So far in these early days of 2013, the big-ticket items affecting the domestic and global economies—US politicians finally agreeing the Fiscal Cliff deal, the resulting stock market rallies—have garnered most attention, but there’s something interesting going on at a much more micro-economic level: small companies are starting to quietly emerge from the aftermath of the financial crisis to serve specific data needs. Perhaps 2013 will be known not as the Year of the Snake, as in the Chinese calendar, but the Year of the Startup?
So the end of 2012 didn’t herald Armageddon, as some mis-interpreted the ancient Mayan calendar to mean. An alternative interpretation is simply the end of one calendar cycle and the start of a fresh one—and many in the financial markets have been wishing for just such a clean slate since 2008.
One effect of the financial Armageddon that has plagued the industry over the past four years has been the almost indiscriminate head-shrinking at financial firms, and the knock-on layoffs across companies serving those firms. Anyone who talks to me regularly will know that the growing pool of available talent created by these layoffs has been a pet topic of mine for some time, as it has created the perfect storm of expertise swimming around in that pool and, instead of landing in a new port of call, clinging to other survivors floating in the same direction, ultimately gathering enough momentum to be classed as a new peninsula of its own—and that I take every opportunity to crow when I see people taking advantage of these opportunities, such as data industry veteran Jeff Wells’ NuPont product management consultancy inviting other long-serving experts like Kerry Hindle, Jerry Brunton and Tony Moulange, among others (IMD, Dec. 17, 2012), to join his raft and turn it into a warship. After all, when individuals left trading firms, many set up their own trading shops, so why not the same in the vendor world?
There are many factors that contribute to the success of a startup: one is a product or service that works, another is whether there is actual demand for it, and a third is the knowledge and experience of those behind the startup. Hence, TickSmith Corp.—a new historical tick data startup that reunites former employees of Canadian online brokerage platform vendor Exchange Market Systems and SunGard, including former head of its Fame data business, Francis Wenzel—should be poised for success, based on its combined years of expertise alone.
But, just as one swallow doesn’t make a summer, one new company doesn’t signal a new age of innovation. So it’s encouraging to see that there is indeed a trend at work: The end of last year saw the launch of two other Canadian startups targeting market niches with huge potential—Level 3 Data, which uses volume on each side of the spread to create indicators of buying and selling pressure, and iPerform Data, which provides near-real-time fixed income price evaluations. This has continued with TickSmith, as well as ClipperData, another new startup serving a specific niche of commodities shipping and trade flow information, where data is currently lacking, and founded by individuals—Genscape co-founder Sterling Lapinski and Abudi Zein, a veteran of Genscape, Platts, and Argus Media, among others—with decades of experience in the markets they aim to address.
It’s a big indicator of confidence in the marketplace that people are willing to make the leap and establish their own venture, and an even bigger leap when they—or their backers—are prepared to put their money where their mouth is and invest in sometimes-lengthy development and testing projects before bringing a product or service to market. So while ’13 may be considered unlucky by some, let’s hope this is just cause for more optimism in the markets this year.
Anthony and James talk AI and ESG, Reg SCI and the SEC, and Game of Thrones and Dragons.Subscribe to Weekly Wrap emails