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[In a business environment with accelerating rates of change, the power to compete and win is shifting radically from corporations to ecosystems, from leveraging internal assets to accessing external networks, from a traditional operating focus on efficiency to dynamic open innovation. Welcome to the Collaboration Economy and the new source of competitive advantage for firms that want to thrive in our new business climate.

With many cross-industry projections saying that we will see more change and innovation in the next three to five years than we have seen in the past thirty years, firms need to be less insulated and become more synergistic. No one company and management team in isolation can practically keep up with the hyper-changing complexity of our modern business world.

Firms need to leverage their knowledge and experiences with others fighting the same fight or addressing similar challenges. Deeper connections need to be formed between firms that can lead to an ecosystem of resources built on mutual interests. These ecosystems tend to function as open platforms adding substantial new capabilities to all. It is now up to how firms can creatively connect with one another that determines how successful they can be. This puts a whole different spin and a new reality on what "networking" really means and how it is being strategically applied to meet today's challenges.

Greg Satell - a transformation & change expert, top innovation blogger, and bestselling author of Mapping Innovation and Cascades: How to Create a Movement that Drives Transformational Change - has done extensive work in exploring and writing about this new business dynamic of platforms, networks, and ecosystems.

"In an age of disruption, the only viable strategy is to adapt.The objective is no longer to claw your way to the top of the heap, but to nudge your way to the center of the network..Successful enterprises can no longer prosper merely by deploying assets efficiently, but must effectively manage and deepen connections In a networked world, the best way to become a dominant player is to become an indispensable partner."

To dig deeper into the mechanics and strategy of building your company into a platform and developing an ecosystem, we reached out to Institute Founding Member, Mark Spina, President and COO of FLX Networks - a financial services technology platform and membership community. FLX is actively building a "network of networks" through their new community platform which is designed to revolutionize the working relationship and experience that occurs between asset managers, financial advisors, and wealth management firms. We asked questions to better understand how platforms can help us access technology, talent, current insights, and strategic partners and how this can dramatically change the ways we can successfully compete in our rapidly changing industry environment.]

Hortz: What were the strategic decisions behind building your firm as a platform?

Spina: The financial services industry faces a generational transition away from its traditional engagement model, which has been interruption-based and heavily dependent on this high-cost implementation model, grudgingly accepted by the asset managers along with their target audience of wealth management firms and advisors. A cross-current of macro events, including the pandemic, technological innovation, and regulatory evolution have created the necessary momentum for a more invitation-style of engagement and experience to be introduced through a community platform.

Importantly, the competitive pressures are transitioning the industry from sourcing a myriad number of specialized business solutions and vendor firms to looking for strategic partners that can consolidate and integrate the many resources now available. Simply put, specialization has delivered many incredible innovative solutions, but it has also delivered increasing costs (due to more tools and services), complex tech stacks, and an overwhelming number of vendor relationships. Both asset managers and wealth managers seek scalable relationships that creatively serve their business needs, while reducing the number of partnerships and time required to maintain them.

Hortz: How does a platform structure allow you to address the challenges you see facing financial services firms?

Spina: FLX Networks' purpose-built technology platform is designed to create a more economical and sustainable distribution experience with less friction and inefficiency between asset managers, wealth management firms and financial advisors. Through our proprietary technology, we have built a community platform that provides access to a business services marketplace, an aggregated open-architecture asset manager content marketplace, an asset manager exchange, and a social network facilitating the sharing of relevant professional practices and experiences.

Each vertical of our permissions-based platform allows access to a combination of tools, personnel, technology, strategic relationships, and products to help drive a more cost-effective, on-demand, and sustainable business model. Our approach simultaneously delivers the scale of the largest corporations in the marketplace today.

Hortz: Now in your second year of development, what are you learning about the dynamics of building a platform?

Spina: The key learning is a meta learning of sorts - sitting at the center of a network creates a terrific vantage for building a platform. The challenges and trends are easier to see. I know you are a fan of Greg Satell, the transformation & change expert. He states it so well: "We can no longer rely on controlling and leveraging assets, but now must take into account new sources of power, which reside not at the top of hierarchies, but at the center of networks".

While we clearly see the power of establishing a network centered between asset managers, wealth management firms, and advisors, each network participant comes with its own considerations and priorities. The need for educating participants about the potential of this new network has been both a key learning and driver of our succession.

Hortz: How do you then build the platform into a functioning community and what are the benefits?

