SaaS Interviews with CEOs, Startups, Founders
1135 This app lets you use real money to compete with your friends in crypto, stocks
02 Sep 2018
Chapter 1: What is Volio and how does it enable social trading?
He's launched Volio, which is essentially a social trading platform, also now jumping into crypto as well, so you can do with your friends. He's raised 5 million bucks to really grow this. He just went to market recently, 2,500 bucks in total revenue last year. Obviously, that'll grow this year.
He makes money by charging a fee each time you trade, which is really a diluted fee if you do it with a group of friends. So, nice social dynamics. This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich... or crash and burn.
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million.
Chapter 2: How does Volio's business model work?
I had no money when I started the company. It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everybody.
My guest today is Thomas Beattie. He describes himself as a recovering investment banker at his current company, Volio, which we'll dive into today.
Chapter 3: What makes Volio different from other investment platforms?
He runs this startup that is helping people invest together with those they know and trust. He's devoted time across several sectors, but his common thread is that they're all financial service related or in the capital markets. He has extensive experience in the formation, structuring, and financing of public and private companies.
Transactions across international capital markets have provided him with considerable insight into valuation, positioning, and strategy. He now leverages this to contribute to the development and growth of new and successful businesses. Thomas, are you ready to take us to the top? I am. Thanks. What's the actual business model at Volio? Are you an investment banker?
Voleo is a trading platform, so I used to be a banker, but I left that with a mission to try and help the next generation get involved in preparing for their financial future. Okay, so your cool factor went up a little once you left investment banking. Maybe. Okay, so the URL, is it myvoleo.com? It is, yes. Okay, so tell us about the platform. How can people use it?
So the platform is designed to help break down barriers and help people invest a bit better. It lowers their costs by enabling them to split fees. and it enables them to diversify, which reduces their risk, and hopefully they leverage their collective intelligence to make better decisions.
Chapter 4: How does Volio help users overcome investment barriers?
Okay, Wealthfront, Robinhood, why am I going to use you over these guys? It's really about breaking down those barriers. If you don't think you have enough money, enough knowledge, enough time, or you're just scared of investing... Those other platforms aren't going to help you with that. They break down maybe one of those barriers, but not all of them.
We think that we address them all and make it easier for this next generation to get started, to have a little bit more fun as they're building their portfolios and to learn. And I think those aspects are really important. What kind of strategy, though, does your tool help enable as an active one or a passive one?
I mean, the reason I use Wealthfront or these other guys is because I just I just do, you know, dollar cost averaging. Right. And boom, they take care of it with low fees. That's a great strategy. I like that. I endorse that our platform is built for active or passive strategies. We don't have a robo advisor.
We're having a robo buster created, which will enable you to pick your passive portfolio and reduce those ongoing fees. But really, the strategy is up to the members. Thomas, isn't that a contradiction, picking your passive portfolio? If you're picking something by nature, you have to be active, right?
Well, when you think about it, all these robo-advisors are doing is putting seven ETFs into a bucket and selling it to you and charging you a fee every year for rebalancing it. This is not rocket science. Any member of the public can do this if they have an understanding of why there are those seven elements in that.
given portfolio, we're going to let you decide which from each of those buckets you think is the most appropriate for you. And that'll reduce your costs over the course of your lifetime. And I'll just point out how serious that is.
I mean, they say with a traditional advisor charging you one, one and a half percent per year in total fees, both what they're charging and the embedded ones in the products. that you're going to lose about a third of your wealth over your lifetime. When you look at a robo-advisor, it's substantially less, but it's still nearly a fifth. And that's a big number.
And that's why we think people should be picking their own.
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Chapter 5: What strategies can users implement with Volio?
Okay, so Volio, how do you make money? What's your revenue model? Volio itself is a discount brokerage. We enable groups to split commissions. So we have a commission structure. Teams of three or more split a $12 charge. Individuals pay $4 each. Okay, so let's say that a lot of my listeners are SaaS, private equity, M&A folks. They're running in their own funds, et cetera. They're analysts.
If they want to try this, they're going to sign up. And every time they want to do a trade, they'll pay $4. Is that how it works? As an individual, it's $4. As a team, it's $12. The average number of members in each team on our platform today is nine. So it's costing about $1.30 per person. I don't understand that use case. What do you mean a team?
Like if I get together with friends and want to do this, it's cheaper? That's right. You're pooling your money and you're actually creating what used to be called an investment club. Now, that's not cool anymore, but that's what this is. This is a mobile and social thing that lets you invest with your friends, family, colleagues.
Gosh, I'm trying to think what my board game nights with friends would sound like if the stocks were down that day. Maybe everybody cancels. I mean, but seriously, how do you manage the socioeconomic kind of feeling of that? Actually, it's one where you all have a collective interest in what you're investing in. So everybody cares. Everybody's got a voice.
Chapter 6: How does Volio track member proposals and votes?
Everybody's got a stake. And that's really what it's about. It's about that collective intelligence working for you. I imagine this though can break down and say, Nathan, you told us to add Chipotle a year ago and now there's this freaking bacteria breakout and they're killing our whole portfolio. We're not taking any of your picks anymore. Yeah. That may happen.
