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 right this moment’s episode, we begin with Rob’s background at Goldman Sachs below the now Chief U.S. Fairness Strategist, David Kostin. Then he shares why a private ache level later in his profession led him to begin Koyfin. Rob walks us via the platform, which offers buyers with out Bloomberg entry to skilled grade knowledge protection and the analytical instruments. We hear in regards to 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 shopper 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 fashion
- 16:45 – The perception that led Rob to begin 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 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 – Study extra about Rob; koyfin.com for 10% off
Transcript of Episode 395:
Meb: Welcome to the “Meb Faber Present” the place the main target is on serving to you develop and protect your wealth. Be part of us as we talk about 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. As a consequence of business rules, he is not going to talk about 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 info, go to cambriainvestments.com.
Meb: What’s up, mates? We acquired a terrific episode for you right this moment. Our visitor is the founder and CEO of Koyfin, a monetary knowledge and analytics platform for researching shares and understanding market tendencies. In right this moment’s present, we begin with our visitor’s background on the vampire squid, Goldman Sachs, below 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 begin Koyfin. He walks us via the platform, which offers buyers with out Bloomberg entry to professional-grade knowledge protection and analytical instruments. We hear in regards to 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 shopper 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. Liked not having snow or winter and figured we’d be outdoors much more with a brand new child. And so simply determined to discover transferring right 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. Nicely, as we chatted about earlier than the podcast began, I’ll be down there. And so hopefully we will meet up in particular person considered one of today. The ETF convention, listeners, is now been moved to April. So, if you wish to go and say hello, I’ll be there. Should you’re an advisor and also you need a free ticket, hit me up. I believe we acquired some extras. Anyway, you’re initially Ukrainian, proper?
Rob: I used to be born in Ukraine. I used to be born in a metropolis referred to 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, when you’re within the western half, a little bit extra ethnic Ukrainian and possibly converse Ukrainian. Should you’re within the japanese half, you’re most likely a little bit 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 frightened about any type of invasion or takeover. I believe the japanese provinces are those that actual threat the place all the issues and the drama is.
Meb: Do you may 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 we have now so many individuals there. We have now an workplace the place folks go into. And so we do have a fairly large presence there. Our workers have been a little bit bit nervous and anxious in seeing what’s happening.
Meb: Western aspect?
Rob: Majority of them are Kyiv.
Meb: Yeah. Been on my to-do listing to go to someday.
Rob: Lovely metropolis.
Meb: Earlier than turning into a software program entrepreneur, you’re an funding man. Should you needed to guess taking your insights as an investor, what’s your perception as to a possible final result right here? Do you may have any over a espresso estimation on how this resolves itself? We’re recording this, by the way in which, listeners, starting of February. So, by the point this publishes, we’ll see if Rob is true or unsuitable. 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 appear to be there’s an endgame or any type of technique or plan by Putin, type of flexing his muscle attempting to remain in energy and simply displaying that he’s the sufferer. I do suppose that, in some unspecified time in the future, they are going to most likely take another areas, similar to they did with Crimea. So, most likely a few of the areas bordering Russia, and perhaps a few of the areas bordering the Black Sea. There’s a rustic referred to 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 ultimately, and I believe there can 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 a little bit 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, 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 Road 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 aspect stuff, constructing fashions, writing analysis reviews to provide me a very nice entry into Wall Road and the way to take a look at firms. After which a couple of yr after I began, my boss on the time, David Kostin, was moved into a gaggle referred to as Portfolio Technique to exchange Abby Joseph Cohen, who was the strategist on the time. Mainly, they needed 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 your complete market. So, we had been each single firm, each single sector, international tendencies, and actually attempting to investigate the info, analyze tendencies 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 pinnacle fairness strategist, proper?
Rob: So, he was the fairness strategist when he transitioned in 2003. Abby was there for quite a few years being the…I overlook the precise titles they’d. 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 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 implies 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 rationale 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 development charge. And all these firms 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 more publicity and extra mutual funds, and pension funds began listening 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 observed him internally and why folks externally beneficial 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 over time, increasingly more had been added to the S&P 500. Because the sector grew, as extra capital acquired allotted, as these firms 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 bear 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 folks would go on and be like, “Sienna goes to go up 100x and CMGI.” And he would at all times 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 at all times had a extremely attention-grabbing fashion of delivering issues.
