No doubt you’ve heard the Instagram fairy tale.
Internet start-up. Not even two years old. Two co-founders in their twenties, Kevin Systrom and Mike Krieger. 12 employees. San Francisco-based. No revenues. A phone call from Mark Zuckerberg, and they end up being acquired by Facebook for $1 billion.
Another digital entrepreneurial cliché, right?
Maybe yes…maybe no.
What is true is that some of the important lessons learned by Wunderkinds Systrom and Krieger, also can apply to financial advisors:
1. Great startups don’t happen overnight. Although, the Instagram story seems like an 18-month whirlwind, the reality is slightly different. Kevin Systrom had his eyes on photography and design for many years. When he was at Stanford, 10 years ago, his class presentations were highly regard by his classmates. Moreover, Instagram was the second iteration of a startup for Systrom and Krieger. Their first iteration, known as Burbn, had too many features and was too close to Foursquare’s business model. Systrom and Krieger pivoted quickly from Burbn’s failure and started Instagram less than six months later. In the same vein, we have observed that the most successful financial advisors are incredibly persistent, work very hard, and do not allow setbacks to derail their efforts. Seems obvious, yet not every advisor is able to adhere to these basic tenets.
2. Find team members that complement your skill set. Systrom had a prototype, an idea, and the desire to create compelling experiences for mobile devices. What he lacked was engineering skills. Through his network, he connected with Mike Krieger, who had the reputation as a “stud engineer", as well as other important complementary skills. When building a financial advisory team, find teammates who complement each other. Too often, advisor teams are composed of advisors with parallel skill sets, which defeats one of the essential strengths of the team format, i.e. specialization and complementary skill sets.
3. Building a great product is synonymous with building a great company. Systrom realized that a great product is only 50 percent of the start-up. The remaining 50 percent, e.g. recruiting, building and managing a team, raising capital, bank accounts, taxes, forms, insurance, office space may be less “sexy”, but is no less important. Today, advisors are seeing the same thing. More and more, the top-performing financial advisors today are thinking like a CEO, or more like an owner than an operator.
4. Client feedback is critical. Systrom and Krieger were laser-focused in their devotion to building a product that customers wanted. They instituted a client feedback process called Bar Reviews, which amounted to going out to some San Francisco bars frequented by other geeky hipsters and showing off their prototype. If the hipsters really latched onto it immediately, they knew they were on to something. If the features took too long to explain, it was back to the drawing board. Client feedback is the secret weapon for advisors. We have observed that clients, especially the most loyal ones, can provide observations that are crucial insights into the differentiating and special characteristics of the advisor and their practice. Note of caution: We are absolutely NOT recommending getting client feedback in the midst of a loud bar scene with liquor involved!
5. Networking the Old Way. It is the height of irony, that a product that is in the center of the social media tumult started with the assistance of old-fashioned networking. When Systrom and Krieger first introduced Instragram at 4 a.m. on October 4, 2010, there were so many downloads that their system crashed. Quickly, they went through their mental rolodexes to think of “the smartest person that they knew”. It turned out to be Adam D’Angelo, the chief technology officer at Facebook, who they had met years back at a frat party at Stanford. In the wee hours of the morning, D’Angelo spent 30 minutes on the phone, walking them through the basic things they needed to get back up. Similarly for financial advisors, success comes from the foundations that one builds along the way. Whatever value from the growing power of social media, it is important for advisors to remember that old-timey networking also can be pretty effective.
For additional ideas on how you might enhance your own social networking skills, feel free to download the complimentary ClientWise Learning Tools, from below: