TipRanks’ Uri Gruenbaum on the need for accountability and transparency in stock market analysis

Uri Gruenbaum is CEO of TipRanks.

What is TipRanks? What was the inspiration behind creating it?

TipRanks analyzes big financial data using proprietary Machine Learning and Natural Language Processing (NLP). Our “Financial Accountability Engine” is a multi-award winning platform that allows investors to evaluate investment advice published online, including ideas from market gurus, sellside analysts, and financial bloggers. At the same time, users can see what the most accurate ones, who’ve outperformed the markets, say about their portfolios. TipRanks has a consumer facing website for retail investors and APIs used by the world’s biggest hedge funds, banks, and online brokers.

The idea started after I followed an investment idea published by a technical analyst in a leading financial news website. The investment lost more than 50% in the following 6 month and i spent 2 days googling everything else that the technical analyst recommended only to find out he was usually wrong. This made me realize that everyone should have a service that helps them distinguish between outperforming and underperforming experts – today, we call it a “Financial Accountability Engine”.

Analysts have a lot of influence on stock price movement but it’s traditionally been hard to tell who’s worth following. How is TipRanks changing the way we analyze expert stock market opinion?

Traditionally, Wall Street relied on analyst ranking services that use metrics unrelated to the analyst’s performance (anywhere from how much the analyst earned to how fast he got back to his costumers). Retail investors had no service at all to evaluate how good an analyst is while many of them lost money following poor advice they came across online. TipRanks changes all that by measuring the actual performance of these analysts and answering the simple question of whether they are good or not.

We see leading websites such as CNBC and others that add the TipRanks star ranking near analysts they quote and we see research firms, analysts, and bloggers placing their TipRanks star ranking on their websites and profile pages as a quality stamp.

Who’s your typical user and how have you attracted him/her to your service?

We serve a variety of investor types. Our website has simple services for the layman investor and more complicated screeners and signals for day traders. We also have an internal quant team that creates investment strategies we license to some of the biggest hedge funds in the world.

Our marketing is mostly focused on content and social media. Since we cover the calls of thousands of analysts and bloggers, we have an “army” of people promoting their own TipRanks profiles around the web. We also enjoy broad media coverage, which can relate to our efforts of bringing accountability into the financial markets. In the near future, we will start focusing on outbound marketing, as well.

How are you monetizing the site? How is freemium working?

TipRanks provides many powerful free features that help the everyday investor with decisions. On top of those features, we offer access to more analytic data and signals based on that data as premium features.  We found that freemium was the best business model for our consumer-facing website, as it allows our users to understand the value we bring and the how the premium features will provide additional value.

What should we expect to see in 2016 from TipRanks?

We expect to continue seeing growth both in our consumer website and in our enterprise products. We started licensing an API in early 2014. Our API became an immediate success in Israel, where we started working with all the big banks and brokers and then, in the US. We are now putting efforts to expand our reach to Europe and Asia and expect to see results in 2016 as well. In early 2016, we are also releasing the next generation of a “Smart Dashboard”, allowing users to import existing portfolios and get ongoing insights based on what 50,000 experts are saying or doing – we hope — and believe — it will be a very successful feature.