Episode #395: Rob Koyfman, Koyfin – Constructing The Go-To Investing Platform
Visitor: Rob Koyfman is the founder and CEO of Koyfin.
Date Recorded: 2/2/2022 | Run-Time: 42:49
Abstract: In at present’s episode, we begin with Rob’s background at Goldman Sachs beneath the now Chief U.S. Fairness Strategist, David Kostin. Then he shares why a private ache level later in his profession led him to start out Koyfin. Rob walks us by the platform, which offers buyers with out Bloomberg entry to skilled grade information protection and the analytical instruments. We hear concerning the means to make use of visible instruments and create a custom-made dashboard to see what’s most essential to you.
As we wind down, we contact on some wonky consumer emails and Rob’s annual April Fools emails to customers.
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Hyperlinks from the Episode:
- 1:15 – Intro
- 2:05 – Welcome to our visitor, Rob Koyfman
- 4:19 – Ideas on how the Russian/Ukrainian rigidity may resolve
- 5:46 – Beginning his profession at Goldman Sachs & later within the hedge fund business
- 14:37 – Rob’s funding model
- 16:45 – The perception that led Rob to start out Koyfin
- 22:55 – Constructing the product
- 26:38 – The present person base & the totally different subscription fashions
- 33:01 – Plans to construct an app and take the software program cell by April 2022
- 35:03 – Highlights and lowlights of constructing investor software program
- 38:15 – The way forward for Koyfin
- 38:52 – His most memorable funding throughout his profession
- 40:11 – Study extra about Rob; koyfin.com for 10% off
Transcript of Episode 395:
Meb: Welcome to the “Meb Faber Present” the place the main focus is on serving to you develop and protect your wealth. Be a part of us as we focus on the craft of investing and uncover new and worthwhile concepts, all that will help you develop wealthier and wiser. Higher investing begins right here.
Disclaimer: Meb Faber is the co-founder and chief funding officer at Cambria Funding Administration. Because of business laws, he is not going to focus on any of Cambria’s funds on this podcast. All opinions expressed by podcast members are solely their very own opinions and don’t replicate the opinion of Cambria Funding Administration or its associates. For extra data, go to cambriainvestments.com.
Meb: What’s up, associates? We received an important episode for you at present. Our visitor is the founder and CEO of Koyfin, a monetary information and analytics platform for researching shares and understanding market developments. In at present’s present, we begin with our visitor’s background on the vampire squid, Goldman Sachs, beneath the now chief U.S. fairness strategist, David Kostin. Then, our visitor shares why a private ache level later in his profession led him to start out Koyfin. He walks us by the platform, which offers buyers with out Bloomberg entry to professional-grade information protection and analytical instruments. We hear concerning the means to make use of visible instruments and create a custom-made dashboard to see what’s most essential to you. As we wind down, we contact on some wonky consumer emails and Rob’s annual April Idiot electronic mail to customers. A particular provide to listeners of the “MEB Faber Present,” click on on the hyperlink within the present notes for a ten% low cost for brand spanking new customers. Please get pleasure from this episode with Koyfin’s Rob Koyfman. Rob, welcome to the present.
Rob: Thanks, Meb. Nice to be right here.
Meb: The place’s right here? I simply heard you, like each different VC and crypto maniac on the planet, have decamped to Miami. What was the reasoning there? Had sufficient of the New York winters or what?
Rob: That’s precisely proper. So, I used to be down right here in Miami for my spouse’s maternity go away after we had our first son and cherished it. Beloved not having snow or winter and figured we’d be outdoors much more with a brand new child. And so simply determined to discover shifting all the way down to Miami and simply pulled the set off. I used to be very shocked we truly pulled it off, however, yeah, ended up down right here and loving it.
Meb: Cool. Properly, as we chatted about earlier than the podcast began, I’ll be down there. And so hopefully we are able to meet up in particular person one among nowadays. The ETF convention, listeners, is now been moved to April. So, if you wish to go and say hello, I’ll be there. In the event you’re an advisor and also you need a free ticket, hit me up. I believe we received some extras. Anyway, you’re initially Ukrainian, proper?
Rob: I used to be born in Ukraine. I used to be born in a metropolis known as Chernivtsi, which is identical metropolis that Mila Kunis was born in.
Meb: Oh, magnificence. What’s the vibe, man? Do you continue to have household there? Type of a tense time, huh?
Rob: It’s a tense time. So, not plenty of household there. My spouse’s household lives in Ternopil, which is one other metropolis within the West. However mainly, Ukraine cut up down the center, which is the place Kyiv is. So, in case you’re within the western half, somewhat extra ethnic Ukrainian and possibly communicate Ukrainian. In the event you’re within the jap half, you’re in all probability somewhat bit extra ethnically Russian, or perhaps are aligned with extra of the Russian mind-set about issues. So, within the West, I don’t suppose they’re nervous about any type of invasion or takeover. I believe the jap provinces are those that actual threat the place all the issues and the drama is.
Meb: Do you could have some workers primarily based out of Ukraine?
Rob: A big majority of our workers are primarily based in Ukraine. After I began Koyfin, the primary engineers I employed had been in Ukraine. And so we’re a distant firm, we’re distant within the U.S. We have now some of us in Argentina. However we even have an workplace in Ukraine as a result of now we have so many individuals there. We have now an workplace the place individuals go into. And so we do have a fairly large presence there. Our workers have been somewhat bit nervous and anxious in seeing what’s happening.
