
Can the Bloomberg Terminal be "Toppled"? - jzhen
http://mattturck.com/2014/03/19/can-the-bloomberg-terminal-be-toppled/
======
squigs25
This IS the reason capital IQ started. They've done reasonably well.

There are a couple reasons why it's really difficult to disrupt this industry:

1) An mvp won't cut it. If I'm a trader with 300MM in my pocket, then I need
access to information. All information.

2)Reliability. Traders need a highly reliable connection. No room for error. A
great counter example is Reuters. I worked on a support desk where I had both
Reuters and Bloomberg (at a cost of something insane, probably close to
100k/yr). I imagine that when a major pricing error occurred on any exchange,
I would find out within 30 seconds to a minute. Despite all its resources,
Reuters proved time and again to have pricing issues. Connecting to hundreds
of exchanges with thousands of securities is difficult. When you start to go
outside of the US, there's some really bizarre logic. Bloomberg was incredibly
reliable on the other hand, and their support team responds to issues within
minutes.

2) Network effects. Bloomberg messenger is the way to communicate in finance.
Also, Bloomberg leverages its network to constantly monitor prices, so pricing
problems are discovered REALLY quickly. It's kind of like open-sourcing
security pricing monitoring.

3) Reputation. Even if you create a perfect replica of Bloomberg, would I
stake my clients money on your track record? Even with a good track record,
why would I not trust Bloomberg when it's the de facto standard?

4) IP? not sure about this one, but I imagine there are a lot of features
baked into Bloomberg with legal protection.

5) The cost is insignificant for most of wall street.

Funny story: on a whim I interviewed with capital IQ while I was in college.
They asked me to design an interface that would allow people to access
financial information quickly. Having never used or seen Bloomberg, I
immediately started describing a system of keyboard shortcuts, to which my
interviewer responded that I was basically just describing Bloomberg terminal.
Didn't get the job.

~~~
izyda
Great points. I think #2 (reliability) and #3 (reputation)are really key here.

I would argue that there is a caveat to #1. Agreed that a MVP for a Bloomberg
replacement wouldn't work unless you had everything Bloomberg had and more (in
which case, it's hardly an MVP and good luck). That said, I think an MVP for a
niche fin-tech data product that Bloomberg does not have would work if the
sales pitch is that I use your product in addition to Bloomberg. If you offer
me an edge by providing data (or analysis) others don't have, an MVP would be
fine. Heck, some traders/funds would pay for just a csv file if it contained
unique (but directly useful) financial data/analysis (an obvious example that
may have had potential 5 years ago was sentiment, although now everyone and
their dog is offering that and it's not entirely clear there's direct value to
it). I think the very fact Bloomberg _can_ look like its "from the 1980s" just
reflects the needs of the market it serves. Wall Street doesn't put great
value on pretty interfaces, ease of use, or anything other than direct value
add to their revenue generation process (ie. investing, pricing, selling
financial products, etc.). Tell me how your product makes me more money today.
I think any fin-tech startup needs to be driven by that philosophy if they
want to succeed, I don't see how you'd convince a trader that the fact your
app offers a nice interface or interesting but questionably actionable
analysis is any real advantage if the other guy offers analysis or data that
is directly applicable.

Another thought: while disrupting pricing data would be very difficult (given
the speed + accuracy required + relationship with exchanges), what about other
financial data like fundamentals/accounting/relationships data? That data is
free - it's all on the SEC's EDGAR (and it's far more than just financial
documents, there's plenty of data on individuals too). Would Fact Set or
Capital IQ, for instance, have more competition if the SEC had API/machine
readable data? There has been some effort through XBRL to do this - although
the percentage of filing actually available in that format and the lack of
consistency in the format (in some cases, there's at least several hundred
'tags' for the same or similar financial line item) makes any large scale data
processing from EDGAR a massive undertaking.

~~~
csandstedt
"the lack of consistency in the format (in some cases, there's at least
several hundred 'tags' for the same or similar financial line item) makes any
large scale data processing from EDGAR a massive undertaking."

Izyda, you are absolutely correct on the issues with XBRL. I'm the co-founder
of a company called TagniFi that is working on a solution. We have a
standardized dataset that makes comparing this data across companies,
industries and sectors possible. We are in beta so you are welcome to check
out for API for free: [http://www.tagnifi.com](http://www.tagnifi.com)

~~~
izyda
This looks very cool - I will certainly sign up for the beta. I think there is
real potential in this space.

The only concern - and maybe you have a solution - I have is that to my
knowledge, XBRL has only been required on 10K's and 10Q's since around 2009 (I
may be incorrect, 2010?). As someone involved in research with financial data,
there's really no avoiding using pre 2009 data. Parsing that from raw text
files is even harder than XBRL - is TagniFi able to do that as well? (I've
perused your website but haven't found the answer). Unfortunately, without
that capability, I'm forced to rely on services like Fact Set at least
partially.

