I've been reading many blog articles of late about the increasing use of analytics in early stage venture investing. I've heard the phrase "moneyball for VC" thrown around quite a bit by people who favor real data and analysis over guts and instincts in evaluating (or at least identifying) a potential investment. Though I've always believed in the use of data in investing, I have to ask - when you…

We spend a lot of time looking at startups that are trying to disrupt the financial services landscape for end-users. These businesses are sexy and headline-grabbing ...everyone loves an underdog. But there is another class of financial technology startups that are just as important: financial infrastructure. Communication networks, order routing systems, trade execution, clearing, account filing…

I recently grabbed coffee with a friend who had just finished reading Michael Lewis's new book, Flash Boys, and wanted to talk all about it. The book had raised a big question for him, but it had nothing to do with High Frequency Traders or latency arbitrage. His question was much simpler and more human: "Why is there so much conflict of interest in Financial Services? I feel like all I ever hear…

A very common question asked by entrepreneurs we meet with is: "When am I ready to start pitching my first customers, the so-called 'early adopters'?" Even though this is a well-covered topic, there are still many misconceptions about the process, and even the definition of an early adopter, particularly in FinTech. In this post, I'll discuss how to know when your product is far enough along for…

At ValueStream Labs, we've seen an explosion of early stage financial technology. An unprecedented amount of individuals are leaving their roles at established financial institutions and stepping into more entrepreneurial shoes. The availability of new web frameworks (like Ruby on Rails) and the abundance of developers in New York City allow a person to experiment, and these individuals often view…

To the ValueStream community: ValueStream Labs launched 16 months ago with the mission to discover and grow the entrepreneurial community in FinTech. At that time, we felt strongly that the Financial Services industry required a different approach from the traditional startup accelerator, and since then we've been continually encouraged by the positive reception we receive throughout the FinServ…

If you passed the simple test in my last post for determining if you're ready to start pitching your FinTech product to customers, you now have a new question to answer: what do you want to get from these first users? Few startups explicitly ask themselves this question-but they could be missing an important opportunity to impact both their short-term and long-term growth trajectories. Don't Fall…

FinTech disruption is in its early innings, particularly on the institutional side, but the number of exciting startups is growing. You've likely heard of companies like Lending Club in the lending sector, Wealthfront for wealth management, and Square for payments. Companies like these are reinventing very old processes in their respective sectors, and I could list many more examples of technology…

After writing my post on the Minimum Viable Customer, I stumbled across an excellent article by venture capitalist Michael Skok about finding your Minimum Viable Segment (MVS). Our thoughts are aligned on many points, and it's clear that we've seen many of the same missteps made by startups (which further validates this as a widespread startup issue). The place where we seem to differ…

To demonstrate the process of identifying your Minimum Viable Customer that I described in my post here, I've created this simplified example of a semi-fictional company (semi-fictional in that it is based on my experiences with several real-life companies but I've changed many details for confidentiality purposes). As a reminder, the 5 steps to identify your Minimum Viable Customer (MVC) are…