Meb: Western facet?
Rob: Majority of them are Kyiv.
Meb: Yeah. Been on my to-do record to go to sooner or later.
Rob: Lovely metropolis.
Meb: Earlier than turning into a software program entrepreneur, you’re an funding man. In the event you needed to guess taking your insights as an investor, what’s your perception as to a possible final result right here? Do you could have any over a espresso estimation on how this resolves itself? We’re recording this, by the best way, listeners, starting of February. So, by the point this publishes, we’ll see if Rob is correct or incorrect. However what do you suppose the precise final result is right here?
Rob: I don’t have an informed guess. I’m simply type of like scratching my head like everybody else and being like, “What the hell is happening?” It doesn’t seem to be there’s an endgame or any type of technique or plan by Putin, type of flexing his muscle making an attempt to remain in energy and simply displaying that he’s the sufferer. I do suppose that, in some unspecified time in the future, they’ll in all probability take another areas, similar to they did with Crimea. So, in all probability a number of the areas bordering Russia, and perhaps a number of the areas bordering the Black Sea. There’s a rustic known as Moldova on the western facet, which is Russian managed. So, there could also be some areas there which they take over. I believe that’s what’s going to occur finally, and I believe there might be some type of settlement signed or understanding signed that’ll type of maintain the peace. I do suppose Russia has this concern of NATO. And as a wannabe superpower, they’re somewhat bit uneasy about NATO encroaching and increasing, and so they’re, clearly, not in NATO. And so their alignment with China, I believe, is smart in pushing again on this NATO presence. And so, sadly, Ukraine is caught within the center. And I actually hope that it’s going to type itself out and peacefully, indirectly.
Meb: Yeah, fingers crossed. You had been a Goldman metropolis man in a earlier lifetime, again earlier than they had been the vampire squid, or the hero, relying in your perspective. What was your focus? Had been you a fundy man? Had been you a macro man? Actual property? What had been you doing?
Rob: I began on Wall Avenue masking REITs, actual property funding trusts. On the time, it was the smallest sub-sector within the S&P 500, this was 2002. And doing south facet stuff, constructing fashions, writing analysis stories to present me a very nice entry into Wall Avenue and the way to take a look at corporations. After which a few 12 months after I began, my boss on the time, David Kostin, was moved into a gaggle known as Portfolio Technique to exchange Abby Joseph Cohen, who was the strategist on the time. Principally, they wished him to do exactly much more bottom-up analyses. Abby was simply macro market name. And so I transitioned to portfolio technique in Goldman Sachs analysis after which began specializing in your complete market. So, we had been each single firm, each single sector, international developments, and actually making an attempt to investigate the information, analyze developments which can be happening with valuation, with fundamentals, with totally different top-down and bottom-up themes, make sense of all of it and inform our purchasers, on the time, what to do with their cash, what sectors to obese, what sectors to underweight, stuff like that. So, that was plenty of enjoyable.
Meb: He’s now the top fairness strategist, proper?
Rob: So, he was the fairness strategist when he transitioned in 2003. Abby was there for a lot of years being the…I overlook the precise titles that they had. They had been doing barely various things. After which, at a sure level, Abby moved to…I believe she’s in wealth administration now, or some a part of Goldman. And so he stays the chief U.S. strategist.
Meb: He places out some nice work. REITs should have an attention-grabbing time there as a result of they’ve been round for a very long time, however significantly, I really feel like after the Web bubble burst REITs had a giant second as a result of there have been sure asset lessons that sailed by that 2000, 2003. Not a lot within the monetary disaster, however in that early 2000s interval, they actually began to get a bunch of tailwinds. Was that correct?
Rob: Yeah. So, REITs’ type of attention-grabbing. They’ve their very own designation, which signifies that they’ve a particular tax construction. They don’t must type of pay taxes. Buyers pay taxes, however the caveat is that they must cross inside 90% of their revenue out as dividend. What’s attention-grabbing about our group at Goldman, and the explanation David was promoted to portfolio strategist, which has a job with a lot increased visibility, is he checked out the true property sector from a company perspective. So, he checked out return on fairness and return on money and CapEx, and the way they’re allocating cash and their progress price. And all these corporations had been doing it very capital efficient and capital effectively and producing a really excessive return on capital at a time in 2000, 2001, 2002, while you had all these tech shares that had been falling off of very excessive valuations. And so, at the moment, the sector began getting increasingly publicity and extra mutual funds, and pension funds began taking note of the sector. And I believe David did a extremely good job of placing the context of how a REIT makes cash versus different sectors. And that’s why individuals observed him internally and why individuals externally advisable him to be a portfolio strategist.
However REITs began, it was like EOP and EQR, perhaps GGP or Boston Properties had been within the S&P. After which through the years, increasingly had been added to the S&P 500. Because the sector grew, as extra capital received allotted, as these corporations had been buying extra properties across the nation, and I don’t know what the sector is now, tech sector, however on the time, it was only a sub-sector. I keep in mind David famously, we had a morning name at Goldman and the analysts would go on and discuss to the salesforce and pitch them analysis that they only put out. And all these tech individuals would go on and be like, “Sienna goes to go up 100x and CMGI.” And he would all the time stand up and be like, “And now for a corporation that really makes cash, let me let you know about no matter.” And so he all the time had a extremely attention-grabbing model of delivering issues.
Some of the memorable issues I did there was introduce a report known as the hedge fund pattern monitor. Principally, I came across this information sooner or later and Fax stated I used to be taking part in round with it. I used to be like, “Holy crap. Do hedge funds report their holdings? This doesn’t appear proper. Hedge funds are secretive.” After which we began that and found 13Fs, and David’s like, “Put it collectively, see what you possibly can provide you with.” And I began aggregating stuff, and we began interested by how to consider probably the most concentrated names, how to consider totally different sector exposures, how to consider the place issues are altering. And that was a extremely common report that I believe nonetheless has plenty of traction within the funding neighborhood.
Meb: Unknowingly, I’ve actually referenced you through the years. We ended up writing a e-book on 13F investing. And I keep in mind that report being a very insightful one, and so all comes full circle there. It’s humorous as a result of I all the time wished that REITs, farmland as a pet matter we talked quite a bit about on this podcast, that’s exhausting as hell to put money into for most people. And I’ve all the time stated I’m shocked extra farming conglomerates or funds don’t attempt to roll out a REIT construction, however perhaps sooner or later. In a unique job that may be my profession selection, however an excessive amount of work for me at this level.
Rob: Loads of advantages there on the tax facet, plenty of advantages on the money movement facet and leverage facet. They’re simply capable of have a really excessive return on fairness due to the excessive leverage of the regular money flows. I keep in mind doing the evaluation after we began sector allocations and searching on the evaluation of the very best performing sector, this was in 2003 or ’04. I used to be like, “It needs to be tech. Tech grows quick, tech is a excessive earner.” And it was Staples. Staples was the very best performing sector for 30 or 40 or 50 years. And after we checked out that I used to be like, “This isn’t proper. Staples are boring corporations. They solely develop earnings 4%.” And on the finish of the day, so long as you’re steadily compounding earnings, that’s what issues and never having these big cycles. I’m certain tech, in some unspecified time in the future over the previous couple of years, has surpassed Staples due to the run. However at that time, it was Staples.
Meb: We did a analysis piece or a webinar on REITs, the place we had been displaying that REITs, I overlook the precise timeframe, nevertheless it might need been the final 20 years, was the very best performing asset class throughout the board, which I believe would shock lots of people. However even going again to the Twenties, we talked about this of the 30 or so French pharma industries. In the event you have a look at high one and two, one is tobacco, and two is beer. So, say what chances are you’ll about boring however the money cows anytime you promote to human needs finally ends up being a fairly good market. So, you’re on this monetary world in New York, crushing it, hopped over to some asset administration, hedge funds. What’s the time horizon right here? Is that this round monetary disaster or what?
Rob: So, Goldman analysis I went to work on the prop buying and selling desk in London for somewhat bit. This was 2008, not nice timing. This was in London, then went to a macro fund known as Caxton.
Meb: World-famous store?
Rob: World-famous store. So, I used to be there for somewhat bit, received some publicity to macro and the way macro buyers commerce. Then went to Citi fairness buying and selling technique to be on the buying and selling desk thematic commerce concepts and how one can specific them in choices and baskets and ETFs. Fairly attention-grabbing job. We had an inner hook that we had been working and we had been pitching purchasers’ concepts. So, that was somewhat little bit of better of each worlds. I then went to Lyxor Asset Administration, which is inventory gen to work of their macro workforce. After which lastly, labored at Tekne Capital, which is a long-short hedge fund that was spun out of Duquesne, every part from threat to choices buying and selling to all these different stuff. So, as you possibly can inform, I can’t maintain a job down for very lengthy, not very employable.
Meb: What was the origin story for eager to strike out by yourself?
Rob: After Tekne, I began searching for my subsequent function and determined to start out investing alone for somewhat bit and seeing how I do out there. And with that, I wished to get some instruments to investigate the market, perceive what’s happening. And I’d use Bloomberg and FactSet and CapIQ, and every part beneath the solar in my earlier jobs. However now that I used to be paying for it myself, I wished to search out another assets. So, I do know Interactive Brokers has a lot information, I’m certain they’ve a bunch of instruments that may be nice for me. And it was simply the identical very troublesome to make use of interface as I had seen 10 years earlier than.
Meb: I don’t understand how somebody doesn’t purchase Interactive Brokers. Possibly you should purchase them or LBO them, and simply slap like a fairly entrance finish on them and you’ve got the absolute best brokerage on the market. They’ve such a confounding customer support entrance finish.
Rob: I believe they know what they’re good at, and so they’re good at worth and entry. That’s what they compete on. However that’s not a foul method to consider what we’re making an attempt to do is type of take the entry and accessibility and the protection of Interactive Brokers and give it some thought extra from a analysis and analytics perspective.
Meb: Geez, they’re a $30 billion store. That’s their market cap? My God.
Rob: They’re fairly massive.
Meb: A lot for LBO’ing them.
Rob: You possibly can LBO on that.
Meb: They need to simply purchase Robinhood. There you go. Good. Interactive Brokers buys Robinhood. There’s their fairly entrance finish.
Rob: Are you able to think about buying and selling all of the devices on Interactive Brokers in your app with no Y scale?
