NYC Start-up TickerHound Partners with NASDAQ

Having recently celebrated TickerHound's 1-year Anniversary as a public site, I couldn't be happier to announce our first significant technology partnership with a financial media/tech company: The NASDAQ OMX Group (Symbol: NDAQ).

If you go to www.nasdaq.com you can now find TickerHound's Q&A widgets sprinkled across the site. To dive into the co-branded application we built for them just go to http://answers.nasdaq.com.

This is a big moment for the entire team here and we can't wait to roll out some of the other partnerships we have on deck!

Press release is below:


NEW YORK, Apr. 9, 2009 -- TickerHound.com and the NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today introduced NASDAQ Answers on Nasdaq.com. This new, real-time Question & Answers platform provides Nasdaq.com users with unbiased, community-powered education for the individual investor.

“We’re very excited that NASDAQ, which has a long history of technological innovation in finance, has chosen TickerHound as one of its first social media offerings,” said Wayne Mulligan, TickerHound’s CEO. “NASDAQ’s implementation of TickerHound is a strong endorsement of our brand. We welcome Nasdaq.com’s support in fulfilling our mission of educating and empowering individual investors.”

"NASDAQ Answers provides an intuitive way for individual investors to ask questions and get answers from other users," said Bruce Hashim, Vice President, NASDAQ OMX Interactive Services. "TickerHound made it easy to integrate their robust software suite and we’re confident these social media features will significantly improve the NASDAQ.com user experience."

Now live on Nasdaq.com, Nasdaq Answers allows users to freely browse questions and answers across a variety of investment-related categories. Free registration with a valid email address is required for users to post or respond to questions. Visit http://answers.nasdaq.com to participate in the discussion.

For more information on NASDAQ Answers, visit http://answers.nasdaq.com.

About TickerHound:

TickerHound is a community-powered education website for individual investors. Launched in 2007 the company has focused on creating a scalable and extensible Q&A platform and partnering with top-tier financial media brands. TickerHound’s goal is to provide unbiased, community-powered education for the individual investor. TickerHound provides its partners with a turnkey solution that will allow them to create, customize and quickly deploy their very own Q&A Community. The company plans to announce more white-label community-powered education features on other websites in the near future. For more information, visit www.tickerhound.com.

Cautionary Note Regarding Forward-Looking Statements

The matters described herein contain forward-looking statements that are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about NASDAQ Market Pathfinders and NASDAQ OMX Group's other products and offerings. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond NASDAQ OMX Group's control. These factors include, but are not limited to factors detailed in NASDAQ OMX Group's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.

# # #

A Quote I'm Pondering...

From Brad Burnham at Union Square Ventures:

All of this means that you will see subtle changes in the way we invest our new fund. We will be even more selective about the early stage Web services we back, looking for compelling differentiation, a discrete market focus, and clear evidence of sustainable user growth. You will also see us invest selectively in later stage opportunities that we believe are poised to grow as more users become more dependent on the Web to manage their daily lives.

I concur...

Why Buffett Would Never Buy Google

Yesterday on TickerHound.com, a member asked, “Would Buffett really buy Google?”

The question was based on a Fool.com article (click here to read it) that quoted this year’s Berkshire Annual Shareholder Letter where Buffett writes, “It's far better to have an ever-increasing stream of earnings with virtually no major capital requirements. Ask Microsoft or Google.”

I could see why this led some to wonder – and the Fool.com even wrote an article about it – if Buffett could potentially invest in Google. This made me laugh if for no other reason than Buffett mentions Microsoft in the same sentence…a company he knows intimately (considering Bill Gates sits on Berkshire’s board) but has yet to ever invest in.

But let’s leave that part out of the equation for a moment, let’s just look at the “Google angle” and try to answer the question: Would Buffett really buy Google?

For consistency’s sake, I’m going to analyze this in the exact same way the Fool.com article did:

Is The Business Simple and Understandable?

Definitely!

Google is an ad broker – plain and simple.

