Silicon Valley, FinTech ‘Unicorn’, Symphony.com, is creating a storm in the world of financial services. Created in 2014 when a consortium of 14 financial firms invested $66 million, the open-source communications network was developed to rival Bloomberg in the wake of a 2013 data breach, when journalists were found to have accessed client data.
It’s impressive stuff:
- 320,000 users - expected to grow to 500,000 by the end of the year
- $296m raised across 4 funding rounds, including Google and Goldman Sachs, JPMorgan, Morgan Stanley, who are also customers
- a team of c300 and growing quickly
Like most digital products, Symphony’s success will rest on its ability to respond to customer need, and pivot to meet that need at pace.
The challenge of creating scale
Let me start by grounding the challenge Symphony faces, using two well known business laws: shown in the graph below.
Metcalfe's Law states the effect of a communications network is proportional to the square of the number of connected users of the platform (n2). It is about network growth, customer acquisition and value creation, rather than technology evolution.
When Symphony launched, the market was cynical; until adoption was at critical mass, the product offered little value to anyone. The business faced two key challenges: initially, internal adoption by customers was key in order to convert users and deliver intra-company efficiencies, but ultimately, adoption by customer clients was necessary to enable inter-company trading to see real benefits.
Geoffrey Moore’s chasm theory, indicated by the bell curve on the graph, proposes that the gap between the uptake of new technology by early adopters and the mainstream market is the point at which the transition from being technology-driven to being value-driven needs to take place ― and if this doesn’t happen, any new product or technology introduction is doomed to fail.
So where is Symphony right now?
Right now, the network effect is happening. With licensed user numbers now running at c320k, adoption is building both internally and externally which is where the potential can really start to take off. Additionally, to date, the product has been positioned as a project collaboration tool - a chat solution - but that is technology-driven. These two indicators suggest Symphony is currently at Moore’s chasm. To really succeed and move into mainstream adoption, Symphony needs to make the leap to a value-driven proposition. To do that, it must listen to its customers.
There are early signs that Symphony is doing this. Recently, there is less focus on chat-bots and more talk of becoming a platform for workflow solutions, capable of automating data from a variety of sources and feeding outputs to teams across institutions. This is a value-driven proposition.
A further challenge, as a young start-up in aggressive growth phase, is that Symphony must manage customers at different stages in the product life-cycle and listen to, and deliver on, their expectations and requirements. I can currently see 3 core customer groupings:
New customers, many of whom have invested in Symphony and face the internal challenge of internal adoption. Most activity in this group is focussed on changing mindsets and behaviours internally, to adopt the new technology. The immediate challenge for this group is to prove value on the core services, predominantly via the use of chat-bots. At June’s Innovate Asia user conference, the majority of customers speaking on the panels were in this phase.
Established customers who understand Symphony, have it integrated into their internal environment, have created some early bots to drive uptake, and have a business sponsor who can see where value can be unlocked. This group are seeking support for a programme of projects to unlock value and drive efficiencies through the automation of manual workflows. A good example of this group is ANZ who won the Symphony Customer Innovation Award for their Trade Butler solution, which automates the trade control lifecycle.
Vision. The smallest but potentially most valuable group. They carry significant influence over product development, and the community. They have established Symphony within their business with multiple Symphony projects ongoing and a clear vision of further potential. However, this group is frustrated, waiting for Symphony to evolve its product to meet their vision and expectation of where it needs to evolve. JP Morgan are a good example of this group.
Keeping all three groups happy is tough. As a fast growing start-up, where do you focus resource to generate optimum value? How can you keep everyone happy and ensure your product crosses the chasm to be a truly, value driven proposition?
What does the future hold?
Although each customer group are at different stages, they all share a common requirement to embed Symphony into ‘business as usual’, so they can realise the benefits from internal efficiencies and improved trading experience with clients.
The roadmap in each business will be unique, and putting the core product in place is only part of the story. As customers progress through the stages, they will require unique combinations of solution - designed to deliver value for their business.
To deliver this requires buy-in, funding and resource, a means to mitigate risk and to demonstrate value. It requires an understanding of the ‘art of the possible’ and an ability to move at pace. Proofs of concept, prototypes and minimum viable product releases will enable businesses to do this but historically, these have not been recognised strengths of major businesses.
Therefore, I expect to see strategic partnerships to develop, that matches professional services and specialist agencies with Symphony and its customers. Collectively they will ensure that requirements are captured and understood, that the product is constantly evolved and that, crucially, the chasm is crossed and the significant benefits realised.