Meb: Yeah, precisely. Properly, the Interactive Brokers all these memes cease and crypto individuals begin to find out about futures and spot Foreign exchange. There you go. That’s the true juice. Okay. So, what was your model at this level? You’d type of bounced round a lot of totally different locations. Had been you medium-term fairness particular person? Had been you buying and selling foreign money pairs? The place had been you doing it, fundy? Macro? What?
Rob: A little bit little bit of a mutt. So somewhat bit borrowing from all these totally different kinds that I discovered. So, favored shares and simply corporations. Preferred choices as nicely and interested by what’s the vol market saying and may this be expressed in choices extra effectively or be higher leveraged? I favored macro and interested by what are the top-down views or top-down themes to consider by way of both the Fed cycle or thematic developments? And I favored technical evaluation and actually interested by, is the market confirming my views? Or is it saying one thing perhaps concerning the macro that I’m not interested by? So, just a bit little bit of every part, after which simply making an attempt to suppose, what’s one of the best ways to implement one thing, to implement an thought? So, I might have a macro thought or thematic thought, and there’s simply a lot of methods to do it. And typically that’s the liquidity, typically it simply needs to be with that is probably the most direct method or has fewer different components which can be impacting it. So, my buying and selling model on the time, was in all probability 40% single inventory, 40%, ETFs, and 20% futures choices currencies. I’d say with currencies, the best way I take into consideration currencies is simply you get large leverage. That’s the fantastic thing about it. Usually, when there’s a commerce available in currencies, there’s in all probability commerce available in indices or equities or ETFs. Possibly in case you’re taking part in the Turkish lira and what they’re doing there, that’s in all probability a direct foreign money commerce and extra soiled to play it in equities. However sometimes, the themes that I’m interested by by way of the place the Fed is or which themes are working, that’s sometimes extra straight expressed in equities or ETFs or indices.
Meb: So, you’re saying, “All proper, type of like Meb, open-minded, I’ll use no matter works throughout no matter self-discipline.” Additionally, like Meb, I’m an affordable bastard, I’m not going to go pay for Bloomberg out of my pocket. I joke on this podcast that within the very, very early days of my profession, my technique for gaining access to all these varied information sources was by associates who had been at graduate college at Stanford. So, that they had the logins for all the assorted databases, which they so generously shared. Thanks, GSB. So, you stated, okay, I’m trying round looking for a great answer. Most individuals would cease there and simply both fork up for one among these or cobble ’em collectively. What was the subsequent iteration for you?
Rob: So, it was the primary time that I received an opportunity to essentially discover what’s on the market, and actually making an attempt to make use of the merchandise for my workflow. And so the merchandise that had been meant for people simply didn’t have the potential to do what I wished to do. They didn’t have the information or they didn’t have the precise performance. After which on the skilled facet, not solely was the associated fee very excessive, in order that’s one variable, however they had been simply very disagreeable to make use of. They had been all very previous. For FactSet and CapIQ, the use case is Excel. You get that information to place it into Excel. You don’t get these platforms to make use of the platform on the entrance finish. You get the platform for the information. And sometimes, you’re doing all of the evaluation in Excel. And after I began to place collectively my assets and interested by what I want to make use of, I used to be similar to, “That is loopy what’s happening on this sector, on this discipline.” You’ve got this technological revolution, you could have these software program corporations which can be creating these stunning merchandise, corporations like Tableau which can be actually revolutionizing how that’s visualized. After which in finance, it simply type of crap. It simply appears to be like prefer it’s nonetheless from the Eighties. And simply began taking place these rabbit holes. Why is that the case? Why is it that this can be a discipline the place there’s simply nothing revolutionary taking place and every part’s simply tremendous previous? And the response I received again was, look, the information is tremendous costly. No person new might are available as a result of the information is simply actually costly.
And so I began analyzing and began calling round being like, “How a lot does that really price? Is it a whole lot of thousands and thousands? Is it tens of thousands and thousands? Is it a whole lot of 1000’s?” And I satisfied myself the place I used to be capable of finding out that the information is pricey. It’s not low cost, nevertheless it’s not overwhelmingly costly. And what I wished to do is offered, and there’s information on the market that’s accessible to construct a platform that’s extra intuitive, extra purposeful, simpler to make use of than a number of the platforms on the market. So, that’s after I began and the way I began interested by this idea of Koyfin and began refining it and determined to bootstrap it. At first, I type of stated, “Hey, that is one thing I need to construct for myself. It’s one thing that I’ll rent a few engineers to assist me construct.” I felt very strongly that I knew what I wished the product to appear like, having been a person and investor. However I didn’t actually know how one can construct the product or how one can construct an engineering workforce. And so I began fairly small with a workforce in Ukraine. After which as soon as I noticed some outcomes, I made a decision to develop that workforce. And so slowly, however absolutely, we had been constructing the product, getting suggestions, placing it on the market, as some increasingly individuals began to make use of it. After which at a sure level, it was sufficient traction, there was sufficient alternative that I noticed on this firm that I raised some enterprise capital cash to begin to develop the workforce and shifting somewhat bit quicker.
Meb: What 12 months would this be within the timeline?
Rob: I made a decision to launch Koyfin on March seventh, 2016.
Meb: Congrats, man. 5 years, nicely achieved. You survived the gauntlet of probably the most startups attending to be a toddler. Once you regarded round, what was the primary lacking piece? I keep in mind going again 20-plus years and utilizing issues like TradeStation, utilizing, I can’t even keep in mind at this level, so lots of the varied software program information packages. What was it that you simply stated, “Look, I need this however this isn’t on the market, at the very least model 1.” After which we are able to stroll ahead to what you could have at present.
