From our experiences on how we differentiated in this highly competitive capital markets professional services world
It was a year ago. I was sitting at this coffee shop along with my other co-founders, deeply discussing our plans for an upcoming exciting journey in front of us. It was exciting for multiple reasons – we just quit our “high paying” jobs at top investment banks, convinced our families for the ride (a bigger challenge in India!), and motivated ourselves to march ahead bravely into this new world. We were about to enter into professional services, providing highly specialized software development services exclusively for the investment banking / capital market players.
Initially it looked like a daunting task as there were many players providing similar services and we had to be unique in our own way and we didn’t have the best sales/marketing techniques to crack into the game. We just had one thing in common – our specialized knowledge that we learned through our experience working for large investment banks and broker dealers. With our past achievements in our jobs and great feedback that we carried across functional, technical and project/program managers, we were rock solid in our confidence that our software will delight every customer we will serve and will eventually ripple through the market as word of mouth.
As luck favored us, our first opportunity came from a top financial services provider. There was a pressing requirement there on a critical middle office application development for institutional settlement and we deployed our Java experts. We are grateful they trusted our execution capabilities and provided us that critical break when we needed it the most. The project was complex and had numerous market interfacing elements (Bloomberg, Omgeo, Oasys, DTCC, GSCC, CREST, Euroclear, Canadian Depository Services, etc). Our team worked in sync with our client’s team and ensured every detail in requirements are captured and every functionality developed and tested from a real life operations perspective.We completed the project flawlessly in record delivery time.
From then there was no looking back. Today, we are a 60 member team working on various challenging consulting assignments and in-house product development in the front, middle and back-office technology areas like Exchange Traded Derivatives trade management for Australian markets, various clearing and settlement systems’ integrations and enhancements for global clearing firms, risk management dashboards for margin/risk operations,financial advisor dashboards for wealth advisors, derivatives transaction reporting and agnostic robo advisor engine to name a few.
Being a startup comes with its unique advantages and disadvantages (especially in the financial services sector). I will start with the advantages
1. Embracing Technology – Large banks and broker dealers are stuck with monolithic and age old technology (that definitely works!) but is getting costlier and unviable to maintain by the day. The reasons are many, with the prime one being diminishing manpower with the necessary skills that are nearing extinction. The industry has come a long way from Y2K and in another ~4 years, will be 20 years old from that eventful day. Being a startup, we get the liberty of learning and implementing technologies that will be running tomorrow’s machines and business processes, efficiently. We do not hesitate to try out new technologies and carefully follow the latest trends in the same. We have a plethora of options along with their merits/demerits to suggest our clients.
2. Personalized client interactions and services – A startup’s biggest advantage is its ability to put client before everything else. This is due to the fact that every happy client comes back with more leads. So satisfying clients with the output is of immense importance for our growth. This also means that clients should be able to interact, feel and understand the solution/people while it is being built. If something is off then it will get utmost attention and corrected promptly with minimum turnaround time. This has an immensely positive impact on our clients. They feel very confident talking to the developer rather than a service manager.
3. Closely knit team – A startup doesn’t get a second chance in building its core team. Every member of the firm are carefully vetted by the remaining members before they come on board thereby ensuring we have people with varied and complimenting skills and attitudes. This has the biggest advantage w.r.t alignment with our vision and goals. We don’t question our vision, and when it is required, we give all we have to ensure our mission statement is upheld on all our engagements. This has the effect of not sounding fragmented in our clients’ experiences.
4. Startups are extremely Agile – Ability to be flexible and support the ever-changing needs of our clients. Financial services market demands highly adaptable and niche service providers as the result of going wrong could be very costly and turn out to be fatal for a fledgling company like ours. At many times, we were faced with challenges like the prospect had no clear idea of what they wanted often resulting in requirements getting amended/revoked or at times totally redone. In such cases, being a startup, we have that extra flexibility of walking along with our clients. For tackling such situations, we would go ahead and provide our understanding of similar systems and how the application would function with many a times with a proof of concept without any charges – this way our client is confident that our interests in the projects are in line with theirs.
5. Flexible Pricing – We are not bound by the global pricing constraints like other MNC’s or monolithic companies are. We don’t have the overarching marketing, sales and huge infrastructure costs to factor into our pricing. We tailor make our software and ensure we provide value for money as the average sale cost in this industry is usually higher than other verticals. If the end solution would be deemed out of budget, we would end up proposing something viable or a cut down lean version that provides basic / day 0 items. This would enable our clients to get a first hand view of our development capabilities and at the same time have the time to test out their solution with their end users for feedback before investing further into the product.
6. Freedom to experiment: As a startup, we have the luxury to experiment and learn in various areas – building prototypes based on ideas, marketing, hiring, training, etc. All of us are free to be creative and do market research in their own interested areas and come up with product/service ideas. We strongly believe that giving the required resources (infrastructure, etc) to passionate and skilled self-motivated employees results in the best output. We have built couple of working prototypes and have few more in the pipeline. We are confident that few of these will become a full-fledged products to serve our clients.
The biggest disadvantage is we can’t really spend a fortune on marketing and sales (which converts into better pricing on the other side). We are very lean and only rely on word of mouth. Bigger clients will hesitate giving out their marquee orders to new kids on the block and that is where we have a lot of brand building to do. We know we can do it way better, faster and more effectively than others but we are still too young to be noticed! But we know, “one day”, we will be.