Pierce Crosby, Head of Business Development at Stocktwits
Can you tell me about StockTwits? StockTwits is the largest social network for investors and traders. We specialize in basically providing the platform for people who can’t afford services like Bloomberg, Thomson Reuters…and we basically provide a free service for hundreds of thousands of investors who want to connect, exchange trading ideas, and ultimately make more money.
Why wouldn’t investors want to keep valuable information to themselves? Why do they choose to share it?The whole thinking is that if you are an investor, you have a natural interest in sharing your investment theses. Any time that Carl Icahn goes on CNBC, it’s not because he likes television; it’s because he has an invested stake in talking about the investments that he’s made. As a result, you see the companies that were talked about spike 2%, 3% on the news. This is a similar thesis; these are investors who want to have their investments known, and it’s an idea marketplace. If I say I’m an investor in Amgen Pharmaceuticals, there are 100 people who are also bullish investors that have different theses than mine, but there are also 100 people who are maybe short the stock, and they’re going to tell you why. So it’s a great way for people to exchange ideas and more or less figure out what’s the most valuable, and who should I be listening to? It really tests you as far as being an investor goes. How did you end up working at StockTwits? I used to work at Thomson Reuters on the Breaking views research team. It was a good job, but a very static role. It was just kind of unappealing to me, so thankfully the opportunity to join StockTwits came up, and I took it and haven’t looked back since. I think that working for a small company is 100 times more rewarding than working for a giant company, in the sense that every day that I don’t come to work, things don’t get done. If I work at Thomson Reuters, I’m one of 60,000 employees, and if I don’t come to work, the company will keep going. It’s really nice to have that sense of ownership when you work with a company that’s less than 20 people. Does StockTwits have any relation to Twitter? No, we’re actually completely separate from Twitter. Once upon a time, we used to pull in Twitter’s API. Twitter had a much more open network of API partners, so we pulled in Twitter data to basically fill these containers. What I mean by containers is that each company has its own quote page and that Twitter’s commentary would fill in this quote page in the early days. We turned off Twitter in 2012 because a lot of noise was coming from Twitter, whereas we were really focused on people who were producing signal — consistent investment insights that are really valuable to the community. We’ve basically just been growing organically since then. Almost all of our growth is organic; we don’t do large marketing or advertising. People love StockTwits, and they share it, and it’s created this virtuous cycle. If you’re an investor and you don’t know where to go, it’s kind of like we’ve become the destination, so it’s been good.
Who are your target customers? Are they only in the States, or are you also planning on expanding globally?Personal investors are the target right now. For the most part, we’re a media platform. So that’s in the U.S.; it’s in Canada; it’s abroad; it’s pretty much everywhere. Our other clients are asset managers, who are also globally based, so it’s really both of those. How do you make money if access to the site is free? Since the site is free, advertising is the majority of our business. TD Ameritrade, for example, is an advertiser on StockTwits, because they realize that we are the crowd, and if they want to be the broker of the crowd, then they should advertise with us. It’s a pretty simple discussion, really. We don’t currently have a sales team; mostly people come to us in search of advertising. On top of that, a small part of our business is the data business. Since StockTwits is becoming so large, the aggregate conversation of crowds is one that’s quite compelling for an investment manager. So that’s growing, but it’s very small as a segment right now.
What is your traction so far? Can you disclose any metrics, such as a number of users?Our number of monthly active users is close to 300,000. We do about 100,000 trading ideas per day, meaning 100,000 people who are trading Apple or trading Google or trading Tesla, or what have you. Can you disclose who your competitors are? Our biggest competitors today are Yahoo Finance, Twitter, and then a whole bunch of startup social investing sites. It is really crazy; just over the past couple of years, there’s been an explosion of different platforms that think they can do social. It is very interesting, because while everybody thinks they can do it better than we do, we find that the value of what we do is really not so much the platform that we provide, but the community that we provide, and that is incomparable. We have the largest online community of investors and traders ever, and that remains our biggest advantage, because people love StockTwits and the community members, so they don’t really have any interest in going to other sites.
What is the plan for the next six to twelve-months for StockTwits?We just had an event called Stocktoberfest in San Diego. Our CEO Ian Rosen talked about a bunch of the things that we’re doing in the future, one of them being launching a premium service, which has a lot more customizable features. We’re also ramping up our events business; we already have one event, but we’re going to be launching a bunch of events for our community members. We just launched a news product, and we just launched a great new charting product, thanks to our partners, ChartIQ. On top of that, it’s really just about growing the conversation. One thing that’s really interesting is that StockTwits users are extremely dedicated. We look at other social platforms to get a sense of how engaged users are. On Twitter, the average usage per day is about 16 minutes. Pinterest, I think, is about 19 minutes a day. Facebook is considered the industry leader; it’s at 51 minutes a day, and we basically have the exact same metrics as Facebook, right around 51 minutes, so it’s all about widening that conversation, because right now everybody’s so engaged, so we want to find a way to scale that across millions and millions of people rather than just thousands and thousands.