“The best way to militate against venture capital investment risk is to get proactively involved and to build up a portfolio that creates a holistic value trend…”
FST Media: What are your business and digital priorities for the next 6 months?
Jiang: We are looking to build a holistic value chain across our portfolio companies so that they can cross-refer and cross-integrate with each other’s platforms. These investments were synergetic by design; we invested where we can build up a value chain across investment management, financial planning, mortgage brokerage, trading platforms and automated wealth management advisory. The collective whole will be integrated along the individual parts of the portfolios.
FST Media: What technology or innovation is proving to be the single biggest game changer across the finance industry?
Jiang: There are a couple of things which people need to be mindful of and pay attention to – one is the rise of robo-advisory across the country. Another area is blockchain, and at Sapien we are very focused on blockchain as it has a lot of disruptive potential across many industries, not just financial services. We are going to be hosting a blockchain symposium in Brisbane in November, where there will be what we believe to be a world-first announcement of a public-sector blockchain initiative we have been working on.
FST Media: How are you leveraging marketplace knowledge to deliver customer-centric services?
Jiang: Customer centricity is paramount in the digital revolution and particularly in online market places. What that means is typically there are a number of characteristics: the customer is able to be as well informed as they would like to be, the customer has full capacity to self-service and self-help themselves, and there will be sufficient information from whichever platform they are accessing to be able to do that.
There is a need for good design principles and design thinking to be applied to customer experiences online, so anything that does not have to be manually entered should not have to be – there are effective API integration systems for that. Cybersecurity is also very important in this as well and being aware of that is really what customer centricity means, particularly in the marketplace or the platform context.
FST Media: What can be done across the finance sector to minimise Cybersecurity risks?
Jiang: It is such a difficult topic to tackle in a comprehensive manner because there are so many aspects to Cybersecurity and privacy, which I would relate as an adjacent topic. The aggregation of people’s data is continuing to increase and therefore the value of that data is also continuing to increase, and it becomes more and more attractive and lucrative to attack and breach corporate systems to get access to sensitive and valuable data. I do not see any likely abatement in people wanting to cause breaches or attack systems, because it is constantly becoming more and more valuable to do so if you are successful. What that means is that organisations and individuals need to really pay attention to managing data in a safe manner. In a digital capacity, you should not leave passwords or anything similar where they can be easily exposed.
From a company point of view, there needs to be more holistic and preventative measures taken. It is not just about implementing a preventative security system, because that does not exist. We are always looking for the next best thing in this space and the perfect software does not yet exist. Prevention needs a combination of structural and architectural safeguards, but most importantly, preventative processes – how to deal with process breaches when they happen. What caused uproar, for example, was the poor response after the recent Census debacle and the very poor continuance of essentially no contingency planning following from that.
FST Media: How are digital disruption and new innovations changing venture capital investment risk?
Jiang: Venture capital, being primarily focused on early stages, always has a degree of risk. That can be mitigated in a number of ways, first of all it’s about proactive management of portfolios. We have a belief that purely financial passive investments are very high risk; you are basically leaving your financial future to the outside forces of the market and/or the management team, so we liken that to the equivalent of gambling in a casino. To be invested, we demand a board seat in the company and we expect and will have agreed with the management team to get proactively involved in everything from cash flow to the pipeline management, forecasts and projections, strategic market entry, the on-boarding of new channel partnerships with future investors. That way, we can really integrate ourselves in the strategic and operational team work.
The best way to militate against venture capital investment risk is to get proactively involved and to build up a portfolio that creates a holistic value chain. These are the two primary approaches we use to mitigate risk.
FST Media: What are the key differences between Eastern and Western fintech markets?
Jiang: There are so many differences ranging from the cultural, to market size, to the technological, the people, the practices and even the habits of entrepreneurs and investors. Culture is a big one and comparing East to West is a difficult comparison. North America, for example, is quite different to Australia in terms of business approaches and in turn, different to Europe again. It is hard to generalise because the West especially does not necessarily behave similarly and in my experience, there are very different markets. Compared to Chinese markets, however, there are different expectations regarding traction and therefore, the amount of capital and the amount of time that is needed to get a venture started, is different.
In China, a start-up can go from launch to being world number one in its market category within a year. That is being done increasingly more and more recently. It is a very different scale and set of expectations to those in Australia, where that sort of speed would be utterly unheard of even in Silicon Valley, that would be quite difficult to expect. With the sheer size of the population and market in China, anything that is consumer-oriented or related to peer-to-peer (P2P) can grow ridiculously in a very short period of time. That has cultivated a different mentality because things happen so fast in markets there, far faster than could be reasonably expected of anywhere else in the world.
FST Media: What is the next big thing for Sapien Ventures and how will you measure its success?
Jiang: We are fairly young, just over a year old, so we are not yet well-known in the market place we operate in. One of our biggest objectives is to promote our awareness and increase our exposure to the industry, to the market, to government bodies, and to entrepreneurs. We are not afraid to blow our own trumpet as it were! We have a few significant initiatives around events that we do and also things that we are working on, which range from capital raising to finding bigger deals and as a VC firm, we are in perpetual fundraising mode, so we are now looking to raise a third fund. We have internal expectations and milestones to hit that are very exciting.
FST Media: Where do you look for emerging technology trends?
Jiang: We have quite sophisticated deal flow channels so we see through our global partners, team members and some unique big-data capabilities, very broad and extensive deal flows in the areas that we focus on. In the next 12 months we will also be looking at a number of liquidity events.
FST Media: How do you sustain an innovative culture in your team of staff?
Jiang: I would like to be able to say there is a specific formula to it, but that is not quite true! As a group we are very big on cultural alignment and yet we are deliberately building a lot of diversity by way of the people we get on board and their work experiences and backgrounds. We are also very aligned in terms of our investment philosophy and in terms of our thoughts on the impact that tech will have across markets over the coming years, not just in financial services. We all have a common belief of how the market trends will play out and beyond anything else, it is important to have a cultural alignment and unity.
FST Media: What is the best career advice you would pass on?
Jiang: Some really great advice which I have taken heed of is to always have goals and always seek out mentors to help you achieve every stage of these life goals. I was given this piece of advice during high school and ever since then, I have constantly set goals for myself – where do I want to be, what do I want to have accomplished, and what sort of people do I want to have met, worked with and come across. I have had many mentors over my lifetime which have helped me over many stages and helped propel me to the stage of career that I want to get to; all that comes back to having clear and established goals within specific time frames. Once you are really articulate and clear on what your purpose and mission is, mentors will come along on your journey.