5 things you should know when starting a fintech company
TRANSCRIPT
THINGS YOU SHOULD KNOW WHEN STARTING A FINTECH BUSINESS
Stephane DuboisCEO & Founder, xignite@sdubois - [email protected]
5
FINTECH IS HOT
FINTECH INVESTMENT
2009 Q2
2009 Q3
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2011 Q3
2011 Q4
2012 Q1
2012 Q2
2012 Q3
2012 Q4
2013 Q1
2013 Q2
2013 Q3
2013 Q4
2014 Q1 E
$M
$250M
$500M
$750M
$1,000M
$1,250M
$1,500M
$1,750M
$2,000M
0
50
100
150
200
250Funding Deals
Source: CB Insights
EVOLUTION OF FINTECH DEALS BY QUARTER
There was more money invested in the first quarter of 2014 than in all of 2006 (when we raised our first round).Good timing!
ARE YOU READY TOJUMP? Or have you
already jumped?
Then remember this…
DATA IS THE LIFEBLOOD OF FINTECH
u
CHANCES ARE YOU WILL NEED MARKET DATA
TRY TO LEARN ABOUT MARKET DATA
Market Data• Quotes• News • Benchmarks
Reference Data• Fundamentals• Financials• Analytics
Master Data• Identifiers• Classification• Corporate Actions
Historical Data• Valuation• Time Series• Tick Data
Equities Funds/ETFs Futures
Options Bonds Forex
Metals Benchmarks Derivatives
ASSET CLASSES
TIMELINESS
Low
late
ncy
Real
-Tim
e
Del
ayed
End
of D
ay
His
tori
cal
DATA TYPES
DELIVERY OPTIONSFiles
FeedsAPIs
If you come from the industry, you probably know quite a bit already. But what made sense when you worked at that big bank may not work for your startup. Ask your vendor to help you out.
MARKET DATA IS NOT FREE v
SCRAPE AT YOUR OWN PERILSDo you really want to start on your path to entrepreneurship success by stealing intellectual property? And do you really think your investors won’t mind?
DON’T GET CAUGHT WITH YOUR PANTS DOWN
KNOW ABOUT EXCHANGE AGREEMENTS AND FEES
w
IF YOU RECEIVE OR DISPLAY MARKET DATA
Delay (Delayed Quotes/Real-Time Quotes)
Depth (Last Sale/BBO/Level 2/Depth of Book)
Breadth (Single Exchange/Consolidated Tape)
Source (NYSE/NASDAQ/BATS/etc.)
Type of User (Pro/Non-Pro)
Usage (Display/Non-Display/Wallboard/Web/etc.)
Control (Control of Access/Control of Display)
You become a distributor for the exchange.As a distributor, you may need to sign an agreement and pay licensing fees. Those fees depend on:
Exchange agreements and fees make up a complex domain with many changing rules, options, and significant cost implications. Choose a data vendor that will take the time to help you chose what is right for your business.
MATCH YOUR COSTS TO YOUR GROWTH x
DON’T GET OVERLY DATA HAPPY
• Whether you are building a new platform, web site, or mobile app, the temptation is high to integrate tons of market data in your V1.0 in order to fuel growth and beat the competition.
• This may work but also can be overkill.• Just make sure you meet 80% of your
market requirements in V1.0.• But don’t get far under 80%, or your
product may not stick.• That’s just good product management.
V1.0 V1.1 V2.0 V2.170%
75%
80%
85%
90%
95%
100% DATA COVERAGE VS MARKET NEED BY VERSION
O V E R K I L L
DON’T BLOW YOUR CASHQUICKLY
y
WHAT YOU SPEND ON DATA IS JUST THE TIP
• Not all data sets are created equal.• Neither are all APIs.• APIs that seemed cheap on the surface
could waste tons of your time and money during implementation once you dig in. Time and money you just don’t have.
• Beware of legacy solutions that will have you build infrastructure instead of focusing on your own product and value-dd.
• Look under the surface. Don’t assume data will be easy to integrate until you try. Try those APIs before you buy. Be demanding with your vendor.
WELCOME TO FINTECH.AND GOOD LUCK WITH YOUR BUSINESS.WE’LL BE WAITING FOR YOUR IPO.
STEPHANE DUBOISCEO & FOUNDER, XIGNITE
@SDUBOIS - [email protected]
xignite