Spina: At its launch, FLX offered asset managers access to a marketplace that provided modular and on-demand distribution solutions. As a member of FLX, asset managers received a community page that served as a central location for the asset manager to place marketing content, product training, and pertinent firm information. Asset managers could then search through the various marketplaces within the platform and leverage teams of experienced sales personnel, as well as sales leadership, sales infrastructure, technology tools, marketing, website development, etc. The interest in this unique approach was immediate, and the firm executed on its first capital raise.

COVID-19 transformed the world and economy as we knew it. This crucible moment led to a second key element of building the platform into a functioning community. FLX enlisted the clients of asset managers (i.e., wealth management firms and financial advisors) to also become members of FLX. FLX identified both a bottom-up and top-down strategy designed to create gravitational pull to a newly established community. It was at this time that FLX aggressively pursued the development of a community where asset managers, financial advisors, and wealth management firms would feel compelled to visit and leverage tools, services, and resources to easily access information, reduce noise, and increase productivity.

Hortz: What is your plan and criteria for growing your FLX Solutions Exchange on your platform?

Spina: The FLX Solutions Exchange has also proven to be an area with significant learnings to date and forward-looking opportunities. In many ways, it's a microcosm of starting and building a business in an unconventional way. We have plans to grow our FLX branded Solutions, strategic partnerships, and selectively expand the range of partners on the platform in the near to intermediate term.

Importantly and differently as we move the company into year three, we see Distribution or "Shared Client Engagement Teams" as one of the Solutions available. Based on our modular approach the Shared Client Engagement Teams are routinely paired with a set of Solutions that best fit the Asset Manager's needs. For firms that were historically focused on institutional, alternative or international markets and are now entering the US advisor and intermediary marketplace, we routinely consult them to first ensure product readiness and promote brand awareness, leveraging the fractional services of our Solutions capabilities, then layer in the personnel.

From a strategic partnership perspective, we are selectively engaging across multiple domains. When you see and believe in the power of the network, those domains include AI, data, benefits, along with access to industry associations and wealth management firms. While other firms have built well-developed networks to aid the financial advisor in their engagements with the consumer, we are focused on the B2B "space in between" asset managers, wealth management firms, and advisors in the US. The US market alone is a $50 trillion product market and it takes about $50 billion annually to make that market function from sales, marketing and data perspectives. We also have international plans on the near horizon, eyeing markets with relatively large advisor markets including Canada, UK, and Australia.

Hortz: Any other thoughts you can share with financial professionals on how B2B digital platforms like yours can help them evolve their traditional way of doing business?

Spina: Yes. Think about almost every other buying and selling experience, both B2B and B2C. They have changed meaningfully over the past five to ten years, mostly to an on-demand setting aided by subject matter experts at key decision-making or inflection points. We see these trends and are catalyzing the same experience for the wholesale distribution market.

So, definitely, we see and talk with executives from such a wide variety of firms, cutting-edge boutiques to dominant players, each intent on growing their business. The conversations are taking place with asset managers, wealth management firms, large RIAs, and advisor teams. In an oversimplified form, we see leaders beholden to the legacy style of things and then those willing to embrace or at minimum, experiment with a new approach.

For example, most readers can very readily recall their experiences with wholesaling, from different lenses and angles. While we've been saying this for a few years, even prior to Covid, it's now clear that there will be meaningful change going forward. We are going to help by "innorupting" (innovate/disrupt) the status quo. One way is through creating a Virtual Wholesale Market.

This premier virtual wholesale market, as we envision, is where advisors through the general community or through a white-labeled wealth management community, tailored for their respective firm, can access all the meaningful asset manager content, insights, thought leadership, and investment product information. Separately, asset management sales teams can search for advisors and identify their engagement preferences and needs. The detailed profiles provided by every member of the FLX community allow them to share interests, career experience, product needs, service needs, and desired form of engagement (i.e.- phone, in-person, email, etc.). The benefit is to simplify, personalize, and customize the engagement experience.

Hortz: Any recommendations on how financial firms can reinvigorate themselves in platforms and being part of a network?

Spina: Yes, while there are many options, a couple of concepts repeatedly reveal themselves to us as competitive drivers.

We have been talking about creating "Synthetic Scale" as a way to reinvigorate or better compete. Scale has been a driving objective for many in the asset and wealth space. As a select group of firms have achieved that goal and accumulated massive scale, it's made it more challenging for others to compete. By joining a community and leveraging the shared Solutions and buying power of the community, firms or even business units can forge a path to growth.

We have also encouraged firms to experiment. While well worn, the expression that "doing things the same way and expecting different results" is still very much an operating belief of many firms. Whether it's a large experiment or small one, we see significant value in trying new approaches. This can run across an entire business, a subset, a product type, a channel, a geography, or some combination thereof. The opportunity to experiment abounds.

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