Published 3rd June, 2019
This essay is a culmination of all that we have learnt over the past year. It focuses on understanding user behaviour, financial product marketing and content creation.
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Balance Sheets, Income statements, Risk Assessment and SpreadSheet Analysis are boring. The assumption is that people want to learn and will be committed to the cause if it’s done right. This, in our opinion, is a myopic assessment. While it is true that most people aspire to learn to invest at some point in their lifetime, very few people have the resolve to go through with it. Despite the plethora of educational content out there, most of it has failed to translate any of its engagement into active participation in the financial ecosystem. This is evidenced both by the abysmal retail participation in the markets and the growth of the investing/brokerage market as a whole. As the founder of Zerodha, Nithin Kamath aptly summarized, “We are a big fish in a small pond.” And the pond refuses to grow at a serious pace
This poses an interesting conundrum. If you can’t educate the consumer how do you get him/her interested in stocks/investing? Our thesis is that more people are likely to invest or consider investing in any financial product if they can find a compelling narrative. This narrative must focus on storytelling above all else. The narrative must forego all complexity and technical jargons for the sake of a more inclusive experience. The narrative must be as compelling for a fin-agnostic user as it is to a seasoned investor. The trick here is to find the right balance between creative freedom and financial reality. Our solution to this — Analysis using Story Telling
We have been writing deeply researched long-form articles for some time now. Unlike traditional reporting, it’s mostly restricted to rigorous analysis of a particular subject matter. This obviously isn’t ideal because long-form articles on investing written in English serves a very niche crowd. It won’t get us a million hits. We have to get very creative to sell our articles to our subscribers. At least that’s what we believed. However, despite serving a niche crowd we have not had any real problems growing.
The myth that Indians don’t read long-form articles is just that — A Myth. So long as there is a compelling narrative backing up the article they do it very willingly. On average our articles are about 10–12 minutes long. And readers spend anywhere between 8–9 minutes. Despite the niche market and our limited reach (because we only started a few months back) we easily hit 10,000+ reads on our posts. Good content gets shared much more often and yields relatively higher engagement levels than clickbait junk that is peddled as financial news/analysis. In addition to building credibility, it also gives us access to an enviable set of influencers. Top market experts on Twitter and elsewhere are always on the lookout for quality content. In fact, we have been able to garner most of our following because of this goodwill.
Although this method yields sticky readers, it’s still an ineffective approach to obtain significant reach. So we knew fully well we had to experiment with other forms of content.
We published the first Bar Chart Race to experiment with video content. The video was a simple illustration of how Jet Airways ceded market share during the later years after having dominated the airspace during the early 2000s. The video attracted over 1 Million hits across social media platforms yielding considerable traffic for us on our website. People immediately got on the bandwagon (as we did by following global cues) and tried to replicate this in India. However, in the absence of a compelling narrative, most videos did not catch on. Visualisations work better than plain text, but they truly shine when they are backed by a really good story. The story in the video was about the rise and fall of Jet. The funny looking bar chart was only an addendum. In fact, we recently did another bar chart race, only this time it was about the most valuable companies in India. No narrative — Just visualisation. While it did reasonably well, with a cumulative 100,000 hits. It got nowhere close to the popularity that Jet Airways got us. The bottom line — Visualisations do better than text. But it’s the stories that truly sell.
Ted-Ed is a non-profit that produces high-quality videos centred on compelling storytelling. However, their business model is rather unique. While most of their revenue comes directly from patron donations, there is another indirect source of revenue that keeps them afloat. Consider for example the video below. If you have a few minutes to spare, do watch it.
When they do make a video on a rather esoteric subject as this one — “The Journey to Pluto”, they do so after collaborating with a subject matter expert. In this case, however, the expert has another ulterior motive to collaborate with Ted Ed. He has a new book coming out, unsurprisingly on the same topic — chronicling the journey to Pluto. The video with the animations brilliantly encapsulate the complexities and the intricacies involved in getting to Pluto and hooks the viewer until the end. The unsuspecting viewer who until this moment did not care much about Pluto suddenly wants to know more and gladly proceeds to check out the new book. Ted-Ed makes a small cut when a book is sold.
