Episode #395: Rob Koyfman, Koyfin – Constructing The Go-To Investing Platform – Meb Faber Analysis



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 as we speak’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 via the platform, which supplies traders with out Bloomberg entry to skilled grade knowledge protection and the analytical instruments. We hear in regards to the potential to make use of visible instruments and create a personalized 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.

As a particular supply to listeners of The Meb Faber Present, click on right here for 10% off for brand new customers.


Sponsor: If you happen to’re looking for the much less apparent and are curious in regards to the ever-changing world and the way it impacts investing, The Energetic Share podcast is for you. Hear thought-provoking conversations with thought leaders, firm executives, and William Blair Funding Administration’s personal analysts and portfolio managers as they share distinctive views on investing in a world that’s at all times evolving. Take heed to The Energetic Share on Apple Podcasts, Google Podcasts, Stitcher, Spotify or TuneIn or go to right here.


Feedback or strategies? Interested by sponsoring an episode? Electronic mail Colby at [email protected]

Hyperlinks from the Episode:

  • 1:15 – Intro
  • 2:05 – Welcome to our visitor, Rob Koyfman
  • 4:19 – Ideas on how the Russian/Ukrainian pressure would possibly resolve
  • 5:46 – Beginning his profession at Goldman Sachs & later within the hedge fund trade
  • 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 completely different subscription fashions
  • 33:01 – Plans to construct an app and take the software program cellular 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 – Be taught 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 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. Resulting from trade rules, 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 mirror the opinion of Cambria Funding Administration or its associates. For extra info, go to cambriainvestments.com.

Meb: What’s up, mates? We received an amazing episode for you as we speak. Our visitor is the founder and CEO of Koyfin, a monetary knowledge and analytics platform for researching shares and understanding market developments. In as we speak’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 via the platform, which supplies traders with out Bloomberg entry to professional-grade knowledge protection and analytical instruments. We hear in regards to the potential to make use of visible instruments and create a personalized 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 e mail to customers. A particular supply to listeners of the “MEB Faber Present,” click on on the hyperlink within the present notes for a ten% low cost for brand new customers. Please take pleasure in 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 liked it. Beloved not having snow or winter and figured we’d be exterior 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 really 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 will meet up in individual one in every of lately. The ETF convention, listeners, is now been moved to April. So, if you wish to go and say hello, I’ll be there. If you happen to’re an advisor and also you desire 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 similar 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 principally, Ukraine cut up down the center, which is the place Kyiv is. So, should you’re within the western half, just a little extra ethnic Ukrainian and doubtless communicate Ukrainian. If you happen to’re within the japanese half, you’re in all probability just a little 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 fearful about any kind of invasion or takeover. I believe the japanese provinces are those that actual danger 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. Once I began Koyfin, the primary engineers I employed have been in Ukraine. And so we’re a distant firm, we’re distant within the U.S. We now have some people in Argentina. However we even have an workplace in Ukraine as a result of we have now so many individuals there. We now have an workplace the place folks go into. And so we do have a reasonably large presence there. Our workers have been just a little bit nervous and anxious in seeing what’s occurring.

Meb: Western aspect?

Rob: Majority of them are Kyiv.

Meb: Yeah. Been on my to-do checklist to go to someday.

Rob: Stunning metropolis.

Meb: Earlier than changing into a software program entrepreneur, you’re an funding man. If you happen to needed to guess taking your insights as an investor, what’s your perception as to a possible end 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 end result is right here?

Rob: I don’t have an informed guess. I’m simply kind of like scratching my head like everybody else and being like, “What the hell is happening?” It doesn’t appear to be there’s an endgame or any kind of technique or plan by Putin, kind of flexing his muscle attempting to remain in energy and simply exhibiting that he’s the sufferer. I do suppose that, sooner or later, they may in all probability take another areas, identical to they did with Crimea. So, in all probability among the areas bordering Russia, and perhaps among the areas bordering the Black Sea. There’s a rustic known as Moldova on the western aspect, 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 shall be some type of settlement signed or understanding signed that’ll kind of hold the peace. I do suppose Russia has this worry of NATO. And as a wannabe superpower, they’re just a little bit uneasy about NATO encroaching and increasing, they usually’re, clearly, not in NATO. And so their alignment with China, I believe, is sensible 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 kind itself out and peacefully, ultimately.

