Bolsa & Financial Red | Interview with its founder & CEO – Jesús Pérez
Financial Red is a platform for bloggers writing about financial sector.
Bolsa is a community for all investors.
Jesús shared his story of how he got started, what the business models of Financial Red and Bolsa are, some insights on the media market, and what it takes to become a great entrepreneur.
The transcript of the interview is provided below.
Martin: Hi. Today we are in Madrid, a very Catholic city. Have you ever wondered why God is really connected toMale? Here we have the answer. Jesús from Madrid, who is operating some of the very well known financial companies here in Spain. Jesús, who are you and what do you do?
Jesús: I am not the person who you think about. I am the CEO of Financial Red and Bolsa.com. When I go abroad, it’s very strange for people that someone can be called Jesús. But in Spain, it’s very typical name, people like that name.
Martin: What did you do before you started this company?
Jesús: I was a computer engineer. My first job was really working in the internet bubble, just at the beginning of the internet bubble. So I really learnt a lot about the developing portals. And I also really love the market, love financial. I really like to develop invest developing programs, so I really like the financial. With that two kind of things, I start my financial media company in 2007.
Martin: In 2007, Okay. And how did you change from being an employee to becoming an entrepreneur?
Jesús: The main reason was my partner Gonzalo. He is a person who’s been an entrepreneur for 5 years. He can’t imagine himself working in a company. So when I met him, I understand the opportunity that we have to create our first company. We think a lot but we make a decision to leave the bank employment and to begin with this project.
I am really happy. I think it was a very dangerous decision but when you really like something, after that you can pursue it with passion, I think you can do whatever you want.
BUSINESS MODEL OF FINANCIAL RED & BOLSA.COM
Martin: Tell us a little bit more about how the 3 companies are working together?
Jesús: When I define Financial Red, I think it’s a media that belongs to the talent of the network. We really find bright talented people in writing about finance and we invite them to write for Financial Red. We are really a group of people that write for a company.
Martin: So, a blog network?
Jesús: It’s a blog network. Right now, it’s now like a blog format. Right now, we write in different kind of spaces, like social network, we are really a portal. But really it’s the type of people, people on the internet with 2.0 permit, to discover that kind of talent. And that’s really the reason of the success of Financial Red.
After that, we discover that the media is a very competitive environment and usually in those years, the payment or the outside pays were lower and lower. So with the amount of high traffic, because for one year we were the most visited financial website in Spain, we decided to try a different business model. That’s why we created Bolsa, as an association network of investors and also another company to try to monetize people with other kind of place.
Martin: Okay. And the Financial Red is a blog network. So basically what you’re doing is selling some ads and on the other hand having other people writing great content. Are you focusing with the content on some specific niche, like news or education or a specific technique related to trading, or some events related to trading or is it totally open that everybody can write on any topics?
Jesús: Anybody can write about whatever they want. But I think, our main focus is opinion. Because people who write for us, are people who are passionate about what they are writing. They don’t have time to write about what is happening in the real time, but they can really make a very good analysis of what is happening. I think this is our main advantage.
We are probably a more opinion media. Sometimes media can’t do opinion. You have some limitation about that. We are all the time making opinions about everything in financial, opinions on everything and sometimes creating trends of opinions.
Martin: For Financial Red and Bolsa, where are the users coming from? From which countries and from which marketing channels, like search engines, social network?
Jesús: I think at the beginning of the company, we are really an international company. We’re in 20 countries, a lot of them in Spanish language, like in Mexico right now the first country, Spain, Argentina, Colombia and Peru.
At the beginning, I think people find us from Google, from search engines. Right now, in the last 2 years, people come find us from social network like Facebook, LinkedIn, Twitter. We have moved from search engines to some social networks. Right now we have a very high percentage of traffic that arrives from social networks. Search engines have also huge amount of traffic, but right now I think the search engines, probably sometimes find other things in this kind of environment.
Martin: What is the share of search engine traffic from your visits?
Jesús: I think 4 years ago really nothing. Right now, I think it’s about 15 – 20%. It is really lowering a lot and that’s why we really focus on making good things for social network. So I think it’s becoming important. Sometimes, Twitter is a very financial social network. We have tickers, as you know hash tags. In the stock market, we have a lot of people who visit us from Twitter. And probably for more usual things like Tips for Saving, Tips for Taxes from Facebook. For more specific things also from LinkedIn.
I think every social network has their preferences. That’s why we like it very much, because we find people in that kind of network and they like us. So we have a team that only focuses on delivering our content in social networks.
Martin: With Bolsa you said that it’s somehow an investor network or trader network. Can you tell us a little bit more what people can really do there?
Jesús: Bolsa is really a specialized social network of investors. So, we don’t have… that is not a media company.
You can have a premium profile, so we try to leverage all our content or the best things and can provide it to our users, so they can make the best decision in the market.
