In this episode of the Fintech Focus podcast, we look at Software as a Service (Saas) from the lens of institutional investors.
Imagineer (not the Disney-owned tech workshop for engineers) is a relationship management software company, with products designed to help fund managers and institutional investors operate more efficiently, helping them effectively manage their clients and market themselves. Their clients usually fall in the $3-5 billion AUM category.
We speak with the company’s CEO, Jeremie Bacon, a lifelong entrepreneur with 20 years of experience in financial services technology and how institutional investors use technology like his.
Speaker 1: 00:03 Welcome to Benzinga’s Fintech Focus podcast. Your weekly dive into the world of fintech, featuring conversations with leaders on the front lines of the financial revolution.
Spencer Israel: 00:16 Hey everyone. Welcome to Episode 35 of Benzinga’s Fintech Focus podcast. I’m Spencer Israel. We are back from our summer vacation finally, and we’ve got a good one today. Jeremie Bacon is our guest. He is the CEO of Imagineer, a software company for fund managers and institutional investors, and he has been since 2018. Jeremie is in a pretty unique spot right now because even though he’s relatively new to the company, he actually competed against them for a decade with his first startup, Backstop.
Spencer Israel: 00:45 But Jeremie’s career as an entrepreneur actually started long before that back at the ripe old age of eight when he cornered the local paper route market in his town. Because Jeremie interfaces with so many institutional investors, he’s got a pretty good point of view of the asset management industry right now, and how technology is changing it. Without further ado, here is my chat with Jeremie Bacon from Imagineer. Jeremie Bacon, welcome to the Fintech Focus podcast.
Jeremie Bacon: 01:16 Thanks for having me. It’s nice to be here.
Spencer Israel: 01:18 I always start these off by asking about the person’s background, and how they got into where they are now, and how they got into this industry. Because a lot of people I find, some of them really are interested in finance from a young age, and a lot of them aren’t, and they fall into it. Where on that scale do you fall?
Jeremie Bacon: 01:36 I fell into the world of financial services, and trading, and finance, in college. I grew up as an entrepreneur to be honest. I was starting little businesses and stuff from the time I was a little kid, and all through college I was doing the same thing. It was when I was finalizing my undergraduate work, and preparing to go off to do a research degree overseas, that I picked up a book on the markets and became quite frankly just totally infatuated with them for a couple years. In fact, it was a pretty famous book. The Market Wizards was the first, it was the seminal volume that hooked me.
Jeremie Bacon: 02:09 I spent a few years, nights and weekends, reading up on trading strategies, and the markets in general, and market history, and how you do research, and read every book that’s ever been recommended to be read by someone who wants to understand finance and trading. That ultimately helped me to find my way into an internship role with a Japanese bank in the late 1990s where I was able to learn how to do foreign exchange trading, and structure products, and mutual fund creation, and all kinds of other fun stuff, in Japan of all places, before coming back to the U.S., and going to work for Goldman Sachs. So it was an interesting path that took me down the lane, if you will, of financial services, and ultimately fintech as well.
Spencer Israel: 02:46 What was the best business that you started as a kid?
Jeremie Bacon: 02:48 The one that was most fun was the business I started when I was like nine. When I was eight, and there’s a bit of a backstory here, so you can cut it if you want, but when I was eight I became infatuated with the idea of getting a pet bird, like a parrot. I really, really, really desperately wanted one. My parents, justifiably, they wouldn’t buy it for me. They said, “Look. If you want to get a bird, or anything for that matter, you got to go buy it yourself.” I think most parents would think, “Oh. The kid’s eight. He’ll give up on it right away.” I was like, “All right. Fine. I’m going to go get a job,” and so I did. This was back in the days when you could still go get a paper route, and no one really cared what your age was. So I got a paper route, and started doing that, but quickly discovered that there were a bunch of paper routes next to mine, and also that were managed by kids not too much older than me.