~~~
csandstedt
Thanks for the feedback. You are correct that the lack of history is an issue
for us but we have to start somewhere and the cost to collect non-XBRL data is
really high. The timing of the available history in XBRL depends on the size
of the company. XBRL was phased in starting in 2009 with the largest 500
companies filing their 2010 10-Ks in XBRL. These 10-Ks generally had income
statement data back to 2007 so that is where most of our data starts on the
larger companies. The next largest 1,500 companies started filing in 2010 so
their data generally starts in 2008. The remaining 9,000 companies started
filing XBRL in 2011 so their data generally starts in 2009. This means we have
7 years of data for the largest 500 companies, 6 years of data on the next
largest 1,500 companies and 5 years of data on the remaining 9,000 companies.
Since the cost to go back and collect this data manually is really high we are
going to focus on building the deepest datasets (footnotes and industry-
specific) to offset the lack of history.

------
chollida1
Funny timing, we are pretty big bloomberg users and just had the Reuters Eikon
sales team in.

Things bloomberg does well....

\- Emsx, they have the largest trading network in the world. If you are able
to trade, its free and every broker is hooked up to it. You can be up and
running in a few days.

\- market Data. To get full market data for just the Canadian exchanges is
about $15,000/month. With a bloomberg terminal its about $300/month.

\- excel plugin. You can pull real time data, reference (non changing data
like the dividend rate) and historical market data into excel. You can
experiment so quickly with the combination of bloomberg and excel. This can't
be stated enough.

\- decent api. You can pull the same data you could from excel into your
C++/C# or java app with their api. This also really simplifies prototyping and
makes it easy to write the basic infrastructure you need at a a hedge fund.

With these three things bloomberg has done something pretty remarkable.
They've locked down the lower end market here making it hard for competitors
to start from the bottom as the bottom is significantly less profitable now.

 __EDIT __as to what Eikon does better than bloomberg, the answer is not much.
They have a bit better discover ability for functions due to their auto
complete typing being much better than bloomberg.

Eikon also ranks analysts predictions and then gives predictions as to how a
company will do against its earnings, they tell me their predictive model can
be very accurate.

Reuters also has reuters news integration which is arguably better than
bloomberg's news.

~~~
wdewind
I'm curious, what does Reuters Eikon do well/better than Bloomberg?

------
asharpe
I used to lead the BB MSG product lead, I can safely say from the inside the
communication aspects were absolutely viewed as the killer feature. Simply all
US Bond trading is done over the BB MSG system - this is a trillion dollar per
day plus market and you must have the BB terminal to interact - the $20,000 a
month is cheap to be able to make daily trades of multi tens of millions of
dollars. Whenever we made a change to the code, we were told: if you break
MSG, when the Wall Street Journal writes its front page story on why the bond
market came to a screeching halt, you name will be mentioned.

To give another example, in an annual product planning session, the metric was
asked of product managers: how many of our user base would go if we removed
your product area. The Derivative team got up and said 50,000. The MSG/Comms
team got up and said All of them. The Derivative team replied, we were taking
a guess on our number, the MSG guys are absolutely right, we lose the entire
business without Comms.

------
paperwork
People who haven't used a bloomberg terminal often don't realize that its
value is far greater than the data it provides. The article already mentioned
network effects due to chat system and other similar features. Another
component of network effect is the eco-system of vendors who have built their
products assuming access to bloomberg on a local machine (so they don't have
to provide their own data)

24 hours a day someone is available for a live chat. If I remember correctly,
hit the 'help' button twice and a chat window pops up where an actual live
user answers questions. These questions can range from not understanding how
to use some feature to help locating data and beyond. If the discussion is
getting too involved for chat, the support person won't hesitate to call you.

Bloomberg bundles in several interfaces beyond their GUI. The excel plugin,
which updates your spreadsheet in real time is fantastically easy to use.
Programmers can use official apis in various languages to query static data or
subscribe to real-time feeds (although exchange contracts need to be signed
separately).

Bloomberg symbology is hugely important. People outside the industry might
find it absurd that it isn't very easy to know the _name_ of the instruments
being traded. Are you trading AAPL? Is it the one traded in US, Europe's
various exchanges or anywhere else in the world? Are you using cusip? isin?
sedol? reuters symbol? bloomberg symbol?

The bbg GUI looks like it belongs to the mainframe era, but the user interface
is actually very convenient for people who rely on it daily. Simple commands
bring up the data you need immediately, no need to click though a bunch of
menus.

Upstarts will have trouble toppling bloomberg for another reason: vendor
contracts are a mess. Getting the right to distribute data is very expensive.
The contract costs a fair chuck of change, then the distributor must keep
track of every single end-user of the data (which associated costs of
technology, legal, etc.) This is the case with very standard data feeds, like
New York Stock Exchange! A great deal of data comes from markets where deals
are done 'over the counter.'

I don't say all this to discourage anyone from trying. I've thought about this
problem a bit and it certainly will be a very interesting project for whoever
tries to get in the game.

