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

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 in the present day’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 by means of the platform, which supplies traders with out Bloomberg entry to skilled grade knowledge protection and the analytical instruments. We hear in regards to the skill to make use of visible instruments and create a custom-made dashboard to see what’s most vital to you.

As we wind down, we contact on some wonky shopper 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 spanking new customers.

Sponsor: If you happen to’re searching 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 all the time evolving. Take heed to The Energetic Share on Apple Podcasts, Google Podcasts, Stitcher, Spotify or TuneIn or go to right here.

Feedback or recommendations? Interested by sponsoring an episode? E 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 stress would possibly 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 cell by April 2022
• 35:03 – Highlights and lowlights of constructing investor software program
• 38:15 – The way forward for Koyfin
• 38:52 – His most memorable funding throughout his profession
• 40:11 – 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 target is on serving to you develop and protect your wealth. Be a part of us as we talk about the craft of investing and uncover new and worthwhile concepts, all that can assist you develop wealthier and wiser. Higher investing begins right here.

Disclaimer: Meb Faber is the co-founder and chief funding officer at Cambria Funding Administration. Because of business rules, he won’t talk about any of Cambria’s funds on this podcast. All opinions expressed by podcast individuals 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, pals? We bought an amazing episode for you in the present day. Our visitor is the founder and CEO of Koyfin, a monetary knowledge and analytics platform for researching shares and understanding market developments. In in the present day’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 by means of the platform, which supplies traders with out Bloomberg entry to professional-grade knowledge protection and analytical instruments. We hear in regards to the skill to make use of visible instruments and create a custom-made dashboard to see what’s most vital 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 spanking 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 outdoors much more with a brand new child. And so simply determined to discover shifting all the way down to Miami and simply pulled the set off. I used to be very stunned 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 individual considered one of nowadays. 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 need a free ticket, hit me up. I feel we bought 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? Form of a tense time, huh?

Rob: It’s a tense time. So, not quite a lot 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, in the event you’re within the western half, a bit extra ethnic Ukrainian and doubtless communicate Ukrainian. If you happen to’re within the jap half, you’re in all probability a 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 nervous about any form of invasion or takeover. I feel the jap provinces are those that actual threat the place all the issues and the drama is.

Meb: Do you might have some workers based mostly out of Ukraine?

Rob: A big majority of our workers are based mostly 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 of us in Argentina. However we even have an workplace in Ukraine as a result of we now have so many individuals there. We now have an workplace the place individuals go into. And so we do have a fairly large presence there. Our workers have been a 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 checklist to go to sooner or later.

Rob: Lovely metropolis.

Meb: Earlier than turning 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 might 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 improper. However what do you suppose the precise end result is right here?

Rob: I don’t have an informed guess. I’m simply form of like scratching my head like everybody else and being like, “What the hell is happening?” It doesn’t look like there’s an endgame or any form of technique or plan by Putin, form of flexing his muscle making an attempt to remain in energy and simply exhibiting that he’s the sufferer. I do suppose that, sooner or later, they’ll in all probability take another areas, identical to they did with Crimea. So, in all probability a few of the areas bordering Russia, and perhaps a few of 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 feel that’s what’s going to occur finally, and I feel there shall be some form of settlement signed or understanding signed that’ll form of maintain the peace. I do suppose Russia has this worry of NATO. And as a wannabe superpower, they’re a bit bit uneasy about NATO encroaching and increasing, they usually’re, clearly, not in NATO. And so their alignment with China, I feel, is smart in pushing again on this NATO presence. And so, sadly, Ukraine is caught within the center. And I actually hope that it’s going to type itself out and peacefully, not directly.

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? Have been you a fundy man? Have 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 experiences to provide me a very nice entry into Wall Avenue and the way to have a look at firms. 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 switch Abby Joseph Cohen, who was the strategist on the time. Principally, they wished him to do exactly much more bottom-up analyses. Abby was simply macro market name. And so I transitioned to portfolio technique in Goldman Sachs analysis after which began specializing in your complete market. So, we have been taking a look at each single firm, each single sector, world developments, and actually making an attempt to research the info, analyze developments which are happening with valuation, with fundamentals, with totally 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 chubby, what sectors to underweight, stuff like that. So, that was quite a lot of enjoyable.

Meb: He’s now the top fairness strategist, proper?