Rob: So, the very first thing is the information protection, is I wished one thing that covers a bunch of various belongings and appears throughout asset lessons and never simply targeted on one factor. So CapIQ, very a lot targeted on equities, doesn’t have plenty of stuff on economics or macro. Morningstar is clearly very mutual-fund-focused. So, the information protection. I wished a platform that has plenty of fairness, information fundamentals, valuation, but in addition different asset lessons like mutual funds, ETFs, financial information, bonds, currencies. And so the information protection and professional-grade information protection was essential to me.
The second factor was actually the analytical instruments to show that information into data. So, I didn’t need a platform the place I needed to suck stuff into Excel and do the workflow in Excel. I wished a platform the place I had the performance within the platform to do what I wished it to do. My favourite, personally favourite platform out of all of the platforms I’ve used, is Bloomberg. Bloomberg, there’s plenty of unhealthy issues about it, together with the associated fee and a few UI stuff, nevertheless it’s truly actually highly effective. And it’s actually highly effective as a result of it has plenty of performance. Not solely does it have only a ton of information nevertheless it has 30,000 features that you need to use to investigate that information. Michael Bloomberg was early on in a few of these ideas that at present are fairly widespread. And he constructed all of the graphing stuff himself and capable of actually visualize and graph any type of information. The truth that you are able to do keyboard shortcuts and entry stuff actually shortly, Superhuman is an organization that popularized this within the electronic mail world, and now it’s type of turning into a pattern in software program. However Bloomberg, these keyboard shortcuts, they did it as a result of there was no mouse after they began placing their platform collectively. So this means to essentially get by the information by graphing, by dashboards, by snapshots, and having that performance within the platform, that was tremendous, tremendous essential to me.
And the very last thing is simply having a contemporary and intuitive person interface. So, one thing that was simple to make use of, someplace the place you could possibly click on round and actually felt extra like a Airbnb than it did like Interactive Brokers or Bloomberg. That was one other factor that was essential to me. Kind of backing as much as my profession, one of many issues that my first supervisor, David Kostin, was actually good at is presenting information, is mainly taking a bunch of information after which saying, “All proper. That is how we should always manage this, or that is the factor we should always name out.” And we’d spent a very long time in our stories actually interested by how do you manage? How do you visualize? How do you current information? And that’s not one thing that was actually achieved on Wall Avenue. These individuals would simply draw information on a web page and throw a bunch of numbers and say, “Right here, learn it.” Whereas, he spent plenty of time interested by, how was the information interpreted? And had me begin studying Edward Tufte books and interested by information visualization and stuff like that. So, that’s one thing that was ingrained in my thoughts very early on in my profession, and that’s one thing that I actually recognize, and that’s one thing that I wished to indicate up within the platform as nicely.
Meb: How lengthy did it take you to get model 1 out? I think about it was not low cost, though you appear to have actually been tailored the distant workforce earlier than it was cool. What was the unique rollout? Family and friends, or did you do it the place it’s truly public-facing fairly fast?
Rob: One of many issues that I thought of is what can we innovate on, what can we add, is the enterprise mannequin, is how we promote the product. And after I regarded round within the tech world, within the software program world, the very best corporations, the fastest-growing corporations had been rising as a result of they had been a freemium. They had been gifting away a bunch of the product totally free after which charging for extra superior performance. And that’s one thing that I believed was sensible, one thing that I believed was product plus progress, that in case you have the very best product on the market, you let individuals use it, and so they’ll pay you for it in case you’re fixing an issue for them. So proper from the start, what we wished to do was have a freemium mannequin and have a considerable portion of our product to be accessible totally free, after which cost customers for extra stuff. So to reply your query, the primary model was in all probability about 18 months after launch and there was iteration. I discovered a designer on Craigslist that I used to be working with and we had been designing it.
Meb: And to be clear, did you could have any software program chops your self?
Rob: Zero. Zero software program chops. And so I simply labored with the designer. First iteration was me working with the software program engineers, drawing it on pencil and paper and giving it to them. After which when the product got here out, I used to be similar to, “What the hell is that this? That is the ugliest factor I’ve ever seen.” They had been like, “Properly, get a designer.” I’m like, “A designer? What do they do?” I discovered a designer, her title was Mei, she had a full-time job. Within the weekend she was serving to me design a bunch of the markups and a bunch of the screens. And it simply so humorous seeing the unique designs and what Koyfin initially regarded like. The skeleton was there, that it was a single-page software, it targeted on charting. There have been issues that you could possibly do on the facet to impression the charts and there was a menu. And the best way I thought of it was from a Bloomberg perspective. These are the 50 features that folks use on daily basis, and I need to concentrate on 10 at first. So, I targeted on graphing and movers and monetary analyses and mutual fund description and GM, which is the efficiency graph. I actually thought of it from a modular perspective, like we need to create modules. We don’t need something to rely on the rest. And that’s actually essential about our product as a result of it’s a really flat construction. It’s a really modular construction, which is very easy to navigate and to consider.