~~~
iaskwhy
I say this a lot: "You don't know what's customer support until you try
Bloomberg's." It's surreal.

One year and a half ago I was involved in an important project which required
niche data. I was creating so many help requests I got sent a real person for
a couple of hours whenever I needed.

For comparison, this same project required even more data from Reuters and the
replies from the support team were so bad things escalated quickly to top
managers. It took some time but eventually we had a meeting with top managers
from Reuters and then I finally got a real person for a couple of hours.

~~~
tbrock
That is all just hand holding so you didn't go back to your boss and say the
words "bloomberg didn't have the data", which is their version of a nightmare.

The value is really only in the data and delivering it to you. The server side
software might be wizardry as mentioned here but the client software is a
joke. Want to render a chart or read a story? It uses internet explorer in as
the rendering engine for you and is slower than molasses.

~~~
jeremyjh
That is all just value-added services that protect their reputation and deepen
their relationship with customers. That's all.

~~~
vvvv
"That is all just value-added services that protect their reputation and
deepen their relationship with customers. That's all."

Surely, delighting your customers in the provision of your product/service is
what a successful business is all about...

------
hangonhn
"It would take immense amounts of venture capital money to build a direct
competitor across all those niches."

Wait. You don't need to. Niches actually make it easy to take apart.
Concentrate on one niche and do it better, faster, and cheaper than Bloomberg.

Having been in finance, there is a lot of unhappy Bloomberg users. The
organization itself, however, is pretty top-notch. They have some really
brilliant people working there and the customer service is quite good.

That said, I think in a classic innovator's dilemma scenario, one could build
a company that has very few features but does it well and don't actually need
to provide support. More importantly, do it for cheap.

Then again, "cheap" isn't usually what finance companies look for. The
inefficiencies of that industry is staggering. So long as they come out ahead,
it might not be worth it for them to save some money but have to live with
limitations.

So maybe the right approach is to target some segment of the finance industry
that cares only about a niche and has to really watch their bottom lines.

~~~
mattturck
Yes, agreed. But the difficulty here is that a lot of those niches are very
small, in terms of number of users. Assume for example you're building a
product focused on munis, which I don't think is a very well covered niche for
now. How many potential users are we talking about here? 20,000? A bit more
maybe? Yet you need to build a whole technology platform to serve them. Only
makes sense (from a venture perspective) if you use munis as a beachhead to
expand into another area, but as it turns out, the next area requires you to
pretty much start from scratch on a number of fronts, because it is going to
be so specific. So building a large business here requires you to address a
bunch of different niches and hire specific teams for each - lots of venture
money required, IMHO.

~~~
bane
But the returns can still be good.

Let's say you do just that, snag half the market and get 10k users each paying
you $500/mo for their niche.

That's still a $60m/yr business.

~~~
antr
As someone who has used Bloomberg's Terminal for 5 years: Bloomberg's sum of
the parts product is far more valuable than the parts sold one by one - add to
that the immediate top-knotch customer support 24/7/365 and breadth/depth of
the data they have, Bloomberg is a killer product. IMHO, I really doubt any
product decoupling will be of value to any of Bloomberg's current customers.

~~~
bdunbar
> to any of Bloomberg's current customers.

I'm not the only person to have thought about this - what about new guys who
can use 'a Bloomberg' but can't afford the price? Is there a way forward for
these guys to create new customers?

~~~
antr
Absolutely, there are many customers left out at +$20k a terminal per year.
The questions is, which of Bloomberg's services they want the most. I wished I
knew the answer.