We can talk about their technology all we want – and believe me, that’s what makes their ability to broker ad dollars so effective – but at the end of the day, the way the company makes 99% of its money is by putting publishers and advertisers together.

That’s a pretty plain vanilla business to me (regardless of all the sophisticated search technology they have on the backend).

Do They Have Favorable Long Term Economics?

I’m going to skip this for a moment and come back to it at the end. You’ll see why below.

Is Management Candid and Competent?

I’d have to give the affirmative answer on this one as well.

The founders, Larry Page and Sergey Brin, both have the better part of their net worth’s tied up in Google stock. That means management’s interests and the share holders’ interests are certainly aligned – something Buffett always looks for in a company he’s buying.

And in terms of candor and competence – their execution speaks for itself and if you’ve read Google’s annual reports and even their S-1 filing, you’d know that they’re candid and up-front about how they manage their business.

So this item gets checked off the list as well.

Is The Price Right?

Here’s where we run into problems…

Buffett’s brilliance isn’t based on the fact that he knows how to value an asset…I know a lot of folks who can value an asset.

My father knew exactly what we should pay for our home when I was a kid.

I could tell you right off the bat how much I’d pay for new car.

In fact, Finance 101 teaches people basic asset valuation models – more specifically, Discounted Cash Flow analysis.

The ability to value an asset isn’t difficult…you just plug some numbers into the equation and you get your value.

The difficult part is making sure the NUMBERS themselves are the right numbers.

So now you’re probably asking, “How do we know if the numbers we’re using are correct?”

Well, you’ll never be able to tell if the numbers are EXACTLY correct – you’ll have to use your best judgment (and even then you’re probably going to be off, and that’s why in Ben Graham’s infinite wisdom he taught Buffett – and thousands of other value investors – to apply a “margin of safety” approach to business valuation…but that’s another story).

But here’s the caveat (and this goes back to the “Does the business have favorable long term economics?” question)…according to the Fool.com article, because the internet has favorable long term economic characteristics, and Google is by far and away the leader of the internet pack at the moment, they assume that Google will therefore have favorable long term economic characteristics as well.

But that just isn’t so…the tech sector is predicated upon the process of creative destruction. Companies must find new and innovative ways of doing things or they’re destined to become obsolete. I mean, how many times have we seen this happen in the last 10 years?

To argue that Google will ALWAYS maintain a competitive advantage in a space that changes by the hour is foolish (no pun intended).

That’s why Buffett only invests in mature companies that compete in mature industries. It makes the tough part of business valuation (using the right numbers) much, much easier.

So to answer the original question as simply as possible, would Buffett ever buy Google?

In my opinion...Not anytime soon!

Click here to leave your answer to this question.

10 Wall Street Sales Secrets (Part I)

Since I've started writing this blog I've mainly been focusing on my current venture, technology, etc. I haven't really dug down deep and talked about many of my past experiences, especially about my time on Wall Street.

I was only on "the street" for a few years as an analyst/broker, but I learned my fair share about what it takes to succeed in that business. Reason being, I was working through the worst Bear Market we've seen since the depression.

While everybody was socking their money away under their mattresses, I was on the phone, cold calling and telling investors that now was the time to be buying stocks (considering the market has doubled since then, I guess I was right). Needless to say it was an uphill battle, but it taught me some of the most valuable sales secrets Wall Street has to offer. Secrets that enabled me to open more new accounts than even the most seasoned professionals in my firm.

I guess these aren't really "secrets", they're more like sales tactics that have been proven to work. I didn't invent these, but I made it my business to master them.

And now, in the spirit of blogging and open communication I'm going to pass on these proven, battle-tested sales strategies to all those who care to learn. So whether you're a broker on Wall Street selling stock or a door to door salesman hocking vacuum cleaners, these tips will help you take your business to the next level.

So here goes...

1. Welcome and Expect the Rejection - I know that this may sound counterintuitive to anyone who believes in the law of positive attraction. However, the reality of the situation is that out of the new accounts you've landed over the years, 90% of them probably didn't say "yes" the first time you asked them for the order. It's just a fact.

