Baking Surprising Benefits Into Our New Business

I was not expecting the bakery close to my home to be a source of inspiration for our pioneering LoopFX liquidity pool, but when starting a business, you tend to take lessons where you find them.

Let me explain…

A new bakery has recently opened up down the road from my home. Every morning, I now enjoy the fresh smell of whatever daily special they have – croissants, muffins, cinnamon swirls…

It’s great and I’m not alone here. Hundreds of commuters walk past and enjoy this brief moment when you feel like you could be walking down an alley in Paris, rather than near a noisy TFL trainline.

Despite this great perk, I rarely ever actually buy something from the bakery. I am benefitting from the bakery’s output, but I was at no point actively engaging in any sales. I am, in fact, a freeloader. They were unintentionally running a ‘free baking smells distribution business’ and I was taking full advantage.

And this struck me as a lesson for us as we develop LoopFX. Being an economist by trade, this is a small-scale example of a Positive Externality – a product or service that has an uplifting effect beyond its immediate customers or users. Healthcare and education are usually cited as examples. The theory says, we all benefit from these services as we live in a society powered by more healthy, educated and productive people.

So where does LoopFX come in?

We have built a unique liquidity pool that addresses problems for both the Buyside and the Sellside. We have dozens and dozens of supporters, many of whom have recognised that our solution extends far beyond those who use LoopFX. Our clients have unanimously agreed that by improving the pricing ecosystem, our benefits extend beyond those who use the Loop every day – just like the bakery providing that positive externality for commuters.

By providing both Asset Managers and Banks with a ‘free option’ to check for a market axe to offset their risk, the positive impacts can go beyond direct LoopFX users. Think about it… If market participants can exit risk more efficiently, the risk profile of those trades’ decreases, which in turn can be reflected in better outcomes for the entire market. We were always determined to place this “whole market” benefit at the heart of the Loop.

Being a former practitioner, I knew the FX market was a complex ecosystem and to succeed we had to find our place in that landscape. But I also knew we had to do a lot more than simply fit in, we had to improve life for everyone, members and non-members. I knew the market would only truly accept an offering that not only found a place in the existing landscape, but also made it work more effectively for all the players.

I did, of course, finally cross the threshold and buy some cakes. The oven smells dragged me in more effectively than any marketing campaign ever could.

This same effect is working for us too. Our members introduce other members.

So enjoy the wider benefits of our liquidity pool with my full blessing and come on in when it feels right.

The cakes were awesome, by the way.