Jeremie Bacon: 03:33 So I went to all these kids and I said, “Hey look. I’ve got extra time on my hands. I will gladly do your paper routes, anywhere from half to all of them, if you’ll give me anywhere from 60 to 100% of your monthly revenues. I’ll even collect the money, and all the tips and stuff, and I’ll pay you for your route.” Surprisingly, a bunch of kids said “Sure,” so that was my first little venture. Wrapping up a bunch of different paper routes in my town. Spent many, many hours every single day for years doing that. But I was making, for an 8, 9, 10, 11-year-old kid, I was making hundreds of dollars a month, which was a lot of dough for me at the time, and I learned a lot about entrepreneurship through that experience.
Spencer Israel: 04:08 So you were monopolizing the paper route market in your area is what you’re saying.
Jeremie Bacon: 04:12 Basically yeah. Yeah exactly. So I was trading early I guess is what I would say. I was trading a bit of my extra free time, mornings, and weekends for a little extra cash. It worked out, and I got my bird. He was awesome, and I got a bunch of other crap too.
Spencer Israel: 04:24 You graduated college in 1999. Do you think growing up at that stage of the market, obviously a very exciting time, did that color anything for you? Did that make a difference?
Jeremie Bacon: 04:36 Walking into the market as it was about to collapse you mean?
Spencer Israel: 04:40 Yeah. Yeah. The fact that you came of age during the dotcom bubble more or less.
Jeremie Bacon: 04:43 The short answer is “yes” on a couple different levels. On one level in particular, especially as it relates to fintech, I grew up writing software. One of the other things I bought when I was a little kid, after I started my paper route business, was a computer. I started programming in BASIC, and ultimately Pascal, and C, and C++, and C#, and everything else from the time I was like 10. All through grad school I was still programming. In fact, one of the last part-time jobs I had when I was doing my grad program was, I was doing Visual C++, and we were building a healthcare application for 3D modeling of x-ray images and stuff. I was a coder, in as much as you could be a coder without formal training and formal education, all through my high school and undergraduate years.
Jeremie Bacon: 05:24 Going into the 1990s, and seeing the internet become a thing, and I spent most of the ’90s actually overseas in Japan on the back of the bursting of its asset bubble, which was largely related to the overinflation of the real estate market there, but also obviously a massive equities bubble as well that burst, and as you probably know, has never recovered. That nearly three lost decades of economic prosperity in that country ever since that massive bursting. So for me it was really fascinating to see the 1990s playing out because on one hand we had this amazing rise of technology, and tech companies, and tech services, that were starting to take advantage of this thing called “the internet” on the one hand. Then we had this crazy financial marketplace that was also growing, and changing, and morphing, in a million different ways.
Jeremie Bacon: 06:10 It was exciting. When I first went to work at Goldman, I was in the institutional equities business there, and this was back when electronic trading was just becoming a thing, and synthetic derivatives were just starting to be thought about. These esoteric instruments that we saw grow and play a massive role in markets over the last 10 years, were thoughts in research papers and spreadsheets of quants, of early-era quants at this time. So it was a fascinating time to get involved at a place like Goldman, and be able to see the evolution of the hedge fund market, and the evolution of electronic trading, and then ultimately the evolution of a lot of the synthetic and structured products that are so commonplace today. It was awesome.
Spencer Israel: 06:50 Then in 2003 you leave Goldman, you co-found Backstop, which is the precursor to I guess what you do now, a SaaS company for financial services. What did you see in the early 2000s that made you think, “Oh. Financial services really could use better software.”
Jeremie Bacon: 07:07 A couple of trends were apparent at the time. One was that you had this world of hedge funds and hedge fund investors, so private capital and private markets that was really coming into its own. The number of hedge fund managers was exploding, and the services and service providers that were dealing with those folks was also exploding. And as is usually the case in financial services and markets technology, the majority of the dollars that were being invested, and the majority of the dollars being spent, were going toward what I would call front-office applications due to maybe middle-office applications around trading, and order, and execution management, and that kind of stuff.
