Is Foursquare the future of Investing? Twitter co-founder un-pivots Jelly

The Human Powered Search Engine

Christopher “Biz” Stone, co-founder of Twitter and Medium is in his words trying “un-pivot” his ask and answer startup Jelly. Jelly is was started in 2012,  from Stone’s belief that the future of search will not be to be thinking up some keywords, getting lots of results, and then hopefully getting an answer. Instead Jelly will work in ways similar to Quora or Yahoo Answers, where a person ask questions and then just live their life until they get their answers. Biz Stone states Jelly is “Helpful answers for busy people.”

Basically, Jelly learns which people know what things and it learns what your question is about. Then, it pairs your question with people who are most likely able to help you. As a bonus, you can follow up with these real people to get into specifics, and for those who wonder what about trolls who give answers that are irrelevant to the questions, Jelly will have a ranking system where people rate those that give the best questions, and therefore the highest ranking people will be the ones that have their answers shown.

The Future of Investing

Chipotle reported its first quarterly loss on Tuesday, with massive decline in sales, falling nearly 30%. While many investors was expecting a decline, they were still caught off guard by the scale of the drop. However there was one company that was no surprised. Foursquare, the social-media app that allows users to check in and tell their friends what they are up was able to predict a 29% dip in Chipotle visits from its users.

This is the future of investment that many are calling “alternative data”. Alternative data is where obscure data sets can be turned into tradable information. Such firms such as RS Metrics which uses satellite images to examine traffics going into and from stores. RS Metrics was able to predict an increase in traffic into JC Penny from the amount of vehicles in the parking lots of the retail store.

As more and more firms begin to adopt the use of "alternative data" it seems that mining raw and unstructured data for investment insights is going mainstream. Investors are hiring data specialists and putting projects in place to make sure they aren't left behind. At some point this "alternative data" won't be so alternative anymore.

The Future of TV

 Netflix released its Q1 earning last week with disappointing results, however there is still few people who can argue that the video streaming company has not completely changed the face of television.  With Facebook announcing its live streaming service, and Twitter’s signing a deal with the NFL to live stream, which will include pre-game Periscope (Twitter’s livestreaming service) broadcasts with players and team, it is clear that the future of TV will be split into two categories: Live-Stream and On-Demand.

The time of switching through channels looking for something at least moderately entertaining is over, the main reason, that people are still subscribed to cable services, are because of the monopoly cable has over sports events. But as these sports associations begin to realize that they need to begin following the trend of millennial cord cutters, many will start to look for more option to reach their audience, as did the NFL with Twitter.

The future of TV is simple, there will be the side where we watch live-streamed events such as the sports, award shows, musicals, news, and so on, while the other side will be shows targeting specific audiences. With this being the clear path that TV will take, channels such as HGTV, Home Shopping Network, Lifetime might soon be forgotten and ultimately removed from our lives.

Medium Raises $50 Million, Uber loses $100 million, and Sean Parker (Re) launches another startup.

Medium Raise $50 million in funding.

Medium, the social online publishing platform announced that it has raised $50 million in Series C funding. Less than a year ago they raised $57 million in Series B. Medium was founded by Twitter co-founder Evan Williams in 2012, and the startup is a pioneer in what many call social journalism, Evan William created Medium as an idea that encourages users to create longer posts than the standard 140- characters of twitter.

Uber Loses $100 million lawsuit.

Uber has reached a settlement in two class-action lawsuits in California and Massachusetts that contested that Uber should be classifying its drivers as employees instead of independent contractors. In exchange for up to $100 million to the 385,000 drivers represented in the cases, both sides have now agreed that drivers will remain independent contractors and not employees. Although this might seem like a bit hit for Uber, many see it as a win for Uber, as they can still present their employees as independent contractors instead of taking them up as employees.

Sean Parker Relaunches Airtime.

We previously reported Silicon Valley “Bad Boy” launched Screening Room, the start that is trying to bring recently released movies into the living room. Now Sean Parker is relaunching his failed social media/ mobile chat app Airtime. Originally, Airtime was a mobile app that simulated chat roulette where users chat with different people each time, this time Airtime is presented as a mobile chat room where friends can share photos, music, video that they can all experience simultaneously. If Airtime becomes successful it will face competitors like Snapchat, and possibly chip away at market shares from the social network he helped create: Facebook.

