

Ask HN: Review my investment website startup, StockYoyo.com - tmfkmoney

We just started StockYoyo (http://www.stockyoyo.com)3 months ago and feel like we're about ready to do a bit of marketing.  Before we spent our hard earned cash we wanted to see what
things we should be focusing on and the best feedback we've gotten so
far is from members of a hacker news meetup I've been going to.<p>StockYoyo is an investment website based on game mechanics and social
networking principles to help people learn about investing.<p>We would love general feedback on the site, and we are particularly
looking for feedback on the following things:<p>1) UI.  We've recently made some changes and we'd like to know how the
experience is.
2) The game mechanics/feedback loop.  We're trying to make it stickier.
3) The rating system.  Is it understandable/useful.<p>Of course those are just the things we know we need to know about.
I'm sure we're missing stuff we should be thinking about so any other
ideas would be great.
======
arturadib
Hey guys, I was there for the demo yesterday. I wanted to talk to you but I
had to leave early due to a prior commitment. I hope you'll take the comments
below as constructive criticism.

To better prepare for my comments, let me start with a few facts most
investors don't know. (For the impatient, there's a TL;DR at the end).

1) The stock market is not infinitely resilient; the price of a security
_does_ respond to investors' actions, as per supply-demand.

2) The price of a stock is not a random, meaningless number that keeps going
up and down in funny ways; it actually measures the market price of the
company (aka 'market cap', which is roughly equal to the number of shares
times the share price).

3) The market price of a company is a very, very important barometer for both
the company and the overall economy; to name a few, decisions for M&A (mergers
and acquisitions) by other companies are based on such numbers, as are lending
and investment decisions by banks.

4) For a lot of companies, the vast majority of their shares are traded/held
by individual investors like you and me (as opposed to institutional
investors, like pension funds, college endowments, mutual funds, etc); for the
curious, you can check out the quantity 'institutional ownership' percentage
of a company using your favorite stock quote tool (e.g. Google Finance).

An important corollary of the above facts is that, _collectively_ , individual
investors like you and me have an enormous power in driving up and down the
market prices of public companies. Consequently, if most investors base their
buy/sell decisions on criteria other than company valuation, it is likely that
their actions will be doing a serious disservice to the market as whole:
market prices of companies will no longer reflect the company's value (see
below), and will instead reflect whatever is it that investors based their
decisions on (such as the phases of the moon, whether the company is being
hyped up in the media, amazing little charts that try to predict what the
market will do next, etc).

Somehow we've got to an unfortunate place where many companies and
publications incentivize investors to think in terms of "what will the market
do", "let's ride this climbing wave", "don't be the last sucker to leave this
stock", etc, instead of asking the simple question "is this company over- or
under-priced?". This is bad for the market, bad for the economy, and
consequently bad for investors.

I hope these words will help you reconsider the direction you're heading with
StockYoyo. We need tools that empower investors to make more educated
decisions, and not more "go-with-the-flow" services.

Check out Trefis.com for a step in the right direction. (DISCLAIMER: I am not
by any means affiliated with them).

May I recommend the following literature:

\- Irrational Exuberance, by Robert Shiller (For a gentle introduction on how
collective misguided investment can lead to bad things)

\- Value Investing, by Bruce Greenwald et al (For a gentle introduction to
value investing)

\- Security Analysis, by Graham and Dodd (To learn from the masters, using
good old English from the 30s)

