Silvia Davi spoke with David McKay, Director of Marketing at BlackBoxStocks, at the recent National Investment Banking Association conference in New York.
Silvia Davi (SD): David, thanks for joining me at the NIBA conference and congratulations on the continued growth of BlackBoxStocks.
David McKay (DM): Thank you, it's good to be here.
SD: Tell me about the mission behind the company, and why it was founded.
DM: So our founders, two of them, were high frequency traders back in early 2000, and the third founder is our CEO. And they're all friends. So, over cocktails, he thought of this idea to take their high frequency trading model and format it for the retail trader. So that's where the idea came from, and it's been doing extremely well because more and more people are doing their own trading, their own investing. They have accessibility to so much information, which BlackBox compiles and make it gives them so much information in the easiest form, and BlackBox is something... I guess in the scope of where we would like to see the company going is people trading from their mobile devices, whether they're a new trader, an experienced trader, they have a 9 to 5 job, trading could be their side hustle or managing their investment portfolio, they're able to keep up with it using our alerts, scanners and information. So, they get to trade on the go, and we try to put that together with the community aspect.
SD: You touched on a couple of interesting topics. I definitely think that there's a lot more information accessible to individual investors more than ever before, and having a side gig, or a side hustle as they call it, it's definitely growing. So, how do you inform your audience? It seems like you have an algo that triggers particular market movements for your customers. Explain how that works.
DM: So, we have several algorithms that are triggering black box alerts and scanners. We offer real-time news, so we have like for instance, pre and post-market scanners, which a lot of traders love because during earning season, when a lot of people do trade and make most of their money, we're able to pick up on as soon as a company, or reports those earnings, our scanners pick up the trading, the movement, the volatility and they're able to just move over, click on the real time news, and by quick glance, just see what the EPS is, the revenues, and then the guidance the company that is doing the guidance. And they're able to determine what they want to do with that information.
SD: And so, you're empowering individual investors essentially to be their own money managers.
DM: Yeah, yeah, exactly.
SD: How were you using AI? It seems to have been a very big buzzword. Explain how the technology works itself and the future of AI in stocks and trading.
DM: So, it's interesting with the AI, our system is learning and we're getting constant feedback, on the way people are trading and what they're having the most success trading. So we try to build the system out based on the user feedback, what do the people want, where do they need help, how are we solving problems for them? In terms of, in terms of AI, you know it's really interesting because in our community, you're able to see what's trending, every day. So, the social media aspect of it is producing a lot of information for us on how to make the platform better and build up the component better to give people features in the social media that will help them find information quicker, more efficiently, and on the go.
SD: And in general, how do you use the system? Is it free for investors to log on or do you have to subscribe?
DM: You have to subscribe. We are a SaaS model and we offer a monthly membership and a yearly, so the monthly is $99.97 and the yearly is $959.00.
SD: So for anybody that's interested, you could go online and just do a monthly subscription and, to your point, then they'll be getting all the alerts or they can customize what they're looking for.
DM: Yes, so they can visit us at www.blackboxstocks.com, and they get several emails, so we offer a lot of videos, a lot of guidance in the beginning, especially for people that are new, we encourage people to familiarize yourself with the platform, the alerts. We want them to have some knowledge and this is why we're building out more of a robust education system - to know what they're doing before they start putting their money into the market, because our system is really incredible, but you need to learn how to use it first if you're not familiar with it. Some people pick it up within a couple of days, some people who've been trading, they pick it up immediately, but we want people to really know how to use the alerts, so that way they're not just seeing something and buying it not knowing what they're doing because we don't know who's a scout trader, we don't know is a swing trader, we don't know who's an options trader. So, you got figure out how you want to use the system and the information that we offer.
SD: That's interesting and lastly talk to us about the game plan. You went public a few years ago, so you have been growing and expanding your traded on OTC markets.
SD: What's next in terms of your growth and expansion?
DM: So yes, we're looking to raise a 22 million and a pre-IPO and we want to uplist to the NASDAQ. We're figuring out and determining what's the best way for us to go about this. We want to raise the $2.2M, we want to apply that to deploying large marketing budgets and we've done a few small test budgets and it's gone quite well, so we're really looking forward to that part, and also applying the rest of that money to building out a native mobile app, so that all of this information - push alert notifications, customized watch lists, as you mentioned earlier - will be able to, people will be able to use their phone, their tablet, anywhere they are and have a responsive mobile app to give them information wherever they go.
SD: And it seems like a big part of the model is education, and you have a very dedicated group of loyal customers, but who do you see is growing the most? What segment of the business do you find there is more opportunity for growth in?
DM: Segment in terms of what kind of traders?
DM: Yeah, so right now, I'd say options. So, since we added the options portion of the platform, and we've seen significant growth in our consumer basis. Most of our people are options traders now because they're able to trade with usually less risk and they're able to have more reward, once they figure out how to trade using the alerts and information in our system. This also lets people trade every day with a cash account, which is very important. So, somebody with a small account that doesn't have much experience can log on our system and after they're joining, get some education, and within a couple of days to a few weeks, be trading on their own.
SD: So it's fascinating, it seems as if the democratization of trading is here, thanks to platform such as yours, and the education and the growth, and are you finding that there's global customers as well or is it pretty much US?
DM: It's definitely global. So, we are in 42 countries, so we have members in over 42 countries. Most of that is due to organic growth and is affiliate-driven in those two small marketing test budgets we did, so we're really looking forward to capitalizing on the network effect of putting some money into marketing and really ramping up because people are making 100 to 1000% trades on our system, and they're out there talking about it on social media, they're hashtagging BlackBoxStocks, TeamBlackBox. We have really great global branding as well. But they're singing their praises and they're very excited - when you teach somebody how to trade and how to use the platform and make them money, they're the best advertising that we could ever have, and it just proves what we're doing, and we're getting better and better at it with the trades that people are making, so we encourage people to post their trade confirms and get involved in the community, and that's just such great advertising for us as a company.
SD: Absolutely. Word of mouth always helps. And organic growth. And lastly, tell us about your background, how did you get involved, did you come from a strategic marketing business development background or do you have trading background?
DM: So, I was the first beta tester of black box, so back when it was a penny stock trading system, this was when it was just being built, I started using the platforms and I always wanted to learn at a trade, and I felt inferior. I didn't know where to get the information. Who's gonna teach me this? So, a lot of people feel this way, they wanna learn about the market, they see Wall Street movies, or they see their friend making money trading or investing, and they wanna learn how to do it, but they don't know where to get the information. You feel inferior. So, we offer a service that provides a lot of information and education. And that's how I got into it. So, I started trading pretty well with it, fell in love with the system, and I know the guys that created this company, so I put together a deck and I come from a marketing background, and pitched them, and now I am the Director of Marketing and Business Development, and I love it.
SD: Well, congratulations, nothing like having the Head of Marketing and Business Development be your testimonial, so congratulations, and I wish you all the best of luck.
DM: Thank you very much.
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