So when you go in there to land a new account, walk in there expecting them to say "no" right away. Because if you go in there assuming they'll say "yes", and when they don't, you'll not only be unprepared for the oncoming "verbal wrestling match", but you'll also psych yourself out wondering why they said "no" to begin with.

But if you go in there expecting them to say "no" then you'll be ready to follow up with appropriate questions and rebuttals. And that's when deals get closed - not after the first 10 seconds of your presentation, but rather after the 1 hour conversation you have with the prospect.

2. Just Listen - All too often I see novice salesmen who are so eager to "say the right thing" or tell the prospect just one more feature about their product that they don't simply shut-up and listen to what the potential client is telling them.

You have two ears and one mouth, you should listen twice as much as you speak.

Even if you're not totally buying into what the prospect is telling you (more on this in a minute), just listening and not chewing their ear off makes them think that you really care about them and what they have to say. This is so important because this is how you go from having a client to having a friend - and at the end of the day, people don't fire friends.

3. They're all Liars! - You might be scratching your head right now wondering why I just told you to listen to your prospects, but then in the next breath I'm calling them liars.

Well, let me explain...

They're not really "liars" in the sense that they're trying to trick or deceive you. But they are lying to you (and to themselves) when they give lame excuses for why they can't buy what you're selling. Excuses like:

- "I don't have money"
- "I have to talk to my wife first"
- "I'll think about it and call you back"

Those are all lame excuses...and it doesn't mean that they're simply "not interested".

In salesman's vocabulary, "not interested" really means "not convinced". Because if you did your job of pre-qualifying these prospects properly then you should know if they have money or not or if they are the decision maker for this type of transaction.

So when they use these excuses, listen to them because they might inadvertently tell you what you'll have to say to close them, but assume that for the most part they're just making excuses and lying to you.

By keeping with this mentality you won't get bogged down trying to give them advice on how to "come up with the money". Instead you'll start talking about the benefits of your product and why they can't live without it. And that my friend is how you close new accounts!

(NOTE: The first 3 Sales Secrets were basic principles, now we'll get into specific tactics)

4. Completely Ignore the First 3 Objections - That's right, this is another one of those "contradictory" statements when taken at face value. Let me explain...

If you're pitching a guy who gets lots of sales calls everyday - procurement managers, CEO's, individual investors, etc. - then they're conditioned to screen out the weak salesmen. Don't get me wrong, it's not like they sit there and go "I'm only going to buy from the best salesmen", but at the end of the day, it's the best salesmen who close the deals.

So chances are, his first 3 objections are just standard objections he gives to every salesman that calls. Most will go, "Ok sir, I'll call you back down the road." But that's not what he wants to hear...people are always looking for ways to make or save money. If you have a good product and you really believe in it, then you'd be doing this customer a HUGE disservice by not continuing to try and pitch him.

When I was recommending stocks I REALLY believed in what I was doing and that's why I would stay on the phone and pound the table until I got the deal. And that brings me to my next tactic...

5. Click or Close - This is an old Wall Street saying and I'm sure it applies to other sales jobs as well. The phrase basically means that the guy has to either hang up the phone on you (the "click") or open an account with you (the "close").

This is a tough principle to stick to but it's the difference between a million dollar producer (a broker who earns $1 million per year in commissions) and a guy who takes home less than $100k a year on Wall Street. It was the one characteristic I saw the million dollar producers consistently display.

They all had different sales pitches, they all had different ways of asking for the order, and they all even had different ways of approaching the market - but what they ALL had in common was the ability to stay on the phone no matter what. They would stay on a single sales call for over an hour (sometimes they got the account and sometimes they didn't) and would stay on for another hour if the guy let them. It was an amazing display of discipline and it paid off ten-fold when compared to the guys who would hang up after 3 or 4 objections.

Once you overcome the psychological barriers of rejection, this discipline is easy to put into practice and could mean millions in extra income for your firm and family.

