A note from MarketReader Co-Founder and CEO Jens Nordvig on our journey so far, and what the future holds:
Starting a company is hard. But when you can see that the product you are building will allow millions of users to understand the world better and faster, the pain is worth it.
Three years ago, we started defining the business plan for MarketReader. I remember sitting in an attic room, in a rented house, during the COVID pandemic, and thinking hard about how to create technology to explain market movements.
Markets are complex. Hence, a technology that explains market movements cannot be simple.
When we were raising seed capital in the the autumn of 2022, we spoke to a venture capital firm. And they pressed us. “How come you are so slow? Why don’t you just release a version of MarketReader with the models you already have up and running?” The VC guy, was not a markets guy. And we could not explain to him that if we tried to explain markets with a partial or simple set of models, it would inevitably not be credible. We would fail, as so many others have failed before us.
We hired the development team for MarketReader in early 2022, and we have been cranking day and night since then. To build a technology that can consistently explain market moves, in real time, and along all the dimensions a human would put to work when trying to get to the truth: news, flow, events and cross-asset effects, etc.
We are embracing complexity as we build the technology, as it is the only way to capture market nuance. There is no short-cut (and for those asking, this is our MOAT).
Our Phase 1 is now mostly complete. We currently have solid algorithmic explanations of market moves, for all assets listed in the US (>10K stocks, ETFs. ADRs), and well as a growing universe of macro assets (and our clear goal is to have all assets in the world covered, as soon as possible).
For example, below are summaries of asset moves in the Regional Banking sector on Oct 20th:
And we are now embarking on phase 2, where we take the insight to a higher dimension. And this phase will accelerate into 2024. Explaining price action over longer time horizons, summarizing activity across an entire sector, or looking at macro news on a global scale, and distilling the essence.
If we compare explanations of a single security with other technology, or a very smart human, it is a tough competition. MarketReader may currently not be able to analyze Microsoft stock better than the top tech analyst on Wall Street (how it looks in the future, time will tell…)
But the power of MarketReader comes from its scalability. When Silicon Valley Bank cracked in March, MarketReader detected it early (as the clear epicenter of the shock) and crucially it allowed us to monitor the entire sector, across 300 names, in real time. A single human analyst cannot do that. It is just too much information to process.
Similarly, there is incredible opportunity in scalability over time. What moved Eli Lilly (see below), or any other stock you are interested in, over the past quarter? There is no good tool currently able to capture all drivers of price action over longer time frames and get concise summaries. But since the MarketReader technology analyzes market moves in high frequency, and pinpoints the key causes (the signal, without noise) as they happen, we can now aggregate that information to different time horizons: weekly, monthly, or longer. And we have these insights available in real time, always up-to-date, when the user wants them.
I have been absolutely blown away from looking at the longer-term summaries the MarketReader team has developed recently. It is a totally new form of content, with no real competition (AI is part of it, but it is AI in combination with a host of other modeling approaches). It will define a new product category, which goes way beyond traditional financial news.
Let me conclude…
When we set out to build MarketReader, we were hopeful that our framework would have much higher explanatory power than existing technologies. Explain market moves better! And our expectations have been exceeded. But it is when you put the content into a higher dimension (across many assets, or over longer periods of time) that the true power of a noise-free stream of content becomes so self-evident that the value stands out, and actually shocks you. It is in this higher dimension that you see the superiority to a human-driven process.
Building is hard. The push-back from investors is hard. The setbacks, which are inevitable in a start-up, are draining. But we are on to something BIG. MarkerReader is on track to define the next generation of financial news and insight. And it is that feeling of empowerment that makes us driven to succeed, and move further ahead.
Thank you all for the support on our journey.
Jens Nordvig | CEO