Launched the primary model, put it within the wild. First, we didn’t actually have a web site. You’d go to Koyfin and it might be the app. And we had a debate internally whether or not that was good or not and determined to have a touchdown web page to explain what it’s as a result of some individuals would go to it and be like, “Oh my God, what is that this? It feels such as you’re about to steal my data. I don’t know what that is.” So, we had somewhat gateway with a touchdown web page. After which simply blast it out to my community, had virtually no utilization. I used to be going round funding golf equipment. I keep in mind after I went to Columbia College and pitched it up the funding membership there and now we have 18 individuals enroll. And my co-founder messaged me he’s like, “Oh my God, 18 individuals signed up.” However 17 of them didn’t use it the next day. It’s very iterative, interested by what are individuals utilizing it for? Why are they utilizing it? And I used to be studying plenty of web sites on the time on product administration and the way to consider product improvement. It’s a complete science, it’s a complete framework. Why do individuals use issues? The roles to be achieved in framework. If in case you have one thing, how do you determine what’s working? Why are individuals utilizing it? How do you add to that? Do you concentrate on issues persons are utilizing, or do you concentrate on issues that folks aren’t utilizing? And do you concentrate on issues that persons are requesting? And I keep in mind at first, individuals had been simply requesting stuff and we had been doing every part. After which, at a sure level, we had been like, “Wait, what the hell are we even constructing right here?” So having a framework to prioritize options and having a framework to outline our customers was essential. And so we made plenty of errors, however have mounted them, figured them out, and have been shifting ahead, which is essential.
Meb: So, you develop into a software program founder, you begin to determine it out. And software program is all about implementation and iterations. The place are we at present? What are individuals primarily utilizing this for?
Rob: If I summary our software program away or how we’re interested by our customers, there’s solely 5 issues that our customers are doing that we need to assault and assist them do from a software program perspective.
Meb: I assume the overwhelming majority are professionals/engaged people.
Rob: So, nearly all of our customers are people, after which the second largest phase is monetary advisors. And it’s people who want extra superior instruments than Yahoo Finance or their brokerage. So it’s not like Robinhood individuals who had been like, “Hey, I ponder what the EBITDA margin is of Apple and the way it compares to Fb.” So, nearly all of people don’t know what to do with our software program as a result of it’s fairly superior. There’s a studying curve. The largest phase of people now we have are software program engineers. They have an inclination to have extra disposable revenue, they are typically somewhat extra quantitative. Loads of former Wall Avenue persons are utilizing us as people, nevertheless it’s positively for the extra superior particular person person. And to reply your query straight, so the free model, which is 90% of our customers or 95% of our customers is free. Then now we have three tiers. We have now a fundamental tier, which is $15 a month paid yearly, now we have the plus tier, which is $35 a month paid yearly. After which now we have the professional tier, which is $70 a month paid yearly. The distinction is you get extra information, extra performance, extra customization as you go up within the tier construction.
Meb: Is among the greatest levers the power to export information? Of the tiers, what’s the primary levers between these?
Rob: Taking all these classes one after the other. So, on the information facet, for instance, the mutual fund that’s solely in our professional tier, as a result of now we have to pay per person for that information. And so now we have to place it within the increased tier. We all know that monetary advisors sometimes use that information, in order that they have somewhat bit extra disposable revenue. So, that’s one instance of one thing that’s simply within the professional tier. And now we have some very fundamental performance within the free tier for mutual fund information, like a chart or simply seeing what mutual funds now we have. Downloading information is in our center tier. So, in case you wished to obtain a dashboard or obtain the constituents of an ETF, you are able to do that within the plus or professional tier. So, the monetary information for a inventory. Within the free tier, we solely have three years value of free information. However in case you wished to take a look at the total 5 years, that’s fundamental, 20 years is plus, after which full historical past is professional. So, that’s an instance of information availability.
One other factor is the power to create your personal dashboards. So, one of many advantages of Koyfin is you possibly can create your watch record and dashboards of various securities, of various graphs, combine and match other ways to take a look at the market. So, in case you’ve ever used the Launchpad characteristic on Bloomberg, which is permitting you to customise the way you need to have a look at the market, that’s what the dashboards are replicating. And also you get two free dashboards within the free model and also you get eight within the fundamental model and also you get limitless within the plus and professional model. One other instance is transcripts. So, firm transcripts or firm filings are solely within the plus model. We have now some premium information sources like Reuters which can be solely within the fundamental and up model. So, simply interested by extra superior workflows, customization, extra superior skilled information.
Meb: I interrupted you, sorry. You had been going to stroll by the primary use instances for why persons are interacting with it.
Rob: The 5 buckets, if we take into consideration are analytics, discovery, monitoring, collaboration, and execution. In the event you summary away what our customers are doing, it type of falls in these 5 buckets relating to investing. So, on the analytic facet, the most well-liked characteristic by far is our graphic or means to graph any type of time collection or any type of monetary information, so clearly inventory costs or mutual fund costs, or complete returns. However then if you consider any monetary or any financial information or ETF flows or drawdowns or no matter it’s, you possibly can graph that on Koyfin very simply. And so you could possibly simply kind in a collection and add the collection after which transfer the graphs round. That’s actually highly effective. That’s differentiated. That’s the primary characteristic.
The second characteristic is actually the dashboards I simply talked about, which is customizing the totally different modules to the way you need to arrange your platform. So, within the dashboards, you possibly can have a watch record and two graphs or three watch lists or 4 graphs collectively, combine and match various things. And that customization characteristic is tremendous highly effective, and our second most used perform.