Rob: So, he was the fairness strategist when he transitioned in 2003. Abby was there for a variety of years being the…I overlook the precise titles that they had. They have been doing barely various things. After which, at a sure level, Abby moved to…I feel 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 will need to have an attention-grabbing time there as a result of they’ve been round for a very long time, however notably, 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 by means of 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’ form of attention-grabbing. They’ve their very own designation, which implies that they’ve a particular tax construction. They don’t need to form of pay taxes. Traders 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 rationale David was promoted to portfolio strategist, which has a job with a lot larger 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 firms 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 more publicity and extra mutual funds, and pension funds began listening to the sector. And I feel David did a extremely good job of placing the context of how a REIT makes cash versus different sectors. And that’s why individuals seen him internally and why individuals externally advisable him to be a portfolio strategist.

However REITs began, it was like EOP and EQR, perhaps GGP or Boston Properties have been within the S&P. After which over time, increasingly more have been added to the S&P 500. Because the sector grew, as extra capital bought allotted, as these firms 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 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 simply put out. And all these tech individuals would go on and be like, “Sienna goes to go up 100x and CMGI.” And he would all the time stand up and be like, “And now for an organization that really makes cash, let me inform you about no matter.” And so he all the time had a extremely attention-grabbing fashion of delivering issues.

One of the crucial memorable issues I did there was introduce a report known as the hedge fund development monitor. Principally, I chanced on this knowledge sooner or later and Fax stated I used to be taking part in round with it. I used to be like, “Holy crap. Do hedge funds report their holdings? This doesn’t appear proper. Hedge funds are secretive.” After which we began taking a look at 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 fascinated by how to consider essentially 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 feel nonetheless has quite a lot of traction within the funding neighborhood.

Meb: Unknowingly, I’ve actually referenced you over time. We ended up writing a e book on 13F investing. And I do not forget that report being a very insightful one, and so all comes full circle there. It’s humorous as a result of I all the time wished that REITs, farmland as a pet matter we talked quite a bit about on this podcast, that’s arduous as hell to put money into for most folk. And I’ve all the time stated I’m stunned extra farming conglomerates or funds don’t attempt to roll out a REIT construction, however perhaps sooner or later. In a special 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, quite a lot of advantages on the money movement 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 after we began taking a look at sector allocations and searching on the evaluation of the most effective 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 most effective performing sector for 30 or 40 or 50 years. And after we checked out that I used to be like, “This isn’t proper. Staples are boring 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, 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 overlook the precise timeframe, but it surely may need been the final 20 years, was the most effective performing asset class throughout the board, which I feel 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 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 needs finally ends up being a reasonably 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 a bit 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 a bit bit, bought 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 taking a look at thematic commerce concepts and how one can specific them in choices and baskets and ETFs. Fairly attention-grabbing job. We had an inner hook that we have been operating and we have been pitching shoppers’ concepts. So, that was a bit little bit of better of each worlds. I then went to Lyxor Asset Administration, which is inventory gen to work of their macro crew. 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 may inform, I can’t maintain a job down for very lengthy, not very employable.

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

Rob: After Tekne, I began in search of my subsequent function and determined to begin investing by myself for a bit bit and seeing how I do out there. And with that, I wished to get some instruments to research 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 wished 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 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 understand how somebody doesn’t purchase Interactive Brokers. Possibly you should buy them or LBO them, and simply slap like a reasonably 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 feel 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 foul method to consider what we’re making an attempt to do is form of take the entry and accessibility and the protection of Interactive Brokers and give it some thought extra from a analysis and analytics perspective.

Meb: Geez, they’re a $30 billion store. That’s their market cap? My God.

Rob: They’re fairly massive.

Meb: A lot for LBO’ing them.

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

Rob: A bit of little bit of a mutt. So a bit bit borrowing from all these totally different types that I discovered. So, favored taking a look at shares and simply taking a look at firms. Appreciated taking a look at choices as effectively and fascinated by what’s the vol market saying and may this be expressed in choices extra effectively or be higher leveraged? I favored taking a look at macro and fascinated by what are the top-down views or top-down themes to consider when it comes to both the Fed cycle or thematic developments? And I favored taking a look at technical evaluation and actually fascinated by, is the market confirming my views? Or is it saying one thing perhaps in regards to the macro that I’m not fascinated by? So, just a bit little bit of the whole lot, after which simply making an attempt 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 components which are impacting it. So, my buying and selling fashion on the time, was in all probability 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 large leverage. That’s the great thing about it. Usually, when there’s a commerce available in currencies, there’s in all probability commerce available in indices or equities or ETFs. Possibly in the event you’re taking part in 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 usually, the themes that I’m fascinated by when it comes to the place the Fed is or which themes are working, that’s usually extra immediately expressed in equities or ETFs or indices.

