On July 5, Thomson Reuters Labs™ celebrated the official launch of its Incubator, a program that provides select startups with office space, mentoring and access to Thomson Reuters data and technology capabilities. And while the Incubator is certainly in early stages itself, the team is proud to have Open Mineral, a Swiss startup focused on developing solutions for the commodities industry, as its first resident. We sat down with the Lab’s Barry Dooney, who oversees the Zurich-based Incubator program and Boris Eykher, one of the co-founders of Open Mineral, to learn more about the startup, the Thomson Reuters Incubator program and what each organization is hoping to get out of this pairing.
Barry, why is it important for Thomson Reuters to engage with startups?
Dooney: It is said that it is not the strongest of the species that survives, but the most adaptable. With the technological revolution we are facing today, there is a more acute need for established firms to work with nontraditional partners. By engaging with startups, Thomson Reuters will tap into a wealth of new co-creation ideas and keep ahead of the latest market trends to help our customers navigate the transformative technologies impacting their businesses. Additionally we get to work with a new entrepreneurial talent pool, willing to take more calculated risks, who will drive new trends.
What is the Thomson Reuters Labs Incubator?
Dooney: Through this program we’re giving startups — with whom we see an important or interesting potential alignment for our customers — office space, executive mentoring, and access to our data and technology capabilities for a duration of six months. As a key part of the program, we also facilitate the interaction of these early stage businesses with our own network of customers, investors and industry partners.
Essentially, our goal is to help startups grow their businesses – while exposing our own business to new ideas and innovations, and potentially, new market opportunities.
Boris, what are you looking to achieve with your startup, Open Mineral?
Eykher: Open Mineral is a B2B marketplace for direct trade of physical commodities between buyers and sellers as well as corresponding trade services. Our marketplace connects mines with smelters without an intermediary, providing powerful analytics and intuitive design to tender, negotiate, and execute the direct trade of metal concentrates, e.g. copper, zinc, lead, gold and silver.
Ultimately, we are working to make the historically opaque concentrate trading industry more efficient, more transparent and as a result, more profitable for companies that produce and use raw materials, such as mines and smelters around the world.
Our goal is to give more information to sellers and buyers, so they can make better decisions, which will be data-driven and ultimately more profitable.
How did the idea come about?
Eykher: My co-founder, Ilya Chernilovskiy, and I both worked in the commodities industry, trading concentrates, for a number of years. It quickly became apparent that the entire buying and selling process was centered around the trader. Traders have a ton of information on producers, their technological advantages and difficulties, as well as the full market knowledge on all the sides, so it’s the intermediaries who make the hefty profit margin. On the other hand, mines and smelters in particular, have relatively small margins because of the information asymmetry. It is very difficult for mines and smelters to squeeze out an extra dollar of profit and it takes a tremendous amount of effort and time to decrease costs even by few dollars per ton. Yet a significant chunk of net income is left on the table because of the commercial terms and complexities set up by the intermediary.
We saw an opportunity to change this imbalance of power — to give more control to concentrate producers and consumers by opening up data and establishing direct relationships between the counterparties for making transparent deals.
I was recently speaking with someone working with the physical commodity industry who said, ‘When I started in this business more than 20 years ago, traders controlled the industry. You know what has changed? Absolutely nothing.’
It’s obvious that this industry is due for disruption and digitalization, similarly to many other industries. And who will be able to incite it? Well, we want to be the ones.
Where are you in your startup journey?
Eykher: We’ve developed the first phase of our platform, which is now capable of putting tenders, receiving offers and going through multiple negotiation rounds. We’ve been testing it with first customers and executing real-time transactions to identify areas for improvement. We’ve also been meeting with prospective customers, miners and smelters, to introduce them to the Open Mineral platform and to show what it is capable of and what it could do for them. And we have also just launched our website, www.openmineral.com.
What’s been the early reaction?
Eykher: So far the response has been even better than we anticipated. We were prepared for some hesitation because each of these orders is typically a multi-million lot, but we’re generating a lot of interest. However end-to-end execution is difficult, so this is a long-term project since it deals with many aspects of the physical commodity industry.
The companies we’ve spoken to are especially interested in spot markets. Historically, they haven’t been able to take full advantage of the spot market opportunities, so they are keen on a change and showing a lot of interest.
How did you learn about the Thomson Reuters Labs Incubator?
Eykher: I had been going to a number of industry events on blockchain, and at every single one, there was someone there from Thomson Reuters, so I knew they were doing interesting things and I started to follow them. Then Thomson Reuters held a “Hack the Valley” hackathon and I attended the presentation day during which they used the opportunity to soft launch the Incubator and of course it was very interesting to me. A week later, I presented our business to the Labs and executives within Thomson Reuters Financial & Risk, who ultimately approved our participation in the program.
It is not the strongest of the species that survives, but the most adaptable
What are you each hoping to get out of the partnership?
Dooney: For Thomson Reuters, two of the incubator goals are to accelerate our own innovation capabilities and develop our customers and partners of tomorrow. By providing our incubator support, Open Mineral will enable the digitalization of an opaque market estimated at over $90 billion. For our employees to work alongside such experienced and ambitious entrepreneurs is a breath of fresh-air and a learning experience as it promotes a strong sense of entrepreneurship across the organization. The data that could be generated on the Open Mineral platform may complement the world class Thomson Reuters content we provide our customers and potentially lead to a longer term strategic partnership.
Ehyker: We are hoping to get a very quick learning curve on a number of different areas, with great advices that we could bounce off. For example, we’re having conversations about the best ways to structure our data with different tools for capturing it. Getting the right foundation now will increase our chances of building up the right product that reflects the needs of the customers and changes the industry standard.
How does the Incubator work?
Dooney: Unlike other incubator programs that have a very linear process — month 1 training for x, month 2 training for y, etc. — our program is designed to be needs-based. We meet with the startup, go through their needs, their wish list – and then do our best to match our people and resources with their needs. For example, Open Mineral as part of their wish list asked to meet with a tech architect to get feedback on their architecture and software selection, so we made an introduction; they wanted to understand our commodities data, so we hooked them up with a commodities data expert; they need marketing advice, so we’ve made connections with members of the Thomson Reuters marketing team.
Here in Baar, we have approximately 100 senior level colleagues from across the entire company. Having this microcosm of the company, all this expertise in one place, is very advantageous to the startups who work with us here.
How has the progress been so far?
Eykher: So far, the Incubator has been tremendous help for Open Mineral. In just a few weeks, we’ve been able to meet with a wide range of subject matter experts, all of whom have provided immediate value to us. It’s been extremely valuable to be able to bounce ideas off of people who have extensive knowledge in a particular subject area. For example, we’ve gotten API design and best practice guidance from Thomson Reuters technology team; access to Eikon-for-commodities licenses provided by the sales team; and consultation from experts from Thomson Reuters marketing and communication team to help determine the best logo for our brand. We are getting lots of great advice and are truly appreciative of all the support.
Barry, what’s next for the Incubator program?
Dooney: Our second startup joined our program in June, and we are delighted with the pipeline of quality startups that are submitting applications. Our recent ‘Crack the Hack’ women in technology event in Zurich was a great success and we plan on running more of these events to increase the number of female lead startups seeking to join our incubator. Becoming a leader within the Swiss startup technology ecosystem is our incubator mission therefore continuing to collaborate with key stakeholders such as universities, government agencies, business associations, and the investor community is a priority for Thomson Reuters.
You can also read more on how corporations and startups make great partners, and the many ways Thomson Reuters is engaging with the startup community.