危 wēi danger
In 1981, Michael Bloomberg was fired from Salomon Brothers, where he was a General Partner. He used his $10 million severance package to found Innovative Market Systems (subsequently renamed Bloomberg LLP) with the help of 2 former co-workers. Their aim was to provide financial software tools such as analytics, an equity trading platform, data services and news to financial companies globally. At the time the online market for financial information was dominated by Reuters and Telerate who had successfully sold their products to the IT managers of brokerage houses and investment organizations. These purchasers valued standardization of the product above all else because this made installation and management of the systems easier. Given these needs were so well met by the incumbents it was unclear how Bloomberg might break into the market.
机 jī opportunity
Bloomberg had other ideas– having worked in the industry he knew that it was the traders and analysts that created the value in the finance houses and that they were the key users of the services. For them, accuracy and speed of information was far more important than ease of installation. Bloomberg built a proprietary terminal, with 2 screens rather than one, and tailored all services to the needs of the traders and analysts – he then began marketing his product directly to them on a subscription basis. Bloomberg’s offer was so clearly superior to that of his rivals that the traders and analysts trialed it, and then pressured the IT purchasers to switch across. Bloomberg also used this deep understanding of its users to begin to offer completely new services, for example enabling them to buy flowers and jewellery from their desks (probably to make amends for working such long hours!). Bloomberg grew to become one of the largest providers of online financial information in just 15 years. Incredibly Michael Bloomberg still owns 85% of the group which boasts 100,000 users in the US and 150,000 across the rest of the world.
How About…
- Questioning the established buying processes in your industry, perhaps shifting your focus from purchasers to users?
- Offering a physical aspect to a service with a subscription model, claiming valuable real-estate and making your offer stickier?
- Examining other potential needs of your core users for additional revenue streams?
—