 _TL;DR:_ Services that treat the stock market as a gambling machine ("will it
go up??") are doing harm to the market and the economy. Stock prices have a
purpose and a meaning, and the market is suffering from the ill-advised
actions of investors, who are victims of services that incentivize trades
based on things other than company valuation, such as silly technical
indicators, or popular consensus on whether a stock is going up or down.

~~~
tmfkmoney
I totally agree with you about the problem with "go-with-the-flow" rating
systems. You should not simply be able to perform well by picking highly rated
stocks. This is one of the problems we're trying to solve.

Our rating system actually has an internal pricing mechanism which is designed
to drive the ratings toward zero and prevent piling on behavior. If you just
follow the crowd you won't do well as a real investor and you won't score well
on our site.

Judging by the feedback we've been getting that's not nearly as obvious as it
needs to be and we're trying to figure out how to best show that.

------
nbd
I also saw your demo at the HNDC meetup last night - nice job, and kudos for
being brave enough to get up in front of a room full of critics.

Some feedback:

\- Without seeing the demo, I'm not sure I would easily get what the site is
about from a quick glance at the home page. You have some nice wording -- "A
free and enjoyable way to learn about investing" -- but it's part of a
scrolling animation and doesn't jump out at you. I also don't see the word
"game" anywhere on the front page. It seems like your two key themes are "fun"
and "learning" and those don't quite stand out enough.

\- The actual game mechanics are a little confusing - why would users actually
care about being the "executive" of a company? As an investor, I might care
about learning more, or being exposed to good advice, but to assume that
people will be motivated to win a game just because you created it seems like
an overreach.

\- Why would StockYoyo picks be better than one of the million other investing
sites out there? For that reason, why would it be better than the ultimate
"wisdom of crowds" valuation -- the market itself?

I could imagine that one of the numerous self-managed investment sites out
there would benefit from having a compelling, easy to use game where aspiring
investors could learn but then also easily transfer their picks into real
money when they are ready. I'm thinking of the online poker model -- a .net
site to learn with play money, a .com to use the real stuff. There might be
some significant regulatory hoops to jump through to get this working but I
can see real potential there.

~~~
anactofgod
I made the comment at HNDC last night that "Are crowds wise? That's arguable.
But it definitely moves in herds."

The value of a well executed stock "betting" game is that, since what is being
wagered is of little or no value compared to an actual market position, the
herd may reveal it's intentions in the game before a similar movement is
noticeable in the actual market.

For this to to be true, though, two necessary, but by no means sufficient,
pre-conditions need to be satisfied: a sufficiently large and well-informed
herd; playing a game that maintains the proper balance of care-free (not too
much at risk) -vs- care-full (enough is at risk) gameplay.

~~~
jaredmck
Why would the crowd reveal its intentions earlier in a game than in the actual
market? It seems historically, the herd does the opposite. The game is an
"easier" market than the real market; much like how play money poker is far
easier than real money poker games.

------
aspiringsensei
I'll offer feedback on the ratings system. My one gripe with your site is that
the "buy" or "sell" justifications provided by your users seem weak. For
example:

    
    
        Electric cars are pretty modern now and Tesla is one of  the few companies, that really can offer some excitement to them
    

\- User Vlado

If you'd really like these guys to learn about investing, you should think
about putting prompts in to get them considering the various factors that
might lead to this being a successful investment:

* What's this company's valuation? * How does it compare in the competitive landscape? * How well-capitalized is it? * Etc, etc.

It seems like these are "bus station judgments" in large part, where people go
"i like this company, it will do well." Build in prompts for deeper
consideration if you really want to teach people something and generate useful
data.

~~~
staticshock
This is a good idea. It would be interesting to see people answering questions
such as: At what valuation would you _sell_ this stock? What do you think is a
reasonable P/E for this company, and why? If the company isn't cash flow
positive, in what timeframe do you expect it to turn the corner?

------
dagw
As a concept I like it, and I think your implementation looks good. However
the level of commentary in the Cooperative insight is really weak, bordering
on completely useless. I'm not sure how to solve that, but to me that is
something that instantly jumps out and greatly lowers my impression of the
whole site. I realize that it is early days and you don't have many comments
to chose from, but perhaps some tough curating of the comments you display is
still in order.

------
fname
Saw the showcase at HNDC as well, interesting idea for sure.

Click: <http://www.stockyoyo.com>

------
_pius
Just saw this startup at the Hacker News DC meetup last night ... very cool
concept!

------
m311ton
I like the concept. It's light and fun and I could see how it would become
addicting especially given your game mechanics setup. Are you using a third-
party platform to run that?

From a marketing perspective, this might be something to pitch to high schools
with finance classes. It's a bit lighter than some of the more technical stock
simulations but I could see teachers using this as an intro to investing and a
way to engage students. I think understanding how you're positioned relative
to the heavier simulators like VSE would be valuable.

My one request would be for a demo or screenshot or something on the front end
before I register. I like to see what I'm getting into before I give you my
email address and create a username.

Stickiness does seem to be a challenge. I love the idea of becoming
"employees" of a company based on how you predict their stock. But beyond
that, I'm not sure what else there is to do. I make a pick and wait to see
what happens. What do I do in the meantime?

