Open innovation has a strong foothold in the tech industry. Big tech companies create application programing interfaces, or APIs, to tap into the knowledge base of outside software developers. By doing this, centralized companies are able to access external pools of knowledge that enhance the value of their own proprietary application. One prominent such example is Facebook’s ‘Like’ button API. Facebook made integrating the ‘Like’ free and easy because it let them tap into apps’ users, giving them access to massive data they didn’t have access to before.
This type of open innovation isn’t unique to Facebook — most all tech companies do it. This isn’t, however, the case for all industries. Tech lies on one end of the open innovation spectrum while the financial sector lies on the other. This is especially true for underwriting services provided by large investment banks like Goldman Sachs. Co-founding Decipher Capital — a VC fund investing in blockchain-enabled projects — coupled with being an investment banker at Goldman gives me a unique perspective into how and why blockchain enabled technologies, specifically asset tokenization protocols, will disrupt investment banking.