SiaaS : Simple as a Service

In a twitter exchange, I discovered that the creators of Monopoly were launching a new, “simplified” version of their famous game and that their new game could be a paradigm for financial services:

Yes, but simplifying by adding intelligence behind or simplifying by dumbing down? RT @shamir_k: Interesting take http://bit.ly/geKvyp

In the same time, Jack Dorsey explained in an interview with Technology Review his philosophy of product design

All this feels surprisingly satisfying. Square is elegant. The user’s flow through payment or application has been reduced to the fewest possible steps; the app has minimal features. This emphasis comes directly from Dorsey, who says, “I’m really good at simplifying things.” He espouses a tremendously attractive belief that good industrial design wins customers’ trust by disappearing.

He explains, “People think of design as being visual, but to me it is editorial: ‘What can we take away to get to the essence of what we’re trying to do?’ What I love about a really well-designed product is that you don’t think about it. Steve Jobs is a great editor: when you use an Apple phone, its form fades away and all you think about is the content. I want a similar thing for Twitter. With Square, we’re trying to accept payments. We have two groups we need to address: our users—the merchants—and their users, consumers. We want the merchant to be focused on taking a payment. And for the consumer, for me, I want to be able to walk into a coffee store, enjoy my coffee, and walk out and eventually question whether I had paid or not.

1+1 = Simple as a Service. What if a successful strategy for companies was to provide simplicity? But then what is being simple? Not all companies with a minimalist offer or product qualify as a SiaaS company: simplifying for their customers has to be part of their DNA, how they see and improve in their industry.

A relevant example is probably Southwest airlines:
– A single website to find tickets – http://southwest.com
– One plane type – One seat type
– Price include 2 checked bags
– Free food offer, which has remained the same where other companies have changed.
Simple flying, efficient service to go from point A to B. While other airlines have slowly degraded their offers, Southwest’s has not changed to the best of my knowledge.

Take in comparison most of other airlines trying to cut cost: variable fees for bags, no food or pay for it, multiple seat types with various prices. All these things makes it difficult to evaluate the total price of a flight by confusing customers.
Not simpler : dumbed down.

As web based services allow innovative approach in User Experience (in a relatively restricted framework) and because financial services have been built knowingly or not around complexity, several startups are attacking entrenched incumbents by using a SiaaS approach:

Square – start accepting credit card, the simplest way to make money
I have written a lot about Square (here) but there global approach is targeted towards making things simple, not just only the payment:
– Simplified sign in without the previously required checks and controls
– 1 small and simple device
– Really easy interface
– Beautiful receipts (because being simple is not dumbing down)

Betterment – invest better
Betterment offers a simple approach to investment account, by allowing users to create a portfolio of treasury bonds and stocks (via ETFs) and automatically reallocating the proportion of each products.
– Simplified allocation process: expected returns (positive and negative) via sliders on allocation and time frame
– Peer comparison via a simple speedometer
– Single fee structure: no fees for reallocation, no minimum balance (to be fair, the echo on the fees amount is sometimes negative with 0.9% being high, but it depends on how the betterment account is used)

BankSimple – a bank that doesn’t suck
While not launched yet (covered on this blog here) Banksimple aims at simplifying banking. There will be strong emphasis on UI, as described in the following post by Bill DeRouchey, BankSimple’s creative director : read

“Usually people are forced to do a lot of mental math about how much money they ‘really’ have at any given monent,” says DeRouchey. “We do that math for them. Our UX philosophy is, let’s do all that stuff — let’s make it nearly impossible for you to fail with your personal banking.”

How to create your SiaaS startup?
+ Beautiful design
+ Easy to understand pricing
+ Complex competitors
=Value to your customers

What criteria would you add? Do you have other example of SiaaS companies?

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  • Omniprasan

    Excellent Post!

  • M Kisiel

    Spot on! I think you are right about it – user centered design, keeping it simple. Not new paradigm, but new in finance :)

  • M Kisiel

    Spot on! I think you are right about it – user centered design, keeping it simple. Not new paradigm, but new in finance :)

  • M Kisiel

    Spot on! I think you are right about it – user centered design, keeping it simple. Not new paradigm, but new in finance :)

  • http://www.parkparadigm.com parkparadigm

    Nice to see you’ve got 2 of our companies on your list. Not by chance. It is a core part of our investment thesis > (traditional) finance not only does not embrace simplicity but worse revels in complexity. Our shorthand metaphor is “Microsoft” finance vs “Apple” finance. Sure it’s (now – not 5 years ago when we first used it) now a bit cliched but folks understand.

    Couple other simplicity driven portfolio companies:
    – FX Capital Group – simple FX (see http://www.rabbitfx.com)
    – Timetric – simple data (www.timetric.com)
    – Blueleaf – simple wealth management (www.blueleaf.com)
    – Weatherbill – simple (weather) risk management (www.weatherbill.com)

    And if you want a great read on simplicity John Maeda http://twitter.com/#!/johnmaeda is a must read:
    http://astore.amazon.com/theparpar-20/detail/0262134721
    http://lawsofsimplicity.com/

  • Anonymous

    Thank you!

  • Anonymous

    Not new I agree, but focused companies with a long term perspective on this strategy may be few

  • Anonymous

    Apple Finance might sound cliche, but between 5 years ago and now, Apple’s focus has remained the same … a “simple” focus. Thanks for the reading recommendation, I looked at John Maeda website and will add the laws of simplicity to my reading list.

    I agree with you Finance is a market open for simplicity. Business analytics might also be the same, with startups such as Lokad http://www.lokad.com/

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