition, Mexico is introducing legislation to regulate FinTech firms (including those operating with crypto currencies) and here are similar initiatives in many other countries (3). These recent developments were all highlighted and debated by MEPs. Draghi was invited to explain the ECB stance to mitigate the risk of crypto currencies. MEPs asked him if he was more on the Chinese side, in favor of prohibition, or on the Japanese side, in favour of regulation. Draghi said that he didn’t think that a regulatory framework for crypto currency was currently needed. Then, he added that the ECB has no authority to either to prohibit or regulate...

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Effective alternatives to brainstorming

Ideation is a critical phase in project development, yet all too often, it is reduced to a whiteboard, a set of post-its, and a scramble to emerge with a socially satisfactory conclusion. However, decades of research have uncovered a series of techniques that can help innovators get the most out of the ideation phase. The purpose of this article is to discuss why traditional brainstorming often fails, and techniques that can navigate these roadblocks. Standard brainstorming In a typical brainstorm session, a group attempts to generate ideas in a two-stage process (Diehl & Stroebe, 1987). The first stage involves an open environment where participants are encouraged to avoid evaluation, vocalize a large number of outlandish ideas, and build upon other participants’ contributions. In the second stage, people evaluate the ideas, often by means of coding, categorization, and discussion. Through this process, brainstorming aims to generate a wide assortment of ideas, and then narrow this selection through careful reasoning. Brainstorming is an incredibly popular technique for firms and groups to innovate, but as has been repeatedly noted by both academics (Mullen, Johnson, & Salas, 1991) and the mainstream press (Lehrer, 2012), brainstorming simply isn’t that productive. Although the general procedure described...

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Team diversity: The foundation for successful innovation

Where does successful innovation originate? A eureka moment in the shower? A whiteboard coated in post-its and sharpie scribbles? Inspiration and ideation are indeed critical steps for successful innovation, but there is one important factor that may precede them: team diversity. Diversity is often in the headlines for unfortunate reasons. Overall representation of women and ethnic minorities in the tech industry is abysmally low, and many companies are plagued by sexual harassment and discrimination scandals.  Although inclusiveness and diversity are moral obligations, they also make sense from a business perspective. As will be discussed in the following sections, a number of studies empirically link team diversity (i.e. gender, ethnicity, and education) to innovation performance. Gender balance and innovation In a study looking at the composition of 4277 Spanish tech firms, researchers sought to determine whether gender diversity (i.e. balance) predicted firm innovation (Díaz-García, González-Moreno, & Sáez-Martínez, 2013). This is especially relevant for Spain, where the authors note that the technology sector is particularly imbalanced (64.2% male). The dependent variable was whether the firm had produced a new product on the market in the past two years (i.e. radical innovation), based on data from the Eurostat’s ‘Community Innovation Survey’ (CIS). As predicted,...

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Our five key takeaways from Zest Malta

Zest Malta Picture

Our CEO, Geert Desager, recently addressed the tech startup community in the Mediterranean at the Zest event in Malta, held on the 19th and 20th of September (1). His presentation set out to debunk  seven commonly held beliefs about innovation and offered alternative lessons based on facts.  This event attracted over four hundred attendees from the tech startup community in the Mediterranean, including entrepreneurs, investors, accelerators, and corporations. The panelists kicked off the day with a vibrant discussion about disruption and how new technologies will transform businesses and society at large. Blockchain was at the heart of the debates (2). This technology allows the registration of anything of value such as money, stocks, healthcare records, or identities on a distributed ledger. It has the potential to disrupt nearly every industry, changing the way business transactions are performed. #1 Great ideas are never too small for Malta Hon. Silvio Schembri, Parliamentary Secretary for Financial Services, Digital Economy and Innovation, noted that Malta is well positioned to take advantage of the current disruptive environment driven by tech startups. Great ideas are never too small for Malta! The Government has worked tirelessly to kick-start a startup ecosystem. As a testament to this, it has...

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How does customer feedback affect attitudes and behavior?

How many times per day are you asked to provide feedback on a product or service? Like this app? Rate it in the app store! How is our website? Please fill out this satisfaction measure. Thanks for your recent purchase. Do you have time to fill out a short survey based on your shopping experience? While this kind of data can be useful in service optimization and design, these methods can result in unexpected outcomes. More specifically, soliciting customer feedback can often result in the ‘measurement effect’. This is the finding that measuring attitudes can affect subsequent behavior (positively or negatively). Therefore, how you go about measuring attitudes is essential. In this article, I want to discuss some of the ways in which polling customers can affect their attitudes and behavior. Evaluation Expectations: We are more critical when we expect feedback solicitations In many of our consumption experiences, we can sense an upcoming evaluation. Amazon orders, hotel stays, even an Uber ride; we know that we will be asked to provide our satisfaction and feedback afterward. What effect does this have on our attitudes? Consumer research indicates that it probably awakens the critic within us, making us more negative about...

