Entrepreneurs: Know Your Customers, and that They Don’t Know what They Want

Posted on 1 CommentPosted in Startups

    It’s paramount for entrepreneurs to know and understand their customers. The customer relationship can help grow business as well as product development. Customers are typically not very helpful or open to new products, ideas, etc. Main reason is that they have their own priorities and they can be lazy. They are comfortable doing things in a certain way, dealing with existing vendors, and do not need added hassle of working with newer innovative ideas.   Typically there are 2 ways to engage them more at idea stage of a start-up:   1. Have the pressure applied to them from the top (top down approach) – for B2B products and services, this can be done by engaging potentially more […]

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Open Source Technology for Financial Services

Posted on 1 CommentPosted in Finance, Trading

    Financial Services play an important role in the countries’ and their economies’ functioning. Following the credit crisis (2008), and its various consequences (de-leveraging, lesser sophisticated financial products, shift towards increased regulation and transparency, reduced transaction volumes and margins, etc.) have lead to a massive shrinking of the financial services market size. This has led to a large down-sizing amongst the key participants including brokers, investment banks, exchanges, technology vendors, institutional investors (funds), etc. With the above mentioned business scenario in mind, and the fact that all these participants need technology for automation, growth and even sustenance of their  business, do we need every participant (10,000s of brokers,  100s of exchanges, 1000s of technology vendors, 100s of regulators, 100,000s […]

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The Future of Capital Markets

Posted on Leave a commentPosted in Trading

Financial trading has grown from manual to electronic to automated with the use of algorithms in the last few decades. The increased adoption of technology will lead to disruptive trends in the current decade and drive exponential growth in newer business segments created within the capital markets (like additional liquidity that was generated by Algo/HFT players in the last few years) . We will possibly witness some of the following trends,     Open Source Technology Platforms  Given the fact that fundamentally most technology platforms within capital markets do very similar things (access information, manage trades and risk, comply with regulation, etc.), there could be a significant growth potential in the market to collaborate constructively.  They can leverage off latest […]

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Algo Trading: The 1-O-1

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Electronic trading in the last decade has laid the foundation for increased use of technology in the financial markets. If a trader’s mind can be coded into an algorithm (step by step procedure used for calculations and decision making), we can automate a lot of what the trader does. And using an algorithm , the trading can be more disciplined, faster and can process lots of complex data. Algorithmic trading means an algorithm decides when to buy or sell a financial security at which price, and how will the order be executed and risk managed. This helps replace mundane tasks a trader was doing, and even leading to some complex data processing that an algorithm (with the use of computing […]

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Inspiring the Start-up team

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A start-up’s success is mostly directly linked to the combined performance of its team. Hiring a good  team is important,  but how they collaborate and deliver is also crucial.   Managing the team No entrepreneur should be managing the team. Management is an over-rated term that does  not work in the start-up culture. Actually management does not even belong to the today’s corporate world either. No managers like to manage, no employees like to be managed.  The carrots and sticks  (incentives and punishments) are completely outdated in today’s professional environments. The team should work together in a flat structure with roles of each individual defined to some extent, and leaving room for everybody to step up along the way and […]

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Securitisation: The 1-O-1

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Securitisation has been a key factor in the rise of financial services businesses and it poorly managed sub-prime loans distributed across the world through securitisation led to the subprime crisis in 2008. In this article, lets look at the details of securitisation. Securitisation is the process of creating financial securities, that can be traded by the investors. Investment banks are sometimes referred to as Securities houses, as they are responsible for creating and trading of these financial securities by bringing and buyers and sellers together.   Securitisation Explained Imagine that an Investment Bank could originate 3 loans for example as shown below, $100,000 each, and then issue 2 bonds worth $150,000 each. The monthly interest paid by A, B and […]

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Root of Sub-Prime/Credit Crisis of 2008

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  What caused the sub-prime problem will be discussed and debated for long time. Many blame the Sub-Prime crisis upon Greedy Wall Street Investment bankers, or on “Risky” Hedge Funds, or on Incompetent Regulators. But the fact is, such a massive problem can be hardly attributed to only one participant in the market. I believe it’s the whole marketplace (including regulators, investment banks, mortgage houses, credit agencies, as well as investors) that should share the blame. Securitisation took off in the early 80s, and was an efficient tool to spread risk, and reduce costs of financing. Since the mid 1990s, mortgage issuers were encouraged to offer home loans to all Americans including the ones without a good credit history or […]

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What is Investment Banking?

Posted on 4 CommentsPosted in Finance

  What is the role of an Investment Bank? Different Investment Banks would have a variant of the following generic business structure. Investment Banks in simplest terms help match investors and institutions who need capital, and then help bring together buyers and sellers in the financial markets. They typically would have a Research division providing analysis of companies, their financial situations etc. to all the internal businesses as well as to the external clients. Corporate Advisory business also known as Investment Banking would basically help companies raise and spend money. This is done through primary issuance of Debt (loan), Equity (shares) and other related securities, and Mergers and Acquisition activities. The Capital Markets business of Investment Bank helps investors buy […]

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Role of the CEO in a Start-up

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  If you are one of the main founders of a company, you may become the CEO. It is always a good position to have, but a very challenging one too. You will need to constantly perform well in order to retain that position and grow the company. Your multi-tasking skills along with hard work, common sense and execution oriented attitude will take you a long way. You should possess the domain expertise, great people skills, ability to sell, telescopic and microscopic view (high level view of the ecosystem along with attention to detail), and unlimited strength to execute the plan.   Know Why you are Doing it You should evaluate why you want to run a start-up. There may-be […]

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How to start a Start-up

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  Presumably you have an idea with which you are considering to start a company. It’s going to be an incredibly challenging and exciting journey. Here are some points you may like to consider,   1. Idea might be good, but Evaluate if you can make it into a Sustainable Business  This is called market research, customer survey, business feasibility analysis. There are ways to approach this – maybe you are trying to create a completely new market segment that does not exist today. Probability of you succeeding is well below 1%. But it should not discourage you from trying. Here you must really get down to the details of the problem the new product / market segment will solve […]

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