Town hall 27th July 2020: Business update from David

 David M. Brear photo
David M. Brear Group CEO
5min read

Yesterday afternoon we shared in a town hall that we will be pivoting our strategy for 11:FS Foundry and restructuring that team.

Since the beginning of 11:FS, we’ve always believed that core banking technology needs to evolve to allow us and others to deliver truly digital financial services. To be truly digital, you need not just brilliant, modern customer research, design, UX, product, and marketing; but also brilliant, modern technology that’s built from scratch with the full potential of the tools and capabilities available today. 11:FS Foundry is that: a core part of the vision we have for the industry and for our company.

The changes announced yesterday are the result of two factors that have played out over the last 6-12 months, and which (particularly on the new business front) have been affected by the current state of the market and world. The first is a need to refocus our strategy for 11:FS Foundry - and the team within it - on accelerating the development of its best-in-class product. The second is the reality of an economic climate where customers are taking a more conservative approach to spending, with the revenue we expected for this year and confidence in our future pipeline not materialising.

These last two years have been the beginning of an amazing journey to realise our vision for what a modern core banking platform should be, and we’ve accomplished a ton so far. We have the early stages of a great product, a truly supportive investor and partner in DNB, and some fantastic clients we’ve worked with along the way. And of course, we’ve been able to bring on board and have the pleasure of working with some incredible product, ops, design, and engineering talent.

We’ve always run 11:FS Foundry like a start-up within a start-up. And, like many start-ups, the product and team have grown to reflect the opportunities in front of them. With early strategic investment from DNB, we’ve been focused on building for their roadmap and the integration services required to support it. While we’re proud to have DNB as an investor and partner in getting 11:FS Foundry to where it is today, we realise there’s so much more happening so quickly in the core banking space. We need to make sure we’re zooming out from what’s directly in front of us to see the bigger picture and bigger opportunity.

We still believe, even more so now, that there is a huge opportunity for 11:FS Foundry, but we need a different approach to realise it. The core banking sector holds tremendous potential for the future of truly digital financial services, and it’s moving incredibly quickly. Survival goes not to the fittest, but the fittest AND fastest. We need to make sure we can develop a best-in-class product at speed, and both quality and speed require relentless focus. We want 11:FS Foundry to focus relentlessly on creating that best-in-class product as quickly as possible to compete as a leader in this space.

On the revenue front, like every start-up you live deal to deal in the early stages. A few wins and you’re in hyper-growth, a few paused or delayed deals and you have to stop and reassess. Since we’ve run 11:FS Foundry as a relatively separate division of 11:FS, it has had to manage on its own deal flow and balance sheet. While we know there are plenty of partners (and investors) out there looking for something like 11:FS Foundry, we haven’t found the right fit in time to continue at our current size and scale.

Therefore, we will be restructuring 11:FS Foundry to bring it into the group as a core part of our integrated offering focusing solely on product development while our consulting division takes over services and integration work. We want our consulting teams and 11:FS Foundry teams to be working as closely as possible together, each focusing on what they do best. We believe this is the best structure for our customers, for developing the best services and products possible, and for running the most efficient and effective business we can.

Unfortunately, this will involve some of the team leaving us, with the remaining team focused on product development. This is such a tough reality to face, especially after the redundancies we went through within the group in June, which did not impact 11:FS Foundry. But we believe it’s now the right thing for the 11:FS Foundry business long-term and our group strategy overall.

As part of the restructure, we will not retain a separate CEO role for 11:FS Foundry. Instead, the core team will be overseen by Ewan Silver, our group CTO, who helped develop the original product vision for 11:FS Foundry. He will be working closely with Vaughan Sharman and Rhyd Lewis, 11:FS Foundry’s CTO and Head of Delivery respectively, who have been leading the key product and client initiatives over the last year.

We will be extending the same support to the 11:FS Foundry employees leaving as we did to those who left in June, which is detailed here. These are some fantastic people who have been integral to the growth of the 11:FS Foundry business over the last couple years. There’s so much growth and opportunity in this space, and we know there are plenty of companies looking for good people right now. We will be waiving all restrictive covenants for those leaving to help them find new roles as quickly as possible.

These strategic and team changes will not affect delivery with any existing clients. All delivery work in/around 11:FS Foundry will continue, now just as one integrated team within our consulting division. DNB remains an investor and valued partner beyond just the work we’re doing together.

As part of this renewed focus for 11:FS Foundry, we also plan to raise additional capital to accelerate our product roadmap. There is so much need for truly digital core banking solutions and we believe the potential in 11:FS Foundry will make it a leading challenger in this space.

We want to be as transparent as possible with everyone, as we have been with all the changes and challenges we’ve faced this year. We know so many of you have been rooting for 11:FS Foundry since it launched, and we all appreciate your support, particularly now. This is not the end of the road, far from it - just a different path than the one we expected and would have hoped for in happier, easier times. Thank you to everyone who has contributed to our journey so far. We are who we are because of you.

 David M. Brear
About the author

David M. Brear

David is the CEO of 11:FS and since his dream of being a sportsperson was crushed (along with the ligaments in his knee!) and he had to get a proper job. He has worked in pretty much every angle of the financial services industry but never lost that competitive desire to win.