------
kori40
Reuters has been trying to topple Bloomberg relentlessly for years. Although
they managed to reach feature parity with them on the content, data &
analytics and communications(BB Chat vs. Reuters Messaging) on most of the
asset classes they continued to loose even at FX where they are the strongest:
Bloomberg at its core is a communications company and Reuters didn't manage to
break into the most valuable part of their community i.e. buy side.

Buy side, asset management companies like hedge funds, pension funds, has be
the target audience for any startups so that sell side companies would flock
into the systems for creating transactions. The term flocking must be taken
literally as buy side doesn't have time to wait around to find their favorite
counterparts. The easiest(!) way to achieve this is to create JV's with
financial institutions which is exactly what Markit did \- founded in 2003 \-
reached $1B and 3000+ employees in 2013

BB can only be toppled by breaking into the buy side community and getting the
backing of some of the key players on the sell side. Would they care?
Absolutely, as they hate the fact that they have no negotiation power over
their data & terminal spend with BB. The cost of maintaining BB terminals is
definitely not a noise or a friction of their expenses as some commenters
suggested: At every market downturn trading desks are asked to slash terminal
costs by deciding between the terminals(BB vs. Reuters) or start sharing
terminals. With Reuters banks could negotiate contracts. However with BB they
can't negotiate at all as they absolutely own the community.

------
lallysingh
The arguments here sound similar to why Office is still huge.

\- While expensive, it's not expensive for the people that use it
professionally.

\- It's got more features than any single user needs, but each user's got
their own subset that they care about that it's a big moat to cross for
competitors.

\- Network effects. File-format interop with other Office users sells a lot of
copies.

\- It's "the standard." You don't need a reason to choose Office over its
competitors, but you need a reason to choose a competitor over Office.

------
rbcgerard
As a former Bloomberg user (ugh, its so annoying that my new boss does not see
the value in $25k/yr for my favorite IM client), I can say that the author has
it dead right that most underestimate the caché and value to the actual
network (so what if the new product is good, all my clients/brokers/etc are on
Bloomberg)

TR's Eikon product shows you how hard hard it is to compete, depending on the
package it can be 1/3 the price of a Bloomberg for a great product, but still
has trouble gaining traction...

------
sz4kerto
Some of my collegaues paid for Bloomber _only_ to access Bloomberg chat. This
is not $1/y, this is around $20000/y.

And of all the trading stuff I worked with, Bloomberg had the less downtime of
all. Even it's full (FULL) of legacy shit and crazy interfaces (things like
some realtime feed has a binary protocol and I had to write the state machine
for doing the handshakes, error checking and stuff). Still, it worked 100% of
the time.

------
codegeek
Toppling Bloomberg is kinda like Toppling Google. They are giants. If you go
head on, you will most likely fail because you will try to do a lot of things
in marginally better (if that) way. I can only think of one way: targeting a
very very small niche that BBG handles and do it _significantly better_ (not
necessarily cheaper). Keep in mind that the costs of $20,000/yr for a BBG
license might sound like a lot to us but for wall st, that is chump change. Ok
well lately, firms are getting cost aware but even then, it won't make a dent.

------
fsk
First, Bloomberg's code base represents decades of cumulative institutional
knowledge. That's both the downside (it looks 30 years old) and the upside
(it's been thoroughly tested and users know what to expect).

Second, for Bloomberg's target customers (big banks, big traders, big hedge
funds), the price is just noise in their budget. If you had a "cheaper"
Bloomberg clone, you might get more customers but less total revenue. The
people who have been trading for 10+ years and know Bloomberg terminal by
heart will still want a Bloomberg terminal.

~~~
mattturck
Yes on both. The second point is particularly interesting, and counter-
intuitive. There's something about the necessary learning curve to figure out
how to use a Bloomberg terminal that makes it sticky. People end up viewing
knowing how to navigate the terminal as part of their professional skillset.
Of course, that probably only works as long as there's no serious enough
alternative in sight.

------
hindsightbias
I once did a technical visit there and the IT Director/VP started trolling me
on kernel internals. It took me a bit to figure out he was vetting what
someone in L3 had told him.

Bloomberg has driven more kernel tunings on traditional unix flavors than any
org I'm aware of. Smartest people in the room.

------
peloton
Remember the Bloomberg terminal snooping controversy from last year? Reporters
at Bloomberg News had access to terminal meta data that allowed them to view
user contact information and monitor login activity.

When the activity was disclosed, Goldman and a few other banks were trying to
figure out ways to replicate some of the features (including chat). I'm not
sure where those projects stand today but my point is that their biggest
clients desired to sponsor the unbundling of some of the terminal's core
features.

------
kunle
As an ex-trader I always wonder what the right attack vector is, but I agree
generally. BB is not standing still by any means.

The flipside is, most of the money managed by firms is not handled over
Bloomberg nor is Bloomberg the final point of analysis before trades are made.
For example one group at my old firm (in fixed income) used a custom built set
of tools on top of excel connected directly to their own bare metal sitting on
the floors of all the exchanges where they traded contracts. They pulled in
their own prices at their own frequency (which was much faster/accurate than
available via Bloomberg). Same was true in our group - data came from the
exchanges (though with not as custom/frequent a setup), and bloomberg was used
as a quick and dirty way to look up historicals/trends, rather than anything
live.

More recently I've thought the best attack vector is messaging. There isn't a
Bloomberg messaging app on the appstore. Of all the use cases, this is the
most irreplaceable - you can probably pay up for all the data flows (banks all
pay exchanges directly for higher fidelity data flows than Bloomberg provides)
but aggregating that 500k odd userbase of finance professionals? INSANELY
HARD. If Bloomberg had an API though . . .