Jeremie Bacon: 07:39 But when you went in and sat down with institutional investors, like a pension fund, or an endowment, or a family office, on one hand, or their customers, the hedge funds and private equity funds on the other, it was apparent that there just weren’t any really good, and particularly like no, there was zero web-based software products that had been put in place for these folks to manage their relationships with their clients and/ or their managers. So you had a hedge fund that needed a way to manage their marketing initiatives, and their investor relations, and investor services initiatives, and their reporting, via the web and otherwise to their clients, and there just weren’t a lot of tools out there for that.
Jeremie Bacon: 08:12 On the flip side, there were all these institutional investors with tens of billions of dollars that they were allocating to funds. Only managers, traditional managers, hedge funds, and private equity funds, and the like, didn’t have any really good systems for keeping track of all the research, and due diligence, and analytics that they were producing as a result of the job they were doing to decide which managers to invest in. So it was a no-brainer that, “Hey. There’s an opportunity here to build some software.”
Jeremie Bacon: 08:36 The few tools that did exist, they were built in the 1990s and before, so they were all desktop software-based applications built around DOS or like Windows 95 frameworks, and they were already really old and dated. The internet was just becoming a real thing, and ASP, and Software as a Service was … Well heck, Software as a Service wasn’t even a thing yet. It was still ASP, and on-demand software solutions and things. So it was a great time to jump in, and start building a software platform based on pure SaaS technology for the investor relations, fund marketing, and ultimately for the operational due diligence, and research management marketplace.
Spencer Israel: 09:13 These hedge funds, did they know that they didn’t have good technology or did you have to tell them, and show them?
Jeremie Bacon: 09:19 Good thing is that most of them recognized even then that they needed tools, and most of them had something in place. Right? If you’re a traditional manager or a hedge fund manager, you’re always raising money. Every day you’re raising money. In the early 2000s there weren’t a lot of full-fledged marketing and investor services teams. Back then, the hedge fund market was sort of nascent and just beginning to come into its own, and so most marketing initiatives were handled by the principals themselves. Because hedge funds in the early 2000s, it was like a couple of guys, and maybe a couple of girls, in a closet running a strategy. They raised the assets, and serviced the assets all themselves. But maybe with some spreadsheets, and maybe they were using a software tool like Act!, right, or their contact book in Outlook as a way to manage their relationships.
Jeremie Bacon: 10:03 But they recognized that they needed something more sophisticated, and quite frankly, something specifically built for the asset management industry. Because there are pretty serious rules, and restrictions, and regulations, around what a fund manager can do, and how a fund manager can market his or her products to which types of investors and those things. So they recognized there was a need for something. Then the question like always is, your client, your prospect, even if they recognize the need for a tool, they may or may not be willing to pay for it. Specifically in the early 2000s, very few were willing to pay for something that was hosted on the internet.
Jeremie Bacon: 10:34 In fact, we knew that we were going to be successful with that first company I co-founded, Backstop, because for the first nine months to a year, every single meeting we had, whether it was with a prime broker or with a fund manager, we were laughed out of the room. I was like, “Hey. We’re building this cool software as a service tool to let you manage all your client relationships online.” “They were like, “You’re nuts. I’ll never put my client data on the internet.” That to me was music to my ears because being a believer in the web, and
Jeremie Bacon: 11:00 … Believe on the internet, that’s exactly what I needed to hear to feel that much more confident that we were going to do it right. That we were going to win that game because the tsunami that was, and still is, the internet, it was coming fast and it wasn’t going to go away. So people understood it.
Spencer Israel: 11:15 That was my next question, was the first few years of Backstop, ’03, ’04, ’05, kind of that weird dead period between Web 1.0 and Web 2.0. So, these people weren’t super enthusiastic and yet that made you think that you were right anyway?
