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What’s Your Investment Strategy?

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October 9, 2019

Ok, so maybe you’re not a serious investor. Perhaps you need a little assistance (don’t we all??). 

The #FinTech  industry has seen a serious boom in the form of new technologies that make investing and financial administration processes easier. 

Pitchbook, for example, is a personal favorite.  It offers information about public and private equity markets. These insights “enable companies, investors, advisors and professionals to capitalize on new business opportunities via due diligence research on private market intel, fundraising information and source investments.” 

Solving the issue of cost management, Suplari — a top pick of finance, procurement and operations teams– uses machine learning to analyze, predict and cut expenses.

When it comes to automation, Acorns takes keep the change to another level.  That’s because it automatically invests change from purchases in a diversified portfolio and provides educational content to get users up to speed on their investments.

In terms of accessibility, platforms like Tala provide credit access to people in underserved parts of the world like Kenya, the Philippines, Tanzania and Mexico. Tala underwrites potential users that have no traditional credit history using alternative data. 

On the other end of the spectrum, Coinbase‘s online platform allows users to buy, sell and manage digital currency that includes mobile accessibility and supports 32 countries.  Users have exchanged over $150 billion in digital currency since launch.

Amid a marketplace full of tech-based evolutions in financial management this week I’m wondering:  how might we update our internal investment formula? 

Time Value of Money.

Time and money always seems to be at odds with each other.  If you’re not loosing time, then you’re loosing money.  Or, you’re gaining one or the other.   They may as well be irreconcilable concepts, or as the old saying goes, perhaps they are one in the same: time is money!

As former practicing attorney, I loathed the billable hour.  Projects, meetings and tasks were broken down into 6 minute increments or .1 billable hours.   Similarly, when negotiating salaries or hiring consultants, we often attribute value as in direct correlation to the amount of time spent on execution. 

This model, however, bears inherent flaws. It summarily overlooks the cost of experience at its net present value.  Indeed, what one individual can complete in 1 hour (that may take another individual 15 hours) is often the result of years of experience or superior expertise.  So, let’s consider a new currency of measurement: value instead time.

The ROI on Personal Touch

The white paper, Think More Expertise Will Make You More Trusted? encourages us to consider a simple formula for organizational trust:

The Trust Quotient score contemplates four variable inputs of trustworthiness.

  • Credibility – our command of language, skills, credentials and expertise.
  • Reliability – actions, predictability, and dependability.
  • Intimacy – openness and availability to be confided in, perceived discretion, empathy and safety.
  • (Low) self-orientation – focus on others over ourselves.

Though it may seem counterintuitive to make relational business decisions, even in the face of reducing operational efficiencies, the Trust Equation  highlights an important insight. Trust is the measurable output of your Return-on-Intimacy (ROI).  

In his book, The Speed of Trust, Steven Covey argues that trust is an essential ingredient for any high-performance, successful organization.  Thus,  there’s no harm in investing in getting to know people for who they are and what drives their passion instead of opting for a singular focus on investing in projects as a measure of performance.

Cheers,

Leigh-Ann / Venture Cafe Miami

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