The Pomp Podcast - #824 Social Investing w/ Rishi Khanna

Starting point is 00:00:00 What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Rishi Khanna is the Chief Executive Officer at StockTwits. In this conversation, we talk about StockTwits, about social investing, we talk about NFTs, cryptocurrency, and ultimately the vertical integration of trading infrastructure and the social audience that StockTwits has. I really enjoyed this conversation with Rishi, and I hope that you do as well. Before we get into this episode, I want to quickly talk about our sponsors. This episode is brought to you by Mode.

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Starting point is 00:03:28 Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Rishi, what's going on, man? Hey, man. How's it going? Nice to connect. Absolutely. Let's just jump right into StockTwits recently added crypto trading.

Starting point is 00:04:00 So not just talking about crypto, but now you guys actually are allowing people to buy and sell cryptocurrencies. Really, where did this come from in terms of adding that functionality to the platform? Yeah. So, you know, it's been a long time coming from a work perspective. But really, the strategy came out of when I took over a couple of years ago, we've done an amazing job of building this amazing, highly engaged community that has the ability to talk about it. I think the question then for us is, OK, how do we deliver more value to the community? How do we give them more tools, more data, more information and ultimately bridge the gap all the way from idea and conversation with your community and take that through all the way through execution? And then even after that, portfolio management and portfolio awareness. So for us, you know, it was natural to kind of build that bridge to through to execution, because why do you need to jump somewhere else?

Starting point is 00:04:50 You know, if you're having if you're spending all day in stoplights and having conversations there, why do you have to now switch your apps and jump quickly somewhere else to do it? And then, you know, last year with as we began speaking with Alameda and FTX, that became, you know, kind of a very natural partnership there for us to work with them to introduce it as the first leg of execution. And it is just the first because, you know, we believe in multi-asset class kind of global platform. So for us, it came out, we want to be able to connect the dots. You know, you're spending all your time on StockTwits. You're having your conversations there. You're learning there. You're sharing ideas there.

Starting point is 00:05:24 You should be able to do the quick execution part, which is largely commoditized in many asset classes and will be quickly commoditized, I think, across the board. So obviously the name of the company is StockTwits. And to start out with stocks, crypto obviously is a company. is related to financial asset, but, uh, there's a lot of differences, uh, as well. How do you guys see, uh, kind of consumer behavior on the platform between stocks and crypto? Is it obviously a growing part of the interest level? Do you have other ways you break down kind of the crypto audience versus the stock audience on StockTwits? Yeah. So, uh, it is different and yes, the company's name is StockTwits. Uh, I get told that all the time. Um, but you know, when, when we

Starting point is 00:06:07 introduced crypto i think it was now four or five years ago onto the platform you know in the beginning it was i think 2017 right 16 17 time frame uh it was organically kind of slowly grown but over the last three years you've seen an explosive growth where it has become a large part of the conversation on a daily basis especially you know bitcoin which uh just coincidentally right before recording this is the number one trending ticker on stock splits right now um but between you know your big you know bitcoin ethereum obviously 2021 doge was a very big player doge was actually the number one most active crypto across the board amc was the most active stock and i think if you look at the parallels between the psychology of you know

Starting point is 00:06:51 why there's the similarities between meme stocks and your amcs and your gmes and those as well as of crypto is there is this sense of equity or ownership in the conversation, right? You have ownership over this new asset, this new coin, this new token. People feel great ownership over AMC and GME as individual and retail traders, whether it comes from the, you know, screw the hedge fund world, or it just comes from, hey, we're going to do this. We're going to do this together as a community and collaborate. So that community element is very much shared between the two.