Meb: Yeah, fingers crossed. You have been a Goldman metropolis man in a earlier lifetime, again earlier than they have 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 have been you doing?

Rob: I began on Wall Avenue overlaying 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 aspect stuff, constructing fashions, writing analysis studies to present me a very nice entry into Wall Avenue and the way to have a look at corporations. After which a couple of 12 months after I began, my boss on the time, David Kostin, was moved into a bunch known as Portfolio Technique to interchange Abby Joseph Cohen, who was the strategist on the time. Mainly, they wished him to just do 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 all the market. So, we have been each single firm, each single sector, world developments, and actually attempting to investigate the information, analyze developments which might be occurring with valuation, with fundamentals, with completely different top-down and bottom-up themes, make sense of all of it and inform our shoppers, 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 pinnacle fairness strategist, proper?

Rob: So, he was the fairness strategist when he transitioned in 2003. Abby was there for a variety of years being the…I neglect the precise titles they’d. They have 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 an enormous second as a result of there have been sure asset courses that sailed via 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 need to type of pay taxes. Buyers pay taxes, however the caveat is that they need to 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 actual 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 development fee. And all these corporations have been doing it very capital efficient and capital effectively and producing a really excessive return on capital at a time in 2000, 2001, 2002, whenever you had all these tech shares that have 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 being attentive to 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 folks seen him internally and why folks externally advisable him to be a portfolio strategist.

However REITs began, it was like EOP and EQR, perhaps GGP or Boston Properties have been within the S&P. After which over time, increasingly have been added to the S&P 500. Because the sector grew, as extra capital received allotted, as these corporations have 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 speak to the salesforce and pitch them analysis that they only put out. And all these tech folks would go on and be like, “Sienna goes to go up 100x and CMGI.” And he would at all times rise up and be like, “And now for an organization that really makes cash, let me let you know about no matter.” And so he at all times had a extremely attention-grabbing model of delivering issues.

One of the vital memorable issues I did there was introduce a report known as the hedge fund pattern monitor. Mainly, I discovered this knowledge someday and Fax stated I used to be enjoying 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 may give you.” And I began aggregating stuff, and we began serious about how to consider essentially the most concentrated names, how to consider completely different sector exposures, how to consider the place issues are altering. And that was a extremely well-liked report that I believe nonetheless has plenty of traction within the funding group.

Meb: Unknowingly, I’ve definitely referenced you over time. 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 at all times wished that REITs, farmland as a pet matter we talked rather a lot about on this podcast, that’s onerous as hell to spend money on for most folk. And I’ve at all times stated I’m shocked extra farming conglomerates or funds don’t attempt to roll out a REIT construction, however perhaps someday. In a distinct job that might be my profession alternative, however an excessive amount of work for me at this level.

Rob: Loads of advantages there on the tax aspect, plenty of advantages on the money move aspect and leverage aspect. They’re simply in a position to have a really excessive return on fairness due to the excessive leverage of the regular money flows. I keep in mind doing the evaluation once we began sector allocations and looking out on the evaluation of the perfect performing sector, this was in 2003 or ’04. I used to be like, “It must be tech. Tech grows quick, tech is a excessive earner.” And it was Staples. Staples was the perfect performing sector for 30 or 40 or 50 years. And once 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 enormous cycles. I’m positive tech, sooner or later 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 have been exhibiting that REITs, I neglect the precise timeframe, however it may need been the final 20 years, was the perfect 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. If you happen to have a look at high one and two, one is tobacco, and two is beer. So, say what you might about boring however the money cows anytime you promote to human needs finally ends up being a fairly good market. So, you might be 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 just a little 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 just a little bit, received some publicity to macro and the way macro traders commerce. Then went to Citi fairness buying and selling technique to be on the buying and selling desk thematic commerce concepts and the right way to categorical them in choices and baskets and ETFs. Fairly attention-grabbing job. We had an inner hook that we have been working and we have been pitching shoppers’ concepts. So, that was just a little 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, all the things from danger to choices buying and selling to all these different stuff. So, as you may inform, I can’t maintain a job down for very lengthy, not very employable.

Meb: What was the origin story for desirous to strike out by yourself?

