Product or Platform???
“I love products, but I absolutely believe in the power and prowess of platforms.”
I began my Wall Street career as a user of what I believe remains one of the most successful platforms ever invented worldwide irrespective of industry. Its main rival today in the Financial Technology (FinTech) space, started life with a different business DNA and viewed the world from an entirely different perspective. Yet this rival developed a successful platform too. During that first stint on the Street, I also saw the birth of arguably one of the most successful financial analytics businesses ever launched. Fast forward after business school, product management roles led me to being a business partner with all three and in many instances, co-developing proprietary product offerings and participating in extended testing of strategic areas of further development within their respective ecosystems. And then much later, I went back to being a user of these platforms but this time as an insider. After nearly two decades spent in investment banks and the largest FinTech platforms’ ecosystems, it comes as no surprise that I love products, but I absolutely believe in the power and prowess of platforms.
Investment banks’ activities, for good reasons such as information security, client confidentiality, regulatory scrutiny, and an all consuming never-ending intellectual property arms race — i.e. proprietary market and technology capabilities competition with each other — have always been shrouded in secrecy to some degree. This makes selling to this community challenging and getting to know what investment banks as e.g. technology clients actually do quite difficult. Furthermore, the bulge bracket members of this “club” have vast resources which allows them to almost always leave the door cracked open to the build versus buy option. Nevertheless, over the last two decades, the openness of this constituency’s relationship with third party vendors has evolved. And I believe for the good. However, many banks still operate in a legacy software, patched quilt environment. Accordingly, simply “understanding” investment banks’ needs as technology clients can be misleading. The successful platforms mentioned above know this because their offerings are firmly ensconced in these banks’ technology ecosystems. And they use this knowledge and positioning to ward off smaller upstarts and more nimble, innovative rivals. So, a reasonable question to ask at this juncture is, when selling information technology offerings to this community, which strategic route should we choose? Should we be Product or Platform focused?
In Part 2, we will see that two common strategies pursued are not necessarily mutually exclusive long-term, and that a third actually complements the prior two. All three “mindsets” are as relevant today as they were two decades ago. Product or Platform? Stay tuned!
