Huddlestock – My view – Focus on scalability

In my last “My view” article about Huddlestock I focused on the overview and the overall concept that I see within Huddlestock. Now the Q2 report has been released and I want to address some details about how I view the operation.

My focus is always on scalability. I would much rather have a business that can automatically onboard customers and have a good margin on each customer than to hold out for a big deal every now and then to save the day.

In my opinion, Huddlestock has exactly what it needs to do just that. It has the software from Bricknode and the regulatory permission in Norway with passports into other countries like Sweden and many more.

The big idea

When we started Bricknode our big idea was to create a B2B focused online brokerage firm which had full control of its software and had its own regulatory license so it could act as the broker/bank for customers. Financial advisors would be able to onboard themselves to Bricknode as their broker and as their administrative tool to run their business.

They could then direct their own customers to a sign-up link where they would be onboarded to Bricknode and linked directly to their financial advisor. The advisor could set up their fee structures which would be automatically handled by Bricknode, and the fees would be automatically transferred to their Bricknode account.

Model portfolios could be designed for both individuals and groups of customers while at the same time the customers could have other accounts which they direct themselves, all within Bricknode.

The network effect

Eventually we would be able to build networks between many financial advisors, FinTech companies with alternate investment offerings and the end customers to become the primary platform and broker/bank for both B2B and B2C. We would finally end up organizing finance 😊.

I was a financial advisor for several years and experienced the need for a B2B focused broker like this. Me and many of my peers tried to find a solution but we always had to do a lot of administrative work ourselves and all the online brokers were heavily focused on B2C and not B2B.

When we started Bricknode we did not have the capital to do this as a big-bang approach, so we had to first think SaaS and at least partially finance the creation by offering other financial institutions the opportunity to use our platform as it was being created.

This slowed us down a bit but also forced us into building the software so that others could use it and to create configurations and to build it very generic.

Since we did not have our own brokerage license, we could not offer to take on customers in our own custody so instead we had to charge software fees and the customers had to have their own permissions to hold assets, process orders and have their own relationships with fund trading networks etc. Bricknode became only a software supplier and not a real provider of the whole solution.

The complete solution

Now with Huddlestock this is different. For the first time ever, Bricknode, together with the brokerage license of Huddlestock, can act as the real solution provider with a completely different business model. This removes the hurdle for the customer of having to pay software fees and then having to solve a lot of problems themselves.

To me, self-onboarding of B2B customers like, for example, financial advisors and their end customers is something that is extremely valuable. As an investor I am focused on what can be done today and repeated over and over again to absurdum. Sure, a large deal here and there can help to push things forward but that is not where I see the potential multiple coming from. It is what can be done now and how it can be scaled rapidly!

This is how I perceive value and why I continue to be extremely excited about what I do on a day-to-day basis in the “code cave” and in the structuring of automated processes to take care of administration. This is how you build scalability from the ground up, not the other way around!