Rob: After Tekne, I began searching for my subsequent function and determined to start out investing alone for just a little bit and seeing how I do available in the market. And with that, I wished to get some instruments to investigate the market, perceive what’s occurring. And I’d use Bloomberg and FactSet and CapIQ, and all the things beneath the solar in my earlier jobs. However now that I used to be paying for it myself, I wished to seek out another sources. So, I do know Interactive Brokers has a lot knowledge, I’m positive they’ve a bunch of instruments that might be nice for me. And it was simply the identical very tough to make use of interface as I had seen 10 years earlier than.

Meb: I don’t know the way 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, they usually’re good at value and entry. That’s what they compete on. However that’s not a nasty method to consider what we’re attempting to do is kind 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 huge.

Meb: A lot for LBO’ing them.

Rob: You may 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 folks begin to study futures and spot Foreign exchange. There you go. That’s the actual juice. Okay. So, what was your model at this level? You’d type of bounced round a variety of completely different locations. Had been you medium-term fairness individual? Had been you buying and selling forex pairs? The place have been you doing it, fundy? Macro? What?

Rob: Just a little little bit of a mutt. So just a little bit borrowing from all these completely different types that I discovered. So, preferred shares and simply corporations. Appreciated choices as nicely and serious about what’s the vol market saying and may this be expressed in choices extra effectively or be higher leveraged? I preferred macro and serious about what are the top-down views or top-down themes to consider by way of both the Fed cycle or thematic developments? And I preferred technical evaluation and actually serious about, is the market confirming my views? Or is it saying one thing perhaps in regards to the macro that I’m not serious about? So, just a bit little bit of all the things, after which simply attempting to suppose, what’s the easiest way to implement one thing, to implement an concept? So, I may have a macro concept or thematic concept, and there’s simply a variety of methods to do it. And generally that’s the liquidity, generally it simply must be with that is essentially the most direct method or has fewer different elements which might 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. Sometimes, when there’s a commerce available in currencies, there’s in all probability commerce available in indices or equities or ETFs. Possibly should you’re enjoying the Turkish lira and what they’re doing there, that’s in all probability a direct forex commerce and extra soiled to play it in equities. However sometimes, the themes that I’m serious about 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 might be 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 inexpensive 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 having access to all these varied knowledge sources was via mates who have been at graduate college at Stanford. So, they’d the logins for all the assorted databases, which they so generously shared. Thanks, GSB. So, you stated, okay, I’m wanting round looking for a superb resolution. Most individuals would cease there and simply both fork up for one in every of these or cobble ’em collectively. What was the following 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 attempting to make use of the merchandise for my workflow. And so the merchandise that have been meant for people simply didn’t have the aptitude 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 aspect, not solely was the fee very excessive, in order that’s one variable, however they have been simply very disagreeable to make use of. They have been all very outdated. For FactSet and CapIQ, the use case is Excel. You get that knowledge 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 sources and serious about what I would like to make use of, I used to be identical to, “That is loopy what’s occurring on this sector, on this area.” You may have this technological revolution, you could have these software program corporations which might be creating these lovely merchandise, corporations like Tableau which might be actually revolutionizing how that’s visualized. After which in finance, it simply type of crap. It simply seems prefer it’s nonetheless from the Nineteen Eighties. And simply began happening these rabbit holes. Why is that the case? Why is it that it is a area the place there’s simply nothing modern occurring and all the things’s simply tremendous outdated? And the response I received again was, look, the information is tremendous costly. No one new may 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 bunch of tens of millions? Is it tens of tens of millions? Is it a whole bunch of 1000’s?” And I satisfied myself the place I used to be capable of finding out that the information is dear. It’s not low cost, however it’s not overwhelmingly costly. And what I wished to do is out there, and there’s knowledge on the market that’s accessible to construct a platform that’s extra intuitive, extra useful, simpler to make use of than among the platforms on the market. So, that’s after I began and the way I began serious about this idea of Koyfin and began refining it and determined to bootstrap it. To start with, I kind 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 seem like, having been a person and investor. However I didn’t actually know the right way to construct the product or the right way to 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 broaden that workforce. And so slowly, however absolutely, we have been constructing the product, getting suggestions, placing it on the market, as some increasingly folks 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 broaden the workforce and shifting just a little 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 essentially the most startups attending to be a toddler. Whenever you seemed round, what was the principle 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 knowledge packages. What was it that you simply stated, “Look, I would like this however this isn’t on the market, not less than model 1.” After which we will stroll ahead to what you could have as we speak.