One of the memorable issues I did there was introduce a report referred to as the hedge fund pattern monitor. Mainly, I came upon this knowledge someday and Fax mentioned 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’ll be able to give you.” And I began aggregating stuff, and we began serious about 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 standard report that I believe nonetheless has plenty of traction within the funding neighborhood.
Meb: Unknowingly, I’ve actually referenced you over time. We ended up writing a ebook 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 lots about on this podcast, that’s arduous as hell to spend money on for most people. And I’ve at all times mentioned 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 will be my profession alternative, however an excessive amount of work for me at this level.
Rob: Numerous advantages there on the tax aspect, plenty of advantages on the money stream 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 bear in mind doing the evaluation once we began sector allocations and looking out on the evaluation of the very best 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 very best 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 firms. 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, 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, however 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. Should you take 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 wishes finally ends up being a reasonably 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 a little bit bit. This was 2008, not nice timing. This was in London, then went to a macro fund referred to as Caxton.
Meb: World-famous store?
Rob: World-famous store. So, I used to be there for a little bit bit, acquired 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 find out how to specific them in choices and baskets and ETFs. Fairly attention-grabbing job. We had an inner hook that we had been operating and we had been pitching purchasers’ concepts. So, that was a little bit little bit of better of each worlds. I then went to Lyxor Asset Administration, which is inventory gen to work of their macro group. After which lastly, labored at Tekne Capital, which is a long-short hedge fund that was spun out of Duquesne, the whole lot from threat to choices buying and selling to all these different stuff. So, as you’ll be able to 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 position and determined to begin investing by myself for a little bit bit and seeing how I do out there. And with that, I needed to get some instruments to investigate the market, perceive what’s happening. And I’d use Bloomberg and FactSet and CapIQ, and the whole lot below the solar in my earlier jobs. However now that I used to be paying for it myself, I needed to seek out another assets. So, I do know Interactive Brokers has a lot knowledge, I’m positive they’ve a bunch of instruments that will 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 know the way somebody doesn’t purchase Interactive Brokers. Perhaps you should buy them or LBO them, and simply slap like a reasonably entrance finish on them and you’ve got the very 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 worth and entry. That’s what they compete on. However that’s not a foul manner to consider what we’re attempting 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 large.
Meb: A lot for LBO’ing them.
Rob: You possibly can LBO on that.
Meb: They need to simply purchase Robinhood. There you go. Excellent. 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. Nicely, the Interactive Brokers all these memes cease and crypto folks begin to study futures and spot Foreign exchange. There you go. That’s the true juice. Okay. So, what was your fashion at this level? You’d type of bounced round quite a few 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: Slightly little bit of a mutt. So a little bit bit borrowing from all these totally different kinds that I discovered. So, favored shares and simply firms. Appreciated choices as properly and serious about what’s the vol market saying and may this be expressed in choices extra effectively or be higher leveraged? I favored 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 tendencies? And I favored 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 the whole lot, after which simply attempting to suppose, what’s one of the best ways to implement one thing, to implement an concept? So, I may have a macro concept or thematic concept, and there’s simply quite a few methods to do it. And generally that’s the liquidity, generally it simply must be with that is probably the most direct manner or has fewer different elements which can be impacting it. So, my buying and selling fashion on the time, was most likely 40% single inventory, 40%, ETFs, and 20% futures choices currencies. I’d say with currencies, the way in which I take into consideration currencies is simply you get huge leverage. That’s the fantastic thing about it. Sometimes, when there’s a commerce available in currencies, there’s most likely commerce available in indices or equities or ETFs. Perhaps when you’re taking part in the Turkish lira and what they’re doing there, that’s most likely a direct foreign money commerce and extra soiled to play it in equities. However usually, the themes that I’m serious about by way of the place the Fed is or which themes are working, that’s usually extra instantly 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 numerous knowledge sources was via mates who had 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 mentioned, okay, I’m trying round looking for a very good answer. Most individuals would cease there and simply both fork up for considered one of these or cobble ’em collectively. What was the subsequent iteration for you?