Meb: So, you might be saying, “All proper, form 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 methodology for having access to all these varied knowledge sources was by means of pals who have been at graduate faculty at Stanford. So, that they had the logins for all the varied databases, which they so generously shared. Thanks, GSB. So, you stated, okay, I’m wanting round looking for a great resolution. Most individuals would cease there and simply both fork up for considered one of these or cobble ’em collectively. What was the following iteration for you?

Rob: So, it was the primary time that I bought an opportunity to essentially discover what’s on the market, and actually making an attempt to make use of the merchandise for my workflow. And so the merchandise that have been meant for people simply didn’t have the potential to do what I wished 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 associated 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 info. And usually, you’re doing all of the evaluation in Excel. And once I began to place collectively my assets and fascinated by what I would like to make use of, I used to be identical to, “That is loopy what’s happening on this sector, on this area.” You might have this technological revolution, you might have these software program firms which are creating these stunning merchandise, firms like Tableau which are actually revolutionizing how that’s visualized. After which in finance, it simply form of crap. It simply seems prefer it’s nonetheless from the Eighties. And simply began happening these rabbit holes. Why is that the case? Why is it that this can be a area the place there’s simply nothing progressive taking place and the whole lot’s simply tremendous outdated? And the response I bought again was, look, the info is tremendous costly. No person new may are available 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 a whole lot of tens of millions? Is it tens of tens of millions? Is it a whole lot of 1000’s?” And I satisfied myself the place I used to be capable of finding out that the info is pricey. It’s not low-cost, but it surely’s not overwhelmingly costly. And what I wished to do is on the market, and there’s knowledge on the market that’s obtainable 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 fascinated by this idea of Koyfin and began refining it and determined to bootstrap it. To start with, I form of stated, “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 wished the product to appear like, having been a person and investor. However I didn’t actually know how one can construct the product or how one can construct an engineering crew. And so I began fairly small with a crew in Ukraine. After which as soon as I noticed some outcomes, I made a decision to develop that crew. And so slowly, however certainly, we have been constructing the product, getting suggestions, placing it on the market, as some increasingly more individuals began to make use of it. After which at a sure level, it was sufficient traction, there was sufficient alternative that I noticed on this firm that I raised some enterprise capital cash to begin to develop the crew and shifting a bit 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, effectively carried out. You survived the gauntlet of essentially the most startups attending to be a toddler. Whenever you appeared round, what was the principle 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 lots of the varied software program knowledge applications. What was it that you simply stated, “Look, I need this however this isn’t on the market, not less than model 1.” After which we will stroll ahead to what you might have in the present day.

Rob: So, the very first thing is the info protection, is I wished one thing that covers a bunch of various belongings and appears throughout asset courses and never simply centered on one factor. So CapIQ, very a lot centered on equities, doesn’t have quite a lot of stuff on economics or macro. Morningstar is clearly very mutual-fund-focused. So, the info protection. I wished a platform that has quite a lot of fairness, knowledge fundamentals, valuation, but additionally different asset courses like mutual funds, ETFs, financial knowledge, bonds, currencies. And so the info protection and professional-grade knowledge protection was vital 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 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 quite a lot of dangerous issues about it, together with the associated fee and a few UI stuff, but it surely’s truly actually highly effective. And it’s actually highly effective as a result of it has quite a lot of performance. Not solely does it have only a ton of knowledge but it surely has 30,000 features that you should utilize to research that knowledge. Michael Bloomberg was early on in a few of these ideas that in the present day are fairly widespread. And he constructed all of the graphing stuff himself and in a position to actually visualize and graph any form 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 form of turning into a development 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 skill to essentially get by means of the info by means of graphing, by means of dashboards, by means of snapshots, and having that performance within the platform, that was tremendous, tremendous vital 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 could possibly click on round and actually felt extra like a Airbnb than it did like Interactive Brokers or Bloomberg. That was one other factor that was vital 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 knowledge after which saying, “All proper. That is how we should always set up this, or that is the factor we should always name out.” And we’d spent a very long time in our experiences actually fascinated by how do you set up? How do you visualize? How do you current knowledge? And that’s not one thing that was actually carried out on Wall Avenue. These individuals would simply draw knowledge on a web page and throw a bunch of numbers and say, “Right here, learn it.” Whereas, he spent quite a lot of time fascinated by, how was the info interpreted? And had me begin studying Edward Tufte books and fascinated by 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 indicate up within the platform as effectively.

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 crew earlier than it was cool. What was the unique rollout? Family and friends, or did you do it the place it’s truly public-facing fairly fast?

