Building an independent WealthTech company

Many of you know that Advisor360° is an independent company building software for wealth management, but you may not know how our company started. We were born inside the technology division of an independent broker-dealer called Commonwealth Financial Network, then spun out of Commonwealth to form an independent company. We have several investors including the parent company of Commonwealth, and while we proudly hail Commonwealth as our first client, they are not an investor in Advisor360°. Our charter as an independent company is to build an amazing WealthTech company for our shareholders, clients, and employees.

We have built out a comprehensive and modular suite of wealth management software, driving productivity, profits, and compliance for broker-dealers and their advisors. In other words, Advisor360° enables digital transformation for your wealth management business.

So, as we think about forward momentum and building this SaaS company, we ask the question: what are the keys to getting there?

The 3 principles

Anyone who has worked with me before knows these three principles have served me well as the essence of how I think about my work every day in an early stage company.

1. Stay alive (a.k.a. capital).
2. Build and deliver a great product.
3. Sell the product to clients, then repeat.

This all comes down to Capital, Product, and Sales:

Capital is energy.
The first investor in my first company was a seasoned entrepreneur named Haim, a tremendous businessman and friend; tough as nails Israeli fighter pilot. One time he said to me, “Rich, you are running out of capital—you’re running out of energy.” I never forgot that.

• As a start-up, what is the essence of what we do? We take capital. We mix it with ideas and smart people. Then we forge these special ingredients into a highly valuable amalgam. Capital + ideas + people = value creation.
• Without capital, we can't bring our ideas to fruition. This amalgam is an equation for building value for our investors, our clients, and Advisor360°.
• Without energy, you die, whether you are a cell, an organism, or a company. “Stay Alive” is the first principle.
• Advisor360° is fortunate to have access to a lot of capital both financial and human.

• I learned a long time ago that if you take away someone's pain or enable them to achieve their objectives, they will reward you with their business (as an entrepreneur, this is really important).
• Yes, it’s always about the product, but you can’t have the product without the people. What underlies the product is building a great team: the right people that will build that product.
• NO people, then NO product, NO value proposition, and NO clients.

Now to the last and often the most overlooked principle, monetizing what you built. Remember we are in a commercial business. We are a .com, not a .edu or a .org, business…

The fine art of selling.
Understanding what you have built and what it brings to the market is fundamental to any business. Depending on the nature of your business, the way you sell and reach clients might be very different.

For decades now I have been building products and technology that targets the largest and mid-sized enterprises in the world. It’s especially important to understand that enterprise sales engagements are actually not about selling, which brings me to this next key principle.

We must remember (especially as founders or technologists) that because we have been entrusted with investors’ capital and employees’ life energy, we need to create value for all. This boils down not to ideas or being right but monetizing what we have built. This is called “Product Market Fit.”

• I have seen many great ideas that sounded wonderful on paper, but they never converted into tangible value—because the company never established their product market fit. From my experience, the top priority of any technology company at the beginning is actually not the technology but establishing this fit.
• As an engineer, I have great passion for technology and products. But at the end of the day, if you don't sell those products, you’re not creating the value needed to create (and frankly, wasting time and life energy).
• So, what is selling? It's hard to describe selling in a short blog post or video, but here’s my take: Selling in the enterprise market, business-to-business (B2B), is not about selling. It’s all about educating.
• Sales to enterprises is somewhat different than other target markets. The nature of these prospects is that they are very sophisticated business and/or technology people who resent being sold to—and more inclined to look for true partners for a long-term relationship. These kinds of relationships are not merely transactional, sales-oriented relationships. The sales strategy for these clients (while not for the faint of heart) can be extremely rewarding, as they have very high ASPs (average selling prices) and long-lasting engagements. Crossing into the land of genuine partnerships versus a “vendor” or “supplier.”

The big questions

So, in the context of these three principles—Capital, Product, and Sales—here are the questions we ask every day to advance the ball for each principle: 

1. How do we ensure that we have the capital (or budget) that we need to achieve our objectives and plans? 
2. How do we build the right product with the right team (aligned to our sales efforts) to meet our customers’ needs?
3. Lastly, how do we make sure that our sales process aligns to where we are focusing our R&D investment and what we are hearing from clients? How do we connect our clients to our value creation engine?