Rob: So, it was the primary time that I acquired an opportunity to actually discover what’s on the market, and actually attempting 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 needed to do. They didn’t have the info or they didn’t have the precise performance. After which on the skilled aspect, not solely was the price 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 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 info. And usually, you’re doing all of the evaluation in Excel. And once I began to place collectively my assets and serious about what I want to make use of, I used to be similar to, “That is loopy what’s happening on this sector, on this subject.” You have got this technological revolution, you may have these software program firms which can be creating these stunning merchandise, firms 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 happening these rabbit holes. Why is that the case? Why is it that it is a subject the place there’s simply nothing progressive taking place and the whole lot’s simply tremendous previous? And the response I acquired again was, look, the info is tremendous costly. No person new may are available in as a result of the info is simply actually costly.
And so I began analyzing and began calling round being like, “How a lot does that really price? Is it tons of of tens of millions? Is it tens of tens of millions? Is it tons of of hundreds?” And I satisfied myself the place I used to be capable of finding out that the info is pricey. It’s not low-cost, however it’s not overwhelmingly costly. And what I needed to do is on the market, 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 a few of the platforms on the market. So, that’s once 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 type of mentioned, “Hey, that is one thing I wish 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 needed the product to appear to be, having been a person and investor. However I didn’t actually know find out how to construct the product or find out how to construct an engineering group. And so I began fairly small with a group in Ukraine. After which as soon as I noticed some outcomes, I made a decision to develop that group. And so slowly, however absolutely, we had been constructing the product, getting suggestions, placing it on the market, as some increasingly more 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 develop the group and transferring a little bit bit sooner.
Meb: What yr would this be within the timeline?
Rob: I made a decision to launch Koyfin on March seventh, 2016.
Meb: Congrats, man. 5 years, properly executed. You survived the gauntlet of probably the most startups attending to be a toddler. If you appeared round, what was the primary lacking piece? I bear in mind going again 20-plus years and utilizing issues like TradeStation, utilizing, I can’t even bear in mind at this level, so most of the numerous software program knowledge applications. What was it that you simply mentioned, “Look, I would like this however this isn’t on the market, at the very least model 1.” After which we will stroll ahead to what you may have right this moment.
Rob: So, the very first thing is the info protection, is I needed one thing that covers a bunch of various property and appears throughout asset lessons and never simply centered on one factor. So CapIQ, very a lot centered on equities, doesn’t have plenty of stuff on economics or macro. Morningstar is clearly very mutual-fund-focused. So, the info protection. I needed a platform that has plenty of fairness, knowledge fundamentals, valuation, but additionally different asset lessons like mutual funds, ETFs, financial knowledge, bonds, currencies. And so the info 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 need a platform the place I needed to suck stuff into Excel and do the workflow in Excel. I needed a platform the place I had the performance within the platform to do what I needed 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 price and a few UI stuff, however 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 however it has 30,000 capabilities that you should use to investigate that knowledge. Michael Bloomberg was early on in a few of these ideas that right this moment are fairly widespread. And he constructed all of the graphing stuff himself and in a position to actually visualize and graph any type of knowledge. The truth that you are able to do keyboard shortcuts and entry stuff actually rapidly, Superhuman is an organization that popularized this within the e-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 actually get via the info 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 straightforward to make use of, someplace the place you would 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. Form 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 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 reviews 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 executed on Wall Road. 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 info 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 admire, and that’s one thing that I needed to indicate up within the platform as properly.
