LinkedIn can be pretty talkative sometimes, putting up notification after notification, most of which, you’ll probably end up ignoring. However, from time to time, there might well be a notification which really does make you think. This week a notification popped up telling me that it’s been eight years since I started working independent. I had basically forgotten until that point, and slowly a couple of messages came my way congratulating me. It did prompt a bit of reflection. What have I done over the past eight years? What has gone right and what has gone wrong? Most importantly what have I learnt about the experience? I thought it would be worthwhile putting pen to paper, just in case any readers are thinking about embarking on working independently.
Have a well researched plan
I had worked at Lehman Brothers and Nomura for a number of years working as foreign exchange quantitative strategist. I very much enjoyed working at both institutions and also the role. At the same time, I wanted to have an opportunity to work independently. When I left, I did have a plan of sorts, essentially publishing similar quantitative research as an independent and selling research subscriptions for this, working at Thalesians, a company I had cofounded with Paul Bilokon and Matthew Dixon. In retrospect, my plan was light on detail and I hadn’t really researched the space thoroughly enough, including whether clients would be prepared to pay for such a service (a somewhat crucial omission). I also had planned to do a bit of trading. In practice, my intraday FX trading strategies, which I ran at the time, proved to be a big focus and were profitable, helping to support my business and this really was invaluable to help to continue my journey. I had no external “seeding” capital, and hence my trading income ended up being a seed for working independently.
My advice is always do thorough research before jumping to independence. Yes, it will take time, but it will give you the best chance of success. Also think about diversifying your portfolio of ideas. If you trade, do you put all your cash in long EURUSD? No, so why would you do the same thing if you are building a startup!
Change strategy and pivot if it doesn’t work
Whilst my initial strategy didn’t quite work out, I did manage to build up a lot of IP through the process and a large codebase for doing financial research. I learnt a lot through the process. I then changed my strategy and focused more on consulting work in the same area and started a new firm, Cuemacro to focus on that. My projects over the years have been fun and in many areas, ranging from alternative data (coauthoring The Book of Alternative Data with Alexander Denev, and doing projects for a number of data vendors in this space) to transaction cost analysis to developing and licencing trading strategies to quant firms. In the future, I’m also thinking about branching out to create products with a new firm with a team of experienced financial market… I can’t say too much now, but let’s see what happens on that front.
My relationship with Thalesians has continued, and I’m glad to say that I have been part of that journey too, and I’ve taught with Thalesians. I have also taught in recent years, at Queen Mary University of London where I am a visiting lecturer , focusing on areas like Python and alternative data. I’ve found teaching a great way to interact with students and financial market practitioners. I’ve learnt so much from teaching, and glad that I have taken it up, even if it was never part of my initial plans when I quit Nomura. Every so often you will face challenges you never expected too, which might require some changes, and indeed, we’ve all had this during the pandemic.
You are no longer at a big bank: you have to start again
It can be tempting to this clients you have at a big bank are there because of you. At some level this is true, if you’re in a client facing role, such as sales or to some extent research. However, just as important, is the realization that if you’re at a big bank (or indeed any other well known institution) they are your clients, because of the name at the door of your firm and its reputation.
When you become independent at a small startup, you of course still have your CV which mentions all the firms you have worked at in the past. However, you are now working at a small startup. A small startup is very nimble and can do things quicker than large firms, but you’ll need to work at brand recognition in a way that you wouldn’t need to do at a large firm. Sales is difficult, it need work, but is the key for any startup. No sales means no revenue!
Sometimes writing about it can help
I’ve been publishing a blog for many years about what I do, Python, FX etc. often involving a photo which has nothing to do with the article (like the photo of delicious kubba from Borough Market above). I’ve found putting down my thoughts about my area have been helpful to articulate them for myself. If you’re planning on a starting a business, I can really recommend blogging about what you do!
I’ve learnt a lot from the past eight years of being independent, and the above are only a small subset of them! Some things have gone right others have gone wrong, but I’m very glad that I’ve started this journey of independence and continued it. I’ve managed to get a good point in my business, where I can see that each passing year results in growth. It has been challenging, but I’ve learnt a huge amount, and there is a massive amount left to do, but I’m still very keen to continue this path for the coming years.