Rob: One of many issues that I thought of is what can we innovate on, what can we add, is the enterprise mannequin, is how we promote the product. And once I appeared round within the tech world, within the software program world, the most effective firms, the fastest-growing firms 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 sensible, one thing that I assumed was product plus development, that in case you have the most effective product on the market, you let individuals use it, they usually’ll pay you for it in the event 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 obtainable 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 might 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, “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 utility, it centered on charting. There have been issues that you could possibly do on the aspect to affect the charts and there was a menu. And the way in which I thought of it was from a Bloomberg perspective. These are the 50 features that individuals use every single day, 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 thought of it from a modular perspective, like we wish to create modules. We don’t need something to rely on the rest. And that’s actually vital 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’ll go to Koyfin and it might be the app. And we had a debate internally whether or not that was good or not and determined to have a touchdown web page to explain what it’s as a result of some individuals would go to it and be like, “Oh my God, what is that this? It feels such as you’re about to steal my info. I don’t know what that is.” So, we had a bit gateway with a touchdown web page. After which simply blast it out to my community, had nearly 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 now have 18 individuals join. And my co-founder messaged me he’s like, “Oh my God, 18 individuals signed up.” However 17 of them didn’t use it the next day. It’s very iterative, fascinated by what are individuals utilizing it for? Why are they utilizing it? And I used to be studying quite a lot of web sites on the time on product administration and the way to consider product improvement. It’s a complete science, it’s a complete framework. Why do individuals use issues? The roles to be carried out in framework. If in case you have one thing, how do you determine what’s working? Why are individuals utilizing it? How do you add to that? Do you give attention to issues persons are utilizing, or do you give attention to issues that individuals aren’t utilizing? And do you give attention to issues that persons are requesting? And I bear in mind at first, individuals have been simply requesting stuff and we have been doing the whole lot. 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 vital. And so we made quite a lot of errors, however have fastened them, figured them out, and have been shifting ahead, which is vital.

Meb: So, you develop into a software program founder, you begin to determine it out. And software program is all about implementation and iterations. The place are we in the present day? What are individuals primarily utilizing this for?

Rob: If I summary our software program away or how we’re fascinated by 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 have been like, “Hey, I ponder 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 now have are software program engineers. They have an inclination to have extra disposable revenue, they are usually a bit extra quantitative. Loads of former Wall Avenue persons are utilizing us as people, but it surely’s undoubtedly for the extra superior particular person person. And to reply your query immediately, so the free model, which is 90% of our customers or 95% of our customers is free. Then we now have three tiers. We now have a primary tier, which is $15 a month paid yearly, we now have the plus tier, which is $35 a month paid yearly. After which we now have 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 greatest 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 info aspect, for instance, the mutual fund that’s solely in our professional tier, as a result of we now have to pay per person for that knowledge. And so we now have to place it within the larger tier. We all know that monetary advisors usually use that knowledge, so that they have a bit bit extra disposable revenue. So, that’s one instance of one thing that’s simply within the professional tier. And we now have some very primary performance within the free tier for mutual fund knowledge, like taking a look at a chart or simply seeing what mutual funds we now have. Downloading knowledge is in our center tier. So, in the event 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 in the event you wished to have 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 knowledge 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 other ways to have a look at the market. So, in the event 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 now have some premium information sources like Reuters which are solely within the primary and up model. So, simply fascinated by extra superior workflows, customization, extra superior skilled knowledge.

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

Rob: The 5 buckets, if we take into consideration are analytics, discovery, monitoring, collaboration, and execution. If you happen to summary away what our customers are doing, it form of falls in these 5 buckets relating to investing. So, on the analytic aspect, the preferred characteristic by far is our graphic or skill to graph any form of time collection or any form of monetary knowledge, so clearly inventory costs or mutual fund costs, or complete 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 could possibly 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 absolutely 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 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 perform.

The third most used perform are the snapshots. And snapshots are a method for a person to research a selected safety. So, we now have an outline snapshot, an outline snapshot, a dividend snapshot, an ETF publicity snapshot for firms. For ETFs, we now have a constituents snapshot, we may see the constituents but additionally see the contribution of every inventory and every sector to that ETFs efficiency. We now have mutual fund snapshots. We now have totally different snapshots for the securities for individuals to essentially simply get a view of that safety with out having to search for each single merchandise. So, that’s the third most used perform.

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

After which there’s a bunch of performance that’s on the tail finish. So, we now have information that’s fairly standard. We now have a scatterplot that’s utilized by lots of people. We now have a perform that’s considered one of my favourite features I created for myself known as the numerous charts perform, 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 taking a look at technical evaluation or developments, that’s a extremely quick method of with the ability to see that.

