by George Avidon
With a year under its belt, The TradeXchange, a financial information portal based in Norwalk, is preparing for the next phase of the business cycle. We ”” managing partners Milton Marmanides and myself ”” spent considerable time deconstructing the past year in search of mistakes, success stories and lessons learned. Objectivity is critical in approaching mistakes made by the budding startup.
When asked to create a biggest mistakes list made in the first year of operations, it is often very long. We both tend to be rather critical of ourselves and of each other. The company is and has been cash-flow positive for several months. Operational integrity is critical regarding how the business functions and continues to grow.
The business has now grown to almost 200 subscribers. Becoming profitable and cash-flow positive early was always of paramount importance. We believe the biggest hurdle for the business was to be recognized by the capital markets industry. Though already taking on clients, including institutional traders, proprietary traders, research firms and active investors, the company plans to conduct more aggressive campaigns with respect to marketing and sales efforts.
As for our employee goal of 65 employees in one year, I have said we were off our rockers”¦ambition is wonderful and intoxicating, but reality sets in pretty quickly and the real work begins.
Now we believe the 65-employee goal is still feasible, but we will hire as our growth rate progresses.
When asked about venture capital funding in the next year, we remain tight lipped. We recognize the importance of outside investors when discussing plans for expansion. Currently, the company is privately owned by Marmadon Holdings.
My partner is happy with the way we”™ve handled capital funding so far.
“We are glad we did not seek funding too early in the game, that may have changed the dynamics of the business,” Marmanides said.
The more important aspect for any business, including startups and small business, are relationships and referral sources. Within the last several months, our company has been solidifying numerous relationships to boost sales and revenue. There are many nuances to this industry but none as opaque as contacts on Wall Street. With 19 years in the industry, my take is, although Wall Street is not the same as it was 15 years ago, the value of the right relationship can never be overstated.
We did not fall into the trap of overspending in our early days. You hear of too many startups that blow up months after receiving seed funding. We never wanted to be a part of the wrong statistics. Although somewhat conservative in business practices, we consistently search for methods of promotion and marketing. Our group speaks with numerous contacts on a daily basis to better understand what methods work and which ones fail for promoting new and established businesses.
Consistently planning for the future, The TradeXchange is seeking to expand the product line by year end and plans on raising prices for new subscription services.
“We have proved that the concept works with the information provided to our subscribers and we are preparing to approach larger Wall Street firms in the coming months,” Marmanides said.
The firm provides information to the capital markets industry by way of equity options, company and insider filings, smart-filtered social media news and volatility and volume alerts.
We continue to invest earnings on proprietary technology, including hardware, software and cloud-based assets. The TradeXchange has made alliances with several technology firms to better position itself to future needs. Scalability, reliability and vertical growth are critical to our future.
Recognizing mistakes early is key to any business. Still relatively small by industry standards, The TradeXchange is able to pivot rather quickly when new ideas avail themselves.
“One of our biggest assets as a business entity is our ability to take the necessary risks in growing our business while at the same time providing a consistent service to our growing subscriber base,” Marmanides said.
George Avidon is co-founder and managing partner of The TradeXchange in Norwalk. He earned his M.S. in engineering from the University of Bridgeport and a B.A. in economics from UConn. He can be reached at thetradexchange@thetradexchange.com or at 203-939-1250.
