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WealthTech Explained
3 takeaways from my conversation with WealthTech expert Marshall Smith
WealthTech is focused on investments. So where there is an investor, where there is capital invested, and where there is technology related to investing that capital, managing portfolios, doing research, and creating reporting for an investor -that's what I would refer to as WealthTech.
Today, I’m breaking down 3 takeaways from my discussion with Marshall Smith, Managing Director of First Rate Ventures.
Check out our full conversation + how to connect with Marshall here:
The Observer Express
Don’t have time to read the entire post right now? No worries, here are today’s 3 takeaways:
Product Market Fit is a Process. It’s not an endpoint.
Revenue Enhancers Are Easier to Palate. Vitamins >>> Painkillers in WealthTech.
Questions to ask WealthTech Founders: Market, Capital, Competition. Enterprise vs RIA? Sufficient Capital? Who else is working?
1. Product Market Fit is a Process
As soon as these words came out of Marshall’s mouth I knew this would be my number one takeaway. Incredibly practical and helpful view on what is often a very “squishy” concept:
Clients have a never ending list of things they want. You get an unending list of product feedback. “I wish the product did this. I wish the product did that.”
Product market fit is a process. It's not an endpoint. You're always going to be adjusting and investing in your product to increase your product market fit. So everyone arguably has some amount of product market fit. It's just a relative number versus your competition and regarding their other options.
2. Revenue Enhancers Are Easier to Palate
This was an interesting takeaway - a fun question to ask founders is “Is your product a vitamin or a painkiller?” Based on Marshall’s response, it sounds like the WealthTech market is more interested in vitamins than painkillers:
If you're a cost to a wealth tech and you're going to do it for cheaper, or you're going to do it better, you're going to have a harder time winning customers and getting them to change than if you're a product or service that helps them generate revenue. Revenue generating products and services are more successful in being able to grow.
3. Questions to ask WealthTech Founders: Market, Capital, Competition
Marshall voiced 3 questions that apply to all startups, but with some unique application to the the WealthTech Space:
Bonus Lesson: Talent is Not Regional
Couldn’t resist sharing this one too, loved hearing about Marshall’s global teambuilding experience:
Talent is not regional. There are incredibly talented people around the globe that, if given an opportunity to contribute, can generate a lot of value for the end customer and for the business hiring them. They actually bring unique perspectives to the table that you don't necessarily get when you have a one culture focused sort of team.
What Do You Think?
What WealthTech opportunities are you watching?
*I include this section in every post because I’m genuinely curious to hear what you think. I answer every response, so please, don’t be shy!
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3 Lessons Learned
Leverage makes no sense to most people.🔧I spoke to a class of engineering students this week about takeaways from my career. One of the takeaways is that time is more valuable than money, and I used the word “leverage” several times before realizing they had no idea what I was talking about. This tracks - most of us seem to think “How can I accomplish this task” instead of “Who should accomplish this task?” It wasn’t until I became an entrepreneur that this concept started to hit home.
Thinking time is underrated.🧠This week I spent 7 hours alone in the car. It was wildly productive. Rarely do I have such a long time to chew on problems, plans, and decisions.
I’m an open book for better or worse.📖I tend to be pretty straightforward and open. This is a personality trait I’m proud of, but it has downsides. Sometimes I overshare. Sometimes I step on people’s toes. Did both this week…
3 Interesting Links
Tune in next week for a breakdown of my conversation with a B2B marketing expert on evaluating startup go-to-market strategy.
Until then, thanks for reading - have a great week.
-Andrew
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About Me
I cultivate flourishing.
I'm also the CEO of PitchFact, where our mission is to cultivate flourishing specifically through efficient and collaborative early-stage diligence. I'm a proud husband, grateful father, and honest friend. My love languages include brisket, bourbon, and espresso.