The Looming Battle Over Customer Data

  • Karl
  • By Karl Antle, ValueStream Labs   |   March 11, 2016

 The key to the future of consumer financial services is data…but not in the way most industry veterans think.


Note this article originally appeared in Banking Perspective, published by The Clearing House

 

New technology is allowing companies to capture more data about customers and their transactions than ever before. As an industry, we are starting to put that data to use in smarter products and more data driven processes. Bank of America for example, tracks customers across multiple channel interactions, using the combination of website clicks, transaction records, banker notes, and call center records to build a full picture of “customer journeys”. They use this data to make proactive offers to customers including credit card or mortgage refinancing, or cash-back deals to holders of credit and debit cards based on spending patterns. In insurance, Progressive offers Snapshot, a program where drivers earn discounts on car insurance by giving access to...

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Cash Flow is King

  • Karl
  • By Karl Antle, ValueStream Labs   |   November 05, 2015

If you’ve ever run a small business (those things that provide 50% of all US jobs), you know that managing your cash flow correctly is critical to building a sustainable business. You manage your payables and receivables, negotiate terms to extend payments, and obsess over making sure your payroll clears every two weeks. 

Given how important cash flow is to small businesses, it’s bewildering that most banks and lenders don’t actually look at this when evaluating credit worthiness for a loan. Instead they ask for things like tax returns, accounting books, physical assets, and personal guarantees from the business owner. Considering the amount of time the owner of a small business spends thinking about cash flow compared with how much time she thinks about her taxes, accounting, and personal finance…shouldn’t the cash flow be the focus of the lender?

Focusing on cash flow seems like a no-brainer for lenders, but analyzing thousands of payments and...

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The Trouble with Trillions: Many Advisers, No Tech

  • Karl
  • By Karl Antle, ValueStream Labs   |   July 29, 2015

One of the things we find most interesting about Financial Services is the sheer number of "niche markets" that exist. However, when compared to other industries, the word niche seems misleading…after all these highly-specialized segments of Financial Services can represent trillions of dollars flowing between parties, billions of dollars in revenues, and unrevealed investment opportunities.

Traditionally, these highly specialized markets have been served by a cadre of folks in professional services, including consultants, bankers, lawyers, and traders. If you believe that there is a fundamental shift occurring on Wall Street in how research and analysis is conducted (like we do) then this creates tremendous opportunity to launch specialized products and platforms, that each have a sizeable opportunity to go after. 

This is why we are excited to announce our latest investment into Syndicated Loan Direct, a transaction research platform for the syndicated loan market. For...

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The New Finance App That Would Have Saved Me 2 Hours a Day (in Every Job I’ve Ever Held)


Our job at ValueStream is to dig deep to uncover new products that meaningfully challenge the status quo, but the average user of a new product doesn’t have this level of motivation. Early-stage products are rarely as polished or functional as the incumbents they are attempting to supplant, so it’s crucial for the differentiation to shine through.

Or as I like to say, the value proposition needs to reach out through the screen and slap a first-time user in the face.

As an early adopter, I will only devote my time to a new app if the company’s vision is so clear to me that I know the effort I put in to adopting it now will not just result in a short-term benefit, but that it will be continuously (and even increasingly) beneficial to me over time.

It’s for these reasons that I was excited to meet Dean Zarras, the founder of ClearFactr, about a year ago. When he first showed me an early version of ClearFactr, it took less than five minutes for my face to be...

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How Do You Say “Information” in Over 100 Countries?


Professional investors are constantly in search of superior investment opportunities, and this of course requires access to superior information. And although we have seen an explosion of research and data in some areas, there’s still a confluence of issues that limit access to information on companies in the emerging markets.

The number of funds looking at emerging markets has exploded, from several hundred firms ten years ago to nearly 4,500 today¹. One might think this would be accompanied by an increase in emerging market research coverage, but wide gaps persist. Take a country like Russia for example: only 37% of companies in the MICEX-100 are covered by at least one of the top ten global sell side research departments. And even when including research by local banks, 27% of those companies are still only covered by two or fewer analysts².

And this situation is not likely to improve. Equity research is generally viewed as a cost center, and since the businesses...

