Today Motif Investing, a platform built around ideas-based stock investing which BetaKit covered when it launched in June 2012, announced a build-your-own (BYO) version of its service to give anyone the ability to create and market their own collection of stocks, bonds and ETFs, while being able to earn royalty fees each time they are purchased by others. Built and driven by the idea that traditional investing does not cater to how everyday individuals think, the startup designed and brought to market an ideas-based and conceptual approach to stock investing.
Each “motif” on the platform is a collection of stocks, bonds, or ETFs built around a certain idea or trend, so rather than searching for a specific company to invest in, users can search for motifs related to ideas, topics, and trends like ‘online gaming world,’ ‘biotech breakthroughs,’ and ‘cyber security.’ Co-founder and CEO Hardeep Walia spoke with BetaKit about the latest offering and what motifs mean for stock investing.
“It’s a new-age investing platform that’s centered around investing in ideas…all of us are inundated with great investing ideas, 3D printing is pretty hot now in the Valley, global inflation is a big concern,” said Walia in an interview. “Most people either don’t have the skills, or if they do have the skills, don’t have the time to act on these ideas because it requires a ton of homework. What we do is solve this problem by allowing individuals to take these ideas, and if you’ve shopped on Amazon, you can invest in these ideas.”
Prior to today’s announcement, users were able to buy only pre-built motifs put together by the company’s in-house research team, and they could then customize them to their preferences. Now, they are able to build their own around ideas that interest them using a drag-and-drop interface, searching for companies by different criteria including whether or not they’re sociall responsible, or companies in a specific geographic area. They can also adjust the weighting for each stock based on their investment strategy and match the performance of their portfolio against the performance of a benchmark index.
The startup takes a $9.95 transactional fee for each purchase. Each motif can have up to 30 stocks, for both pre-built motifs and BYO motifs, however, with the latter customers are able to earn $1 in royalties each time another user purchases their motif. The platform is also built as a social network, with sharing functionality built-in, so users can build a following, share their strategies with other users, and now make money by leveraging their expertise. Users can be individuals with no prior investment experience all the way up to industry professionals and even brands who want to use the platform to showcase their values.
Other companies BetaKit has covered in the investment space include Stockr, which launched its social network for the investment community last year, and equity-based crowdfunding platforms like CircleUp. And although online trading is nothing new with existing platforms like E*Trade and direct online investing offered by retail banks and brokerage houses, Walia believes Motif has been able to crack the code when it comes to making an unapproachable topic both intuitive and social.
“What we have done is build a product built around how people think about investing…people think conceptually, people think semantically. All the other online brokerage products out there have been built on an institutional legacy process,” Walia added. “No one actually thought about how people intuitively, I mean you can’t change investment behavior, you can’t change any behavior unless what you’re pushing people towards is inherently natural. And that’s what we’re focused on, making investing very intuitive and very natural.”
In a few week’s time the company will start featuring BYO motifs in a catalogue manner, acting as almost an App Store for motifs. By giving investors the ability to build their own motifs, the startup is sure to generate a great deal of attention from private investors looking to showcase their expertise, however whether it’s enough to lure those who prefer having a middleman between their money and portfolio remains to be seen.