Jeremie Bacon: 11:31 Absolutely. One of the things that I think is super essential to keep in mind as an entrepreneur in general, whether you’re in the fintech space or not, is whenever you’re going out to build a new product, if you’re not building something that’s not popular today, you’re probably beating down the wrong door. In other words, if you’re not building for something that there will be a market for in three to five to seven years you shouldn’t bother trying to build a software company. Or any company for that matter because you’re just going to be following a trend and trends change every five to seven years anyway. We took that as, it was a super positive sign.
Jeremie Bacon: 12:03 In fact, at the time the biggest player in the marketplace was a desktop software application, client server based application. I remember the CEO, the first time I met him, we were sitting in Grand Central Station in New York city and he was like, “Oh, we’re going to kill you guys.” And I was like, “Why do you think you’re going to beat us so much?” And he’s like, “Well, because you guys are in the web and no one’s going to buy the web.” And he’s like, “Maybe we’ll buy you guys as a mercy killing in a year or two.” And I was like, “Well that’s cool, mate. You know, there’s plenty of room for us all to be here and have some fun and to find some clients.”
Jeremie Bacon: 12:31 Within two years that business was on the ropes and basically we’d put them out of business because the trend shift didn’t, the trend caught up. By the time I left the day-to-day of Backstop in May of 2013, no one was buying. Hardly anyone was buying client server based software. In fact the only firms that were were firms that were required to do so by internal mandate because they are these giant global mega corps.
Jeremie Bacon: 12:53 It’s actually something that proved, and still does prove, to be a very strategic advantage for a company like Imagineer, is all those years that we competed against each other, when I was running that first company, that was Imagineer’s biggest strength was that it was client server. And they actually eschewed the web for a long time because most of their clients were these big giant, I mean the biggest of the big funds and giant financial services companies that because of their internal regulations and mandates were not allowed to embrace the internet. Specifically as it related to third party applications.
Jeremie Bacon: 13:24 What was a strength for the masses, and what sort of gave us opportunity to grow a big business and on the Backstop side was on the flip side, a bit of a weakness for Imagineer. But along the way Imagineer also made that transition and moved its way into The Cloud as well. And at this point, Imagineer is the only company in our market for the services that we offer that has the capacity to offer both options. You can be 100% web only, or if you are a giant global mega corp who has to have and manage your own private cloud or private infrastructure, you can deploy our platform because it can be hosted inside your private cloud versus ours. At this point it’s a super powerful strategic advantage for a business like ours here at Imagineer.
Spencer Israel: 14:05 In 2013 you leave Backstop and you start a company, Cardston App. I read, and I’m not sure if this is true but I want to ask you, I read that you wanted to buy Imagineer before you essentially came to be the CEO of Imagineer. Is that true?
Jeremie Bacon: 14:19 The short version of the of that story is that we’ve known Imagineer for a long time. I’d say we… I and the rest of the team that were part of the Sinapp organization have known Imagineer forever because we used to be frenemies. We would compete every single day for deals and for business. And Imagineer’s founder, who’s still with us today, who is one of my favorite people on the planet, is a guy named Errol Ducey, who’s just fantastic. We truly were friends and then frenemies for years after we got to know each other well as competitors. And after I left Backstop, there was a two year period where I was doing something else. So I went and was part of a private equity backed turnaround play for a trading execution and markets connectivity platform company, which was a super great experience, before starting Sinapp. So even after we started Sinapp, we’d stayed in touch and I’d been friends with Errol. Imagineer was always a business that I admired and respected and had a team of people that I admired and respected in the Backsnap days. It would have been wonderful if we could have found a way to work together in 2010 or 2011 or 12 or whatever, in those days. So it was even more wonderful that in late 2017 we were able to get back together and then ultimately put Sinapp and Imagineer together at the beginning of 2018.
Spencer Israel: 15:25 Explain what exactly Imagineer does.
