Although it doesn’t get as much attention as other areas of social media, the area of social finance is changing how traders and investors interact with each other and with the companies they follow. As social finance matures it is also constantly branching out into new areas. Today we have a guest post from friend and former colleague Leigh Drogen, CEO and co-founder of Estimize. Estimize is looking to open up the world of earnings estimates to everyone, not just Wall Street sell-side analysts. To say the least Leigh has a unique perspective on where social finance has been and where it is going.
“The Gravity Well of Social Finance” by Leigh Drogen, CEO and co-founder of Estimize
Sometime in 2009, social finance went supernova producing a massive gravity well. That gravity well has grown stronger every day since with each individual investor, institution, analyst, trader, and journalist captured by its pull.
The center of gravity in the social finance world is undoubtedly the StockTwits stream. 150,000 members strong with 600,000 unique viewers each month, StockTwits is the Amazon river of financial content. It is the center of social finance gravity and the protocol for sharing all of the amazing information natural to the healthy function of markets. It is also the major distribution point, spreading content across the financial media ecosystem.
After spending two years at StockTwits helping to build the business and community, I saw an opportunity last spring produced by the maturation of the social finance ecosystem. The size of the social finance community was now able to support financial content creation platforms which act as tributaries of the StockTwits Amazon, feeding content into the stream where the larger community can consume.
Chart.ly was the first of these content creation platforms to succeed in providing community members a tool to share specialized financial content outside of the normal 140 character format. The Chart.ly platform succeeded so well that it eventually accounted for 10% of all content flowing through the StockTwits stream. The platform grew through the links shared into the stream, those community members who identified themselves as technical traders would discover Chart.ly and a portion of them were inclined to contribute.
Chart.ly was born into the StockTwits community, one of the main reasons why it has been so successful as a platform for the sharing of technical analysis. Many different community members have built successful blogs in this way as well.
I left StockTwits to build Estimize last spring because I saw an opportunity to create another financial content creation platform around fundamental data and analysis. Estimize was built to give the social finance community a way to share fundamental content in a structured way.
As the gravity well of StockTwits captures an ever expanding portion of the financial community, several other specialized content creation platforms will be created to feed the stream.
At Estimize we’re also thinking deeply about how to build trust within the social finance community. As the number of voices and amount of content expands, giving the community a way to find those contributors who are most valuable to them will be an important step. If we’re not successful in giving the community tools to filter the signal from the noise, the ecosystem will retard itself with the sheer volume of information.
As a trader and early member of this community, I can’t wait to see what others will build to increase the depth and breadth of analysis shared. We have an amazingly exiting time ahead of us where a greater portion of the financial community will be pulled into this ecosystem by its ever increasing gravity. We’re only in the 2nd or 3rd inning of social finance, and Estimize is just getting started.