$25M and a dash of naiveté

OnedoesnotfixMuch has been said and written about Clinkle, and it’s unfortunate that it will now forever be (fairly or unfairly) defined not by the merit of its idea or growth efforts, but by the $25m funding that it has received to help it “disrupt” payments. I wouldn’t venture to say that Payments has finally jumped the shark, I think the shark has been jumped so many times that it is now a paid regular and has health insurance. It’s not exactly a surprise that we found better success in emerging economies where both a lack of retail banking and a payment infrastructure has led to a thriving alternative banking and payments ecosystem. And we found apathy everywhere else.

It wouldn’t be fair to call the $25m as seed money, as Clinkle had been in pseudo-stealth mode for the last two years and this money was raised along the way. But that’s about the same amount of money Google raised from Kleiner Perkins and Sequoia Capital(among others) back in 1999. And when much of your product is still vaporware (a recent APK teardown found Clinkle referring to card.io – Paypal may have a thing or two to say about that), $25m could sound like the death knell for your startup. Though much of entrepreneurship is blind optimism, a pot as big as what Clinkle has, with that many cooks behind it, can force it on a growth path that it’s hardly ready for, nor should attempt.

Remember Color? Well don’t beat yourself up over it, if you don’t. They didn’t make it, as many others have also come to realize in the photo-sharing, elastic, contextual thingies space. That much money, that early, corrupts a startup’s DNA. The money always comes with strings attached, and with each step – leads it askew. A startup deserves organic growth and $25m or $41m funds anything but – even when you consider (suggested) dumb ideas like this one – giving $10 for signups and $10 for referrals.

So is it naiveté or hubris, or both? Payments is not waiting around for a dazzling bit of wisdom or insight in order to fix itself. It’s myopic because for the last several decades, any change in it has been nothing but incremental. It was not the lack of brilliant tech that led to this rot, but the lack of commonsense, and inertia setting in through decades of incremental layers, growing like a weed but never prompting a fundamental re-think of how payments must function in an increasingly connected, flat and digital economy. So if you are waiting for payments to be disrupted, Clinkle is not it. It will either be a niche player, a quick exit or a flame out. And we should remember that every time we drag Payments kicking and screaming back in to the limelight to reinvent it, we forget that it wants to be invisible.

And the same Bill Gates, who once said “Banking is essential. Banks are not” also said: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”. When people were asked 30 years ago to predict what technology would be ubiquitous in 2012 – none of them predicted the rise of mobility, social media or could anticipate how connected we would be. We can’t because our brains are wired to predict what our schedule will look like tomorrow, but not what will happen a decade from now. So if Clinkle lasts that much, I will be happy to print a retraction. Till then – Clinkle, Keep hustling.

With a name like Clinkle, I hope they get swallowed up and find a profitable and quick exit, because there is just no way in hell that I could look the clerk in the eye, and say “I want to pay with Clinkle” and have any hope of leaving that store with my pride intact. A public shaming each time I pay. What could be better than that, if your goal is to make payments invisible?!

What do you think about Clinkle? Or on how to fix the inertia in payments?

I am on Twitter here, if you wish to connect. And you can find me on LinkedIn here.

Board of Advisors at SimplyTapp - creators of Host Card Emulation driving democratization and open access to NFC in Android. Mobile Commerce & Payments Lead at Experian Global Consulting, serving Experian's clients in Banking, Retail, Consumer Credit & Payments. A strategic adviser w/ over 17 years of international Tech & Business Strategy consulting, advising firms in banking, retail & asset mgmt that seek clarity & insight in to the myriad business models around payments, fraud & commerce. Founded DROP Labs, a mobile payments/commerce strategy & advisory practice. Tweets here. I'm on LinkedIn here.
Cherian Abraham
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