Jeremie Bacon: 15:28 Imagineer is a relationship management software company. That’s the simplest definition for what we do. We have three core products that we market to fund managers and institutional investors. We defined fund managers as traditional asset management firms, long only mutual fund managers through to large scale wealth managers and hedge funds and private equity funds. And then on the other side of our business, we sell software to institutional allocators. So that’s large family offices or multifamily offices or outsource chief investment offices through to endowments and foundations and pension funds and the like. The way we look at the world is if you’re allocating capital to traditional and/or hedge fund managers, we have software for you to help you manage those relationships and your investment research and diligence and intelligence on those. On the flip side, if you’re a fund manager that is managing assets on behalf of institutional investors and ultra high net worth investors, we have a software platform that allows you to keep track of those relationships and handle your marketing efforts, your sales opportunities, tracking as well as all your investor relations, investor services and investor level account transactions. Maintenance.
Spencer Israel: 16:39 Isn’t selling something to asset allocators kind of a pain in the ass, though? Trying to sell something to a hedge fund or a pension fund. God knows what pension fund takes, it takes six months to make a decision. They’ve got to go through the four committees. So isn’t that kind of a pain in the ass?
Jeremie Bacon: 16:58 It can be, yeah, it can be, but it can also be a pain in the ass to sell lemonade on the street corner. Selling anything is hard regardless of the market and regardless of the end client or the target client. That’s part of what it takes to build a successful company is figuring out how to sell it in the first place and how to position value to your end client. But to your point about taking forever, yeah it does. It takes a long time. Sales cycles, particularly on the investor side are very long. Six months is not at all uncommon and it’s not uncommon to see sales cycles take 12, 18 or 24 months on that side of the business.
Jeremie Bacon: 17:27 On the manager side, it can be a lot faster. We have situations where after two phone calls, the fund manager signs up and is using the platform within the same week of getting to know us. But of course even on that side there’s always situations where it takes a year or more to get a deal done. Case in point when I came on as part of the transaction at the beginning of 2018 we were working with a prospective client in, it’s actually their headquarter in the UK, and they’re still a prospective client today, but we have a very active and ongoing dialogue with them. So these things can take a long time. It can take a long time.
Spencer Israel: 18:03 What do you find is the biggest reason that somebody would get Imagineer software?
Jeremie Bacon: 18:05 It varies a little bit based on which product they are picking up. We have three core platforms. There is client tier, which is the CRM for managers. There is Sinapp, which is the CRM in relationship management and ODD if you will, operational due diligence management platform for allocators and institutions. And there’s a platform called web vision, which we sell to both, which is for online communication and reporting portals and reporting dashboards and things to clients, regardless of the type of manager that we’re allocated or selling to.
Jeremie Bacon: 18:32 There are a few common differentiators across all three. What we’re told by almost every client that signs up with us or that migrates away from one of the solutions that’s in the marketplace that they competed with, always comes down to sort of, and it might sound a bit cliche, so I apologize to all the listeners if it does, but it’s a big deal and it’s a true thing with us is this sort of notion of Imagineer’s products being exceptionally easy to use and very flexible but flexible in a way that doesn’t mean you can have a bunch of engineers go in and do a bunch of work to it to customize it and make it exactly like what you want.
Jeremie Bacon: 19:06 In our case, our platforms are flexible and sort of user-driven changes are super crazy simple. One of the challenges that institutional investors have is that because they’re doing research on different types of managers across different asset classes, the questions they ask, the diligence points they’re tracking, the templates and forms they’re using within their research management system to keep track of their notes and meetings based on the type of asset class that they’re dealing with vary.
Jeremie Bacon: 19:33 Most systems aren’t easily configured to sort of make it simple to keep track of just the data points you want to keep track of for real estate funds versus hedge funds versus venture funds versus some weird lumber fund. But with Sinapp it’s super, super simple to configure all that stuff in a matter of minutes so that when your users are doing diligence or taking notes on a manager of asset class A, they only get forms and views and fields that are associated with that asset class based on the underlying manager. It kind of sounds maybe simpleton in nature but that’s how super powerful because it saves a ton of time. It makes it really easy for people to just get in there and use the platform.