Starting point is 00:07:26 I'd say it's actually more, it's stronger in the world of crypto and you're seeing it even stronger in the world of NFTs as a derivative of crypto. And so that's where the commonality has been. It's grown where now you see 30, 40% of the top 10 are the big crypto ones. And on the weekends, you know, as I like to say, weekends are made for crypto. So it's almost entirely, you know, dominated, the trending tickets are dominated by crypto because 24-7 markets. And then talk a little bit in terms about those 24-7 markets and obviously where people can talk and trade. There's like this merging or this trend. You've seen it in stocks, now you're seeing it in crypto. How does that change investor behavior? Do they trade more? Do they trade less?

Starting point is 00:08:09 Are they more likely to hold on to the assets longer? Do they hold wider portfolios, smaller, more concentrated portfolios? What are you seeing an actual change in the investor portfolios? I think it's one of the things I find really fascinating about investing is it's really hard to say like all investing is of one type, right? And you're really familiar with this, but in the world of investing, there's a massive spectrum. And so on one end, you have your very active traders, right? Professional day traders, like that is literally where they make their money and they're very active. And in that world of active trading, you have, whether it's swing traders, momentum traders, technical analysts, each artist that are highly active.

Starting point is 00:08:46 And there, the ability, if you're passionate about it, right, and those that really love trading, love the tape and watching the tape and connecting with that community because that's the community they want to socialize with and be connected to, the opportunity of 24-7 just, you know, gives them, you know, a bigger platform to express their interest and to, you know, seek the enjoyment out of it. On the other end, there are, you know, buy and hold investors and most investors are, you know, less active than that. I'm not a super active trader, right? I'm very much, you know, as I like to tell people, I've held my Microsoft stock for, you know, 20 years. I've held my Facebook stock since IPO. So there's a lot of that. Yeah. So I think, you know, for the very active set, you know, the availability of 24-7 is not necessarily a bad thing.

Starting point is 00:09:35 And now, you know, I think there is an element to, you know, that we want to always be conscious about and be talking about from a, you know, mental health and, you know, kind of always having to be on and always thinking about your money and your portfolios. And so, you know, there's probably elements of that, that, you know, you can make the argument that 24-7 isn't, you know, the best thing in the world. So that being said, I think as we evolve tools, as we evolve information, as we evolve capabilities, as things mature more, how do we, you know, get the positives of 24-7 markets and the benefits of that and what that can provide to society versus, you know, softening the negatives, right? And protecting people from that gambler's mentality or, you know, to the extreme where it's a negative to, you know, people's personal lives and stuff. Got it. And so when you start to think about the actual ability to execute these crypto transactions, you guys partnered with FTX to do this. Talk a little bit about that partnership. How does it work? What are they actually providing you all? And why is this such a good partnership for for users? Yeah. So first, why a partner? Right. I mean, I think the first thing there was we knew we weren't going to go and build from the ground up our own exchange or, you know, our own infrastructure there.

Starting point is 00:10:58 There's a lot that goes into it. Building this stuff takes tremendous resources, expertise and effort. And so when we looked around, you know, FTX, while they haven't been around for, you know, 10 years or whatnot, they've obviously come on really quickly in the market and they built an infrastructure that was really designed from the ground up for thinking through how to make trading better and you know they started in crypto but i think one of the one of the philosophies that you listen to say and talk about is it's not just about crypto it's you know it is about just this notion of trading and what is what is risk management what is trading what does this infrastructure look like how do you apply that ultimately over time to other asset classes and so their you know very

Starting point is 00:11:42 thoughtfulness approach from an infrastructure standpoint and a multi-asset class standpoint, obviously being best in breed from liquidity and transactional capabilities for crypto today is amazing. Their global presence while we've launched only in the US, we are ultimately expanding globally and their global presence with FTX.com versus FTX US was also a big value add. And then I think the two other big elements, one is their thoughtful approach to regulatory nature, right? We know we're in this, you know, I'm going to use the word transitory for fun, transitory state of regulatory, you know, kind of understanding the difference in the U.S., in India, where we're launching that, but all over the world, right? And their proactive approach to that, as opposed to maybe kind of trying to hide or shy away from it or whatnot, I think is a big benefit. And especially, you know, we think that that's going to only help grow the markets, help, you know, make it safer for more people to come in and regular people come in and expand the pie of these other asset classes.

