I recently took an online course called “Section4 Strategy Sprint.” After learning about the strategies that define the most valuable firms worldwide, I am applying this framework to evaluate real-world companies and identify strategic opportunities. The company I have chosen to analyze is Thought Machine, where I work and which I am familiar with.

Overview of Thought Machine

Thought Machine is a product-based company that has developed a core banking solution, transforming the banking industry and empowering banks to offer innovative services to their customers.

Growth at Thought Machine

We recently raised $200 million in our Series C funding round, which involved industry-leading venture capitalists and major global banks like Nyca Partners, Molten Ventures, JPMorgan, and Standard Chartered. This brings our total funding to $350 million and values our company at over £1 billion.

Clients of Thought Machine

We work with a variety of clients, ranging from Tier 1 banks to challengers, including Atom Bank, Curve, Lloyds Banking Group, Monese, SEB, Standard Chartered, TransferGo, Arvest, ING, and JPMorgan Chase.

Products of Thought Machine

Our product, Vault, operates on cloud-native platforms like Amazon Web Services, Google Cloud Platform, and Microsoft Azure, eliminating the need for legacy technology. Vault can be configured through Smart Contracts to run any type of retail bank product, from current accounts to loans and mortgages.

T-Algorithm Strategies Evaluation

I am using the T-Algorithm framework for this analysis, which identifies strategies that have led companies like Apple, Google, Facebook, and Amazon to achieve trillion-dollar valuations. It enables explosive growth and substantial margins, and influential business leaders use it to focus on what matters most to customers while advancing key business priorities.

Traditional Tier 1 banks must adapt quickly to meet their customers’ needs, making it a high business priority for Thought Machine’s clients to transition from legacy systems to a more efficient, cloud-native technology stack.

1. Rundle

Rundle refers to a bundle of goods and/or services that generate recurring revenue. Banks are keen on reducing complexity and are often hindered by outdated, monolithic systems. Thought Machine offers a solution where banks can subscribe to our ledger, paying based on usage, which creates a recurring revenue model.

2. Appealing to Human Instinct

Successful businesses often appeal to a fundamental human instinct. In our case, we target the logical part of the human brain by offering practical and cost-effective solutions. Thought Machine attracts new banks with product advantages in stability, security, resilience, and cost-benefit.

3. Benjamin Button Effect

Products that leverage network effects become more valuable over time. Traditional banks often find it difficult to extract data from their legacy systems. Thought Machine’s product offers the flexibility to integrate with other platforms, like Salesforce and Tableau, to resolve this issue.

4. Visionary Storytelling

This is the ability to articulate a bold vision effectively. Traditional banks often lack a deep culture of engineering excellence, whereas Thought Machine was founded by an ex-Googler with such a culture. This story has been beneficial in capital raising.

5. Vertical Integration

By owning as much of the value chain as possible, a firm can control the end-to-end customer experience. Banks prioritize cost, convenience, and speed, and Thought Machine addresses these needs by offering integrated solutions through partnerships.

6. Accelerant

An “accelerant” firm serves as a career springboard. Traditional Tier 1 banks are risk-averse and lack agility. At Thought Machine, our culture encourages continuous learning, high-quality work, and a great deal of fun.

T-Algorithm Strategy: Visionary Storytelling

Based on my analysis, the strategy with the most significant potential for Thought Machine is visionary storytelling. I propose that we articulate a simple, appealing, and believable vision for transforming the banking industry.

Future of Banking Initiatives

  1. Increase Social Media Presence of Our CEO (Low effort, High impact)

    Just as Elon Musk is portrayed as an innovator, our CEO, Paul Taylor, could increase his online presence. We need a charismatic leader to challenge the status quo in the banking industry. Short videos on platforms like Instagram and TikTok could drive brand awareness.

  2. Engage with Technology Communities (Medium effort, High impact)

    We should consider open-sourcing some of our technology to attract more developers. Organizing meetup groups with perks like free beer and pizza could engage the tech community. Weekly newsletters can keep the community updated.

  3. Deepen Connections with Banks (High effort, High impact)

    Building a good reputation within the banking industry could help in raising additional funds. Partnering with top consulting firms like Accenture, Deloitte, and BCG could also be beneficial.

Next Steps

  1. Tweet more frequently from the CEO’s Twitter account, emphasizing a bold vision.
  2. Open-source part of our technology and create a tech meetup group.
  3. Encourage our banking clients to share success stories using our product.

Any Questions?

I look forward to receiving feedback that will solidify my learnings and improve these recommendations. Don’t hesitate to get in touch with me on LinkedIn: https://linkedin.com/in/victorleungtw