Bloomberg Needs to be Less Swiss Army Knife and More Leatherman

Financial markets bring out people’s innate desire to be a hunter-gather for information.  As people engage on their never-ending journey for “truth”,  Bloomberg has produced the equivalent of the Swiss Army Knife – an all-in-one information, data, and analytic tool.  Just like the actual Swiss Army Knife, Bloomberg has produced a litany of tools – each not the most powerful/useful but together form a useful tool.  And just like a Swiss Army Knife – everyone has one, but few actually use all if any of the tools (and its becoming more obsolete by the day with Sites such as Stocktwits and Chart.ly.

Yesterday, I read a piece in the FT detailing how Bloomberg is investing in a strategy that embraces this concept.

From FT:

Bloomberg’s New York offices, in which digital displays above brightly coloured fish tanks update visitors on the weather in Reykjavik, are famous for the free food that persuades staff to spend as little time as possible away from their desks.

The same urge to keep people within the Bloomberg environment is driving an investment in its news operations, just as many struggling publishers and broadcasters are questioning the value of news suppliers in the digital age.

“We want people to be able to use the Bloomberg terminal for everything,” says Peter Grauer, the group’s chairman. Rather than watch customers stray from its distinctive black screens, it has begun an aggressive aggregation strategy with the aim that all relevant news should appear on the terminal itself.

After two years of buying content from partners ranging from Agence France-Presse to Xinhua News Agency, Bloomberg will soon announce it has added Associated Press, bringing in breaking news from a leading international newswire and, equally importantly, a searchable archive to add historical context.

News is as central to Bloomberg’s success as its data, analytics or customer service, Mr Grauer says.

I think they are making a mistake.

A few years back I got a gift from my Uncle called The Leatherman.  This tool was similar to a Swiss Army Knife except that it lacked the  “stupid” tools (scissors, bottle opener, etc.), and the tools it had were much more useful.  There are also many different “versions” of Leathermen with their own unique set of tools and all much better than a Swiss Army Knife.  At a time when Bloomberg is no doubt about to be assualted on all fronts, I believe adopting the “Leatherman” Strategy would be a better strategy than just adding more tools to the Swiss Army Knife it already is.  The two things that Bloomberg has always done well are News and Data.

This includes:

  • Continuing its EXCELLENT financial journalism that puts any competitor to shame and including this into its core package.  Bloomberg is one of the few media outlets where “News” is till its core business and it does “News” well.   Don’t simply invest in  bringing in outside versions of news, but continue to raise the bar on what financial journalism should be.
  • Scrap Analytics all together and simply feature a data repository that has varying levels of access along with an Open Archicture that allows companies to build analytical tools to use that data.
  • Embrace the Salesforce Model that has varying levels/distributions of SaaS and an AppExchange that allows developers to develop Apps that work within the Bloomberg Architecture and customize their version of Bloomberg.

Anyways, I have always been a big Bloomberg fan and hope that in trying to keep their absurd price tag, they don’t dilute some of the great tools that they already have.

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  1. Chris

    Great thoughts. I work for a competitor, so I am somewhat familiar with their business. It’s been quite interesting to see how things have shaken out over the past 6 months as money managers are faced with cost reductions. Many times firms refuse to give up the Swiss army knife just because of cache. Other times they decide to build their entire process off their platform because they can get everything they need, within reason.

    From my perch, Bloomberg is playing defense in the analytics space. This has resulted in them throwing resources at it to stave off competitors who offer a la carte solutions at a lower price point. I think they would also argue that data is fast becoming the commodity (even if you are very good at making it accessible), but the application that sits on top of that data is the value-add (as you suggest too). There area few smaller competitors surrounding them which I’m sure they’d love to knock off, and given their aggressive culture, I would not be surprised to see them continue to throw massive R&D dollars at the analytical tools. Whether this is the right long-term strategy is debatable, but at this point, they have no choice.

    It’s been a neat industry to be in over the years. My concern now is that margins will get crushed as more competitors rush into the space and financial services becomes a less profitable place to be.

  2. zerobeta

    Thanks for the comment. The data is a commodity but accessibility is not. I think that there must be a dramatic business model shift in the industry and Bloomberg should either shore up its news business and take a risk on a new business model for its data/analytics. Bloomberg has the unique advantage of a large user base and should capitalize on it now.

    I’ve always found the industry interesting. I remember there being a ton going on before the bubble burst. I think Financial Information is an area ripe for change, but the cards are still very much in Bloomberg’s/Reuters/FactSet’s hands.

  3. I think they should open-source the whole app, or add a simple framework for add-ins. Their messaging systems (email and chat) are dinosaurs and could do with some work!

  1. 1 The News before The News » The Long Decline of Bloomberg?

    […] states: Bloomberg Needs to be Less Swiss Army Knife and More Leatherman and makes an argument that Bloomberg should focus on its core competency, financial journalism, […]




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