Joel Bruckenstein: Advice for new fintech innovators

Congratulations – you’ve launched a technology firm at a time in the industry when the potential for your company’s growth and success has never been greater.

Advisors are no longer wary of adopting technology. Every new advisor is a digital native. Tools in play are dialed into advisory needs and are bound to get smarter thanks to AI. 

The advice client is also smarter; they have a ton of information at their fingertips and want even more. And funding is plentiful as every investor wants to get into the next big thing. 

All these upsides raise the bar for becoming a successful firm. You’ll have to work harder for clients, prove your value, establish your business and keep growing.

In my 20 years organizing the T3 conference, I’ve advised hundreds of companies seeking to capture a slice of the market. Some ended up as big success stories; others fell to the wayside. Here’s some advice for your firm as you think about how to make it.

Invest & Re-invest

You’ve heard the phrase, ‘You’ve got to spend money to make money.’ I’d say, ‘You’ve got to spend money to make me spend my money on you.’ You must stay ahead of what the client wants, which means you must constantly invest and re-invest in product development. The average software company spends about 20% of its revenue on R&D, according to Boston Consulting Group. Big Tech spends billions – Alphabet’s annual research and development expenses in 2022 were $39.5 billion, 25% more than in 2021. The lesson here is your innovation effort can never stand still. That means spending a good amount on marketing, too. It doesn’t matter how good your product is if no one knows about it.

Service keeps clients

It also doesn’t matter how good your product is if you don’t have excellent client service to back it up. Every year via the T3/Inside Information financial advisor software survey we track client satisfaction scores across advisortech categories. Tech-savvy advisors have so many choices now; all it takes is one bad experience to push them to look for alternatives. So, respond quickly to requests, constantly deliver personalized experiences, make clients an integral part of your development process and devote plenty of resources to client training. Young firms can make the mistake of focusing so much on product development that they fall short in support. But this market is unique: Advisors loathe spending money on practice software – but when they commit, they spend a lot – and evaluate it in terms of firm ROI. If they can’t figure out how your tool can help them achieve efficacy, it will sit on a shelf until it gets replaced.

Have a vision

It’s exciting when you are starting out. There’s pressure and long nights, sure. But there’s also a sense of adventure when you’re building something. Enjoy the moment. Keep that going with a roadmap for your product development and growth. The culture you want to build should be set from the start because that ultimately shapes your company. It’s easy to get caught up in the day-to-day; when that happens, you can lose sight of where you’re going. There are always going to be hotfixes and integrations to complete. What will attract clients and investors is a compelling story. People buy the company as much as the product. If they have faith in your team, in you, and what you’re building for, how you see the industry evolving, and so forth, they’ll want to join you in that journey. Your job then is to work every day to prove it.