What makes Voleo truly unique is that we track every proposal and vote made by each member. So if you propose to buy Chipotle and the team votes you down, it's going to track Chipotle for you until that point in the future where you lock it off for the purposes of your score. Conversely, if your club agreed to buy it, you're going to be long and it's going to reflect on each individual person.
Oh, good. So you give me the ability to go back in a year and say, look, you should have listened to me. My stocks are performing well. And this feeds a community of top-performing clubs and individuals who can be followed in a redacted way in real time. Okay, now I love you. Now I'm enjoying this. What I mean by redacted is I don't tell them how much wealth you have.
They'll be able to see the weight of a position in your club's portfolio, but never how much money you're managing. Got it. Really interesting. Okay, so you're making these fees, and that's happening every time they are buying or selling stocks. Is there any other way you make money that's more predictable? None at all. It's it's a free platform to use. It's free to create your club.
We remove the partnership agreement element. We have a template for that. You don't have to pay a lawyer or an accountant to set you up the end of the year. We give you your information for your tax forms so you don't have to bother with any of that hassle. You don't need a club bank account.
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Chapter 7: What are the challenges of social trading with friends?
All the things that used to make investing together a pain are gone thanks to technology. OK, so so tell me more about your team. So when did you launch the company? What's the team size today? Team's been around for several years. We've been building this platform first in a simulated context and then registering it as a FINRA member in the United States. So we're now in soft launch.
We've been around for about 12 months. We finished registering across U.S. states in March of last year. And now the team consists of about eight members. We've got some based in the U.S., some up here in Vancouver. I'm based in Canada. And that's the team today. And how many folks, how many users have signed up both on a free basis and also a paid basis?
So we've had thousands of people participating on the SimuTrader app that we have in stores. This gives you a free million dollars to invest on your own or as a team. to get used to the look and feel of the application and to start practice investing.
This has been quite a useful tool, and we've run competitions both with NASDAQ and with the TMX group to enforce, I guess, a higher standard of financial literacy among university students in the U.S. And they're still paying $4 even to trade the fake money, right? Yeah. Fake money. They still pay the same charges that they would if they were running. Oh, this is kind of cool.
So this is interesting. So you can actually make way more money than a wealth front or these guys because you're essentially you're more like a game. But it can become real life if they want. They can actually do real trades through you. They can do real trades. Just to be clear, the simulated trades that they're doing are done with simulated money. They're not paying anything for that.
But they have the same experience that they would have if they were doing this for real. So I'm not paying you for real dollars to spend your million dollars virtual. Not to fake trade. I would never do that to anybody. I would do that. I'm a capitalist. Yeah. But on our real platform, we've now got over a thousand people that have created profiles. Some of them are active in teams.
We've got dozens of active clubs, hundreds of active users, and we're emerging from soft launch next month. You'll start to see us advertising and getting our story out there. Folks, for those of you that want to learn how to go from good to great to totally unstoppable, listen up.
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Chapter 8: What future developments are planned for Volio and Cryptolio?
I think that's great. So I'm trying to, like I told you, I'm a capitalist. I love numbers. I'm trying to figure out how much money you're making. So a couple hundred people. I'll tell you because we're going to be a public company. Our revenue last year was a mere $2,500. I love that. We're at the point where we're starting to look at customer acquisition and scaling the business.
And I think that's going to obviously make us a more significant player in the space. Have you bootstrapped the company or have you raised? We've raised. We've raised several million dollars to build a technology platform. And I'm delighted to say that at this point, we are more of a platform company than a single social trading app.
We are looking now at white labeling our platform to credit unions and community banks across the U.S., enabling those financial institutions to offer a new service to their members and
incremental revenue stream uh generation and of course open up a new channel for customer acquisition and how much have you raised uh five million dollars as of this year and was that a price round or equity or a comparable note uh all equity uh all from high net worth individuals no vc investors so how did you how did you whoever led that around or maybe it was two rounds but whoever your leads were how did you convince them on evaluation with you know pre-product pre-revenue is i mean you have a great background was that it
Yeah, that certainly helped. I think having a team that had been involved in the financial industry was very helpful. We've got a number of very highly skilled technical team members that have built financial software for many years. So that gives our investors a lot of confidence.
And I think just the fact that it was an innovative and truly unique idea, taking what was a social trading app and adding that level of gamification that will make it engaging for all investors, not only this next generation. My audience is competitive as hell. I imagine if we figured out a way ā and by a way, I mean you paying me somehow ā
as a sponsor, but if we figured out a way where I set up a game and challenged all my audience members to go in with me and see if they could beat me over the next two, three, five years, that would be a lot of fun. All right, let's do it. I run these student competitions and they are highly competitive. Our top team over 10 weeks, returned over 200% annualized.
I think it was about 37% over the course of that 10 weeks. They did an amazing job. Well, we'll follow up after the interview and see if we can actually make that happen. But I love the concept. I think this is great. It reminds me back when I was young when I played this thing called Neopets.
I don't know if you have kids and you've heard of this, but it's a virtual world with these little creatures and then they have the stock market. And I'd spend all my time logging into Neopets on the stock market, just trading like they had weird names like berries or fruits or things. But I would refresh it and see my value go up and up over time. And I loved it. It was very addictive.
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