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it cannot exist separately from engineering. This has the advantage that team members
will be more closely involved in the initial design and that there will be fewer broken
promises later on.
The highest priority of the product team is to satisfy seed capital and investment capi-
tal providers through delivery of profitable trading/investment systems. To the extent that
teams may work on multiple systems, the goal is a continuous pipeline of such systems.
Each member (or proposed member) of the product team should write a brief auto-
biography so that management and investors reading the Money Document can imme-
diately determine if the team has the requisite skills not only to build the trading system
but also to market it in an ongoing fashion. A team filled with only quantitative analysts
doubtfully will have the skill to program software tools or the time to successfully per-
form high quality customer presentations. The goal is to achieve a proper, multifunctional
balance across the team.
Product teams should be focused, with an experienced team leader and clear team
objectives. Beyond that, it is also appropriate to discuss the team ’ s design and devel-
opment methodology (like the one proposed in this book). Such discussion will also
increase seed capital providers ’ confidence in the team ’ s ability to successfully complete
the project.6.2. Market Analysis
The goal of market analysis is to determine if there is a viable investor demand for the
trading/investment system prior to seeding development. The market analysis and its con-
stituent sections should contain at least the following information:● The amount of money invested in this type of money management or trading style.
● Average returns per group and index benchmark for this type of strategy.
● Average lifetime of funds in this type of strategy.
● Number of competitors in this sector and who the leaders are.
● Money inflows and outflows into this type of strategy and investment cycle.6.2.1. Target Market
The Money Document will describe who the expected investment capital providers are.
Furthermore, it is desirable to discuss the size of the target market. If possible, we recom-
mend teams utilize credible numbers from sources rather than broad generalizations. Of
course, these will be rough estimates especially until the team can more closely research
competitors ’ market shares. The analysis of the target market includes:● Who wants this type of system?
● How big is the market?
● Why is the system of value to the investor?
● How much will they invest?
● What are the growth estimates for this market?6.2. MARKET ANALYSIS