A NEW MARKET! Navigating the Competitive Landscape of Wealth Management Systems

A Conversation between "Bob" and Stefan

In the dynamic realm of wealth management, where innovation drives progress and competition fuels growth, every conversation offers a glimpse into the evolving landscape.

A few days ago, Bob reached out to me here on LinkedIn, igniting a dialogue that delved into the intricacies of this vibrant industry.

Bob is an alias for a friend of mine who works for a large international custodian bank.

Bob's message resonated with a profound understanding of the competitive terrain within wealth management systems. He astutely pointed out the saturation of the market and identified key players, shedding light on their unique offerings.

His message served as a timely reminder of the crowded marketplace and the imperative of strategic focus.

In response, I acknowledged Bob's insightful observations and shared my perspectives on the matter. I concurred with his assessment of the competitive nature of the market, citing the myriad players vying for prominence. However, I underscored two pivotal factors that set ODIN apart amidst this sea of competitors.

Firstly, ODIN distinguishes itself by targeting the High Net Worth Individual (HNWI) persona, a segment totally overlooked by other players in the market.

Secondly, ODIN's unparalleled ability to automatically reconcile and prepare accurate data sets it apart from competitors. While many can consolidate data, ODIN's automation capabilities streamline the process, offering unmatched efficiency.

I elaborated on ODIN's current traction in the market, highlighting our diverse clientele, including family offices, investment funds, and asset managers. This diverse client base not only validates ODIN's value proposition but also underscores its potential for growth and scalability.

Expanding on ODIN's value proposition, I outlined its significance for various stakeholders, including banks, investment firms, and individual investors. By centralizing and automating data management, ODIN addresses a critical pain point in the industry, paving the way for enhanced efficiency and transparency.

In discussing ODIN's future trajectory, I outlined three potential avenues for growth: incremental revenue generation, strategic financing, and accelerated expansion. Whether through organic growth or strategic partnerships, ODIN is poised to capitalize on emerging opportunities in the market.

Furthermore, I hinted at potential collaborations with established financial institutions envisioning a symbiotic relationship that leverages ODIN's innovative solutions and the Banks’ extensive reach.

In conclusion, my exchange with Bob underscored the complexities and opportunities inherent in the wealth management landscape. By staying agile, innovative, and customer-centric, ODIN is well-positioned to navigate these challenges and emerge as a leader in the industry.

As I reflect on our conversation, I am reminded of the boundless potential that lies ahead. With determination, strategic foresight, and collaborative partnerships, ODIN is poised to redefine the future of wealth management.

Here is the full conversation:

Hello Stefan. I noticed that you've joined ODIN, which provides a consolidated overview for wealth clients with portfolios in multiple places... Just so you know, it's a quite saturated market, and there are some players out there with really wild setups that are quite unique. Just in Denmark, I know the first 5-6 entities that do what you do... Pandaconnect, hemonto, Asure Wealth... and from London, I've met with some - can't remember their name right now - but they have the wildest platform that does what you want, and here, you can also trade their assets with anyone, and they are really heavyweights in the industry... just wanted to give you a heads up... It's a crowded marketplace, and it's not a mass market... just so you don't put energy into something that could be better used elsewhere...

Best of luck...

Bob

Response from Stefan to Bob

Hey there, Bob - and thanks for your message :) I hope all is well with you! :)

Here are my thoughts...

I agree with your observation about a highly competitive market within wealth management systems - I could find about 250 "competitors" in the market, and I have two considerations here...

No one else is targeting the High Net Worth Individual (HNWI) persona, and

there's no one else in the world, apart from us, who can automatically reconcile/book/prepare accurate data for consolidation - the consolidation itself is just a matter of "how to present your data," and to whom, and how - most can do that...

No one other than ODIN can do what needs to happen beforehand - automatically - hence, a large Stock Exchange is also very interested in collaborating with us (once we show a bit more traction of course) - because we currently have 8 clients - 2 Family Offices, 3 investment funds, 2 small asset managers, 1 large asset manager, whom we are onboarding, and these 8 give us a good $160K annual revenue.

I'm currently looking to explore a loan or investment opportunity of $100K-$600K for ODIN - all while chasing customers - so any help would be greatly appreciated :)

Our strongest card, and the reason I got involved in this project, is because automating portfolio data, as a unique value proposition, is simply the biggest pain in the market, and I could potentially create a new structural standard for data sharing between parties - and here, I see an even larger market, in fact - because all stakeholders can be involved.

ODIN's Asset Management Software is more than just good enough for the "professional small asset manager," who typically has 0-20 employees, and is often very close to several HNWIs and Family Offices, so they are also potential secondaries and customers. But perhaps the most interesting customers are actually Investment Funds, as we can solve 3 big pains for them.

The large customer seems to just want to pay a lot for automating portfolio data flow, so they can provide accurate data to their customers.

Being able to gather information about all portfolio data in one place, I think, is an exciting value proposition for a bank, and that's why I've also reached out to several banks.

For any bank working with wealthy individuals or organizations, they know that calculating a rich person's fortune is difficult, and that's why it's apparently a big gain to be able to gather all the data in one place, and then deliver it in a desired format; having an app that automatically shows an accurate picture of one's assets is also a highly demanded commodity - it's on backorder,

And hemonto does it manually, behind the scenes, Pandaconnect does it with Lithuanians and etc. etc. - I've actually only received a single no from a potential customer, and that was because they own our competitor :) - so, even our competitor acknowledged the "big commodity" in the market, so we have a good penetration opportunity, in my opinion, what do you think? :)

Selling it is quite easy - now I just need some salespeople who can help me prove that it's a unique scaling opportunity, with a clear plan to become the new data highway for finance professionals, their companies, and their customers, I believe we're ready for lift-off.

In terms of where we stand as a company right now, I'm considering the following options:

Bootstrapping, currently $160K in ARR - and then as soon as I have an additional $20K per month to play with, I'll get my sales process proven, to show that it's ready for scaling - it'll take an extra year or two to prove scalability, without funding.

$100K, or $20K in funding per month for five months, preferably as a normal but well-interest-bearing loan, because it will ensure that with a small sales/marketing team, we'll have doubled revenue to $40K within 3-4 months, which would mean that within a year, we'll probably have a 150K in monthly revenue, which can actually be run as a "normal" profitable organization - also over time. - However, I'd like to push the accelerator in terms of growth, so the third option is that we find

$600K, because then I can build the organization and handle due diligence for the next round, which will be ready within 6-12 months. - so we might actually gain two years on the whole journey, by finding an HNWI who would like their own app, which would also embark on a new possible unicorn journey, or perhaps a partner who has access to a private equity fund that focuses on explosive growth. Not VC. But specialized.

I can see that we could end up being worth $400M within 5 years, that’s why I am in :-)

I'm in the process of getting our investment pitch in order, as I've received some really good feedback, which I just need to implement. At the same time, I'm working on creating executive one-pagers for our stakeholders: HNWIs, fund managers, small asset managers, family offices, "big clients," employees, and investors.

We also need to create a basic explanation of our solution in a one pager format, which I'll make sure to remember.

Thank you if you've read this far - I really got carried away with my keyboard...

As I reflect a bit, I actually think that your company might be interested in providing a comprehensive overview of all portfolios, for all customers who might need it?

The wealthier you are, the more portfolios you have. - Your bank could potentially become the highway network for investors and their partners, all the way down to the transaction level. - With a complete overview of all assets, there's potential for that. The question is just whether it should say Your Bank or ODIN or something else on the baseball cap :)

I think there are many possibilities - shall we have a virtual coffee?