StockPulse makes the psychology of the stock market tangible with the help of Big Data
Introduce yourself and the startup StockPulse to our readers!
StockPulse makes the psychology of the stock market tangible with the help of Big Data. Every day, hundreds of thousands of investors discuss about stocks and financial markets in online forums or on Twitter. Our computer systems monitor this communication in real time and our proprietary algorithms reliably derive sentiment indicators from it. From millions of tweets, comments, news and forum posts it is possible to identify whether the majority of market participants currently is positive about a stock such as Deutsche Telekom or whether the mood regarding the leading US index Dow Jones is rather negative. For professional investors, such information is particularly valuable. They also pay us good money for these services.
Sentiment data about crypto currencies such as Bitcoin or Ethereum are of particular interest at the moment. Since the beginning of the year we also monitor online communication for more than 5.000 stocks from China and Hong Kong. Our algorithms understand texts in Chinese language (Mandarin). The volume of data we analyze every day has exploded since then.
For a few months, we have also been offering our basic technologies such as crawlers, relevance mappings, spam detection, and structured analysis of big data outside of financial market topics. For example, we compare prices and product reviews across different eCommerce platforms in real-time or automatically look for alternativ information about non-listed companies or startups that could be on the brink of growth and are therefore of interest to early-stage investors.
I am founder and CEO of StockPulse. We founded the company in 2011 and temporarily financed ourselves through an EXIST scholarship of the German Federal Ministry of Economics. We completed two rounds of financing in 2012 and 2013 and have been profitable since 2015. Next year, we plan to expand our distribution network to the US and plan to open an office in New York. A Hong Kong office is planned for 2019.
How did you get the idea for StockPulse and how did you come together as a founding team?
I know my co-founder Jonas Krauß from my studies at the University of Cologne. After several years of research in the field of Collective Intelligence in the United States and Switzerland we were, among other things, developing a model for predicting the winners of the Oscars based on online communication data. Ultimately, we wanted to use these insights to build our own company. That’s why the founding idea basically was: “What works for movies works well with stocks!”. It quickly became apparent that data from hundreds of millions of social media posts and commentary which is evaluated with sophisticated software tools can be condensed to highly valuable analyses about financial markets.
From the idea to the start – what have been the biggest challenges so far and how did you finance yourself?
One of the biggest challenges was to convince the first investors in 2011 for such a highly complex topic as Big Data analysis for financial markets. Today everyone talks about Big Data and Fintech, but back then it was a barely noticed niche. But we were lucky and quickly found a VC and two business angels who supported us financially and with their networks. Another real challenge lies in recruiting: It has not been easy to find good people who combine excellent IT skills and finance knowledge. It just does not work without a big passion for the stock market.
Who is the target client group of StockPulse?
Our clients include hedge funds, asset managers, banks, financial service providers, but also publishers and online brokers. Thus our main target group is from the classical B2B sector. Our data are also available via intermediaries for private users, eg. via Guidants or Finanzen100. With our new “Data Intelligence” offering we are now also addressing companies outside the financial sector.
How is the feedback?
We have several, long-term clients in the financial sector. Theoretically, most of them could terminate the data delivery contracts on a monthly basis. But in practice this has happened only once. One of the largest quantitative US hedge funds receives our data for almost five years now and recently the collaboration has been extended. This shows how satisfied our customers are with our data. From feedback we know that if used properly, our sentiment data can add great value. With our new “Data Intelligence” offering, we are also seeing tremendous interest outside of the financial industry – more and more companies want to automatically collect and analyze data on their industry, competitors, or do pricing comparisons of their products.
StockPulse, where is the road going? Where do you see yourself in five years?
We are already one of the leading providers of sentiment data in German-speaking countries. Of course, we want to keep and consolidate this position. In five years, we want to become the number one provider of economic data intelligence. We will also be in the forefront of the international market, especially in the USA. Especially in North America, the competition for sentiment and Big Data analysis in the financial sector is very strong and tough – but here we can already score with additional and innovative services and the flexibility of a small, agile corporate structure.
Finally, what three tips would you give aspiring founders?
1. Without a good team, often nothing works: So look for co-founders who share your visions and who have the same passion for the idea as yourself.
2. Do not be discouraged by setbacks: A good idea can sometimes take quite a few tries to get it ready for the market. You should also take that into account in your business and financial plans and plan enough liquidity for longer than anticipated development cycles during the first and second rounds of financing.
3. Do not get distracted from your goal by too much praise of friends and family in the beginning. Founding a company is well respected and many people pat you on the back. Pay close attention when your business concept is criticized hard, but constructively, especially by market experts. Then you should listen very carefully. Only then you get the right feeling for the market and how you have to design or construct your product to become successful.
More information you will find here
Thank you Stefan Nann for the Interview
Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.