~~~
apaprocki
Bloomberg chat/msg is available on iOS, Android and BB devices and app stores.
You just don't get it unless you're a subscriber. The entire terminal is
available on iPads, even.

------
bane
I suspect the answer is...not by a direct head-on competitor. There's very
little desire for Bloomberg users to switch. It's not overly expensive
(relatively), so there's little price pressure, it works really well, there's
a broad network effect, information is accurate and timely and reliable.

So say you duplicated all that, maybe even with a slicker interface. Who
cares? Charge 1/2 the price. So what? Just because the guy down the street
sells Pepsi for $1 doesn't mean I feel any pressure to go walk all that way
when my $2 Coke is just fine.

I suspect that coming in from some other angle, doing something entirely
different, and slowly bringing on-line some of the Bloomberg terminal's
attributes and winning over users is the only way. But even that would be
tough. If I'm spending all day looking at my Bloomberg terminal, do I really
want to fuss around with some other machine and yet another monitor? How can
the space on a trader's desk be physically won?

At this point, it's like winning over corporate America's reliance on
Microsoft Office products. It's almost not worth the effort. Just build a
different app that does something else entirely that helps with productivity
that Office doesn't cover...rather than produce yet _another_ word processor,
spreadsheet, presentation suite.

------
bachback
the big underlying question: why does financial data cost so much? why does it
cost 20.000$/year to subscribe to the NYSE feed? because banks and exchange
build their own network and profited from standing in between. this will
change. new structures will replace large parts of banks and exchanges. it
starts with payments but it doesn't stop there.

~~~
twic
Exchanges are natural monopolies. As such, they really ought to be regulated
in such a way that they cannot be exploited to create unnatural monopolies.
But they aren't, and so someone has.

------
wtvanhest
The only way to topple bloomberg would be to provide a service that they can't
match and that most financial participants want desperately, then build out
the capabilities bloomberg already does later. What is that service? I have no
idea.

There is at most a very small chance you can beat them with the same product
at a lower price.

------
mathattack
Very interesting article. I think they capture the way to beat Bloomberg -
latch on to it. Add analysis on top of it. Bloomberg's support is solid, but
they don't do advanced analytics.

The challenge is Bloomberg is locked in to the hearts and minds of all 320,000
users. Most don't want to change their ways. If you want to sell a trader on a
technology, you have to dazzle them in a minute. And these are people who
haven't had to change their keystrokes in years. They like the DOS-like
interface.

And Bloomberg has billions to toss into R&D every year. Every competitor is
nervous about "Is this the year they come for our space, and take us out
because the marginal cost of the asset class is 0, since they're already
paying for the terminal."

------
EGreg
I worked at Bloomberg my first job out of grad school. At the time, I had a
great time programming desktop apps using the pure Win32 API (anyone remember
that?) and even selling some of them on download.com -- in short, I was pretty
close to that time's version of an app store dev and deeply cared about
consumer facing UX.

Bloomberg has new recruits go through 3 months of training, where they teach
you basic computer science and C and C++, all the concepts underpinning their
crazy codebase on the back end. Throughout this whole time, I kept remarking
how outdated the Bloomberg front end seemed to be, how reminscent of DOS. One
thing I kept mentioning the most is how I wish Bloomberg would take a page
from web browsers of the time and introduce Autosuggest as you type.

Anyway long story short, I got lucky. I got placed on exactly the team I
wanted - the one responsible for the main Bloomberg front end. Most people
were working on a backend function, and I got to work on user facing stuff
that all our users dealt with. And lo and behold, exactly the project I kept
talking about came down the pike, and I was placed on it.

As a junior programmer it was very rewarding - I wound up building about 3
different modes for reacting to various keyboard/mouse combinations. I kept
campaigning for the one that was closest to desktop browsers but they went
with another one. I remember them specifically asking me to take away any
newfangled transition fx, making it all match the rest of the DOS-like look.

I had a counterpart in another team, working on the backend and sending me the
actual data to display. This guy was with the company for a couple years
already and probably did way more awesome work than me. My biggest challenge
was wrestling with the legacy codebase on the front end. We kept going back
and forth under major time pressure - Bloomberg is quite agile - to iron out
all the kinks and edge cases. In the end the feature was slowly turned on for
internal employees and then our clients.

I gotta say, it felt awesome to have the opportunity to make such a big
difference at a company straight out of grad school. To this day I imagine I
saved Bloomberg millions of dollars in Help Desk calls (there's a dedicated
button on the terminal) where people would just call to ask what they should
type.

And yet, after all that, it's just a line on my resume and a story I can tell
in interviews. You don't know for sure if I didn't make it up. Don't get me
wrong, I am proud to have made a difference and I'm glad to have had such an
opportunity. But having my own businsss means I can build on my work year
after year, and show that I did it. The value I create can increase over time,
and I have the option of hiring others to help me bring it to fruition. Having
hundreds of thousands of people use the products that I designed for them, and
knowing I can continue innovating on top of this and build more of my dreams
year after year definitely makes me even more excited.