Want to Invest in Companies Like Uber/Snapchat/Airbnb? You just might be able to.

Backround

Seedinvest was founded by Wharton alumnus Ryan Feit and James Han in 2012, who were shocked by how hard it was for startups to get funding.  The basis of Seedinvest is that now everyone can become venture capitalist, by investing in private companies with their own money. They do this in a similar way to Kickstarter the crowdfunding platform but instead of “donating” on Kickstarter, investors on Seedinvest will get shares of the startup idea they are interested in.

How Does it Work?

Seedinvest was kickstarted when President Obama signed the (Jumpstart Our Business Startups (JOBS) Act in 2012, which increased the number of shareholders a company can have before being required to registerd its common stock with the SEC and become a publicly reporting company. The main regulation (Regulation A+) which went in effect last summer allowing private early-stage companies to raise money from all Americans. Startups can now use a Mini-IPO under Reg A+ to turn their customers into investors. Reg A+ is a type of offering which allows private companies to raise up to $50 Million from the public. Companies looking to raise capital via Reg A+ will first need to file with the SEC and get approval before launching their offering. The costs associated with a Reg A+ offering are much lower than a traditional IPO and the ongoing disclosure requirements are much less burdensome, effectively making a Reg A+ offering a mini-IPO.

Downside?

There is consistent noise of a tech bubble getting ready to pop, but this noise is often ignored by many venture capitalist, because they believe even if there was a tech bubble it would not be as serious as the Dot-Com in the late 90s because the insanely high valuations are that of private companies, so any downside wouldn’t affect the general public, but just the wealthy investors of these private companies. Seedinvest would definitely open the door to the general public being affected if a tech bubble on the insanely high valued unicorns popped.

Former Buzzfeed President Launches Cheddar!

Welcome to Cheddar!

Former president of Buzzfeed and CEO of Daily Mail US, Jon Steinberg is launching a new media startup called Cheddar. Cheddar is a new media company that is hoping the future of digital content is videos. Targeting the cord-cutting Millennials, Cheddar’s business plan is to post clip as well as live-stream their daily business commentary straight from the New York Stock Exchange.  We could call Cheddar the CNBC for Millennials.

Officially launching this Monday, and with 5 episodes already finished, Cheddar seems to continue to gain a following, and get more publicity. Steinberg plans to one day stream 8 hours of content daily , instead of the 1-3 hours Cheddar does now. Cheddar’s live shows will focus on tech, media, and consumer stocks, because according to survey of 18-34 years gathered by Steinberg that is what most of the younger generations say they want.

Monetizing

Unlike traditional pre- and post- roll advertising dollars, Cheddar wants its main source of revenue to be distribution deals with services like Netflix and Comcast Watchable. By securing these deals Cheddar would be able to reach television through streaming boxes such as Roku, Apple TVs, and Google Chrome. Now although streaming high quality video is expensive Steinberg has been working with Live X, a cloud-based video shooting and editing technology that can make 4K clips with only a on time cost of less than $200,000, which is 10% less than the cost of traditional control rooms.

Final Thoughts

And although we might be biased here, considering we are also financial media company geared towards Millennials, having raised nearly $3 million in financing and recruiting Peter Gorenstein, a senior producer of Yahoo, as his Chief Content Officer, Cheddar just might give CNBC and Bloomberg TV a run for their money. 

Another Enters the Ring:YAHOO!

Another Challenger Enters…

The Daily Mail has thrown its hat in the ring in the continuing bidding war for Yahoo. The company is apparently in multiple talks with private-equity companies about backing the bid, according to a report by the WSJ. Daily Mail joins nearly 40 companies, with brand names including, Verizon, Microsoft, Google, Time Inc, and CBS who have already or are planning to submit bids for Yahoo’s core business.  Opinions on the value of the Yahoo’s core business have been extremely volatile ranging from $8 billion to some giving the company’s core internet business a value of less than $0, considering its market cap is $34 billion which is roughly the value of its stake in its Asian holdings (Alibaba, Yahoo Japan).