Starting point is 00:12:47 And then the third thing, and, you know, if you've ever had the chance to speak or work with them, great partners, just like, you know, really want to help you win and want to help you succeed and great partners there. You know, it's been a pleasure kind of working with them on that front. So, you know, I think best in class technology, infrastructure, a great vision kind of along the way, understanding what stops with springs of the partnership, smart about regulatory approaches, and then just being awesome partners. And then talk about kind of regulation and how you look at some of the challenge there or what you guys have figured out in terms of being able to actually roll this out to your full user base. Yeah. So, you know, one of the questions that we did get is why crypto first, right? You're called stock twits. Why not stocks first? And part of that is, you know, some of the challenges that we are taking head on, but from the regulatory mixing of bringing these two things together. uh what you know so we do actually have a broker dealer right so we have a broker dealer subsidiary so that's what will allow us to launch equity trading in the u.s which will come very soon now after crypto but crypto is a separate product managed with a separate partnership separate

Starting point is 00:13:58 entity um you know separate regulatory it was easier from some of the regulatory issues but what was some of the technical challenges of bringing these two products together and launching them we wanted to get this out first to work those out uh first and and so we're we've been able to do that so now that will actually allow us to add other asset classes you know us equities being very much the next one you know pretty quickly because we figured out some of the things and some of the issues of having a us broker dealer being concerned nothing about kyc kyc is actually the easy part but really it's aml that crypto presents the problems for regulatory frameworks and DeFi especially, which we're not going into right now, but AML, anti-money laundering for

Starting point is 00:14:44 those that don't know, making sure that you know where the funds are coming in and out of. And so we are similar to many other brokerages like the Robin Hoods of the world where today you don't get open wallet access. You can't just buy a ton of Bitcoin on stock puts and then move it out to some wallet that goes somewhere. It is a closed environment. All that infrastructure is handled by FTX. It is their wallets, their custody, their exchange and everything that happens there. But we don't give you the access to move it out for AML purposes. And this is how you bridge the gap between multiple asset classes. And then over time, we'll be able to kind of open that up. We have, you know, there are people blazing the path there. We think we know the roadmap there. But, you know, we got to start in a responsible way, I think, that, you know, gives the tools to the users.

Starting point is 00:15:35 And then we kind of build on that. Got it. And so talk a little bit about what the actual assets you offer today are. Will you add more assets over time? And kind of what the plan is to maybe even offer other things, whether it's staking or lending or, you know, other types of features other than just being able to buy and sell. Yep. So, you know, today we offer 20 coins and tokens. And again, we are in that sense, with the partnership with FTX US, it is we are limited for this specific asset class to working with what they have available.

Starting point is 00:16:06 So, you know, we do have obviously the big few Bitcoin, Ethereum, Solana, Shiba, Doge from the meme world, right? And then there's a long tail there of other coins and tokens. So we have 20 total that we're offering out of the gate and as they expand and we'll have the opportunity to work with them and talk with them of the thing about the roadmap of as they're expanding, what assets are available. They also take a more kind of thoughtful approach to when coins are added and what coins are added. But then from there, yeah, the world of staking, you know, if we go back to the regulatory conversation, I think there are some question marks there. So I think it is absolutely something we want to offer in the medium term. But I think, you know, we are going to need to understand a little bit better the risks and exposure around staking and lending and, you know, kind of the regulatory risks mostly. Right. Because I think product side, it's been pretty well trodden at this point.