Part II coming soon...

I feel that this is enough for one blog post - there's a lot of information to digest up there. Would love any and all feedback you might have so feel free to comment or e-mail me.

Happy hunting!

Beware the Banks and Brokers!

After reading a post by Fred Wilson yesterday, I started to get a little concerned about an impending economic downturn. While it's always been in the back of my head - considering we've been in a bull market for the last 4 years - I haven't paid it much mind in a while.

Now Fred was talking about a downturn specific to the web - I mean, that's where he makes his bread and butter so it's something that is near and dear to his heart - but my concern is more broad based. I think we can see a major downturn hit the stock market and that will have a reverberating effect throughout the economy, and especially in the fragile tech space.

Here's my take:

After working on Wall Street for a few years you learn a couple of tricks. One of which is, if you want to know which way the market is headed six months in advance, keep an eye on the banks and brokerages.

Once you see the banks and brokerages start to take a dive, you know that the rest of Wall Street isn't too far off - we'll call them a "leading indicator". Every major bear market was preceded by sub-par results in the banks and brokerages.

Now, much of this is going to have to do with the recent mortgage crisis the country has plunged into. A lot of these banks are going to take a monster hit on all of these defaults we're seeing.

In fact, the Wall Street Journal just reported that Morgan Stanley (NYSE: MS) took a 17% hit to Net Income this quarter. Lehman Brothers (NYSE: LEH) showed an increase in profits but took a hit in fixed income due to the mortgage issues.

I also think that many of the banks and brokerages have been reaping the benefits of an unsustainable bull market - the market has been up almost 20% a year for the last 4 years - that means that when this market heads south (or stops rocketing higher) these companies can no longer use their trading and investment banking fees to compensate for losses in other divisions. And that my friends means the brokerages will be headed south for the winter.

When that happens many of the IPO dreams and lofty valuations for many of today's web startups will go into hibernation for the winter as well. But in all fairness this "dot-com renaissance" we've been seeing isn't solely predicated on the public equity markets. But at the very least I think we'll see VC's and other private equity firms tighten the purse strings a bit.

Like I said in my comment to Fred's post, I don't think we're headed for an all out crash in the Internet space, but with the market looking like it might take a bath, investors and entrepreneurs alike need to be cautious now and prepare for a potentially tough winter.

Some steps to take:

1. Batten down the hatches and lower your burn rate: If you're currently supporting high fixed costs figure out ways that you can right-size your Income statement if revenue suddenly takes a hit (i.e. if revenue drops 25%, how can you cut costs by 25%?).

2. Stockpile your supplies: For investors and entrepreneurs this means you need to get capitalized! If you've got enough cash on hand and this downturn isn't "too" bad, you'll be just fine. But for those operating on a shoe string budget already, you might be in for even tougher times if this downturn hits.

3. Focus on the Fundamentals: At the end of the day most of this stuff is beyond any of our control, so there's not much we can do by worrying. So focus on your business - continue to execute on all fronts and proceed with your plan. Don't take your eye off the ball for a single second.

I think James Dean said it best - "Dream as if you'll live forever; live as if you'll die tomorrow."

I prefer, "Act like your company will be around forever; but plan like it could be gone tomorrow."

Random Thoughts...

I've been trying to come up with a really good topic for my next blog post - the last few were just sort of ramblings about current news - but I can't seem to think of anything that is "entertaining, enlightening and informative. " There's a ton of stuff coming out in the news these days about mergers, rounds of funding, new gadgets, etc., etc. But with all the other blogs out there covering this stuff in depth why should my take on the situation matter so much?

The real question that's been racking my brain is, "how do I differentiate myself from the millions (ok maybe not millions) of other blogs covering the EXACT same topics?"

I'm not quite sure of the answer yet but I have a few ideas in mind.

What I'll do for the time being is simply jot down a few of the memes that have been popping up on my radar as of late.

