Q&A with Michael Giles, founder & CEO of Roboinvest

Ultima-RDK's picture
Rank: Orangutan | 333

Launched in January 2012, Roboinvest is a social investing platform that allows anyone to "look over the shoulder" of top investors in real time. The company recently completed its angel round of financing (article linked at bottom of page). Hope those of you in fintech find this interview interesting - feel free to post follow-up questions / discuss below.

Special thanks to Michael for taking the time to help the WSO community!

Can you just give a brief description of your company, Roboinvest? Where did you get the idea?

Roboinvest is combining the proven business of online stock brokerage with social networking to help the world invest together by creating a simplified online brokerage that's inherently social with a focus on the mobile experience, built on an open platform. It's a big vision but I think we can get there.

What contributed to me creating the company was an experience in college. My friends knew that I traded every day, and saw that I was making good profits. They kept offering me their money to trade for them. That was one experience that made me think this is a common occurrence in the world and there needed to be a platform around this concept.

What is your career background like, and what experiences would you say have best shaped your ability to be successful as an entrepreneur?

I started trading when I was 12 years old. By the time I was 18 and still in high school I had a decent sized stock portfolio and 2 investment properties. At the time I thought I would be a career stock market and property investor. My first job in finance was working for Computershare in Melbourne, Australia. This opened my eyes to the industry and following a year in that job I left to found my first company which was an online brokerage. You learn a lot about online brokerage by founding one before ever working for one - I wouldn't recommend it.

What do you see as the biggest challenges for Roboinvest to expand?

The biggest challenges are customer acquisition. In fintech and financial services in general, the cost per customer acquisition is a lot higher. You need to build trust and credibility and that takes time. Thankfully, if you have an interesting product or story, the media are willing to cover it.

How would you describe a typical day on the job as an entrepreneur?
My typical day as an entrepreneur would be different to the next person, however most of my time is taken up meeting and talking to people - from early in the morning to late at night. I love meeting new people, so I dedicate a lot of time to that. Right now, most of my time is dedicated to financing.

What prevents a larger company with wider capabilities from taking your idea and running with it? Ie a social networking company moving into the investment space, or a fidelity / other investment platform moving into the social space? Are you facing any competition from other platforms looking to capture a similar market?

No. Start-ups are able to exist because they can innovate and iterate quickly, and have nothing to lose. Large corporations cannot do this, which is why opportunities are created. They get protective over their position, and they are not willing to cannibalise but would rather acquire a company if its proven to be successful. Then the start-ups grow into large corporations, protect their position, and the cycle repeats.

You mentioned cost per customer acquisition being a potential challenge in fintech. What do you plan to use as your primary methods for advertising your product to potential customers?

We plan to attract leading traders who have an existing following, provide tools for them to attract new followers and partner with well known brands that can expand our distribution. We also have plans around how the trading data could be utilized for the benefit of both the leader and follower.

What general advice would you give aspiring entrepreneurs?

I could talk about this all day but two things that come to mind are somewhat counter intuitive. I believe in failing fast, but failing forward; and I also believe in the power of slow. Great companies are built over many years. Starbucks had 5 stores in its first 13 years, and it now has more than 16,000 of them. Howard Schultz had a vision for Starbucks to be "the third place" (after your home and work locations). He had a grand vision and he pursued it persistently.

Here is a link to the recent press release:
Roboinvest raises $125,000 in angel funding

Comments (5)

Nov 6, 2012

Thanks for posting. I'm having a bit of trouble wrapping my mind around the logistics of the idea, but it seems interesting in general. Are there not plenty of other forums out there with self proclaimed top traders and researches spewing their advice? In the energy space I definitely feel that's the case. And, in a large picture Einhorn-esque scenario, won't this open the door for traders with these huge fan bases down the road to simply tell their followers to do one thing while they do another? Sounds like a pump and dump broker's wet dream

Nov 6, 2012

This actually sounds like a similar model to Covestor and/or Tim Sykes with his Penny Stock followers....is that a fair assessment?

Thanks for the interview.

Nov 6, 2012

thanks ultima for the interview, much appreciated

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Nov 6, 2012

this sounds almost the same as Kaching.com from a while back. If you are relying on trader leaders to get people to invest and follow, you better watch out for regulators coming in on you.

Nov 6, 2012