Prague Startup
I met up with StockStory Founder Adam Hejl 👋 at the Eska Bakery in the Karlin section of Prague. I had the scrambled eggs with onion and chives. He had the poached egg with fermented wheat and mushrooms.
Karlin has become the destination for the city’s hipsters and startups since being redeveloped after a devastating flood in 2002. The Eska Bakery is at the epicenter.
Adam is building a global tech and content company that is both a throwback to an earlier era and so modern it couldn’t have happened even a few years ago.
StockStory combines AI with insights from Wall Street caliber analysts to generate stock tips for retail U.S. investors.
It’s a business that harkens back to the Value Line research which began publishing almost a century ago, but also draws inspiration from the more recent success of the Motley Fool, which has grown into a behemoth.
Adam’s insight is that there is a large number of retail investors looking to buy quality stocks and they are willing to pay hundreds of dollars a year if they make money on the trades. The company has a few thousand customers and is growing at about 50 percent every quarter.
It’s a simple concept but runs contrary to the conventional wisdom that a) no one will pay for content and b) retail investors should buy ETFs or use one of the many Bloomberg knockoff platforms that provide analysis tools.
Adam argues none of those things are true. Retail investors want a story, not numbers. If they come across a Swiss company that makes great running shoes that Roger Federer likes, it’s a buy. It’s how Peter Lynch used to do it.
StockStory runs lean. There are just eight employees split between New York and Prague. The U.S. registered company raised $3 million in seed capital from angels and VCs.
Three analysts cover about 1,200 U.S. companies. They leverage AI and lots of computing power to assemble the background data included in reports. They then add insights and review reports before publishing.
The firm invests money in their top recommendations to ensure they have skin in the game. Adam said a portfolio of their top picks handily beat the S&P 500 since inception. At some point the firm may create a separate fund for investors to invest in the picks.
The company publishes machine-generated news as a way to attract customers. The articles are created by applying AI algorithms to earnings filings and other data. The content is distributed via Apple News, Yahoo Finance and Dow Jones.
StockStory is a great example of how the convergence of tech and globalization is reshaping the landscape to provide financial information.
Here we have a guy in Prague with a platoon-sized team operating a Delaware-based company making U.S. stock picks with text generation technology the major platforms still haven’t rolled out.
The world is so cool!
BRIEF OBSERVATIONS
CHAIRMAN POWELL: Fed Chair Jerome Powell’s advice to recent graduates: “It is very common to feel, as I once did, that you’re not ready.”
PETE SEEGER ON HOW COLLEGE STUDENTS ARE RUINING THE LANGUAGE: “I believe the American language is being ruined by college students.” Singer songwriter Pete Seeger wrote that in an op-end to a local newspaper. It is one of the great opening lines, in part because its as true today as it was then!
DIGITAL ANTHROPOLOGY: For whatever algorithmic reason, my Threads social feed is filled with random relationship vignettes from random people. Doom scrolling through their observations is one of the great joys of modern digital life, akin to driving slowly through an unknown part of a new city with the windows down.
WHATEVER HAPPENED TO THE SPELLING BEEN WINNERS?: Love this tweet by Menlo Ventures VC Deedy Das analyzing the predictive power of winning the Scripps Spelling Bee. They have gone on to be investors, engineers, academics and doctors.
WEARING A MASK: Life is much safer today in so many ways no matter what random people on the internet tell you.
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