Jeremie Bacon: 20:08 The other thing that’s really different about the way that we work as a business and why people choose us all the time is because we speak the language of our clients in ways that most other firms just can’t. That’s partly because we have an incredibly long tenured team here. Imagineer as a businesses 21 years old at this point and we have employees at Imagineer that have been here for 21 years. Our average employee has been here for about eight years, which is a very, very long time, particularly in a technology company, particularly in this marketplace. Most of our competitors, their average employee life span is about 27 months if not less in some of the bigger cases.
Jeremie Bacon: 20:43 There’s a lot of intellectual property and a lot of sort of institutional knowledge that walks around the halls and Imagineer every single day. And it comes out in conversations with our clients and prospects and it makes a huge difference that our clients can call up and talk to us about anything, whether it’s some esoteric asset class or some weird regulation associated with some sub bullet point in a regulation associated with marketing in a private fund and we understand what they’re talking about. Then we can speak to it in the ways that other people can’t and we built a solution inside of our software that meets that rule or that helps them to do what they need to do. It’s pretty powerful.
Spencer Israel: 21:16 Do your clients come in all shapes and sizes or is there a specific AUM number that you guys tend to fall in range of?
Jeremie Bacon: 21:23 We have clients of all shapes and sizes for sure. In fact, just today we signed up a new fund manager who has got zero dollars under management. It’s a team of three people today that’s got aspirations to grow to a 300 person fund manager and we’ll see if they can make it but our platforms and our pricing structures and things scale based on the type of organization and the functionality they need. So on the one hand we can deal with very, very small managers. On the other, and another… In fact the call I was having before we started our conversation today was with a multifamily office with tens of billions of dollars under management and they’ve got 47 people in their research team alone and like a 150
Jeremie Bacon: 22:00 50 people across the whole family office. So it’s very big organization. One of our biggest clients have a 100 and some odd users of the platform on one side, down to people that have a single user on the other. So we scale very nicely across the board. And I would say depending on the type of business, our hedge fund clients tend to be on average, they’re larger, they’re older, they’re more mature, they’re more complicated and have much heavier investor relations, investor services and marketing needs than a startup does. But again, we have implementations and versions of our product for the startup market as well, but they give a manager everything he or she needs right out of the box to go build their business and scale up to the level of the big boys.
Spencer Israel: 22:38 It seems like every quarter I’m reading another headline about X amount of outflows last quarter from active hedge funds to whatever. And that’s obviously not a new thing. It’s been happening for several years now and to be expected in a bull market. But how has that impacted your business?
Jeremie Bacon: 22:55 That’s the right question to ask, and it’s certainly one that I ask myself every day. In fact, if you were to ask me as a follow on question to that, what keeps you up at night? That’s the one thing that does bother me or worry me from time to time, is what happens over the course of the next three, five and seven years in this market as what we see is less about asset outflows from the market, more about asset consolidation and market consolidation across asset classes. So it’s no surprise and no shock at all that over the last 20 years there’s a noticeable and well documented trend toward, as with most industries, the biggest of the big keep getting bigger and bigger and the smallest keep fizzling out. And asset management, hedge funds and private equity is no different. Back in the early 2000s, it was easy because we’d been coming off a massive bull market, right? It was quite frankly, easy for anyone with a bit of a pedigree to go raise a fund.
Jeremie Bacon: 23:49 And it wasn’t uncommon for folks to to build a fund with a $120 million and grow that thing up. At the time too, you didn’t need a lot of money to be able to run a very successful fund. The cost of regulation wasn’t as high. The cost of running, build and maintain a fund wasn’t nearly what it is today. So on the flip side today, we have a tighter market. There’s a lot more competition. There’s a lot more me-too products out there. So it’s much harder for managers to differentiate themselves and much harder for them to convey their value proposition. And as a result, it’s much harder for them to raise and retain assets.
