So I guess Jack Dorsey didn’t think too much of my Financial Twitter idea, but I still think it has huge potential (and it’s just the first step!)
This post builds on my post yesterday about a twitter for institutional financials markets (or any specific business vertical), but is a little more philosophical.
From what I can see, businesses change their method of communication in two steps: first, the technology becomes available universally – telephone, email, internet – whatever it is. Then, each business has a platform develop that meets their needs with that technology. In this logic the process would look like the following: email comes out, someone develops a product that leverages email marketing, and it becomes the standard for marketing firms/agencies. Computers were brought into the trading world, Bloomberg developed his software – and it became the standard across the street – but it will only remain the standard as long as the desktop computer dominates as the technology of communication/interaction (or they adapt to the next technology)
Now, let’s take that idea from a strategic deployment stance. Obviously you can always enter an area that has established players: nothing is stopping you from launching a new email marketing product. However, the REAL opportunity is entering an area that has just gone through a technological step, but the new platform has not yet emerged. When the internet came out, Google was able to dominate (in my humble opinion), because they were the first mover after a major technological shift – the advent of the internet. People needed to search the web, but there was no centralized way to do so – enter Google. New technologies disrupt the current status quo, and the most important thing is to establish yourself as a platform before the dust settles.
So here are some additional thoughts on what I think the current state of affairs is in the financial industry.
Step 1 was the introduction of telephone communication. You had individuals working on Wall Street calling each other, phoning in orders (which unbelievably still happens), and sharing news/information.
Step 2 was the introduction of the computer. It started with direct lines to exchanges/listing centers (NASDAQ was the NASD’s Automated Quotation – hence the name and its origins). People could now talk to each other rudimentarily over these boxes. This is where Bloomberg solidified his leadership. A great mentor of mine always told me “Bloomberg didn’t sell a service, he sold a box – and once you bought that box, he had you” – and is 100% right. Bloomberg saw a key shift in technology (the introduction of terminals and later computers to trading floors) and created a platform that leveraged it.
Step 3 was the advent and introduction of computers and email. Now rather than having terminals, each person had an actual computer, and things like Bloomberg changed to software. People could now email each other rather than calling. This technology has now been firmly entrenched in the day-to-day operations of Wall Street. However, no single platform has come out to take advantage of this technology yet (mainly email – it still remains relatively under-catered to).
The key lesson here is that Bloomberg once again saw a technological shift – people were switching from basic terminals to computers. Do you think Bloomberg would have lasted if he kept pushing for his terminals? Of course not! He saw the shift, and adapted: he released Bloomberg as a software package.
Step 4 was the introduction of mobile devices. Wall Street is still trying to figure out how these will fit in to their work flows, and the technology is still fresh. No one has figured out how to develop a platform around this (I have some ideas!) but the first person to do so has the potential to become the next Bloomberg in the community.
Step 3 and 4 – the Fertile Soil
In my opinion, the opportunity right now on Wall Street revolves around developing platforms around step 3 and 4. Email and Mobile are two products that have entrenched themselves into the day-to-day activities on Wall Street, but have yet to develop a meaningful and effective application method.
Take email for instance: no one uses any form of cloud (from what I know) – email lists are stored locally on people’s computers and managed in the most hap-hazard way. No one has any idea who is opening/looking at what – emails are blasted out en mass. There is no centralized community/communication hub – everyone operates in a fragmented environment.
On to mobile – it mostly serves as a fancy phone at this point in time. There is no software out for Wall Street to manage meetings, set reminders, update clients, read emails, get news highlights in their sectors, etc.
These two areas present the most fertile grounds for new ideas and products. A key question to ask yourself is, what areas in my industry/business are ripe for innovation? Look at technology that is available – is it being utilized in your sphere of influence? How are the benefits of collaboration, mobile, and crowd-sourcing being using in your world? How COULD they be used? If you can answer those questions – figure out how new technologies can be leveraged to develop a platform in your business – you just might have the next Bloomberg on your hands.