2 min read
01 Feb

Dan:   PSP’s approach to win/loss is unusual, I think, in its commitment to what you call “peer” interviewing. Has it always been that way?

Richard:   Let me give you a little background.  One of the main problems I see that has been endemic across the analyst industry for decades is that analyst firms want to use the lowest cost interviewers available to maximize their profit margins.  So, the interviewers tend to be college students who only read a script of questions.  They are robotic interviewers.

When I listened in on some of these interviews over the years, I was appalled because the respondents were getting angry at the low-level interviewers who had zero idea of the technology and the business problems the executive was facing.  And an angry respondent tries to get rid of the interviewer as fast as possible, and nothing they say can be trusted.

The executive being interviewed would say something out of the ordinary and the interviewer would not react—they had no idea that something unusual or important was said—and so they’d just go on to the next question in their list.  The respondent could figure out in milliseconds that the interviewer knew nothing about the subject.  I felt that the respondents were angry because when they agreed to the call, they expected to talk with a senior analyst, not an inexperienced and unknowledgeable interviewer.

Any time that I made a case that we needed at least analyst-level interviewers, my management said sure, as long as you maintain our profit margin, you can use anyone you want.  To use analyst-level interviewers would have been priced at least $8K per interview.

Without high-level interviewers I felt we weren’t able to do a good enough job.  That’s why I decided to start-up my own company to do this work at a much lower price point, with the level of quality required, and using peer-level interviewers.   Either I, or another high-level, experienced interviewer conducts the interviews.   We never use what I call “robotic” interviewers, who just read off a list of questions.

Dan:   What do you feel it is that the executives you speak with respond to? Is it the industry and subject matter? Or, the seasoning and maturity of the interviewer?

Richard:   Well, I feel both are important, but understanding the market is most critical.  If a respondent says something unusual, such as they need 10x as much processing power for something, an experienced interviewer will ask why. You have to know when to dig into the next level of detail, or when to move on because the discussion is commonplace. A non-domain expert wouldn’t understand and react appropriately.  Dan, isn’t it so much better when you talk with someone who really understands your FinTech concerns?

Dan:   Absolutely, especially when people use language with different meanings in different contexts. I’ve seen discussions around the concept of “connectivity,” as a competitive differentiator in FinTech, fall off the rails more often than not because people have different ideas of what that means.  For example, people may mean:

  • Physical network connectivity (think cans & string, wired communications, the Internet, etc.)
  • Application-to-application connectivity (like a broker’s trading algorithm sending electronic orders to a stock exchange’s trade matching engine)
  • Middleware connectivity (such as messaging systems, standard & proprietary protocols, trading gateways, etc.)

[For a unique FinTech perspective on the otherwise common build vs. buy decision, see Hard Hats and White Gloves: Build vs. Buy in Fintech Win/Loss Analysis]

Richard:  Yes, you need to figure out what the respondent is actually talking about. Words like “performance”, “robustness”, “availability” mean different things to different people.

Dan:   So, here’s the thing. In FinTech, when connectivity suppliers from network providers to broker/dealers debate the competitive merits of standard vs. proprietary connectivity, it’s important to differentiate a discussion of wires from a discussion of FIX messaging protocols and bespoke API’s.  In these cases, the competitive win/loss landscape is different, the skill sets are different, the economics are different; and the argument to build a “sticky” client interface has merit, or it falls flat.  The interviewer needs to know what “connectivity” means to the interview respondent that has brought up the topic.

Richard: Dan, that’s a great example.  An inexperienced interviewer would not ask a clarifying question about which connectivity was at play and just move on to the next question in their listing.  And the respondent would know the interviewer was unqualified to be interviewing them.  All questions and answers which follow would be useless.

Dan:  Absolutely.  Thanks for your time today—I enjoyed our talk and I look forward to our next call. 

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