The third most used perform are the snapshots. And snapshots are a method for a person to investigate a selected safety. So, now we have an summary snapshot, an outline snapshot, a dividend snapshot, an ETF publicity snapshot for corporations. For ETFs, now we have a constituents snapshot, we might see the constituents but in addition see the contribution of every inventory and every sector to that ETFs efficiency. We have now mutual fund snapshots. We have now totally different snapshots for the securities for individuals to essentially simply get a view of that safety with out having to search for each single merchandise. So, that’s the third most used perform.
The fourth are market dashboards. So now we have a bunch of market dashboards that you could browse totally different components of the market. So, an element’s dashboard the place you possibly can see how components are performing sectors, currencies, indices, international yields, yield curves, other ways of slicing and dicing the market, and that’s our fourth most used perform.
After which there’s a bunch of performance that’s on the tail finish. So, now we have information that’s fairly common. We have now a scatterplot that’s utilized by lots of people. We have now a perform that’s one among my favourite features I created for myself known as the a lot of charts perform, the place you place in an ETF or a watch record or an index and it exhibits you all of the charts in that index or ETF. And so if anybody is technical evaluation or developments, that’s a extremely quick method of having the ability to see that.
Meb: We received 13F’s in there, or what?
Rob: You realize, we don’t have 13Fs and that’s as a result of the information is tremendous exhausting to license. Not one of the suppliers will give us the 13F information within the full view. They’ll give us the highest 20 or the highest 10. I believe what we’re going to do is actually simply use the SEC web site and get the information ourselves as a result of the information is definitely higher organized now than it was. There’s, like, a extra outlined method of how 13Fs must be filed and the way they must be tagged in every safety. And so I believe we’re going to be getting that information ourselves, however coming from the one that created the hedge fund pattern monitor from 13Fs?
Meb: That’s what I imply. Come on, man. Come full circle. The dashboard is nice. To me, that may be a fairly good homepage. So many of those apps and web sites, you may get shares and that’s about it. However significantly for the macro individuals, they need to see a lot of various things. It’s rather well achieved. When are you guys going to construct an app? Is that within the playing cards?
Rob: Yeah, it’s within the playing cards. Simply expanded that workforce to get that out quick. It’s type of been lingering somewhat bit longer than I wished. However every part goes proper, it ought to be out by April.
Meb: Oh, wow. Quickly.
Rob: Quickly. Sure. So, it’s type of attention-grabbing. Our platform is desktop first, we are able to’t do the workflows that we’re making an attempt to do on the telephone. However the telephone is clearly crucial by way of having the ability to observe your portfolio or watch lists or information or simply what’s taking place out there. And so we’ve been actually interested by what goes on the app, what’s the characteristic of the app? How does it hook up with the general software? However it’s trying good, it’s going to be nice. It’s going to be hopefully out in April.
Meb: Good. Properly, trying ahead to that since you guys have discovered a wedge there, I believe on what I used to be saying with the dashboard. So far as roadmap, you’ve constructed this firm, it’s profitable, what’s the longer term appear like for you guys as you look out to 2022 and past? Is it simply countless characteristic requests from customers? Do have some designs on enlargement to sure information silos or options? What’s subsequent for you guys?
Rob: The long run for Koyfin is actually to be the monetary working system for various customers, for various buyers. And what meaning is, after I have a look at our platform, now we have everybody from college students to hedge fund managers utilizing our platform, which is actually unusual as a result of they’re not the identical person persona. They’re totally different person personas. However the motive that they’re utilizing our platform is as a result of they’ve widespread workflows and so they’re capable of customise the system for their very own use instances. And so after I take into consideration the longer term, I take into consideration that energy and that place that now we have of been capable of customise the platform for the use case of that specific investor. So, our imaginative and prescient sooner or later is that we’re going to be linked to any type of monetary information that’s on the market. After which having that toolkit that the person can then select of how they need to have a look at that monetary information, whether or not it’s by portfolio analytics or mannequin portfolios or portfolio optimizations or simply graphing or snapshots and having the ability to combine and match how they need to have a look at the market, what asset lessons to take a look at, and the way they need to manage.
Meb: Inform me some highlights and lowlights of this expertise, software program, designer, entrepreneur, working with clients. I think about, now we have virtually 100, in all probability over 100,000 buyers now, so I can inform tales all day about enjoyable, unhappy, insightful suggestions we get on a regular basis. However what’s it been like in your facet? Was it only a 12 months of meme inventory requests final 12 months? Something humorous, bizarre, totally different that you simply need to cross alongside?
Rob: So, many alternative customers and folks. And now we have over 300,000 customers now. It’s attention-grabbing how individuals work together over electronic mail, simply persons are well mannered and a few persons are good and a few persons are participating, different persons are simply dicks. I’m sorry, can I say that?
Meb: Yeah. That’s my first rule of social media and simply being a human within the 2020s is DBAD, don’t be a dick.
Rob: That rule is consistently violated. However we’ve gotten our fair proportion of anti-Semitic responses to my emails, simply tremendous unusual and all the time somewhat bizarre. We had Barbra Streisand’s assistant attain out to us one time and try to arrange a name with Miss Streisand. That didn’t occur as a result of we don’t have choices information on our platform but.