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What Social Sentiment startups are missing


We look at a lot of startups that fall into the “social sentiment indicator" space—software products that track mentions on social media and newsfeeds and then use proprietary algorithms to ascertain what the public sentiment is about a stock, whether bullish or bearish. We're still trying to figure this space out. In our experience, professional investors consistently ask for tools to help them make better assessments of market sentiment on their own, so they can have more nuanced control over how to profit from their own differences in opinion. We're still trying to understand the market size for products that take the discretion away from the investor and lock it away in a “black box”.

While we have struggled with investing in companies that solely sell indicators, we love data tools that empower investors to be better at their jobs, and we believe that social media, newsfeeds, and blog RSS feeds represent an ocean of valuable data. If any of you...

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2 Years and Accelerating: A Recap of ValueStream’s Open Advisory Birthday Bash


ValueStream Open Advisory Board Meeting

 

It had been far too long since the last ValueStream Community event, so we threw an Open Advisory Birthday Bash at WeWork Park Ave South on May 7th to update our community on recent developments while also celebrating our belated 2 year birthday.

Attendees included more than 100 senior professionals from top buy side firms, sell side institutions, and FinTech companies who have been most actively helpful in the ValueStream community over the past year. (Unfortunately, due to space limitations for this venue, we couldn’t invite you all, but we wanted to).   

Over 30 FinTech startups were also represented, from seed stage companies to established players like Palantir, Betterment, and Estimize.

So what’s an “Open Advisory Birthday Bash” anyway? It’s a combination of a new concept we are experimenting with that we call an “Open Advisory Board Meeting” and a belated celebration of ValueStream’s second anniversary, which...

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ValueStream Expands FinTech Funding Up to $1.5M for Select Startups


ValueStream is excited to announce an expansion in our FinTech funding for companies in the ValueStream Development Lab, a startup accelerator purpose-built to service the needs of innovative technology and data providers to the Financial Services industry.  

With our newly expanded investment offering, ValueStream will now provide between $100,000 and $1.5 million in funding per portfolio company, to be deployed over two rounds of financing. This is truly a unique offering for an accelerator, and one that will be highly advantageous for both startups and investors, alike.

The Advantages for Companies

The ValueStream Development Lab works with and invests in early and growth stage technology and data companies in the Financial Services industry, commonly referred to as “FinTech”, as well as companies in other sectors that have an opportunity to create sizeable customer bases in the Financial Services industry. ValueStream provides portfolio companies with...

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Launch Your Product Faster And Cheaper By Identifying Your Minimum Viable Customer


If you have been following my “early adopters trilogy”, you might recall I first introduced a simple test for determining when you are ready to start pitching your product to its first customers, the early adopters. And in its second installment, I discussed five important value catalysts you can obtain from these early adopters and how each can be critical to the success of your startup.

Now, it’s time to put these two concepts together and answer an even more important question. While there may be dozens of customer segments that could use your product in its current form (which represents your universe of currently viable customers), which group of customers should you focus on first?

The Minimum Viable Customer

In this post, I’ll lead you through an exercise to answer this question by identifying your Minimum Viable Customer.

In Lean Startup methodology, a Minimum Viable Product (MVP) is the simplest version of your product that has value to a customer....

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Identifying Your Minimum Viable Customer: A Detailed Walkthrough


To demonstrate the process of identifying your Minimum Viable Customer that I described in my post here, I’ve created this simplified example of a semi-fictional company (semi-fictional in that it is based on my experiences with several real-life companies but I’ve changed many details for confidentiality purposes).

As a reminder, the 5 steps to identify your Minimum Viable Customer (MVC) are:

  1. List all of the currently viable customer archetypes you have identified
  2. Rank the value catalysts required from your early adopters (revenue, legitimacy, evangelism, engagement data, and/or user density) in order of importance to your firm at this time. (Again, see my last post for a discussion of this topic.)
  3. Rank each viable group based on how well they provide these value catalysts, and then rank each group based on the combined catalyst achievable
  4. Estimate the relative cost to your firm of driving adoption in each group
  5. Choose the group with the highest expected value...

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