Last night, I pitched our company at ElevatorPitch event by PeopleConnect. It went well, nothing surprising - ranging score of 2 or 4 (no 3s are allowed), not a damn 5, neither a damn 1. Before I get to the main question of today's blog post, I have to get something off of my chest. We are stucked in the mediocre land - a 5 would tell me that we definitely have something, and a 1 would say that we are on the wrong track. But we consistently get either 2 or 4. Mediocre land is demoralizing, however it has a pattern to it. I get a score of 2 from older panelists, and a score of 4 from the younger ones. We are in a situation where people agree there is a problem, but do not want to accept or believe that our product will solve it. I have concluded that we need to show traction. Had my pitch had an extra line saying "and we launched a simplified version of our product in January and our sign-up rate has been increasing by 10% every week", then the scores would have been much more different. I think the time has come that as the CEO I need to make a decision to get us out of mediocrity and into the fantastic land. More to come on this topic in a later post (stay tuned!). Now let's go back to today's question!
In today's post I will talk about one particular question from a panelist who has me thinking since last night. He asked with puzzled eyes "what would Warren Buffet think?". This particular question is what I have been asking myself ever since we started, and it has guided my thinking. I did not get a chance to answer the panelist during the event, however I'd like to pay the question the attention it deserves, and answer it here.
Assim, if you are reading this, thank you for your question! This one post is for you!
What would Warren Buffett think about our product?
Warren Buffet will be so proud! Uncle Warren has a certain style of investing. Based on what I've learned, he believes in and act based on three logics : 1) Invest in great businesses that can create value, 2) Buy them at a great price, and 3) Control your emotions and do not panic-react to the short-term market fluctuations. His decision-making is slow, his taking-action is swift. He reads, learns, and gets to know the companies. He waits for a good price patiently, and when it happens he strikes swiftly. In most cases he believes you need not to do anything as an investor. You need to sit on the sidelines, observe and wait for the right price. Buy only and if only a great business - you've learned so much about that you feel competent of your knowledge - is available at a fair price. In case of uncle Warren, he goes through the process on his own, through his readings, and potentially discussing it with his close circle of competent team. This is a slow process that takes patience and it is the hardest thing for a young and new investor to replicate. Read, and do nothing! Learn, and stay put! Observe, and don't act! It it the hardest thing to do for a new generation of investors that are used to act fast, be busy, try, fail, try again. It is getting harder to become a Warren Buffet. Now, if there was a company that could help young investor do the work that Warren Buffett does, wouldn't that be something Warren Buffett be proud? If there was a company that would tell you whether the companies you are looking at are great businesses or not, wouldn't that be interesting? If there was a company that would read the news, annual reports, and articles, and summarize them into a format you could read quickly and understand effortlessly during your morning train commute, wouldn't that worth paying for? If there was a company that monitored the prices for the moment it is in the vicinity of a fair price value so that you get notified at the right time, wouldn't Warren Buffett be proud? I'd believe so! I'd bet if Warren Buffett was born in 80s or 90s, or he was not rich enough to be compliant with the status quo of his decision making process, he would have built such company himself. But he is old, and rich enough not to care! But we are not, neither old, nor rich enough!
What is it that we are building?
We are building a company that uses the efficiency of technology, and accessibility and abundance of data in order to make it possible for anyone to become a Warren Buffett - or broadly said - to become a better investor. If you still remember, I'm writing this blog post in response to Assim - a panelist in an elevator pitch event I participated last night. One of the other panelists brought up an interesting topic that deserves some attention too. He said and I'm paraphrasing "I used to go to the library to get the data I needed, and I worked hard to find a way to make the data relevant to me and use it to make investment decisions. But my kids do not want to take the time to learn, and make the data work for them." The question is, why can't we use technology and data abundance we are fortunate to have these days into a tool that makes everyone a little bit more like Warren Buffett. The new generation who is used to reliable and free data, prescriptive reviews and online content, and is distracted by rapid noise, news, and drama of online lives, do not have Warren Buffett's patience and discipline. We can help them to be a little bit more like him. We are building a company that uses the efficiency of technology, and abundance of data to enable everyday people and especially younger ones make stock market investment decisions quicker and more effortless.
What's so unique about what we do compared to everything else that exists already?
I realize this question is a bit distanced from the the original question of the post, but it naturally comes to mind when someone (and by that someone, I mean myself) is crazy enough to claim Warren Buffett would be proud of what we do. It is natural to ask what is so special here and how come no one else has been doing it? I wholeheartedly agree with anyone who says all trade platforms and many other tools have a slew of research and analytics tools. I also wholeheartedly agree they are part of the problem. Having access to abundant data does not mean you can make good decisions. Let's experiment! Close your eyes and imagine a 30-year old sitting at the Blue Bottle coffee shop, trying to make an investment decision:
He logs in to a brokerage platform, thinking to himself, where do I start? From a screener tool? From an industry data table? Or would I search for the company I've heard about in the news or during the lunch conversation with my friends! Where to start? And then he gets a Twitters notification. He leaves the screen to check the messages, scrolls down the page, and reads a couple of more things, and then he remembers he was investing. Back to the brokerage platform and he is thinking to himself again, Ok, somehow I landed on one company. Ok, let's make a decision using the data and tools available on this page! I need to make a decision in 5 min or less! Cause that's how I usually find everything else I need online. I've heard it is a good thing to be fundamentalist in investing. Look for fundamentals. What's that P/E ratio? It's green. If it is green why not everybody else buying it? Oh, let's check the social sentiment, or go see what the financial analysts say. Even if it is the best company in the world, isn't it too expensive to buy? But Amazon is too expensive and everybody keep buying it. Will I not be in a better place if I just buy an S&P500 index fund? I've heard no one can pick stocks. What do I do now? Oooo, wait what is this new tool they've added... Why do I need this? Damn it, it's been 45 minutes. Why can't I just make a decision in 5 min!
This is a typical experience of a user in a world with an abundant data. Maybe the previous generation of investors had to deal with lack of data and the companies solved it by keep adding new tools and new data. But the new generation of investors need to deal with extracting insights from the ocean of data, and no one has solved that yet. This phenomenon is not limited to the investors. Internet has made data accessible to everyone, and the process of solving the problem of not enough data, has created the new problem of having too much data. Check Finimize.com, They just raised about $560K in series A funding. They read the news for you, and tell you what's the most important news of the day, and why you should care. Aren't there many other companies that just give you the news? Every website of every news channel does that. Their secret is they tell younger people what's worth their attention and why.
Our product does the same! We tell young investors which data is worth their time and why! We also do that openly, logically, and efficiently. It saves them from getting overwhelmed by the large volume of data, and brings them the insights that matter. Our simple, visual, and interactive one-pagers translate abundant data into insights. We do not give the users yet another set of data, we give them the ability to make sense of the data quickly and effortlessly. Ultimately we'll help our users to become more logical and less emotional investors.
This is a product Warren Buffett will be proud of!
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