~~~
polymatter
That was a good story and quite interesting. But it didn't really give much
perspective to the question "Can the Bloomberg Terminal be 'Toppled'?". Do you
have any insight on that?

~~~
AznHisoka
Who cares? I upvoted his comment because it entertained me and gave me some
insights.

------
jsudhams
The cost is immeterial here, i think the way it should be done is
priority/exlcusive contracts for certain data and price the tool ridiculasly
like 1 million type and get few high worth brokers to use it. Add some thing
like AI stuff or only sold for ferrai/lamb/bugatti owners. Then it gets word
of mouth and trader will make the client/companies buy these.... make some
money out of these idiots (BTW, i have no experience in trades but i
personally beleive the trade messages time should be regualted across the
world so everyone gets the mesage at the delivery and based on your connection
you can pickup may be slightly faster)

------
madaxe_again
Literally, absolutely. I've seen them hurled through sheet-rock walls by
furious traders, and have fond memories of a chap whose monicker was "Elvis"
launching an entire monitor tree, bloomberg term and all through a 13th story
window.

Figuratively, probably not, it's basically considered a standard. It'll only
go away through attrition as a result of other trading tools providing the
same functionality and better, but as this is already the case and the
groundswell isn't happening - anyones guess. We probably have to wait for the
folks who cut their teeth in the 90's and before to retire, for the culture to
shift.

------
coreymgilmore
The problem with trying to 'top' Bloomberg isn't so much in making a better
(all encompassing) product; it is more in trying to convince the legions of
users and financial companies to make a change.

The world of finance is terrible slow at adopting new technology (I know a lot
still use XP, sadly). So first, you have to convince people to upgrade. Then
the next fun part: actually doing it. 1) fund the change. 2) get the gigantic
IT departments to implement the change. Not so easy.

Then, will users even want to use something else? The finance world still uses
Blackberry!

~~~
fleitz
As well whatever solution you come up with must pass muster with the
compliance officer.

------
rjsjr
Another tricky part to competing with high priced financial services like this
is that often the decision maker doesn't bear the actual cost. In a large bank
spending another 20K for core services isn't going to affect a trader's or
salesperson's bonus and on the buy side (hedge funds or institutions) these
are often taken care of by the prime broker.

When it's someone else's money, you're likely to pick the highest quality and
not really care if 80% of the functionality/quality is available for 25% of
the cost.

------
joncooper
Nope.

(edit):

\- Massive network effects

\- User base has the (excellent) UX hard-wired in muscle memory [1]

\- Cost is immaterial to the audience

\- Absolutely superb, market-standard analytics [2]

[1] One older gent I know asked me why his Outlook wouldn't send mail. He
said, "I keep hitting <1><Go> and it doesn't send!"

[2] Many folks don't realize that Bloomberg is way more than just IM and
market data. In fact it has a comprehensive set of extraordinarily usable and
precise analytic tools that are simply unmatched by anyone else's offerings,
including the internal tools of nearly every bank and most hedge funds.

