Why FinTech is Hard: Lessons from the CEO of BondCube – Huy Nguyen Trieu
August 26, 2015 \
8 Comments
Paul Reynolds, the founder and CEO of Bondcube, very kindly accepted to share what he went through and this is invaluable insight for anyone interested in FinTech today.
Comments
One Word: Grind – New trading platforms need considerable time to gain traction and achieve critical mass. MarketAxess took several years to validate themselves. Hats off to Mr. Reynolds for starting a new venture. As they say: Winners lose more than Losers. This is because Winners play more (put themselves out there) – don’t give up – learn from their losses – and, come back stronger.
If history is to repeat itself again, keep in mind three factors are likely to determine which platforms will survive and thrive over the next 3-5 years 1.) Access to much more capital than the initial business plan indicated. It takes years to build, and nurture the network, much less monetize it as Hollywood suggests. 2.) Anchor tenants. Having network participants with a strong financial incentive to use and support the platform helps tremendously in the early days. Look at who is still around from wave one 15 years ago. (All consortium plays of sorts) 3.) A business strategy that… Read more »
Yes, kudos to Paul and his efforts. i am sure there will be many comments about the interview, Pauls lessons learned, etc… I want to address some of the authors assumptions about what defines the ideal startup. The articles author writes: “In many ways, Bondcube had many of the features of the ideal Fintech startup: – Huge addressable market: trillion dollar bond market subject to huge regulatory changes with many market participants looking for new solutions – Experienced team: CEO who had worked for years in bond trading at the largest firms and knew all the market participants, structure of… Read more »
Merlin, you are…ON FIRE!
Nice article with a different angle, and kudos to Mr. Reynolds for offering his thoughts. It’s intriguing to see the successful concept of minimum viable product brought up in the fixed income electronic markets. The continued blending of Silicon Valley methodology with Wall Street can make for a very interesting cocktail. It gives credence to the author’s closing comments, and brings to mind Winston Churchill,..“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
I remember calling on a very influential person who had been a great mentor and role model. I presented my business plan for a new start up and request for funding. He declined. His reason? “I never fund a start up on a start up”, by which he meant that he would never fund a start up that was the first start up for the CEO. He would rather the entrepreneur make his first round of mistakes on someone-else’s money. He was right, I failed. Everyone has to start somewhere and you want to start on a start-up follow Paul’s… Read more »
What a great opportunity for all of us to have Paul share his insights into the challenges he faced, and to his credit, where he thinks he failed. We are in an industry where the incumbents have a distinct advantage and any innovation that challenges the status quo faces tremendous challenges. I think Chris’s choice of Sisyphus was a perfect meme for this article. However, and this is where I think we really need to dig deeper, is understanding that any company, incumbent or disruptor, needs to solve a problem serious enough that it seeking a solution. Having the strength… Read more »
Wolfman, interesting comments on regulation. From Paul’s experience, seems the fixed cost carries a pre launch funding barrier to innovators, and a moat for the incumbents. So, will regulators impose more regulation to overcome the barrier of regulation? As noted US equity markets did. From a light perusal, it seems MIFID II rules would lower the barriers for a platform to have their quotes, IOI’s etc, displayed and respected. Would be interested to hear someone’s perspective there..
Paul has joined a long list of aspiring entrepreneurs who have donated time, money, and ideas into the gutter of corporate bond electronic solutions debris. We are in a different time than those early pioneer days where the first piles of debris started collecting. It seems the lessons we are relearning are very clear. the buyside is voicing its desire for progress, alternatives, enhancements etc etc yet behavioral change is both very hard and perhaps not all that necessary. BondBook had alignment, capital, and a price-based IG trading protocol??? toast. Many other examples abound. MKTX and TWEB checked all four… Read more »
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