Jeremie Bacon: 24:18 And what you see oftentimes, and this is again, this is true of any marketplace in any industry. It’s not always the best managers or the best products that win. Oftentimes it’s the group that knows how to tell their story the best, that’s best at conveying the value proposition and best at messaging and marketing that wins. And it’s one of the reasons why the biggest of the big fund managers look and feel the way they do, is they’re marketing machines. They’re really good at that now. And their products, if you look at their returns relative to their smaller peers, they’re usually not as good as the small guys and gals are, the smaller funds are. But they’re are known brand, they have a known name, they’ve got a certain cachet in the marketplace and so assets are going to flow to them by default as a result. That trend is certainly going to continue if you believe what you read in the financial press, right?
Jeremie Bacon: 25:01 The biggest of the big are going to keep getting bigger, and it will be harder and harder for there to be a large number of what I would call mid-tier alternative asset managers out there. I think what you’ll continue to see is the really good managers that are focused on being the best at what they do will continue to exist and survive. They might not be multi-billion dollar managers, but they’ll manage two, five, $700 million and have a wonderful lifestyle and build a fantastically successful business. And there’ll be surrounded by the managers, the fewer and smaller in number managers that manage billions and billions and billions of dollars. Good news is again, from our perspective, we can serve with all those clients and we tend to try to pick the winners if you will. Fund managers aren’t stocks, but you can usually pick pretty good ones. We try to, we try to win those and grow our business with them as they grow theirs.
Spencer Israel: 25:49 You have listened to previous episodes, so I can’t ask you my last question about what keeps you up at night, but that’s okay. I have another one. In any case, I was actually reading an article over the weekend just about Ritholtz and how they’ve over the past 10 years, how they’ve done this guerrilla marketing campaign to take over the RIA industry more or less by blogging and tweeting incessantly. Do hedge funds. I guess other asset managers, come to you and ask you guys, “I need help marketing. How can I market my firm?”
Jeremie Bacon: 26:20 Yes. Short answer is yes, and increasingly so. In fact, one of the things that we’re focused on as a business, again, that differentiates us is because we’re so focused on this notion of relationship management and marketing and servicing clients and building client relationships. We are spending even more of our time than ever now working with our clients and helping them to manage their messaging and to think about their brand and to think about brand strategy and marketing strategy. And historically, fund managers have always feared this notion of marketing, because marketing tends to have a salesy connotation with it. And that’s really, marketing and sales are connected. They’re tight, but they’re different things. And RIAs, in particularly managers of private funds, you can’t advertise your securities for sale because it’s not a registered security most of the time, but that doesn’t mean you can’t brand, it doesn’t mean you can’t market, it doesn’t mean you can’t tell your story.
Jeremie Bacon: 27:13 And so a big part of what we’re trying to convey to our clients now at this point and certainly going forward, is that, look, it’s okay to tell your story. In fact, the managers that have become the biggest of the big, have become the biggest of the big in part, because they’ve been around for a long time. Yes, there are those managers out there, but the majority of those that have become extremely successful in this market are doing the exact same thing that the majority of companies that are successful in other markets are doing, and have been doing, and that is they have established a brand. They’ve established a position, they’ve established a framework for communicating with the market, and then they’re aggressive in doing it. They’re not selling their funds, but they’re selling their ideas. They’re selling their brain power, they’re selling their pedigree.
Jeremie Bacon: 27:54 You go to the websites of almost every one of the top 20 hedge fund managers and private equity fund or venture capital managers on the planet, and these are beautifully marketed firms. They’re beautifully marketed products and they’re telling their stories in a fantastic way. When you talk to their institutional investors, which again we do because those are also of our clients. They’ll tell you at nine times out of 10, they’re going to allocate capital to a manager who’s telling their story and is doing a good job of defending that story versus a manager who has a splash page that’s, a Wix website or a GoDaddy landing page, that is too afraid of their own shadow to talk about what they do and why they’re good at it.