------
anonu
This is a topic that is of deep interest to me, as someone who works in the
finance and tech space. I think the key is not to think about how to replicate
the BBG Terminal experience - but how to chip away at things that it does
well. The IM part is key and theres a consortium of big banks and others who
are trying to replace that with their own IM network. Im open to discussing
ideas with people in this forum - let me know if there is any interest.

------
0xa
Hi, I'm an engineer at Kensho (mentioned in the linked post). As the author
mentioned, we're targeting the analytical insights space to start. We're ~25
people[0] who aim to revolutionize access to complex, meaningful financial
analysis in a way that is intuitive, fast and meaningful. We also read HN, and
I'm happy to answer questions.

Matt

[0] [http://www.kensho.com/#team](http://www.kensho.com/#team)

------
sumedh
Most startups in the financial sector focus on trading and institutional
investors nobody thinks of the little guy, the individual investor.

We are trying to build a poor man's Bloomberg for individual investors and
simplify the world of financial analytics.

[http://craytheon.info/](http://craytheon.info/) (Its in Beta)

~~~
izyda
I think the reason the largest startups focus on institutional investors is
because these are by far the largest users of financial data and are willing
to pay for it (just look at Bloomberg's subscription fees). With just a few
customers, you could have a million dollar business. How much would an
individual pay for access to similar data? Given they could just give their
funds to a professional to manage, probably less than that professional costs
them.

That said, your startup looks cool and could be very useful if you're able to
extract data all historical financial data from annual and quarterly filings
(something that is very difficult right now) but it's worth noting that there
any many startups in the space of making investing easier for retail investors
(many of whom frankly aren't passionate about or interested in anything to do
with investing beyond growing their personal funds) probably the most notable
ones are maybe Wealthfront
[https://www.wealthfront.com/](https://www.wealthfront.com/), Robinhood
[https://www.robinhood.com/](https://www.robinhood.com/), and most related to
your startup, Quandl.

~~~
sumedh
Thanks for the feedback

There are plenty of retail investors who want to do their own fundamental
analysis which is our target market for now. If it works out well then
probably we would think of scaling up.

> (something that is very difficult right now)

I agree, our parsers sometimes have a tough time extracting the data so we
have to modify the parsers accordingly. Our data acquisition expenses are
ridiculously low since we don't have to buy it from third parties.

We already have the service up and running for Indian retail investors with
paying customers (craytheon.com). Some of those customers asked us if we can
start a similar service for US markets.

~~~
izyda
It's an interesting concept, thanks for the response.

Speaking of parsing, I was made aware of
[http://www.tagnifi.com/](http://www.tagnifi.com/) I think elsewhere in this
thread (I have no affiliation with them whatsoever). They appear to parse XBRL
- probably in much a similar way as you do (although, I think they offer just
raw data rather than the screening tools you do, so slightly different
purpose/target). Just thought I'd share in case you found in
interesting/useful.

~~~
sumedh
I did not know about tagnifi. You are right they just offer the raw data while
we go one step further by creating the financial charts from the raw data but
I would be keeping an eye on them from now on.

As you pointed in your comment that they don't appear to parse pre xbrl data
while we do.

In your earlier comment you said most startups in fin-tech space are not
passionate/interested about actual investing, I completely agree. I have seen
many startups claim that their users by using their service will get above
average returns.

So if their service provides above average returns why are they even selling
the service, just trade/invest your own money and you will be rich in no time.

The reason we started Craytheon because we wanted a service which would help
us make better investment decisions in the stock market. Which is why the
first US company we added to our database was Enron.

Check out this link, I think you will like it

[http://craytheon.info/articles/enron_fundamental_analysis_ac...](http://craytheon.info/articles/enron_fundamental_analysis_accounting_gimmicks.php)

------
tomelders
The problems with getting software onto traders computers are simpler than
this article leads you to believe.

Insurance. Getting insurance to install a .exe as part of a banks trading
process is insanely difficult. The banks aren't interested in going down that
route.

------
antonius
If a start-up can figure out a way to provide the mass financial information
that Bloomberg provides and charge even 1/10th of what Bloomberg charges
($20,000 per year), it would disrupt the monopoly that is Bloomberg.

~~~
mbreese
I'm not so sure... given the (apparent) network effects, and the fact that (I
assume) Bloomberg users aren't going to be too price sensitive, you're
unlikely to make a big dent their user-base anytime soon.

What you _are_ likely to do though is bring in new users who were price
sensitive or who couldn't justify $20,000 for their particular use-case. For
those who wouldn't spend $20,000, $2000 is a lot easier to swallow.

So instead of taking Bloomberg's market, you'd be more likely to create a
second tier of service.

