Part III — The beautiful synergy between data, collaboration, and communication
This is the third article of our series “How more collaboration could drive better investment decisions”.
← Part 1 — Data enables decision-making … if you have the right tools
← Part 2 — Investors’ data problem: from scarcity to overload
The great challenge for investors today is to make sense of the overload of information that they are exposed to on a daily basis. So, what if instead of investing in more upstream — data collection — and midstream — data analysis — capabilities, investment firms focused on the downstream section of the investment data funnel?
What if deeper collaboration and more communication were the solutions to making smarter investment decisions?
The case for better communication and collaboration
We believe that developing collaboration and communication is the only way to deal effectively with recent developments which impact investors, such as
- data overload (see previous article)
- the rise of remote work in a post-covid 19 world;
- the importance to monitor extra-financial risks such as regulatory changes or environmental impact
Many pieces of evidence point in that direction. Over the last decade, financial analysts downsized the average number of companies under their coverage by roughly 25%, according to StarMine numbers. Over the same period, analysts’ job postings dropped only by around 18%. These numbers underscore how investors prefer to focus their limited resources on deeper analyses and due diligences…which calls for deeper collaboration.
Ray Dalio, founder of American hedge fund Bridgewater Associates, has long claimed that the main competitive edge of Bridgewater comes from its principles — idea meritocracy as well as radical transparency and truthfulness — which they have translated into internal processes that precisely foster communication and collaboration (if you are interested in that topic, we highly recommend that you watch the video below).
Our personal experience also supports this view. When working with partner asset management firms, we found that investing in downstream processes — collaboration and communication — yielded the most benefits. We created simple interfaces on which we transferred data that were held captive in old excels, mails, and chats. These interfaces made it easier to access, update, and share data and analyses within the company, but also with external experts. Thanks to this, we had more and better ideas, improved relationships with external stakeholders, and greater happiness at work.
In search of a workspace for the investment teams of the future
We looked extensively for a software that would support better investment decision-making. Although we couldn’t find one, we met along the way fascinating members of the investment community who helped us identify the key features that investors would like to see in their workspace. Among the most prominent ones were:
- Comfort: A modular, all-in-one workspace to read, write, analyze, and share financial and extra-financial investment data.
- Context: A place to link facts with figures and contextualize or back-up data with sources of information.
- Collaboration: A place to pool due diligence efforts with relevant stakeholders to trigger faster and better decisions.
Challenging the status quo with Thread
The tool we describe does not yet exist. However, we are working hard to make Thread, our tailor-made solution, a reality. Once it is up and running, we are convinced that it will enable investors to find, organize and contextualize both structured and unstructured data in a truly collaborative way, and therefore lead to systematically better investment decisions.
Part 4 — Next-generation productivity tools: reimagining investors work in a digital world →