What is for Sale?

Yahoo’s business that’s up for sale can be categorized into 3 categories, its Asian holdings, its’ Display and Video Ad Formats, and its Search engine.

Yahoo’s Asian assets includes its 15.4% in Alibaba Group, which is worth around $30 billion, and its 35% stake in Yahoo Japan, which fairs a lot better than its American counterpart.

Yahoo’s Display and Video Ad Formats on Yahoo’s Display network partners. Ad sales includes Yahoo homepage, sports, finance, mail, as well as the blogging site Tumblr which Yahoo purchased for $1 billion in 2013.

Yahoo’s search engine has generated around 40% of the companies’ revenues and according to a Re/ code report, Yahoo is telling potential buyers that it expects to see its revenue drop another 15% this year.

Why Daily Mail Why Yahoo?

Yahoo might be the purchase entry way for the UK based Media Company. Having debuted a U.S. version of the Daily Mail in 2012 the company has reached 66.7 unique visitors and is looking at the U.S. as a significant growth driver, and Yahoo can definitely contribute to Daily Mail’s global expansion.

The Daily Mail can also use Yahoo Finance to fill the business section, and with the popularity of Yahoo Finance among millennials it can integrate seamlessly with Elite Daily (Daily Mail’s millennial centric media website).

Final Thoughts

It is interesting to see what Daily Mail might have in store for Yahoo, but it seem that the final bidding war would be between Verizon and the Daily Mail, as both sides seem to benefit the most from the purchase of Yahoo’s business, but if Yahoo does not sell itself soon, it can begin another nasty battle with activist hedge fund Starboard value, in the upcoming shareholder’s meeting coming up this spring.

RobinHood: Trading made simple (maybe too simple?)

Robin Hood

Stock trading startup recently announced that they plan on bringing their free stock trading app around the world, and has chosen China as their first country to launch, as reported by TechCrunch. So for those who never heard of Robinhood let us take a look back on what makes this startup so disruptive to the financial markets.

A Brief History

Robinhood was founded by Vladimir Tenev and Baiju Bhatt, two Stanford alumnus who spend most of their career building high-frequency trading platforms for various financial institutions in New York City, that is where they realized that electronic trading firms pay essentially nothing to place trades on the market, which inspired them to start Robinhood and instead of charging $7-$10 per trade like most online brokers do, you can place trades for free.

With $66 million in funding at an undisclosed valuation, led by brand name investors such as Google Ventures, Andressen Horowitz, Index Ventures, as well as celebrities like Snoop Dogg, Nas, and Jared Leto, Robinhood is in an amazing position to overhaul the financial markets and change how we trade.

Is This A Good Idea?

While many applaud the idea (over $1 billion in transaction and over 1 million traders on the platform), and the stylish, simple design (won an Apple Design Award), there are going to be many problems as the app continues to gain a following and grow in popularity.

One of the main concerns many financial experts have is the fact that free trading is not always going to be good idea, because free trading encourages continuous trading and as many financial experts know, consistent trading is often not good for the investor. There are many studies that show the buy and hold method usually brings in a better rate of return than continuous trading, as shown in a study by Brad M. Barber (a finance professor at the UC Davis) named “Trading is Hazardous to Your Wealth. In the report Dr. Barber found that

“Individual investors who hold common stocks directly pay a tremendous performance penalty for active trading. Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that trade most earn an annual return of 11.4 percent, while the market returns 17.9 percent. The average household earns an annual return of 16.4 percent, tilts its common stock investment toward high-beta, small, value stocks, and turns over 75 percent of its portfolio annually. Overconfidence can explain high trading levels and the resulting poor performance of individual investors. Our central message is that trading is hazardous to your wealth”

With an app that makes trading look and act like a game, Robinhood might not be stealing from the rich and giving to the poor, but instead stealing from the novice and giving to the market, and now they are moving to a country with the largest amount of mom and pop traders. As renowned value investor, and teacher of Warren Buffet, so eloquently stated
"The investor’s chief problem—and even his worst enemy—is likely to be himself"