Rob: So, the very first thing is the information protection, is I wished one thing that covers a bunch of various property and appears throughout asset courses 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, knowledge fundamentals, valuation, but in addition different asset courses like mutual funds, ETFs, financial knowledge, bonds, currencies. And so the information protection and professional-grade knowledge protection was essential to me.

The second factor was actually the analytical instruments to show that knowledge into info. So, I didn’t desire 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 fee and a few UI stuff, however it’s really 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 however it has 30,000 features that you need to use to investigate that knowledge. Michael Bloomberg was early on in a few of these ideas that as we speak are fairly widespread. And he constructed all of the graphing stuff himself and in a position to actually visualize and graph any kind of knowledge. The truth that you are able to do keyboard shortcuts and entry stuff actually shortly, Superhuman is an organization that popularized this within the e mail world, and now it’s kind of changing into a pattern in software program. However Bloomberg, these keyboard shortcuts, they did it as a result of there was no mouse once they began placing their platform collectively. So this potential to essentially get via the information via graphing, via dashboards, via 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 can 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 knowledge, is principally 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 studies actually serious about how do you manage? How do you visualize? How do you current knowledge? And that’s not one thing that was actually achieved on Wall Avenue. These folks would simply draw knowledge on a web page and throw a bunch of numbers and say, “Right here, learn it.” Whereas, he spent plenty of time serious about, how was the information interpreted? And had me begin studying Edward Tufte books and serious about knowledge 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 respect, and that’s one thing that I wished to point out 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 really public-facing fairly fast?

Rob: One of many issues that I considered is what can we innovate on, what can we add, is the enterprise mannequin, is how we promote the product. And after I seemed round within the tech world, within the software program world, the perfect corporations, the fastest-growing corporations have been rising as a result of they have been a freemium. They have been gifting away a bunch of the product totally free after which charging for extra superior performance. And that’s one thing that I assumed was good, one thing that I assumed was product plus development, that in case you have the perfect product on the market, you let folks use it, they usually’ll pay you for it should 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 have 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 identical to, “What the hell is that this? That is the ugliest factor I’ve ever seen.” They have been like, “Properly, get a designer.” I’m like, “A designer? What do they do?” I discovered a designer, her identify 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 seemed like. The skeleton was there, that it was a single-page utility, it targeted on charting. There have been issues that you can do on the aspect to affect the charts and there was a menu. And the best way I considered it was from a Bloomberg perspective. These are the 50 features that folks use day by day, and I need to deal with 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 considered 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 folks would go to it and be like, “Oh my God, what is that this? It feels such as you’re about to steal my info. I don’t know what that is.” So, we had just a little 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 we have now 18 folks join. And my co-founder messaged me he’s like, “Oh my God, 18 folks signed up.” However 17 of them didn’t use it the next day. It’s very iterative, serious about what are folks 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 growth. It’s a complete science, it’s a complete framework. Why do folks use issues? The roles to be achieved in framework. When you have one thing, how do you determine what’s working? Why are folks utilizing it? How do you add to that? Do you deal with issues individuals are utilizing, or do you deal with issues that folks aren’t utilizing? And do you deal with issues that individuals are requesting? And I keep in mind to start with, folks have been simply requesting stuff and we have been doing all the things. After which, at a sure level, we have 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 fastened them, figured them out, and have been shifting ahead, which is essential.

Meb: So, you change into a software program founder, you begin to determine it out. And software program is all about implementation and iterations. The place are we as we speak? What are folks primarily utilizing this for?

Rob: If I summary our software program away or how we’re serious about 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, the vast majority of our customers are people, after which the second largest section 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 have been like, “Hey, I’m wondering what the EBITDA margin is of Apple and the way it compares to Fb.” So, the vast majority 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 most important section of people we have now are software program engineers. They have a tendency to have extra disposable revenue, they are typically just a little extra quantitative. Loads of former Wall Avenue individuals are utilizing us as people, however 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 we have now three tiers. We now have a fundamental tier, which is $15 a month paid yearly, we have now the plus tier, which is $35 a month paid yearly. After which we have now the professional tier, which is $70 a month paid yearly. The distinction is you get extra knowledge, extra performance, extra customization as you go up within the tier construction.

