Rethinking the Secure Data Room: This is Not a Feature War

In the last year or so that we’ve been building out our new ShareSecure Data Room, we’ve found it tempting to just look at other data rooms or portal solutions in the market and simply copy all the features they have. I think it’s a natural instinct for software developers to envision being able to answer yes whenever a prospect asks about whether your software offers a particular feature. But with ShareSecure (and with our AIM product, for that matter), we’ve made a conscious effort to reject the notion that great software is the result of simply having more features.

Instead, we prefer to be more thoughtful about what features we add by asking ourselves how a feature (or lack thereof) solves a problem, which actually is the gateway to a product that is ‘better, easier to use, and more efficient. 

So why not include every feature?

It seems that many of our competitors in the data room and portal space would disagree, but we think there are a number of drawbacks to including every imagined feature.

One is that each additional feature makes the product incrementally more expensive and those costs get passed on to consumers. We see this play out in the home appliance market with the LG internet TV refrigerator.

It does what any other ordinary refrigerator does, but it has so many more features!

My favorite is the 37-centimeter LCD display on which you can watch Internet TV–if you have a phone jack behind your refrigerator.

Then, and only then do you get to watch TV on your fridge! And it’s only 5x the price of other refrigerators. Don’t get me wrong–this product and its features have their place, but most of us would prefer to watch TV elsewhere, and can’t justify this price tag. Which of your data room’s features are you paying for but don’t use?

The second reason we don’t want to include every feature is that more features result in more confusion. It is cumbersome for users to have to wade through a host of features that don’t necessarily add value and potentially distract them from doing what the software was intended for in the first place.

This rule applies to most software tools but perhaps it applies uniquely to data rooms since fund managers use data rooms to serve their own clients and providing LPs with complicated tools can frustrate them and make them less satisfied with your service as a GP.

So what features do you need?

The other day we were on a call with a client who currently uses a competitor’s product and they asked if ShareSecure prevents end-users from taking a screenshot. We answered that it does not, that we feel preventing screenshots makes sharing documents more difficult, and that the existence of that feature is unnecessary. The client’s response was “Okay. We have that feature now and we never use it.” Clearly, the client was curious and may have been doing a formal feature comparison, but the point is that it was irrelevant to the client whether we had that feature or not.

We’ve been through 15 years or so of data rooms now that we’re just copying each other’s features and the result is a customer base that has a very standard set of unfounded expectations and that asks a lot of the wrong questions. Like the client I mentioned above, you need to ask whether or not you’re going to use a certain feature, but it’s also crucial to focus on whether or not that feature really adds value to your end users’ experience and whether it makes you more effective in serving your clients.

Click here to find out more about our virtual data rooms and how it stands out from the rest of the data rooms out there.

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.

fund management software