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

Rob: You recognize, 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 feel what we’re going to do is absolutely 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. 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 feel we’re going to be getting that knowledge ourselves, however coming from the one who created the hedge fund development 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 notably for the macro individuals, they wish to see a variety of various things. It’s very well carried out. 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 crew to get that out quick. It’s form of been lingering a bit bit longer than I wished. However the whole lot goes proper, it ought to be out by April.

Meb: Oh, wow. Quickly.

Rob: Quickly. Sure. So, it’s form of attention-grabbing. Our platform is desktop first, we will’t do the workflows that we’re making an attempt to do on the cellphone. However the cellphone is clearly essential when it comes to with the ability to observe your portfolio or watch lists or information or simply what’s taking place out there. And so we’ve been actually fascinated by what goes on the app, what’s the characteristic of the app? How does it connect 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. Nicely, wanting ahead to that since you guys have discovered a wedge there, I feel on what I used to be saying with the dashboard. So far as roadmap, you’ve constructed this firm, it’s profitable, what’s the longer term appear like for you guys as you look out to 2022 and past? Is it simply limitless 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 absolutely to be the monetary working system for various customers, for various traders. And what meaning is, once I take a look at our platform, we now have everybody from college students to hedge fund managers utilizing our platform, which is absolutely unusual as a result of they’re not the identical person persona. They’re totally different person personas. However the purpose 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 instances. And so once I take into consideration the longer term, I take into consideration that energy and that place that we now have 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 form 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 by means of 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 courses to have a look at, and the way they wish to set up.

Meb: Inform me some highlights and lowlights of this expertise, software program, designer, entrepreneur, working with prospects. I think about, we now have nearly 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, totally different that you simply wish to cross alongside?

Rob: So, many alternative customers and folks. And we now have over 300,000 customers now. It’s attention-grabbing how individuals work together over e-mail, simply persons are well mannered and a few persons are good and a few persons are participating, different persons are simply dicks. I’m sorry, can I say that?

Meb: Yeah. That’s my first rule of social media and simply being a human within the 2020s is DBAD, don’t be a dick.

Rob: That rule is continually violated. However we’ve gotten our fair proportion of anti-Semitic responses to my emails, simply tremendous unusual and all the time a 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 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 payment, we’ll do some customized bespoke work.”

Rob: Yeah. I used to look at her in “Yentl,” and that’s going to be a shopper. 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 individuals didn’t even click on on the hyperlink. They’re simply, like, replying, “How may you do that? There’s no method this is smart.” That’s all the time 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 surroundings 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 all the time attention-grabbing to see of who has a humorousness. After which final 12 months, we had an April Fools of Koyfin is totally pivoting in 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 bought hacked. So, the Wikipedia April Fools hyperlink directed you to, like, a porn website. And so individuals 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.” And so they 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 pal, Jeremy Schwartz, the top 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 individuals have been and Jeremy, who’s at an enormous company firm, whose PR crew wasn’t amused at my joke. However it was humorous anyway. It’s good to have a humorousness, notably 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 bought now?

Rob: 25 workers, seeking to do our Sequence A fairly quickly, so nonetheless a reasonably younger firm. For us, like the longer term, construct the most effective product on the market, resolve our person’s wants. When it comes to 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 now have this actually attention-grabbing positioning of getting the most effective 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 feel the end result will deal with itself.

Meb: Your profession spanned each beginning an organization and being in a variety of funds, in massive funding retailers. Most memorable, good, dangerous, in between funding?

Rob: I feel the funding I bear in mind essentially the most is CMGI within the ’90s. I don’t know in the event you bear in mind.

Meb: Oh, God. You simply precipitated 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 bought 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 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 in the event you’re a public firm, then identify a stadium the shares or simply an absolute dumpster hearth, the worst sentiment indicator. It was nearly like a VC portfolio roll up all into one. AltaVista was a portfolio firm.

Rob: There have been a few official ones in there, however 100 of them and doubtless 2 bought 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 individuals go in the event that they wish to discover out what you’re as much as, what’s happening in your world, try the software program, give it a attempt? What’s the most effective spot?

Rob: Yeah, go to koyfin.com, create a free account takes two seconds, begin utilizing the software program. And in the event you prefer it, and we assist you to analyze the market, examine your investments then improve to the paid model.

Meb: Superior. This has been a blast. Thanks a lot for becoming a member of us in the present day.

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

Meb: Podcast, listeners, we’ll submit present notes to in the present day’s dialog at mebfaber.com/podcast. If you happen to love the present, in the event you hate it, shoot us [email protected], we like to learn the opinions. Please evaluation us on iTunes and subscribe the present wherever good podcasts are discovered. Thanks for listening pals and good investing.