Small Business, Big Trends

Ever read something and thought… “wow that was really insightful, I’m gonna keep that“. I do that, sometimes it’s just a small phase, could be a whole story or something profoundly moving.  I like to keep them around and look back on them once in a while.

Here we sit just past the midpoint of 2010, back in January prognosticators galore put their ante in the game making predictions and claims for the coming year. One caught my attention and as I mentioned above, I kept it.  The top 10 trends in Small Business for 2010, part 1 and part 2.

As we sit here in the midst of a struggling economy (or is it a recovering economy?) it’s thought provoking to review these trends. As the we embark on a new era of financial regulation how will this impact not just the big investment banks, but what about the small funds and asset managers?  Is it business as usual?  Here are a few of those trends from Steve Strauss with my 2 cents of course.

The New Frugality – Technology buyers in Capital Markets are looking for ways to improve total cost of ownership.  Unlike commercial business which can generally get-by with last year’s technology in an effort to keep costs down, technology is the stuff that makes the difference between winners and losers in the trading world.  The side effect is that it requires traders to also be savvy technologists to be able leverage the right mix of vendor products with their own intellectual property (IP) to keep ahead of the pack yet not be buried in software and hardware costs.

Welcome to the Era of Hyper-Connectivity –  While the general public is trending towards hyper-connectivity of social media in the use of Twitter, Facebook and YouTube this is also occurring the markets. Connections to multiple brokers, ECNs, Exchanges, Single Bank liquidity  providers, Reuters/Dow Jones News feeds provide traders and algo trading systems this same hyper-connectivity.  The inter-connectedness means more decisions, more opportunities, more data to capture, more quant research, more arbitrage, … As in the social media world, it’s but the tip of the iceberg.

Social Media Grows Up –  Marketing a technical product requires the right approach to reach your target audience.  Knowing how that audience thinks and responds well (or poorly) is the key. Technical people learn by reading, doing, experimenting and tinkering. They like to hear from like-minded people. Twitter, Facebook, LinkedIn and Blogs provide an approach to broadly (virally) reach this audience in a subtle yet influential manner.
When it comes to buying technology, many vendors think technical people don’t hold the purse strings.  Who do you think the budget owners ask when it comes to buying software?

Sharing vs. Shared experience – There’s nothing like a shared or a common experience that will immediately bond strangers together.  It’s that experience of been there, done that, lived through the pain. People will see in each other’s eyes, no words need be spoken.  As I mentioned earlier (the New Frugality), there is a demand on traders to also be expert technologies. So they must scrutinize vendor platforms often deciphering techno-speak into a language they understand. What does “parallel CEP engine” mean if what I want to do is “Calendar Spread Futures Trading?” Some from Wall St. have made the leap from trader to vendor joining ranks with others savvy in commercial software development and sales creating small business perfectly tailored to deliver technology aligned with exactly the needs of traders and quants.

The Start-Up Economy – Here are the stats on small businesses in the USA:

  • Number almost 30 million, employ more than half of all workers, constitute 99.7% of all employers
  • Create the majority of business innovations
    (Source: U.S. Small Business Administration Office of Advocacy, 2009)

Small business is clearly a major force in the economy. Those savvy, risk-taking individuals with an idea and a dream kick off the bureaucratic shackles of the corporate world, gather a team together under a singularity of vision that fuels their vigor and defines them as an formidable authority to reckon with. As I portrayed above (Sharing vs. Shared experience) they often have the benefit of been-there-done-that. Their products exemplify that, they are fit-for-purpose to the chosen industry not general-purpose software shoe-horned in.

Once again thanks for reading.

Visit OneMarketData, a small business for the Capital Markets industry built by Capital Markets experts.

For an occasional opinion or commentary on technology in Capital Markets you can follow me on  twitter, here.

About Louis Lovas

Director of Solutions, OneMarketData, with over 20 years of experience in developing cutting edge solutions and a leading voice in technology and trends in the Capital Markets industry.
This entry was posted in Algorithmic Trading, Analytics, Complex Event Processing, Equities, Foreign Exchange, Futures and Options, Tick database. Bookmark the permalink.

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