Meb: Is among the largest levers the power to export knowledge? Of the tiers, what’s the principle levers between these?

Rob: Taking all these classes one after the other. So, on the information aspect, for instance, the mutual fund that’s solely in our professional tier, as a result of we have now to pay per person for that knowledge. And so we have now to place it within the increased tier. We all know that monetary advisors sometimes use that knowledge, so that they have just a little bit extra disposable revenue. So, that’s one instance of one thing that’s simply within the professional tier. And we have now some very fundamental performance within the free tier for mutual fund knowledge, like a chart or simply seeing what mutual funds we have now. Downloading knowledge is in our center tier. So, should 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 knowledge for a inventory. Within the free tier, we solely have three years price of free knowledge. However should you wished to have 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 individual dashboards. So, one of many advantages of Koyfin is you may create your watch checklist and dashboards of various securities, of various graphs, combine and match alternative ways to have a look at the market. So, should 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 now have some premium information sources like Reuters which might be solely within the fundamental and up model. So, simply serious about extra superior workflows, customization, extra superior skilled knowledge.

Meb: I interrupted you, sorry. You have been going to stroll via the principle use instances for why individuals are interacting with it.

Rob: The 5 buckets, if we take into consideration are analytics, discovery, monitoring, collaboration, and execution. If you happen to summary away what our customers are doing, it kind of falls in these 5 buckets in relation to investing. So, on the analytic aspect, the most well-liked characteristic by far is our graphic or potential to graph any kind of time collection or any kind of monetary knowledge, so clearly inventory costs or mutual fund costs, or whole returns. However then if you consider any monetary or any financial knowledge or ETF flows or drawdowns or no matter it’s, you may graph that on Koyfin very simply. And so you can simply sort 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 basically the dashboards I simply talked about, which is customizing the completely different modules to the way you need to arrange your platform. So, within the dashboards, you may have a watch checklist 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 operate.

The third most used operate are the snapshots. And snapshots are a method for a person to investigate a selected safety. So, we have now an summary snapshot, an outline snapshot, a dividend snapshot, an ETF publicity snapshot for corporations. For ETFs, we have now a constituents snapshot, we may see the constituents but in addition see the contribution of every inventory and every sector to that ETFs efficiency. We now have mutual fund snapshots. We now have completely different snapshots for the securities for folks 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 operate.

The fourth are market dashboards. So we have now a bunch of market dashboards you could browse completely different components of the market. So, an element’s dashboard the place you may see how elements are performing sectors, currencies, indices, world yields, yield curves, alternative ways of slicing and dicing the market, and that’s our fourth most used operate.

After which there’s a bunch of performance that’s on the tail finish. So, we have now information that’s fairly well-liked. We now have a scatterplot that’s utilized by lots of people. We now have a operate that’s one in every of my favourite features I created for myself known as the numerous charts operate, the place you place in an ETF or a watch checklist or an index and it reveals 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 with the ability to see that.

Meb: We received 13F’s in there, or what?

Rob: , we don’t have 13Fs and that’s as a result of the information is tremendous onerous to license. Not one of the suppliers will give us the 13F knowledge within the full view. They’ll give us the highest 20 or the highest 10. I believe what we’re going to do is basically 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 once. There’s, like, a extra outlined method of how 13Fs need to be filed and the way they need to be tagged in every safety. And so I believe we’re going to be getting that knowledge 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 could be a fairly good homepage. So many of those apps and web sites, you will get shares and that’s about it. However significantly for the macro folks, they need to see a variety 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 kind of been lingering just a little bit longer than I wished. However all the things goes proper, it must be out by April.

Meb: Oh, wow. Quickly.

Rob: Quickly. Sure. So, it’s type of attention-grabbing. Our platform is desktop first, we will’t do the workflows that we’re attempting to do on the telephone. However the telephone is clearly crucial by way of with the ability to observe your portfolio or watch lists or information or simply what’s occurring available in the market. And so we’ve been actually serious about what goes on the app, what’s the characteristic of the app? How does it hook up with the general utility? However it’s wanting good, it’s going to be nice. It’s going to be hopefully out in April.

Meb: Good. Properly, wanting 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 long run seem like for you guys as you look out to 2022 and past? Is it simply limitless characteristic requests from customers? Do have some designs on growth to sure knowledge silos or options? What’s subsequent for you guys?