Starting point is 00:17:03 I mean, it's still evolving very much so. But we will absolutely look at those. I think the opportunity to look at beyond that. So NFTs and the NFT marketplace. I think that's a really interesting space. And, you know, there's a lot to talk about there in terms of, you know, the volatility of that and, you know, kind of the legitimacy of a lot of projects and stuff and love having that conversation. But separately, I think it is an aspect that gets a lot of regular people excited and interested because it's a way to connect. It's a bridge, right? Whether it's through sports, whether it's through art, whether it's through pop culture aspects, right? It brings a bridge. And so adding that capability and exposure down the line and then crypto derivatives, right? When you ultimately think about from a trading and investing perspective, you know, U.S. equities, U.S. options, crypto, crypto derivatives is a next logical extension there. And again, having FTX as our partner where they've made the acquisitions, have the licenses and built the team there to be able to do it best in class, both from a tech perspective, but also from a safety and infrastructure perspective. we're looking at all that

Starting point is 00:18:07 because our vision ultimately is that StockTwits is we want to be the platform that hosts the global conversation across all asset classes for the individual, for the retail, right? I don't really give a shit so much about the institutional world and I come from there historically.

Starting point is 00:18:24 But, you know, that's, we want to give, connect the dots there. And we believe, you know, for the next generation of investors, it is going to be multi-asset class and it will eventually be global. You'll be able to invest in other countries. Obviously, a lot of other countries want to invest in the U.S.

Starting point is 00:18:39 Crypto is global. Inherently, it's not beholden to nation states and lines that have been drawn for years ago. And so talk to me, obviously, the thought process here is that you'll eventually add stocks as well and kind of vertically integrate so that people can not only buy cryptocurrencies, but they'll be able to buy stocks via the platform also. Yeah. So we expect to add stocks by early next quarter, if not sooner. um so you know we we had that in place it was mostly some of the technical complexities of getting crypto out first and making sure things like money movements and all were well done and well designed um we did that for that reason first and then equities will be a fast follow

Starting point is 00:19:18 so you know a couple months and then when you start to think about uh kind of moving forward what do you expect from uh the cryptocurrency community are there specific milestones you're looking forward to or things that you're measuring in terms of success, whether it's volume traded, number of assets, anything there? Yeah, I think what's unique about StopTwits is we are a social platform first and a community first, and now we're adding in execution. But what I tell people is we don't have to win execution. I don't think it's a zero-sum game as some people make a lot of tech sound like. We don't have to be bigger than Robinhood to be successful, right? We don't have to be bigger than Schwab to be successful. What we

Starting point is 00:19:59 have to do is, you know, engage and provide the utility and value to our community and to the users. And where we start determining is crypto execution successful is, are we giving the community, you know, the right tools where they're spending more time and engaging more, where they're, you know, willing to move their trading off another platform. It doesn't mean everyone's going to, that'd be silly for me to assume, right? Like if my model said, hey, we're going to steal all of Robinhood's clients or all of Webull's clients, that's just dumb. And so our focus is about how are we engaging? And that's our North Star metrics are more around engagement and time spent on the platform, engagement within the community activity than it is necessarily about

Starting point is 00:20:48 transactional model. Obviously, as a business model, it is very much a standard kind of crypto exchange business model where there's a small spread, smaller than most of the other platforms out there, if not all. And that small spread is where the revenue is generated, ultimately over time as you add staking and stuff. But I think our first and foremost is, are people spending more time? Are we able to help people find their tribes? Even within Bitcoin or Ethereum or Solana, You might have, you know, different kind of tribes in there of how you invest, how you trade, how you think about that asset or asset class. And so that's what we look at. Are we delivering the value that you're engaged in and spending more time and attention with us? Got it. And then when you start to think about the team that you're building, how much of the internal team, the employees are focused on cryptocurrency?

