It Really is About the 99% Perspiration
Catching up on some reading this week, I came across this excellent piece in The Atlantic, which claimed that “The Age of Tech is Over.” The following passage resonated:
“Software ate media, and media went down pretty smoothly. Now it has to gnaw through the harder, crunchier parts of the global economy.”
Witnessing the incredible pace of change and progress within the tech sector over the past decade has been breathtaking. Exactly 10 years ago this week, global stocks bottomed out in the aftermath of the financial crisis. Today, we live in a world where a list of the world’s most valuable corporations is almost entirely dominated by big tech.
However, as the Atlantic piece and others have emphasized, “tech” is not a sector in its own right anymore. Every company in every industry is using technology, to grow, innovate, and improve. The big tech companies we know well, (Google, Facebook, Netflix, Amazon, etc), in reality are tech-enabled media companies that leap-frogged “old generation” media companies to establish their dominance in the attention and advertising industry.
But just because the pace has been so swift in the media world, it can be tempting to assume that the speed of disruption will be just as swift in other industries. Since Origin operates within one of those “crunchier parts” – namely, the capital markets – we are acutely aware of the dangers inherent in believing that technology’s progress will be easily replicated across all industries.
In reality, this march will slow. The enthusiasm and hot air that’s giving tech startups over-inflated valuations and has banks scrambling to build anything that has ‘blockchain’ or ‘AI’ in the title will fade.
And that’s good news, especially for those of us who work in and around financial services. For friends and partners on trading floors and in investment banks, and who might have been getting sweaty-palmed about their jobs and livelihoods (see Anthony Jenkins’ “uber moment“), it means breathing a small sigh of relief. Automation – unlike blockchain or A.I. – is here but it will benefit financial services for the foreseeable future, helping good people do better jobs.
A slowing of the technology train will also focus the minds of those of us who are building technology businesses, especially if we’re in one of the “crunchier” sectors. When the pressure ratchets up, and the funding environment turns tougher, it’s important that we resist the temptation of “glamour projects“, as McKinsey calls them. These projects emerge as:
“…many companies struggle to find the balance between investing in projects designed to grow the business versus those required to run the business. As a result, they tend to underinvest in so-called unremarkable projects.”
Once the wrong path is chosen, it’s hard to change course. Vanity projects can be highly distracting, especially when they’re only being pursued in order to, either, get people talking or, even worse, wow investors into closing a funding round.
As we know, survivorship bias within business media leads to a collective fascination with terms like “innovation” and “silver bullets”. That’s understandable. We’re humans, after all, possessed by an array of wild urges that we use to mould the world to our world view. We’re also all magpies, forever attracted by shiny, new things.
This approach can lead to overweight investment into moonshots, whereby you seek to do something highly original and flash that has little chance of short term gain or profit. When building from a firm base, a certain portion of business development should be about dreaming big and shooting for that world-changing product or idea. But when times get tough, moonshots don’t hit the target quick enough.
The belief that you have to be highly original or profoundly different is one of the great business myths of our age. To build a successful business, you don’t have to be truly revolutionary. After 4 years building our community, we deeply appreciate Thomas Edison’s famous remark about “1% inspiration, and 99% perspiration.” Excellence paired with consistency and stamina will almost always outlast “the next big thing.” As we think about how the capital markets will evolve, we are forever guided by this principle, to ensure we’re building products and laying down infrastructure that will actually be used by our customers, the issuers and dealers who drive the markets.
As the next chapter of the technology story plays out, it’s worth thinking carefully about what you and your business should be focusing on when times get weird. It’s likely worth turning down the bandwidth devoted to glamour projects and moonshots and turning up the focus on real service and value for users. This approach will drive growth, even in hard times.