November 28, 2016
Our Mission – Disrupting the Industry for Our Clients
We are all familiar with Uber, Airbnb, Tesla, and Netflix as disruptors in their respective industries. All the best recent disruptions have something important in common: they involve companies with the marketing common sense needed to solve customers’ headaches by using technology and cutting costs. We at Gainplan are fiduciaries and take that role very seriously. To those outside of the financial sector, this means that instead of working with one financial institution’s broker, who sells you a product or service of that institution’s selection, you work with an independent advisor who is legally obligated to advise you on the best product or solution for your portfolio – from various financial institutions.
Our founder, Jeff Ivory says that he noticed significant confusion in the financial market. Beyond confusion, he discovered a practice that he felt to be flat-out wrong, and he got flat-out angry about it.
Here are some of our keys of disruption:
1. Solve a ‘Customer Headache’
While marketing gurus have always suggested that business executives should know what their customers want and need, very few of those customers actually know what they desire. Henry Ford is famously quoted as saying, “If I had asked my customers what they wanted…they would’ve said a faster horse!”
Until recently, one of the major challenges for marketers was to come up with great customer insights. My belief is that most great marketing insights come from observation and common sense. Steve Jobs was very good at that game when he invented iTunes, the iPod, and the iPhone. To our knowledge, nobody wrote Jobs an email saying, “These are the products, services, or experiences we need.” What some people call ‘vision’ I call ‘common sense observation.’ Although there is no real scientific recipe to get these insights, four key steps can help develop them: observation of customer behavior, identification of what I call a ‘customer headache,’ reflection, and experimentation. In the case of iTunes, the customer headache is having a huge stereo with hundreds of LPs or CDs. Observation collects facts (e.g. “It would be great if I could carry 10,000 songs around with me on a device I can fit in my pocket”). Reflection combines them (“Could this be done on a gadget small enough to fit in a pocket?”). Experimentation tries out possible combinations of the previous elements (a small hard drive could be the solution). And that’s how the iPod was born! It’s all about solving a ‘customer headache.’
2. Choose a Problem that You’re Passionate About
Over the past few years of working with Gainplan, one common observation amongst the employees is that we are passionate about the financial industry. We all believe from our different points of view that the industry needs changing and we believe we can do it – one client at a time. First and foremost, Gainplan has a fiduciary relationship with each client. Putting your interests first and providing objective advice and solutions is more than just a mission statement – it is our duty.
We use an investment and financial planning process that is fully supported by our own independent research, due diligence, and investment decision-making.
3. Rethink Industry Boundaries from ‘Inside-out’ to ‘Outside-in’
Many of today’s disruptors have redrawn entire industry boundaries by focusing on consumer insights. In its early days Amazon could reliably provide its users with recommendations on what else they might be interested in buying from a previous book order. But nowadays its industry is almost impossible to define; is it an online retailer? A logistics company? Something else? Is Google an internet search company, a software company, or a future transportation company?
In parallel, old industries are being redefined by new competitors. The health industry used to be centered mainly on pharma companies. Now players as diverse as Nestlé (wellness), Nike and Disney (healthy lifestyles), AXA Insurance (affordable healthcare), DSM (life sciences), IBM (analytics), Oracle (software), and many others have broadened the definition of both their own businesses as well as transforming their entire industries to capture a share of the growing pie. Redefining the industry, you want to be in is not an entirely new idea. Back in the 70s and 80s, Peter Drucker and Ted Levitt were already suggesting it. However, today data enables us to see the consumer world with different lenses from the ‘outside-in’ rather than the ‘inside-out.’
Most companies I know claim to be customer-focused. But, a closer look often leads me to conclude that many are more product-driven than customer-driven. They create new products and then look for clients who will buy them; a typical ‘inside-out’ business model – “Now that we have a great product, how do we convince customers to buy it?” Few corporations take consumer insights to heart (‘outside-in’) and deliver extra value at lower costs. Sir Stelios Haji-Ioannou broke the mold in the airline industry by founding EasyJet and focusing on only one customer segment: those who pay for their tickets out of their own pockets. Traditional players competed on economy seats but also business and first class.
4. Add More Value by Redefining New Ecosystems
The next key element in disrupting an industry and solving customer headaches is to create new ecosystems. Again, Apple was a pioneer in this area. In 2013, Apple CEO Tim Cook said at a Goldman Sachs conference that Apple can be distinguished from other companies due to its expertise in software, hardware, and services. On the so-called vertical integration that the company has followed for the last few decades, he said, “Apple has the ability in all three of these spheres to innovate like crazy and make magic happen.”
Other companies are trying desperately to catch up but it’s not easy. Google, Microsoft, and Amazon have entered the fray by setting up their own ecosystems, which include devices, books, games, music, media, and storage services. Each company has its own distinct strength and has been trying to grab market share from Apple. Amazon leads in e-commerce, while Google dominates in online search and advertising. Apple had a head start in music with its iPods and iTunes but its recent Apple Music streaming service is underwhelming and it may be losing ground in the music arena. Who will come out on top? Only time will tell.
5. Share the Solution
To make an impact, you have to make sure that the market understands the problem that you aim to solve as well as your unique solution. You must be able to communicate clearly and effectively. Elliott Weissbluth used a simple analogy – the butcher vs. the dietitian – to explain the differences between a financial broker and a fiduciary.
Our goal is to bring Wall Street expertise and services to the retail customer on Main Street. We work in the financial industry. Not for it.
The financial industry serves itself more than it serves you. We created Gainplan to set a new standard, one that puts you first – we want to disrupt the industry for YOUR benefit.
This commentary on this website reflects the personal opinions, viewpoints and analyses of the Gainplan LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Gainplan LLC or performance returns of any Gainplan LLC Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Gainplan LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.