With eyes honed on Wall Street, two Westport businessmen have launched TradeXchange at 1720 Post Road E., a company targeting what they see as complacency by traditional investment news providers. “Only the amount of news is increasing,” they say, “not the quality.” Plans call for 75 hires in the first year.
Partner Milton Marmanides”™ University of Connecticut focus was business and business finance, which led to an early hedge fund career. He was named a partner at 27 with Atlanta-based real estate investment and advisory firm Imperial Investments L.L.C.
George Avidon is an engineer who studied economics at UConn as an undergraduate. His master”™s thesis for his M.S. in engineering from the University of Bridgeport addressed “disruptive technologies and how inter-industries and inter-curriculum affect one another and contribute to growth and ingenuity.”
Marmanides and Avidon said stints on Wall Street taught them the current business information environment is “ripe for a directional change.”
The pair began discussing the problem casually a year ago and three months ago took the discussions to the business-formation stage and hired a lawyer.
“The process has not been easy and at times difficult to achieve,” they said in response to questions from the Fairfield County Business Journal. “The end result is a method that enables traders to see securities and indices that may be ”˜in play.”™ We call it TX 1.”
What was the impetus for your business and what is your market?
“The basis for the idea surfaced with the notion that information can and will become more overwhelming as volume and its velocity increases at an exponential rate. A mechanism needed to be in place to allow market participants the capacity and capability to utilize information in a method that bears weight as it relates to volume and price volatility.
“Our market includes institutional investors, hedge fund and portfolio managers, proprietary traders, swing traders, money managers, advisers and investors. Because (of) modern technology with respect to cloud computing, telecommunication and mobile connectivity, a subscriber may come from Stamford or Shanghai, China. At a minimum, the subscriber needs to have a willingness and interest to understand the markets and access to a mobile device.”
Where is the effort now? How many employees?
“The original and implemented approach to the business was to bootstrap the entire operation. This bootstrapped business (included) hardware, software, networking, legal, marketing and human resource management.
“After the launch July 15, the firm is concentrating on constantly developing better methods of actionable news dissemination, several aspects of technology, improving algorithms and working on a different subscriber portal. The group is persistently receiving critique from its existing subscribers in order to stay ahead of the industry in the field of real-time news. Existing work in natural language processing and machine learning will propel the next phase of development to understand market-ready information and its potential effects on volume and price. Web and mobile development continues, with work on the user experience and interface. Currently, the firm has a staff of nine including the two managing partners, interns and consultants.”
Are you receiving feedback? Do you have customers?
“For months, the firm conducted an open beta test with market participants domestically and (at) international locations. The primary concentration of the organization during the beta test was consistent communication between users and the firm. It”™s more important to know what is not working than what is working. During the open beta, the subscriber list grew to more than 80 participants. Criticism flowed from all types of participants, including hedge funds, money managers, traders and investors from domestic and international locations. Since launch in mid-July, the firm has been lining up subscribers to begin using the live service.”
What logistics are you engaged in? Brick and mortar, computers?
“The existing office is on the smaller scale but provides the necessary infrastructure for the initial launch. With the technical acumen within the firm, outsourcing technology is not in the cards for this startup. The intention is grow the organization rapidly in all facets of the business. With the availability of commercial space within Fairfield County, the firm is confident and steadfast on growing in Connecticut.”
Where is the finance industry now as you see it?
“We have entered a time when technology, information and speed have converged and are influencing not just price volatility of individual securities and more macro-based indices, but are also influencing volume traded models, with implications for volatile markets. We believe the next phase of evolution will propel market participants to understand how information impacts volatility in price and volume. With the proliferation of social media based information, traders now must interpret information quickly and determine if the information will have any bearing on individual or more sector/index-based securities.”
You plan to grow to 75 employees. Where will you find them and what skills will you seek?
“With an ambitious staff goal of 75 within one year of launch, the firm will seek to hire and expand in several areas: engineering, research and financial analysis, data science, marketing and design. If our current Fairfield University interns are any indication of the level of education that is being offered to the Generation Ys, we will not have any problems filling the necessary technical, financial, business and design roles. The opportunity is massive.”
Where is social media in the equation?
“Valuable information on markets has always existed among the few within the investment community. Social media and other portals seem to have democratized this process and the more average participant now is obliged to construe this barrage of information in order to determine if a follow through will exist in the markets.”
