Would a site that offered fantasy stock trading be a hit with the younger generation? In the February issue of Inc. Magazine, Ryan McCarthy details the pitch given by owners of the Chicago web company HedgeStop (McCarthy, Ryan. “HedgeStop wants to be the MySpace of the financial community. Now it needs $2.5 million.” Inc. Feb. 2007: 32). The two young men who started HedgeStop seem to think it would.
Daniel Carroll and Christoper Carlevato are the masterminds behind this project, which aims to bring the popularity of social networking sites to the world of stocks and financing. Being in their mid-twenties themselves, these two are hoping to “sex-up” the world of business with a site that allows young investors (both casual and professional) to interact with others playing the stock game. Email and a fantasy stock market game are available, as are business links, blogs, and profiles.
Started in 2005, the company has been functional for a good year now, earning $48,000 in 2006. Membership is free and they already have steady customers, including a foreign exchange site and an online ticket seller. So far, HedgeStop has moved up to 2200 members with an additional 400 popping on about every week.
At the moment, Hedgestop has no steady employees. In this article they make their pitch, throwing out the fact that they’re looking for financial backing to hire some full time employees. The investors Inc. brought in to weigh in on HedgesStop and their projected needs had several opinions concerning this “new on the horizon” company.
Jonathan Silver of Core Capital Partners worries that HedgeStop hasn’t been proven to stand the test of time. He feels they would be better teaming up with an already made name, like Yahoo. InterWest Partners general manager, Thomas Rosch, feels that the makers of the site should hold off on looking for backing until they’ve gotten at least one million members. He’s also concerned that HedgeStop will lose their viewers once members find their niche and move further up in the business world.
The chairman of the board of New York Angels, David Rose, has concerns about whether HedgeStop is “alienating” teenagers, the biggest percentage of the population who use network sites. He feels the growth rate is too low and that Carroll and Carlevato could benefit by adding some tutorials on the subject. Though I personally felt the goal of three million members in five years was rather lofty, the experts find this to be a bit on the low side as far as goals are concerned.
Reading this article, Rose makes a good point. When someone thinks of MySpace anymore, it’s usually with the connotation of the teen user. Carroll and Carlevato never come out and say which age group they’re targeting exactly. “Young people” is the closest they get. This term encompasses too general of the population for the reader to find a target audience. Perhaps they are aiming this at teenagers. In a recent article I wrote for AC, I focus on teen entrepreneurs and programs to teach high school students the basics of the business world.
If teenagers make the target, my next concern would be whether there would be interest? While a trading website sounds great for the business bound of America, many teenagers are more worried about having a date for the prom than they are about their portfolio. Not to be discriminatory, it is hoped that those who could care less about a dance and really would rather have a nice stock background could access this site.
If HedgeStop’s main focus is the twenty-something group, they may be onto something. With those fresh out of college and looking to get some financial experiencing, tracking trading activity and playing the fantasy stock market could be a great learning tool for the future. Those savvy enough to want to keep up on the world of business can follow the links the page offers to get updated news on business and technology, read blogs, and check out interviews. Definitely geared toward the younger trader, this site offers a playlist, a humor section, and entertainment links for when you need something to look at besides the ticker tape. Even if HedgeStop members lose interest after they push their way up in the business world, once they become successful, a whole new generation will be waiting to explore the site.
If the focus of society gains strength in the financial aspect, HedgeStop could definitely gain popularity. While it may never be as prolific as MySpace or Facebook, with a little more time, it could easily find its niche on the World Wide Web.