GZV #8: The New Era of Stock Market Traders
Startups. Trends. News. All From a Gen Z view.
themes of the week
Make a product that improves the efficiency of everyday tasks
Gen Z likes soft introductions
Gen Z day traders are inflating some stocks
the flow
Where's money been flowing?
Searchable.Ai
June 4th
Additional seed round of $4 mil
One Liner: Developing a new kind of personalized semantic search engine for your work through AI.
Score: 7.2
Searchable.ai is solving a problem that I feel is prevalent across all generations. Let me give an example, I have been doing work on my computer for 6 years now, resulting in tons of documents, excel sheets, and photos. Sometimes when I am trying to find an old document or photo, it takes 10-20 minutes of searching in order to locate it. My parents usually just give up after 5 minutes of looking.
In Generation Z, we have done most of our high school and college work on our computer. Our hard drives are filled with years of work and documents. The current search method on my computer usually pulls up 50 random files, mostly Imessages that include the word I searched for. Having a tool that improves the efficiency of locating documents would make life on computers much easier.
The one cast of doubt I have for this application is the movement to google based applications, where searching is much easier. Nowadays, I have been seeing a good portion of students and gen z’ers switching over to google docs, sheets, and slides. In my view, this will be the main issue when attracting users.
Itsme
Unknown Status of funding
One liner: Itsme allows you to meet people via a customizable 3D avatar.
Score: 3.9
I’ll start by saying I’m not in love with this app. I think people sometimes profile gen z as the online generation and, yes we are, but we really don’t like to change the way we have been doing things for years.
Let’s say an 18-year old guy wants to meet a girl online, most of the time we will use Tinder or Bumble. After finding someone who we matched with, we will initially talk and eventually transition to texting or snapchatting. It is what we have grown up with and are used to. Talking to someone immediately off the bat is pretty uncomfortable for our generation, we need to be warmed up to people. Itsme just works a little too fast for generation z in my opinion.
To shed a little light on how the app works, you essentially create an avatar, then it matches you with someone online, you then “accept” or “pass” the match. If you accept, the app immediately connects you and your match and you can talk from there.
To improve on the gen z market I would most likely suggest a transition into a softer introduction when meeting people. We don’t want to be immediately thrown into the ring talking to someone, we want to know a little more about the person before connecting.
Dear Clothing and Shoe Startups, all your scores have been under 5.
Case Study: Rhoback
This review is a little different. Recently I have been seeing a lot of startups making shoes, athleisure clothes, lifestyle clothing, etc. The thing is, growing a clothing startup in this market is pretty hard, and the key to success is building your brand.
Let’s look at Rhoback and GM Golf for example. Rhoback is an athleisure brand that is meant for people who “Crave Activity”. GM Golf is a golf-trick shot artist and content creator. I started following GM Golf when he was at 60,000 followers, by then Rhoback was already partnered with him. Fast forward a few months, and GM Golf now has 210,000 followers. GM golf matches the brand that Rhoback is going after, he loves being active, whether it means doing a trick shot outside or just playing golf, he "Craves Activity". By the way, the guy is good too, one of the smoothest swings I’ve seen and most likely a scratch golfer. Nowadays, Rhoback is growing its presence everywhere from golf to casual lounging.
What can you learn from this as a clothing startup? Few things. First off, build an incredible product, Rhoback not only has great marketing, but they live up to their claims with some of the best athleisure clothes out there. Second, define your brand, make products that represent what your company believes in. Third, invest in influencers that not only represent your brand, but love your brand themselves. When hiring in the startup world, you hire people who believe in your idea right? Finally, innovate, innovate, innovate. Make sure that you’re consistently making new products and testing new ideas.
The New Era of Stock Market Traders; Some lead by Dave Portnoy
Tom Lombardozzi
So high school clearly didn’t teach Gen Z enough finance, because once the car-rental company, Hertz, announced bankruptcy, shares skyrocketed over 450%. People should realize that once companies announce bankruptcy all shares are essentially worth $0...
Anyways, as you have probably heard, day trading has been a huge trend during quarantine. In fact, the popular investing app, Robinhood, “saw a historic 3 million new accounts in the first quarter” (CNBC). I would place a big bet that the average age of these accounts is under 25. You see, I've been interested in market for about 5 years, and now more than ever people have been reaching out to me and asking my opinion about what stocks to buy or how to invest.
A good portion of these new traders is also due to Barstool Sports founder, Dave Portnoy, who started livestreaming himself day trading with $5 mil at the beginning of quarantine. People admire his personality and will follow any trend that he gets involved in. To show how much of an effect Portnoy has on the market, let’s look at the penny stock NSPR. One livestream, Dave mentioned the stock, and not more than a few minutes later the stock moved upwards, and fast. Robintrack.net shows that before Portnoy spoke, only 10,000 users held the stock. After Portnoy’s “tip”, the users holding the stock jumped 60% to 16000. This amount of volume can move a small stock like NSPR up very quickly.
There is also an art of mob mentality and FOMO when these new investors get into the game. When kids see all their friends moving into a stock like NKLA they don’t want to miss out, so they jump in too and the volume shoots up. We saw this trend happen back in 2017 with cryptocurrency. People heard of this way to “get rich quick” and tried to hop in, and as we saw the volume, along with the price skyrocketed.
Here is how this may end: I only know one thing for certain about this trend, Barstool, more specifically, Portnoy, is going to evolve in this sector and find out more ways to monetize it and drive more revenue for Barstool. Beyond this, I really can’t tell how this will end. The addition of 3 million robinhood accounts is staggering, and as more and more beginners realize how hard this game is, they will become smarter. They will most likely lose money and stop investing in these stocks without doing research. Another possibility is they will just get tired of trading in a few weeks and forget about their accounts. It's going to be a fun scene to watch play out for sure.
the lookout
In the next 1-2 months more kids will open stock trading accounts. With this massive volume, Robinhood may eye an IPO filing within the next 2 years.
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-GZV