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 group 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 considered is what can we innovate on, what can we add, is the enterprise mannequin, is how we promote the product. And once I appeared round within the tech world, within the software program world, the very best firms, the fastest-growing firms had been rising as a result of they had been a freemium. They had been giving freely a bunch of the product without spending a dime 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 development, that you probably have the very best product on the market, you let folks use it, they usually’ll pay you for it when you’re fixing an issue for them. So proper from the start, what we needed to do was have a freemium mannequin and have a considerable portion of our product to be accessible without spending a dime, after which cost customers for extra stuff. So to reply your query, the primary model was most likely 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 may 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, “Nicely, 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 appeared like. The skeleton was there, that it was a single-page software, it centered on charting. There have been issues that you would do on the aspect to impression the charts and there was a menu. And the way in which I considered it was from a Bloomberg perspective. These are the 50 capabilities that individuals use daily, and I wish to give attention to 10 at first. So, I centered 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 wish to create modules. We don’t need something to rely upon 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 also 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 a little bit 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 bear in mind once 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 an entire science, it’s an entire framework. Why do folks use issues? The roles to be executed in framework. If in case you have one thing, how do you determine what’s working? Why are folks utilizing it? How do you add to that? Do you give attention to issues individuals are utilizing, or do you give attention to issues that individuals aren’t utilizing? And do you give attention to issues that individuals are requesting? And I bear in mind to start with, folks had been simply requesting stuff and we had been doing the whole lot. 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 fastened them, figured them out, and have been transferring ahead, which is essential.
Meb: So, you grow to be a software program founder, you begin to determine it out. And software program is all about implementation and iterations. The place are we right this moment? 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 wish 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 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’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 largest phase of people we have now are software program engineers. They have a tendency to have extra disposable revenue, they are typically a little bit extra quantitative. Numerous former Wall Road individuals are utilizing us as people, however it’s positively for the extra superior particular person person. And to reply your query instantly, so the free model, which is 90% of our customers or 95% of our customers is free. Then we have now three tiers. We have now a primary 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 without doubt one of the largest levers the power to export knowledge? Of the tiers, what’s the primary levers between these?
Rob: Taking all these classes one after the other. So, on the info 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 usually use that knowledge, in order that they have a little bit 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 primary 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, when you needed 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 when you needed to take a look at the complete 5 years, that’s primary, 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’ll be able to create your watch listing and dashboards of various securities, of various graphs, combine and match other ways to take a look at the market. So, when you’ve ever used the Launchpad characteristic on Bloomberg, which is permitting you to customise the way you wish to take 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 primary 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 primary and up model. So, simply serious about extra superior workflows, customization, extra superior skilled knowledge.
Meb: I interrupted you, sorry. You had been going to stroll via the primary use circumstances for why individuals are interacting with it.
Rob: The 5 buckets, if we take into consideration are analytics, discovery, monitoring, collaboration, and execution. Should you summary away what our customers are doing, it type of falls in these 5 buckets on the subject of investing. So, on the analytic aspect, the preferred characteristic by far is our graphic or means to graph any type of time collection or any type of monetary knowledge, so clearly inventory costs or mutual fund costs, or whole returns. However then if you concentrate on any monetary or any financial knowledge or ETF flows or drawdowns or no matter it’s, you’ll be able to graph that on Koyfin very simply. And so you would 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 de facto the dashboards I simply talked about, which is customizing the totally different modules to the way you wish to arrange your platform. So, within the dashboards, you’ll be able to have a watch listing 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 manner for a person to investigate a particular safety. So, we have now an outline snapshot, an outline snapshot, a dividend snapshot, an ETF publicity snapshot for firms. For ETFs, we have now a constituents snapshot, we may see the constituents but additionally 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 folks to actually simply get a view of that safety with out having to lookup 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 which you could browse totally different elements of the market. So, an element’s dashboard the place you’ll be able to see how elements are performing sectors, currencies, indices, international yields, yield curves, other 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 standard. We have now a scatterplot that’s utilized by lots of people. We have now a operate that’s considered one of my favourite capabilities I created for myself referred to as the plenty of charts operate, the place you set in an ETF or a watch listing or an index and it reveals you all of the charts in that index or ETF. And so if anybody is technical evaluation or tendencies, that’s a extremely quick manner of with the ability to see that.
Meb: We acquired 13F’s in there, or what?