This isn't traditional content marketing where the focus is on the product/service you are selling. Instead, the focus is on explaining the complexity involved in flying to Pluto and getting viewers interested in a subject matter they would otherwise not care about. Once the viewer is engrossed with the idea, the book sells itself. We could try imagining this another way. What if the video was never made. How many people would buy a book that chronicles the journey to Pluto? I would presume — Not a lot. The market would shrink immediately and the book would struggle to sell itself unless backed by a famous name. Financial products much like the book-“A Journey to Pluto” needs a compelling hook. If enough people buy into the idea, understand it and can fully appreciate the intricacies, they are likely to try it.
This isn’t merely a hypothesis. Last month we tweeted a thread putting together a small presentation of Bhagavad Gita and Investing. The tweet was replete with commentary and neat visuals. Immediately after posting the thread people reached out to us asking for the presentation, pdf’s, more material, a story and so on. One user, even asked if we could write an ebook. It’s fascinating what a powerful story can do. We are convinced that to better sell financial products, we need to make it more simple and exciting at the same time.
Thread on lessons from Bhagavad Gita
The last part of this essay will concentrate on two different segments of users and how they interact with content.
Despite making it explicitly clear that we don’t dabble in stock recommendations. We often get inundated with calls from people asking for stock picks. We like to call these people “Millionaire Overnight’s”. While most incumbents in the industry think this is a good market to address, we disagree.
This customer has no fundamental understanding of the markets. He blindly relies on stock tips and multi-bagger calls from the self-proclaimed market expert and will gladly remain ignorant of the most important maxim — “To make more returns you must bear more risk.” He doesn’t want the 15–20% annualised returns of a mutual fund. He wants multi-bagger and he wants them quick. He will read a 12-minute article just to find the words — Multibagger. If he doesn’t find it, he will reach out to you in seeking your opinion if he were convinced of your predictive powers.
He is gullible and is most likely to fall prey to Indore based stock tip scams. He doesn’t care much for risk mitigation — Not because he is risk-agnostic, but because he truly believes that one could generate disproportionately large returns without bearing any risk. All he needs is somebody to come in and say the magic words “Big returns with no risk”. He will only listen to frauds and charlatans because only they can deliver what he seeks. He will only consume content if it gives him a clear verdict — Buy/Sell and a target price with disproportionate upsides.
The second kind of user is what we call “The Cream”. This user is willing to patiently listen and reason. He has an insatiable desire to learn if only somebody could make things more interesting. He will study, analyze, scrutinize and is likely to seek more if he finds value in pursuing the subject matter further. He wants to know more about the sector, our thoughts and actively seeks our opinion on the matter as a whole as opposed to simply buy/sell. He might be entertained by the videos and fancy infographics. But he wants more analysis, commentary and deeply insightful stories.
This is the sticky user we described earlier. About 30% of our subscribers consistently come back, time and again to read, appreciate and offer their inputs. Our belief is that this ought to be the ideal target segment for most financial institutions. Not only are they likely to buy into a reasonable financial product but they are also likely to stay invested even during turbulent times. This is the consumer that understands the nuances. “Unlike the Millionaire Overnight’s”, this user can appreciate the utility of a mutual/index/quant fund.
A final note on trust. Perhaps the most important learning for us over the past one year has been that Trust is paramount in this business, for participants mostly are deeply distrustful of institutions. This in our opinion is also why independent distributors have had far better success in selling financial products than online platforms. Unless an institution can build trust and sustain this goodwill, they are unlikely to see any credible traction. This principle holds true with content as well, especially those related to analysis. Building trust can be a painstaking process. Building trust and simultaneously generating high engagement levels can be even more painstaking. That, in essence, is our aim. To be a platform that is not only trustworthy but also engaging and, dare I say, we are only getting started.
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