Don't Hunt Whales

I’m excited to share that we’re going to be running back the Future Proof Fintech Demo Drop on stage in Huntington Beach this September. This is an opportunity for some of the most exciting companies, like VRGL ( we’re investors) and Wealth.Com, who were each on that stage showcasing what they’re building to drive the industry forward. I can’t wait to see the new batch in September. Submit your application here!

But…

I’m going to keep it real. The tech-enabled advisor is all grown up. There aren’t Michael Strahan-sized gaps in our stack. If there’s something advisors want, chances are it already exists.

But that’s what makes innovation so exciting! I think we have most of what we need, and then I love being surprised when I see something new that I’ve never considered. So yes, innovation is happening with new things, and leaps forward are happening with existing tools.

For example, financial planning software isn’t new, MoneyGuide and eMoney have each been around for a long time, but I know a lot of people are excited about what Conquest is building, another company that was on stage last year.

According to a recent industry benchmarking study we participated in, RIAs spend ~5% of their revenue on tech software. That’s a lot of money! We’re looking to spend less, not more.

So, founders need to step up their game and really bring it for advisors to get excited about a new line item expense. And I have no doubt that at least a few of the companies we put on stage will change how advisors do their jobs.

As of last week, we already crossed 2,000 registrations. That’s almost three times the number of people who registered this time last year. FutureProof is the best event in Wealth Management, and people are turning out to be a part of it. If you’re not already signed up, you can do it here.

I have one more thing to say about startups. While most of you reading this are not founders, I think something in here might resonate.

In the last two years, I’ve spoken with almost a hundred companies and noticed a common mistake founders make: “I spoke with Mega Firm XYZ, and they’re interested in what we’re building.”

I understand why they’re excited to share this. Big firms mean big dollars. And if big firms are excited, why wouldn’t everyone feel the same? The other totally understandable reason founders say this is the power of social proof. If XYZ is excited about it, surely I should lean forward, too. But mega firms are a complete waste of time. Here’s why.

I’ll first start by saying that most people are afraid to tell you they’re not into what you’re building. It’s uncomfortable. “Hey yeah, this thing that you’re taking a huge risk on and pouring your soul into, I just think it’s a complete waste of your time."

I don’t use those exact words, I’m not a monster, but I’m happy to tell people what I really think. Doesn’t mean my opinion is always right, but I’ll never BS somebody. I believe it’s cruel to tell people what they want to hear instead of what they need to hear. And nine times out of ten, they appreciate hearing it because most people nod and say, “Yeah, that’s cool.”

One of the main reasons mega firms are a waste of time, and this applies to all industries, is that most of the firms you would be selling into look nothing like them! It’s cool that their chief economist is into what you’re building, but how many RIAs have a chief economist? And is their Chief Economist a decision-maker? Can they sign off on new software?

Mega firms are a huge waste of time because of how much time they waste. You might be speaking with someone for four weeks before you find out they don’t call the shots. You might spend another month finding out who those persons are and another few months trying to convince them all. You might spend another month negotiating a deal if it ever gets there.

You’re almost certainly not a priority for them, so these things never happen quickly. And because there could be so many players involved, what happens if one of the key advocates leaves during the negotiation?

Contrary to popular belief, mega-firms might not have gotten that way due to their operational efficiencies. It’s possible, dare I say probable, that you’d find a mess if you looked under the hood. New software on top of old software, all held together by a couple of pieces of scotch tape. Even if they wanted to “turn you on,” it doesn’t mean that it would be as easy as flipping on a switch.

Another thing that founders might not have considered is that it’s one thing to win a deal, and it’s a completely different thing to service it. Is the founder going to work closely with Mega Firm XYZ’s Chief Compliance Officer? What about their Chief Operating Officer? What happens when things inevitably go wrong? Is the founder going to have time or expertise to do all the troubleshooting? Young companies aren’t ready for enterprise deals, period.

And let’s be real, generally speaking, mega-firms don’t work with companies that just raised their seed round. Why would they waste their time working with a company that might not exist in twelve months?

As a founder, your time, resources, and mental capital are limited. You want to stack small wins and not waste your energy on something that will never happen.

If you want to reach an audience of actual buyers, there is no better place to do it than on stage at Future Proof.