Rob: You realize, we don’t have 13Fs and that’s as a result of the info is tremendous arduous 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 de facto simply use the SEC web site and get the info ourselves as a result of the info is definitely higher organized now than it was once. There’s, like, a extra outlined manner 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 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 may get shares and that’s about it. However significantly for the macro folks, they wish to see quite a few various things. It’s rather well executed. 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 group to get that out quick. It’s type of been lingering a little bit bit longer than I needed. However the whole lot goes proper, it needs 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 will’t do the workflows that we’re attempting to do on the cellphone. However the cellphone is clearly essential by way of with the ability to monitor your portfolio or watch lists or information or simply what’s taking place out there. And so we’ve been actually serious about what goes on the app, what’s the characteristic of the app? How does it connect 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. Nicely, 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 to be for you guys as you look out to 2022 and past? Is it simply infinite characteristic requests from customers? Do have some designs on enlargement to sure knowledge silos or options? What’s subsequent for you guys?
Rob: The longer term for Koyfin is de facto to be the monetary working system for various customers, for various buyers. And what which means is, once I take a look at our platform, we have now everybody from college students to hedge fund managers utilizing our platform, which is de facto 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 frequent workflows they usually’re in a position to customise the system for their very own use circumstances. And so once I take into consideration the longer term, 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 specific investor. So, our imaginative and prescient sooner or later is that we’re going to be linked to any type of monetary knowledge that’s on the market. After which having that toolkit that the person can then select of how they wish to take 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 wish to take a look at the market, what asset lessons to take a look at, and the way they wish 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, most likely 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 aspect? Was it only a yr of meme inventory requests final yr? Something humorous, bizarre, totally different that you simply wish to cross alongside?
Rob: So, many various customers and other people. 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 consistently violated. However we’ve gotten our fair proportion of anti-Semitic responses to my emails, simply tremendous unusual and at all times a little bit bizarre. We had Barbra Streisand’s assistant attain out to us one time and attempt 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 a giant 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 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 payment, we’ll do some customized bespoke work.”
Rob: Yeah. I used to observe her in “Yentl,” and that’s going to be a shopper. I despatched out April Idiot’s e-mail, the primary yr, 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 manner this is sensible.” That’s at all times enjoyable to see.
Meb: Most likely the best click-through charge 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 then you definately even have lots of people who’re pissed off, they had 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 yr, we had an April Fools of Koyfin is totally pivoting in the 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 the direction of crypto, and we had a hyperlink. However the unhappy half is the hyperlink, apparently, Wikipedia acquired hacked. So, the Wikipedia April Fools hyperlink directed you to, like, a porn web site. And so folks 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.” And so they 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 pal, Jeremy Schwartz, the pinnacle of analysis at WisdomTree joking that they had been placing out a light-weight coin ETF and the way rapidly that whipped around the globe and the way indignant folks had been and Jeremy, who’s at a giant company firm, whose PR group 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 acquired now?
Rob: 25 workers, trying to do our Collection A reasonably quickly, so nonetheless a reasonably 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 we have now this actually attention-grabbing positioning of getting the very best product and analytics on the market that individuals love and rave about. And so we’re simply going to be constructing performance, fixing our person’s wants, and I believe the result will deal with itself.
Meb: Your profession spanned each beginning an organization and being in quite a few funds, in large funding retailers. Most memorable, good, unhealthy, in between funding?
Rob: I believe the funding I bear in mind probably the most is CMGI within the ’90s. I don’t know when you bear 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 referred to 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. Considered one 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. That they had named the Patriots subject, it was CMGI subject. So, as my native Lakers facility is now referred to as crypto.com. There’s a bunch of analysis that reveals when 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 reputable ones in there, however 100 of them and possibly 2 acquired 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 folks go in the event that they wish to discover out what you’re as much as, what’s happening in your world, take a look at 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 when you prefer it, and we enable 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 right this moment.
Rob: Thanks a lot, Meb. We’ve had a good time.
Meb: Podcast, listeners, we’ll submit present notes to right this moment’s dialog at mebfaber.com/podcast. Should you love the present, when you hate it, shoot us suggestions@themebfaber.com, we like to learn the evaluations. Please evaluate us on iTunes and subscribe the present anyplace good podcasts are discovered. Thanks for listening mates and good investing.