Spencer Israel: 28:31 From your perspective, as someone who’s talking to all parties here, how good or bad do you feel about the asset management business right now?
Jeremie Bacon: 28:40 I think the asset management business is a beautiful business. As an entrepreneur, there are mornings I wake up and say, “Geez, why am I not running an asset management firm?” Because it continues to be an absolute fantastic business model for a whole bunch of reasons. I mean, first and foremost, from a pure capitalistic perspective, asset management pays. I mean, it’s an incredibly lucrative business and incredibly lucrative industry. Even with fee compression, even with tightening, even with everything that you see in the press, it is still one of the best ways to make a buck on the planet. And there’s a reason that financial services represents such a massive percentage of the S&P 500 and such a massive percentage of our economy. I think it’s a big, big, big, big, big business. I love asset management. I also love it because assets continue to grow.
Jeremie Bacon: 29:23 I mean, people get richer every single day and the number of people that are creating dynastic wealth only continues to go up. That’s a trend that’s not going to change regardless of any short term or medium-term market fluctuations and whatnot. Heck in my life, in my 20 years or whatever, in financial services in the same tech and central markets. We’ve seen the number of family offices balloon from, I think it was like just about 1,000 maybe 1,500, 20 years ago. How many is it today? It’s thousands, right? And that number increases by hundreds every single year. Every time you get a new billionaire, that’s another billion dollars that’s got to be managed by somebody. And it’s going to be managed by the asset manager industry. So it’s an amazingly great business and amazing great industry. I’m super-bullish on it.
Spencer Israel: 30:07 We’ll wrap with this Jeremie. You’ve been an entrepreneur now for a while. You’ve done it a few different ways. How has being the founder and CEO different from what you thought it would be like?
Jeremie Bacon: 30:17 Every company that I’ve had the chance to either found or be part of the founding team effort and work with, that the answer to that question has been different. So there’s always more to learn, and more to experience, and more to do. One of the things that’s interesting about being the CEO of Imagineer is that Imagineer, it was a 20 year old company when we became part of the team. In 20 years it’s certainly not a startup. But being part of a business that has a huge amount of history and a firmly established culture and a firmly established ethos before stepping in. It’s exciting. It’s kind of fun, right?
Jeremie Bacon: 30:49 The good news is that culturally, Erol and I see the world very, very similarly. When we sat down and decided to put the companies together and we had a conversation about what are our values and what do we think is most important and one of our teammates need. And there was universal overlap from the very first set of conversations, which I knew there would be because we knew each other for so well before that. As the CEO, it’s been fun to come in and to learn all the nooks and crannies of the business, what’s worked historically and what hasn’t worked as well historically to try to help figure out, okay, how do we empower our teammates and delegate across the company to effect change, that’s going to help keep us relevant, not just today, but make us even more relevant over the course of the next three to five years.
Spencer Israel: 31:28 Jeremie Bacon is the CEO of Imagineer Technology. Jeremie, thank you so much for joining the FinTech Focus podcast.
Jeremie Bacon: 31:34 Yeah, well thanks for having me on the program. I really appreciate it.
Spencer Israel: 31:39 All right, that’s a wrap for this week’s episode of the FinTech Focus. If you have any questions, comments, concerns, email us email@example.com. Also, don’t forget to subscribe to the FinTech Focus newsletter. It’s been revamped. It goes out every morning at 6:15 AM Eastern time. You can get that by going into benzinga.com, clicking on FinTech up top and then clicking on newsletters. Thanks again to Jeremie Bacon for joining us today. I really appreciate his time. Thank you for listening and we will catch you next week on the FinTech Focus podcast.