Rob: The long run for Koyfin is basically to be the monetary working system for various customers, for various traders. And what meaning is, after I have a look at our platform, we have now everybody from college students to hedge fund managers utilizing our platform, which is basically unusual as a result of they’re not the identical person persona. They’re completely different person personas. However the motive that they’re utilizing our platform is as a result of they’ve widespread workflows they usually’re in a position to customise the system for their very own use instances. And so after I take into consideration the long run, I take into consideration that energy and that place that we have now of been in a position to customise the platform for the use case of that exact investor. So, our imaginative and prescient sooner or later is that we’re going to be linked to any kind of monetary knowledge 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 knowledge, whether or not it’s via portfolio analytics or mannequin portfolios or portfolio optimizations or simply graphing or snapshots and with the ability to combine and match how they need to have a look at the market, what asset courses to have 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, we have now virtually 100, in all probability over 100,000 traders 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 aspect? Was it only a 12 months of meme inventory requests final 12 months? Something humorous, bizarre, completely different that you simply need to cross alongside?

Rob: So, many alternative customers and folks. And we have now over 300,000 customers now. It’s attention-grabbing how folks work together over e mail, simply individuals are well mannered and a few individuals are good and a few individuals are partaking, different individuals 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 continually violated. However we’ve gotten our justifiable share of anti-Semitic responses to my emails, simply tremendous unusual and at all times just a little 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 knowledge on our platform but.

Meb: She’s an enormous dealer. I didn’t know she’s nonetheless cranking out. Good for her.

Rob: That’s my favourite assist e mail to see. I want we did have choices knowledge, so attempt to convert her.

Meb: You may 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 e mail, the primary 12 months, we despatched out an e 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 folks didn’t even click on on the hyperlink. They’re simply, like, replying, “How may you do that? There’s no method this is sensible.” That’s at all times enjoyable to see.

Meb: In all probability the best click-through fee 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 identical to, “Hey, tough setting 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 then you definitely even have lots of people who’re pissed off, they have been like, “How dare you waste my time?” That’s at all times 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 e 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 folks have been emailing me like, “Have you ever clicked on the hyperlink? Did you…” And I’m identical to, “Dude, loosen up. It’s Wikipedia.” They usually have been like, “No, click on on the hyperlink.” So, I used to be identical 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 pinnacle of analysis at WisdomTree joking that they have been placing out a lightweight coin ETF and the way shortly that whipped world wide and the way offended folks have been and Jeremy, who’s at an enormous 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 people y’all received now?

Rob: 25 workers, seeking to do our Collection A reasonably quickly, so nonetheless a fairly younger firm. For us, like the long run, construct the perfect 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 we have now this actually attention-grabbing positioning of getting the perfect 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 variety of funds, in huge funding outlets. Most memorable, good, unhealthy, in between funding?

Rob: I believe the funding I keep in mind essentially the most is CMGI within the ’90s. I don’t know should you keep in mind.

Meb: Oh, God. You simply prompted me sweaty palms. You simply triggered me.

Rob: Once 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, sooner or later, earlier than 2000, and clearly offered it at an enormous loss. However that was enjoyable. One in all my first experiences buying and selling and investing and…

Meb: You aren’t the one individual. I imply, everybody owned it, I owned it. There’s so many issues about this one. That they had named the Patriots area, it was CMGI area. So, as my native Lakers facility is now known as crypto.com. There’s a bunch of analysis that reveals should you’re a public firm, then identify 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 doubtless 2 received acquired and had an actual product. The others have been simply market cap to clicks, proper? That was the valuation measure.

Meb: I’ve to have a look at the eventual autopsy. It was like $10 million, $20million, $30 billion firm. The place do folks go in the event that they need to discover out what you’re as much as, what’s occurring in your world, try the software program, give it a strive? What’s the perfect spot?

Rob: Yeah, go to koyfin.com, create a free account takes two seconds, begin utilizing the software program. And should you prefer it, and we assist 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 as we speak.

Rob: Thanks a lot, Meb. We’ve had a good time.

Meb: Podcast, listeners, we’ll publish present notes to as we speak’s dialog at mebfaber.com/podcast. If you happen to love the present, should you hate it, shoot us [email protected], we like to learn the critiques. Please assessment us on iTunes and subscribe the present anyplace good podcasts are discovered. Thanks for listening mates and good investing.



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