I. Wall Street Journal: To Fee or not to Fee

There are a number of VC's/Bloggers/Entrepreneurs that I really admire who have been talking about the reasons for WSJ.com to go for a free model . BusinessWeek writes one of the most interesting pieces for why it may or may not make sense for WSJ.com to go free. Fred Wilson over at Union Square Ventures has also been writing about this topic since the News Corp./Down Jones merger was announced.

In the end this is going to boil down to a math equation on Mr. Murdoch's desk that will look something like this:

$65million = Annual subscription revenue from WSJ.com online

So the question becomes: At a $30 CPM rate (WSJ could probably get more but we'll be conservative) how many page views would it take to make up for the lost subscription revenue?

Well, let's do the math...

$30 * X CPM's = $65 million
X = 2,166,666 CPM's

Which translates into 2,166,666,000 page views (2.16 billion for those who have a hard time processing that many zero's).

Over the course of 12 months, WSJ will have to serve up 180.5 million pages per month in order to hit that mark. FYI: Compared to some of the larger social networks out there, 180 million page views isn't a lot.

WSJ currently does 1.5 million unique visitors per month - that's a joke when we compare it to some of the larger online financial sites. According to comScore, the top financial sites had the following unique visitors and page views during the month of June:

MSN Money: 12.7 million uniques and 180 million pages viewed
Yahoo! Finance: 10.4 million uniques and 327 million pages viewed
AOL Money: 10.5 million uniques and 206 million pages viewed
CNN Money: 5.4 million unqiues and 50 million pages viewed

Based on this data it's clear that WSJ stands a good chance of replacing its lost subscription revenue with advertising dollars. But, it's still not as "safe" as sticking with a subscription model. The thing that none of these bloggers/magazines have taken into account is the nature of investors.

I was a broker for a number of years and I know from firsthand experience that investors don't mind paying out the nose for good information. And WSJ undoubtedly has some of the best financial editorial on the planet. And with subscription revenue you don't have the ups and downs of ad-based revenue - it's like a utility company, you can reasonably predict how much revenue you'll do each year...that's very comforting for company owners.

Now, that isn't to say that WSJ.com shouldn't begin giving some of its content away for free - I mean, it's pretty obvious that there's going to be a dramatic shift in the investing demographic. As the baby boomers get older, stop investing aggressively (and sadly, begin passing away), this whole web-savvy demographic will take their places as the "investing demographic". This audience won't have a tough time navigating a web site and will be used to getting free access to content.

So to preempt this shift and gain tomorrow's investing audience today, I think WSJ should begin giving free access to some of its content.

Which content should it be? I'm not quite sure.

At the end of the day, yesterday's news is less valuable than today's so maybe giving away older articles would be helpful. It'll allow them to maintain the subscription revenue for those who want their information in a timely manner while still allowing bloggers and those in the non-mainstream press to openly cite and link to WSJ content (which will be very important for building loyalty, brand and traffic).

II. The State of the Web

There has been a ton of talk on this topic...Everybody from Mavericks owner Mark Cuban to the guys over at Read/Write Web have been talking about where we are in the evolution of the web as both a technology and a media platform.

They both raise interesting issues - Read/Write Web focuses more on where we are in the "technology cycle" and Cuban focuses more the entertainment value of the web with respect to its current infrastructure.

The argument that Read/Write Web puts forth is interesting in that they try to map the standard "business cycle" to an underlying phenomenon they view as a "technology cycle". Joseph Schumpeter and other Austrian economists would definitely find this to be a compelling case for their theories with respect to business cycles and economic fluctuations.

Cuban looks even deeper into the technology by arguing that it's not the software that needs innovating but rather the infrastructure (or internet access speeds into the home) is what needs to be upgraded before we'll see another wave of innovation on the web.

I'm not sure who (if any) I agree with yet. I'm still pondering these issues myself but it's definitely forcing my brain to think in a different direction (which I always enjoy).

That's about it for me today, but expect more posts about the "state of the web" throughout the rest of this week/month/year. :)