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Five Startups Who Put Behavior First

behavioral startups

Many companies seek to apply behavioral science to existing business models. Sometimes these are hasty ad-hoc executions, such as failed gamification systems. Other times, they may be more thoughtful and innovative, such as Merrill Edge's "Face Retirement" campaign.  However, such examples are still a matter of applying behavioral insights to a traditional model. What about companies that use behavioral insights right from inception? In this article, I want to list five excellent examples of startups building their core business model around behavior. 1. Moven: Motivating long-term savings What it is: A variety of fintech companies provide customers with savings/spending reminders and other tools to help consumers try to budget their money effectively. While Moven does also offer these types of features, it also goes one step further by offering a “Smart Savings Account”. This system allows customers to develop a personalized savings path, where personally relevant savings goals (i.e. a vacation, a new car) appear on a wish list timeline. Customers’ saving and spending behavior interact with this list, allowing them to visualize their progress towards specific goals. Why it works: Cognizant recently published a report that argued that digitization has disproportionately favored ‘fast money’. There are apps and technologies...

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What’s the impact of innovation in public policy?

It has long been argued that innovation is a driver of economic competitiveness and export performance. Indeed, in economic theory innovation should make workers more efficient. As a result, fewer people are required to produce the same amount of output and the same number of people can produce more output. This should strengthen competitive advantages and support GDP growth. In this short article, I will quickly review the literature and public initiatives in the field of innovation. Innovation in theory Oslo Manual defined innovation as the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relation (1). Innovation is based on the results of new technologies, new combinations of existing technology or the use of other knowledge acquired by the enterprise (2). Joseph Schumpeter considered innovation as a prerequisite for economic development. According to his theory of creative destruction, from the one side innovation destroys technology and decreases employment, whereas from the other side it simultaneously creates more output and other jobs (3, 4). According to Michael Porter, innovation, when defined as a process that allows companies to produce more...

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Does Netflix make us more impatient?

Streaming services are more popular than ever, but what effect does this have on our personalities? According to one report, traditional US media services such as cable television and satellite lost approximately 1.8 million subscribers in 2017. The primary cause of this exodus is, as you probably already knew, streaming services such as Netflix and Hulu. Consumers are rapidly shifting towards on-demand content, free of advertisements and without long waits between programs. However, what (if any) behavioral effect does this have on the millions of people who now favor streaming? One possibility is that ever-present access to what we want is raising expectations and making us more impatient and impulsive. Consider, for example, the urgent demand for a second season of “Making a Murderer” only a month after it debuted (the article notes that the first season was a decade in the making). In this short article, I want to share some reasons for why streaming content could make us more impulsive, as well as some original research I conducted on the subject. More specifically, I’ll present a short survey I conducted with an online sample. Mobile phone use and impulsivity While as of yet there is no direct evidence...

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An introduction to corporate financing with cryptocurrencies

Blockchains, distributed ledgers, smart contracts, dApps, ICOs, ... The buzzwords around digital currency are heard everywhere, but they are sometimes difficult to decipher. In this article, we explain everything you need to know about the latest cryptocurrencies and corporate financing trends to make sure you stay on top of the game. Digital currencies are everywhere these days. The most famous one, Bitcoin, has surged more than 170% since the beginning of 2017.[1] The cryptocurrencies’ total market capitalization has surpassed the $100 billion mark.[2] Whilst some people are preparing for a bubble, others remain convinced of its value. Of course, this price increase might just be speculative, but it could also reflect a change in investors’ attitude towards cryptocurrencies. What if they were now seen as a tool to fund legit startups instead of criminal activities? Let's investigate the latest hype: Ethereum, a new platform using blockchain technology, and the possibility of Initial Coin Offering (ICO) it enables.   Bitcoin price year-over-year increase[3]   Ethereum: More than a cryptocurrency? The rising star in the world of cryptocurrencies is Ethereum. Like Bitcoin, its technology is based on a blockchain or distributed ledger. Ethereum, however, aspires to be more than just a cryptocurrency.[4] Most notably...

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Bitcoins, Blockchains and the Future of Cryptocurrencies


On August 1st 2017, Bitcoin reached a fork in the road, and split in two. The digital currency market is populated with thousands of copycats ("Altcoins"), but only Ethereum competes, and in some ways, beats Bitcoin. Eight years ago, an enigmatic figure called Satoshi Nakamoto published a paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System". This paper described a payment system that removed banks and other financial intermediaries from the equation by creating a chain of verified transactions. In order to validate and protect these transactions, cryptography was used. The aim of the paper was not to create a new digital currency, but one of the outcomes was the birth of a new digital currency called Bitcoin in 2009. This was not the first digital currency, nor the first attempt to use cryptography to manage the currency, but Bitcoin is still around, unlike Mr Nakamoto. The avatar, or pseudonym, has disappeared, but the real person (or persons) who assumed the name is probably still around and actively participating in the market. Why Does Anyone Need Digital Currency? Consider any financial transaction you undertake; it involves a horde of intermediaries, all of whom control the terms under which you operate and...

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