Meb: She’s a giant dealer. I didn’t know she’s nonetheless cranking out. Good for her.
Rob: That’s my favourite assist electronic mail to see. I want we did have choices information, so attempt to convert her.
Meb: You possibly can construct it out only for her and say, “Hey, you give us no matter is above the pro-fee, and it may be the influencer/celeb charge, we’ll do some customized bespoke work.”
Rob: Yeah. I used to look at her in “Yentl,” and that’s going to be a consumer. I despatched out April Idiot’s electronic mail, the primary 12 months, we despatched out an electronic mail, rolling out a characteristic that predicts the inventory market with AI and ML and it’s 99% correct, and click on right here to entry it. Click on right here is Wikipedia web page to April Fools. And so individuals didn’t even click on on the hyperlink. They’re simply, like, replying, “How might you do that? There’s no method this is smart.” That’s all the time enjoyable to see.
Meb: In all probability the very best click-through price you ever get for a marketing campaign. However it’s even funnier that it didn’t even get clicks throughs, it’s simply learn the headlines remark.
Rob: Two years in the past, we did one. That is throughout COVID, so we’re similar to, “Hey, troublesome atmosphere on the market. Get Koyfin for all times for $999. Click on right here,” and there’s April Fools. Lots of people discovered that humorous however you then even have lots of people who’re pissed off, they had been like, “How dare you waste my time?” That’s all the time attention-grabbing to see of who has a humorousness. After which final 12 months, we had an April Fools of Koyfin is totally pivoting in direction of crypto. So, we had an electronic mail with me and Wealthy, my co-founder, with laser eyes, the inventory factor isn’t working or this conventional stuff isn’t working. We’re pivoting in direction of crypto, and we had a hyperlink. However the unhappy half is the hyperlink, apparently, Wikipedia received hacked. So, the Wikipedia April Fools hyperlink directed you to, like, a porn web site. And so individuals had been emailing me like, “Have you ever clicked on the hyperlink? Did you…” And I’m similar to, “Dude, loosen up. It’s Wikipedia.” They usually had been like, “No, click on on the hyperlink.” So, I used to be similar to, “Oh my God.”
Meb: You bought to watch out with the Crypto crowd. I had posted a tweet years in the past from Switzerland with my buddy, Jeremy Schwartz, the top of analysis at WisdomTree joking that they had been placing out a light-weight coin ETF and the way shortly that whipped all over the world and the way offended individuals had been and Jeremy, who’s at a giant company firm, whose PR workforce wasn’t amused at my joke. However it was humorous anyway. It’s good to have a humorousness, significantly over the past couple of years. What’s the plan? Are you simply going to remain impartial? Are you going to continue to grow? What number of of us y’all received now?
Rob: 25 workers, seeking to do our Collection A fairly quickly, so nonetheless a fairly younger firm. For us, like the longer term, construct the very best product on the market, clear up our person’s wants. By way of financially getting acquired or no matter that’s going to deal with itself. We’re in an area that simply has a lot potential and a lot alternative and a lot change. And now we have this actually attention-grabbing positioning of getting the very best product and analytics on the market that folks love and rave about. And so we’re simply going to be constructing performance, fixing our person’s wants, and I believe the end result will deal with itself.
Meb: Your profession spanned each beginning an organization and being in a lot of funds, in massive funding outlets. Most memorable, good, unhealthy, in between funding?
Rob: I believe the funding I keep in mind probably the most is CMGI within the ’90s. I don’t know in case you keep in mind.
Meb: Oh, God. You simply induced me sweaty palms. You simply triggered me.
Rob: After I was first began studying about shares and it was known as the incubator, it’s an incubator. I went from 20 to 2,000 to, like, 1 to 0. I purchased it, in some unspecified time in the future, earlier than 2000, and clearly offered it at an enormous loss. However that was enjoyable. One in every of my first experiences buying and selling and investing and…
Meb: You aren’t the one particular person. I imply, everybody owned it, I owned it. There’s so many issues about this one. They’d named the Patriots discipline, it was CMGI discipline. So, as my native Lakers facility is now known as crypto.com. There’s a bunch of analysis that exhibits in case you’re a public firm, then title a stadium the shares or simply an absolute dumpster fireplace, the worst sentiment indicator. It was virtually like a VC portfolio roll up all into one. AltaVista was a portfolio firm.
Rob: There have been a few authentic ones in there, however 100 of them and possibly 2 received acquired and had an actual product. The others had been simply market cap to clicks, proper? That was the valuation measure.
Meb: I’ve to take a look at the eventual autopsy. It was like $10 million, $20million, $30 billion firm. The place do individuals go in the event that they need to discover out what you’re as much as, what’s happening in your world, try the software program, give it a strive? What’s the very best spot?
Rob: Yeah, go to koyfin.com, create a free account takes two seconds, begin utilizing the software program. And in case you prefer it, and we allow you to analyze the market, test your investments then improve to the paid model.
Meb: Superior. This has been a blast. Thanks a lot for becoming a member of us at present.
Rob: Thanks a lot, Meb. We’ve had a good time.
Meb: Podcast, listeners, we’ll publish present notes to at present’s dialog at mebfaber.com/podcast. In the event you love the present, in case you hate it, shoot us [email protected], we like to learn the opinions. Please evaluate us on iTunes and subscribe the present anyplace good podcasts are discovered. Thanks for listening associates and good investing.