------
alimoeeny
I saw the demo last night, too. Sure there is a need for this, personally I
have tried to do something like that using Google Finance and see how I
perform over time, without actually buying anything. I should say I didn't
understand were the credibility of the site comes from. I mean why should a
user trust the scores? or maybe I missed something there.

~~~
tmfkmoney
Thanks for the feedback. This is one of the main things we're trying to get
right.

To answer your question about the scores, we are using collective intelligence
to generate the stock ratings. Ideally the scores will be a kind of average
opinion of everyone on the site.

One thing that makes StockYoyo different than other collective intelligence
rating sites is that our ratings actually affect how you score when you pick
the stock. We reward contrarian opinion and try to drive the ratings to zero.
With enough users that means any non-zero rating should hopefully be a
meaningful indicator of sentiment.

Unfortunately, we're not sure any of this is very clear and we're not entirely
sure how to make it clear without users having to read our scoring FAQ. Better
UI? Tool tips? walkthrough?

------
cjeane
You aren't giving me enough information. When I view a company the only data
that I get are the current price(how current?), and the value based on user
votes.

The game mechanics are a good start, but you need to find the sweet spot
between where you are and sites like updown.com.

I agree with an earlier commenter that putting things in terms of beating the
S&P 500 is a good reference. Your current focus on up/down this week is a
little short sited for most investors. I know you need to recurring traffic,
but I think you may have abstracted too much from how investing decision are
actually made.

If you had tokens that could be placed on stocks and won by beating the S&P; a
weekly leader board of who made the most tokens, and positions in the company
where awarded to who made the most/least tokens from that company.

------
staticshock
The Motley Fool has a similar system called CAPS, except that their system is
structured around outperforming the S&P 500 index. I like their approach a
lot, because it reinforces the oft-forgotten idea that if you're losing to the
S&P 500, then a passive investment strategy would have suited you better.

~~~
staticshock
And, really, since your competition is The Motley Fool CAPS system, and you
are several years behind them, you would be wise to take a look at how they've
implemented their system to be conducive to learning about investing to help
yourself differentiate. Off the bat, I can name several things:

\- their "outperform"/"underperform" ratings are not absolute, but relative to
S&P 500

\- they provide easy access to SEC filings (quarterly and annual financial
reports, etc), along with statistics (this is important if your goal is to
encourage anything resembling security analysis)

\- they have a wiki dedicated to translating financial jargon

\- they periodically write articles introducing beginners to differing
financial topics, such as fixed income investment, investing for retirement,
investment philosophy, etc (i'll purposefully avoid commenting on the quality
of any of their articles)

\- they have a comprehensive stock screener (with a bug or two, in my
experience, but still fairly worthwhile)

------
JohnTitus
This is the type of site that looks interesting to me, but not enough that I
would register without a better understanding of how it works/what are the
benefits. I think you need one of those quick video demonstrations, on the
front page to better describe it and walk a new person through how it works.

------
hucker
Very interesting idea! Looks like you have a small graphical error right here:
<http://i.imgur.com/cfICi.png>, too little spacing between "dots" and the text
when there is a big headline. (I am using Chrome 11.0.672.2 dev on OSX)

~~~
trueluk
Along the lines of display errors, you have a problem with your slides when a
user has JavaScript disabled: <http://i.imgur.com/lThGo.jpg>. I think you
could set slide.p2, slide.p3, and slide.p4 with display:none; initially in
your css, as opposed to doing it via JavaScript as the page loads, to account
for this.

------
JonLim
Great idea - trying to get my feet wet with stocks again (Played with them
briefly, with minor profits during school) and this seems like a fun way to
give it a go.

Curious: what do you use for email notifications for signups and other
transactions done on the site?

~~~
tmfkmoney
Right now we're not doing anything special. We just send the emails from the
server as we need to. A lot of the emails are set up as nightly jobs which we
queue up in a DB before we send.

~~~
JonLim
Ah, thanks for the heads up.

I asked because I'm the Product Manager of PostageApp, and we specialize on
those sorts of emails. Let me know if you'd be interested in giving our app a
whirl, it takes the headaches of deliverability out of your hair. :)

------
spoiledtechie
Saw the demo as well last night. Interesting concept and if it actually did
hit the masses, I personally think it would have a sway on how you invest into
the market. Great concept though!

------
scyphers
Caught the presentation at HNDC last night; very good UI/UX and a decent idea
to boot

