29A - Venture Concept No. 2

SimpleTrade – Who knew trading would be so simple?

Opportunity – The intended audience for my product are adults who are either young or inexperienced in the stock investment domain. The app does not really apply to experienced investors as they already have the knowledge required to be a successful investor. Many people earn money and route the cash to a savings account. On average, high yield savings accounts generate 1.0% APY (Annual Percent Yield) so for every $1000 invested you would earn $10 per year. In contrast, the stock market generates about 10% yield on average and in 2019 the S&P 500 had returns of 30% and even 33% (if dividends were reinvested). This would have generated about $330 per year for every $1000 invested. This data shows that there is a lot of opportunity in making money if an individual chooses the stock market instead of a standard savings account. The primary issue is that people are inexperienced and if they blindly invest, it could lead to significant losses. The window of opportunity is quite broad as people can start investing any time, especially right now in the middle of a pandemic, it is much easier to make returns as the price of most companies is low.

Innovation – My solution to the above problem is to develop a mobile application called SimpleTrade that would teach inexperienced adults how to begin investing in the market. My primary goal to make sure people feel comfortable buying and selling stocks and realizing that although trading is quite risky, it is a calculated risk and that you should not panic when the price of a certain stock goes down. The app will consist of many features such as a stock market simulation game, daily events and analysis of companies, and 1-on-1 meetings with expert investors. These features provide the necessary skills needed for a new individual to test out their skills and apply it to the market. The pricing structure for this app is quite straightforward. We will have a subscription-based model of 2 tiers. The first would have the user would pay $8/month to use all the features with no minimum contract length, they are also free to cancel the plan whenever they desire. The second plan would be a $6.50/month plan but would consist of a yearly contract and the whole year would be paid at once, this will come out to $78/year which is cheaper than the first plan’s $96/year. By default, we will provide one free 1-on-1 session with the expert investor but have a charge of $20 for each additional session. In order to promote our product, we would run a free month trial of the service to new users if they have been referred by a paying customer. The paying customer would also receive a free 1-on-1 expert meeting for every successful referral. This plan seems to be quite realistic and profitable as the app wouldn’t necessary have a lot of physical costs, just the cost to maintain the app as well as the 1-on-1 meeting cost (collected separately as shown above).

Venture Concept – The main reason people will start subscribing to the app is to gain knowledge and insight about stock trading. The motivation for this service is simple and can be similar to the famous quote - “Give a man a fish and you feed him for a day; teach a man to finish and you feed him for a lifetime”. Customers understand this concept and wish to learn a skill they can use throughout their life. From my observations, there are not many apps that have similar functionality at a low cost like my app. This is beneficial for me as I don’t have to worry about customers switching from a comparable product to mine. The only competitors are professional investment agencies and other online resources (text, videos, courses), etc. In terms of professional agencies, those are too expensive and might not help the investor learn to invest themselves and might be reliant on the agencies for a long time. The online tutorials on the other hand have a lot of misinformation as they can be posted by anyone and could lead to bad trading habits and significant monetary loss. One thing for the user to consider is that although stock trading can bring about a lot of gains, it is a risky venture and that they could potentially lose a lot of money if done incorrectly. Therefore, they should also invest in money that might be comfortable losing. The company would need to have employees for marketing, maintaining the app, contacting experts, and customer support. It could be scaled but to start this is all we would require.

The three minor elements – As mentioned in the previous assignment, my most important resource is accessibility. This app is planned to be supported on both iOS and Android, there is no location restriction as the user could learn even from their own living rooms, and since the subscription is monthly they can cancel and choose other services if that is what they prefer. The product is essentially customer-centric and whatever they wish to get from it, they will receive. A big idea I could implement in the future would be real estate trading as that would open the app to a wider audience and help customers diversify their assets. This might also be less risky because people have a tangible product when it comes to real estate and would be more inclined to start investing. For the people who want a high-risk high-reward investment strategy, I plan to incorporate cryptocurrency trading in the near future. Cryptocurrency will soon become an essential part of society and my app will be ready to accommodate it. As for personal goals, I would like to see myself moving to San Francisco and growing my network. This would be of great value to this app as well as to ensure that the company can go public with an IPO in the future. My hope is to impact a lot of people while making it relatively easy for them to begin investing.

Feedback – From my previous Venture Concept assignment, folks were very interested in my idea and felt like it was unlike many of the other concepts. I have received some praise about my focus on accessibility and the inclusion of cryptocurrency in the future as people agree that these are major factors in the success of this idea. One point that was mentioned was to notify users of the app that there is risk involved in trading. I have to agree with this point, as no matter how trained you are in stocks, you could lose money and it is a risk that the app user needs to be aware of. It is a good point for me to include that in the terms and conditions as well to prevent people from suing me. I have added both future cryptocurrency support as well as notifying trading risks to users to my original Venture Concept.