~~~
greenyoda
For a bond trader who does billions of dollars in trade per year, $20K/year
doesn't even show up in the roundoff errors. Maybe a $2K/year service could
find its way into the world of people who do day trading from their homes. On
the other hand, those people are probably already using a lot of the
information that's available free on the internet or from their brokerages, so
it could be an uphill battle convincing them to shell out $2K for proprietary
financial data.

------
ugwigr
key takeaway for me is so many fin-tech startups are asking the question by
trying, the only real way to find out. personally agree that this is not a
fight you tackle head on - need an angle.

------
vijayr
Honest question - why do financial data feeds (stock data) cost so much?
Ideally, this is public information, so they should be available for free (or
a nominal cost), no?

~~~
gaius
They are. You pay for the guarantee of getting them in real time. Or you can
get them on Yahoo, lol.

------
palmdeezy
As a former Goldman Sachs Invesment Banking analyst, we used SNL for bank and
insurance data and Bloomberg. CapIQ is pretty unreliable and so we never used
it.

------
radley
Perhaps not. The big plays have been fixing weak and outdated, yet vital,
industries.

------
vonnik
one i-bank manager called bloomberg a $2000/month instant messaging service.
most of its users probably don't know how to do much besides email. but it's a
status symbol to have a bloomberg email address.

------
blue11
Many points have already been covered, but there's one really important one:
the data.

It's not just about implementing a niftier interface to look at financial
information. You must have the information itself first. Bloomberg has been
aggregating so many different sources (hundreds, if not thousands) and they
have been doing it for many years now. There aren't that many companies out
there that are good at this. Only Reuters comes close to Bloomberg, as far as
I know, and they aren't really that close. For individual data sources there
are alternatives, but nobody else has such a comprehensive offering. There are
all kinds of issues related to each data source that you would have to tackle
one by one. Of course, anyone can subscribe to the different data sources, the
costs are not going to be prohibitive for a well-funded startup. But regular
licences would not allow you to display the data to your customers for free.
You'd have to strike deals to be able to resell subscriptions to your
customers and make the process easy for them. All of the data providers will
want to get paid, data is not free. Once you start processing the data, you
have to start archiving it because history is important. Bloomberg has been
collecting data for decades. In some cases, they have data that the data
providers themselves don't have because they were not so good at archiving in
the past and many of them are still focused on providing real-time data only.
So, if you wanted to buy historical data, it's going to be hard to get it.
Often your only choice is to buy it from Reuters or Bloomberg and they are not
going to give you licences for reselling the data. Note that even if you
archived a lot of data from real time feeds over time, you still might have
problems with the original data providers not letting you use the data for
commercial purposes. And last but not least, even you got your hands on all
the data that your customers would expect you to have, you still need to
process it. Every data source has it's idiosyncracies that you'd have to
master (not to mention that data formats have been changing over the years and
documentation is often non-existing). This is very tedious and time consuming
work, not the kind of stuff that excites most young startup founders.
Bloomberg has been very good at processing, normalizing, and storing financial
data from a multitude of heterogeneous data sources and they have decades of
know-how.

Off the top of my head I can imagine only a couple of possible lines of attack
that might have a chance: \- Start with a niche solution, then expand slowly
year after year, market after market, data source by data source. Your product
will have to be relatively cheap though, so that customers would be willing to
buy it in addition to Bloomberg. \- Buy the data from Bloomberg. Develop your
own UI. Get acquired by Bloomberg.

~~~
apaprocki
One of the problems is that most things are pretty "connect-the-dots". Getting
acquired by Bloomberg has historically not been a valid exit, as we will
simply build the functionality people want and fully integrate it into the
product in a fraction of the time it would take to fully integrate a company
(if it is even possible).

------
notastartup
Is there an API where one can consume latest ticker price info and news
updates?

~~~
mm0
yes, you have to pay the $20,000 bloomberg subscription.

~~~
fsk
Trying to buy each feed indvidually will set you back MORE than $20k. For
example, you want stock feeds? Do you want the NASDAQ feed or the NYSE feed?
What about the CDNs? And if you want the RAW feed you're also going to hire
someone to parse it for you.

~~~
valdiorn
And then hire five more people to fix data errors.

Most people don't realize that clean and correct data is really, really,
really expensive to make.