Starting point is 00:21:36 Is this making it easier or harder for you to be able to actually recruit people? like talk to me a little bit just about the team itself and kind of their excitement or uh or non excitement for this stuff yeah no recruiting's hard dude so uh i might have to sign up for that uh pomp industry boards uh thing uh the job board there to do some recruiting but um recruiting's been hard i think this has been a big positive for us that shows that we are forward looking and we're you know looking where you know kind of the next generation of of society is looking so i believe it has made us more attractive you know we we're about 50 people so we're not you know particularly big you know when i took over we were only about 15. i think people think stop

Starting point is 00:22:16 twitch is a lot bigger than it is just because of its uh kind of position in the industry but we're now about i think just over 50 people um we you know want to probably double that this year and and i think adding things like crypto you know our investment that we're making from a community perspective and things like nfts and stuff does help because that's where that's where a lot of the brain power is and the tension is going from a fintech perspective right and so that's where also you know you know that crashes aside and market volatility aside this is where the smart people want to work and this is where they're spending their time and brain power and so i think it is helping us in that um you know we have that but we have a lot of a lot of hiring

Starting point is 00:22:54 to do there. So anyone listening out there, come talk to us. Awesome. What can we tell people in terms of if you just had, you know, kind of 60 seconds, what's the pitch as to why they should come use StockTwits or why they should come buy and sell their currencies on the platform? Yeah. So, you know, if you are really passionate about the markets or if you're interested in the markets, the best way to learn about the markets, I think, in investing and trading is via apprenticeship and mentorship and seeing how others do it. And it starts by putting a little bit of skin in the game to learn through that. And the communities on StockTwits, you can find your tribe, you can find the right people to follow that are similar to your style,

Starting point is 00:23:35 to the types of asset classes you want to invest in, whether it's crypto or stocks or other things down the line. And so you should do it with a community. You should do it with that mentorship and apprenticeship because that's the name of the game there. And the other side of StockTwits is you also, you know, get a sense and a pulse of the markets. What is the broader retail markets interested in? What are the broader individuals investing in trading? Where are things going now? Some of it is obvious based on news and some of it is not. And so when you can look at that, you can go to the trending section on StockTwits, go to the most active section, drill in and see, and then you can start learning, right? So being able to understand what is

Starting point is 00:24:10 happening in the markets in a very real-time manner and be able to find the tribes and the people to learn from and apprenticeship and mentorship, I think are the two biggest, you know, value drivers we can give right now. And, and we're, we're not stopping there. I mean, we're really going to be investing heavily in information and data and tools and all the other things around it as well. But, you know, the thing that differentiates us and something that you won't get pretty much anywhere else is that. Yeah. It's it's pretty compelling in terms of being able to have the conversation learn and then execute right there on the, on the platform itself uh where can we send people to find you on the internet or if people are interested in

Starting point is 00:24:47 signing up where can we send them uh to go check out stock twits yeah so download i mean the easiest way to download the stock twits ios app or android app um and then obviously you can sign up on the website as well uh but uh you know i spent a lot of time on the ios app as an iphone user uh and uh you know and we're you know we're on um you know stock twits is on twitter pretty heavily at StockTwits. I'm at Arcana myself. And also sign up for our newsletter. One of the things I didn't even mention is our daily market newsletter. I don't know if you get it. We have over 1.2 million subscribers. It's a really great wrap up, end of day on the markets and stuff. And we have a crypto newsletter as well, like paper, but you can reach us there. So find us on StockTwits,

Starting point is 00:25:31 find us at StockTwits on Twitter and Arcana on Twitter as well. you guys are doing a fantastic job. I'm a big fan. Obviously, I spent a lot of time talking to Howard about what you guys are doing and just seeing the sheer size of it, right? I think it is one impressive to people, just how many people are there, how, excuse me, how engaged they are on a daily basis. And then now the ability to actually execute in a vertically integrated way is pretty compelling. So I am rooting for you guys, keep up the great work. And I think that more and more people are going to become StockTwit users here over the coming months. I really hope so. I appreciate your time, Anthony. Thank you so much. And looking forward to talking more down the line.

Starting point is 00:26:14 Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to palmscryptocourse.com to learn more and I'll meet you guys for the next episode.

The Pomp Podcast - #824 Social Investing w/ Rishi Khanna

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