Case Study: Putting Data First from Day One in the Medici Project

Many startups underestimate the critical role of data management from day one, missing out on a significant edge over established competitors. As a startup advisor, one question I always pose is: How are you handling your data? More often than not, the answer is "not very well." This lack of attention usually stems from a belief that proper data management is both time-consuming and expensive, luxuries startups can't afford in their race to market. Ironically, this makes them similar to the established firms they aim to outpace; many large companies also fail to harness their data effectively, hindered by years of neglect and a cultural mindset that sees data as an operational by-product rather than a key asset.

At Medici, we took a proactive approach from the get-go, embedding data capabilities right from our initial Minimum Viable Product (MVP) release. During our MVP development, we prioritized data quality and data-driven decision-making in our operations, always keeping the future scalability of the product in mind.

First, we made sure we could bring on any type of customer and would be able to customize their journeys as our product grows and scales. We focused on knowing who our customers are, understanding their individual journeys, and figuring out how to both attract more users to our platform and retain them effectively. Additionally, we planned for our customer base's expansion, from qualified investors to a broader range of retail customers and their families. We even incorporated placeholder architecture to later include institutional clients with complex hierarchies and multiple sub-users per-client; we don’t need this today, but it is part of designing for future products, not just the current MVP.?

Secondly, we made preparations to understand the success metrics and costs associated with any number of products we might add to our platform. While the MVP currently features only one product, our roadmap is far more expansive. This foresight addresses a common struggle in the financial services industry: identifying profitable products, understanding true service costs, and pinpointing the features that drive growth. For example, many banks struggle with questions like: Is a "high-fees / low-balance" account more profitable than a "no-fee / high-balance" account? What balance level compensates for the absence of fees? How much does it actually cost to send a wire internationally? Questions a staggering number of banks do not know the answer to, despite owning every piece of the underlying infrastructure. This broad lack of understanding affects not just the bottom line but also the bank's competitiveness and ability to innovate effectively.

Thirdly, we focused on comprehensive data collection, acknowledging that we can't predict every question we might want to answer as our platform evolves. So, at each user interaction point within our application, we've rigorously assessed the types of data that can be gathered and analyzed. Our goal was to capture every possible data point along the customer journey, even those that might not seem immediately relevant. This approach provides us the flexibility to address questions that may arise in the future.

And then, there's Blockchain. Until now, the conversation has focused on traditional databases. However, at Medici, we've reimagined the conventional approach to what serves as the "source of truth." While much of our client data is stored in centralized databases (for now), for financial data, it's a different story. Instead, that data is pulled directly from the Ethereum blockchain, using the customer's crypto wallet as the initial reference point. This methodology ensures that our financial calculations are based on the most recent, primary, on-chain data, not potentially-outdated data aggregated from third-party sources, which can introduce errors.

The advantages of this approach are still emerging and will become more evident as financial systems increasingly decentralize over the years. For now, it enhances traceability and auditability, allows customers to validate their own data without relying on Medici's interface, and ensures that customers retain ownership of their data since it's tied to their own crypto wallets.

To summarize, Medici has strategically established three key pillars. First, we've built in scalability to accommodate various types of customers. Second, we've designed the system to handle an array of products efficiently. Third, we've implemented comprehensive data collection across the entire customer journey. These initiatives lay the groundwork for Medici's potential for exponential growth and give us an edge over competitors who've overlooked these foundational elements. Additionally, Medici has redefined the traditional "source of truth" by combining centralized databases with decentralized blockchain technology for crucial financial data.

Curious about the timeline for these changes? The process involved just two hours of collaborative discussion among key stakeholders, including myself, the CEO, and the lead developer. In that meeting, we outlined customer journeys, identified essential data points, and drafted a data schema, picking what data would be held internally, and what would be taken directly from the chain. After a few quick clarifications via Discord chat, these changes were integrated into the MVP. Our go-live date remained unchanged, showing no impact on our time to deliver.

Julia Bardmesser is the CEO of Data4Real LLC, a strategic advisory firm offering trusted, unbiased, reality-based advice to the organizations on a mission to drive value from data. Want to learn more about leveraging data to scale your startup?

Reach out to [email protected]

www.data4real.com