But also we think it’s very important to leverage the intelligence of the community, of the crowd. I think that kind of network permits it that they can find investment opportunities from other users. I think when you have such a huge community, you realize that they are very good people in making investment decision, so I think what Bolsa try to do is to leverage the best ones.
Because we have some companies that are in the Spanish stock market, they want to share their result, their news. So this is a better way to communicate that kind of things to our community.
So I think companies understand that they can have a more direct contact with the investors and they permit us to have more confidence in the company.
Martin: The companies also pay to distribute this kind of information to the public market?
Jesús: They really pay for having a community in Bolsa.com, to have all different personalities and our help to use that community. It’s not really paying for publishing the content, it’s more to have all the possibilities.
Martin: It’s one package, and that’s it.
Jesús: You have narrowed a community there to have more things to contact with the network.
Martin: You said, the funny thing with Bolsa is you can follow other great investors by seeing their results. This matches very well with your third company, with this algo trading fund, which is performing quite well. Can you tell us a little bit more, how did you come you with the idea of starting this algo trading?
Jesús: Yes. First of all I had agreement with eToro because eToro it was a social community that also shares investment for stock. It really merges perfectly with our social network because they had the transaction part.
I am computer engineer, as I told you. And the last years of my career, I focused on numerical series to study statistics. That kind of knowledge, I know Serge that is one of the most famous algorithm developers in Spain. I really like to laugh with him. So we are in a team really working in developing system and trying to invest because it was one of my things that I want to do in the future.
So right now, I’m very happy with all the people that I have known from Financial Red and Bolsa.com. I also permit to have more ideas of trading. And right now we have developed in 2 years the Sersan System in the company. We have developed 4 systems right now and one of the best systems in Spain. We have a near 50% of profit the first year with real money. It was very-very funny to try to be profitable with an automatic system and we achieved it in the first year.
Martin: Let’s talk about the market for media companies in general and what trends you see in this. Like for example, what the media companies are doing right now, selling ads for eyeballs and maybe what kind of shifts you see they are doing and what your view on that would be?
Jesús: I see different things. We are in a very competitive environment in the media. Right now, not only media companies, but there are also projects like Facebook which is not really media, they all are also competing in the search engines. They are competing for the budget for ads.
So we are really in a competitive system, so that means that there are huge offers to put ad on the internet. That’s really a problem, because you sometimes see that you are in a sector like sport, for example, there are a huge amount of money in sports bets. But you see that media companies for sports magazines are dying. First of all, if this environment doesn’t change there will be no media, or the sports bets will have to create the media.
I think what right now is beginning, there are some media companies that are thinking into becoming a player in the sector in order for the people to survive in the business. One of the businesses would be the sports bet.
I think that’s what happening right now or the media for equity that’s happening, so media companies understand that they are really out of money in this sector. They are writing about that. It’s not really a sustainable environment that this kind of media so do not really have a huge opportunities. I think they are moving.
I think we are mixing a lot of things probably. And if you see media companies in the next years, we are going to develop more business out of media because even if they do not do much with media kind of revenue, business would be huge for them.
So, I think there are going to be a mix between media and business company in the sector. And I think the companies that understand better this combination will probably the next big players. Probably it will appear some big players from media in some sectors.
Martin: Okay. So basically the short story would be that the stand alone business model of media company is not sustainable and they have basically 2 choices of how to grow the company. First one would be just to be parts of other companies like Bolsa Media for equity deals or they just set up or integrate with other companies in their value chain. So maybe even seeing more M&A deals also.
Jesús: I think really what you think about what is media. You have the clients oftentimes on your website or your news. This is very important. So, even Facebook is very important because there are a lot of people wasting time in Facebook. I think media have to learn how to monetize this because there are people who waste time in their sites. I think probably it’s the most valuable thing that they can have. So, they to learn how to really monetize this.
ADVICE TO ENTREPRENEURS FROM JESÚS PÉREZ
Martin: Jesús, we are from Entrepreneurial Insights, we always want to share some insights and advice for first time entrepreneurs. What advice can you give a first time entrepreneur when he wants to start a company?
Jesús: First of all, I say that they have to have a passion in what they do because it helps them to be competitive. You have to love what you are doing, you will probably be good at that.
After that, they need to think a lot about the business model. I think, they can sometimes create things bigger and you can delay the decision of the business model. But from what I have learnt about all this process, is that sometimes if you think a little bit about the business and you find really a good business model, it can really help your company and you can be more efficient and grow faster. So the business model at the beginning is something that sometimes you discover when you have worked in your company for 2 or 3 years. If you can really think a little bit more about the business model and you can test it, it will help you a lot because after that you can be really efficient in your growth.
And the other question that I say yes that they become international. I think in internet, it’s not too difficult to be international. I think, sometimes you are in a country that is not that huge as the United States. However, you need to be international, because if you are in the United States it’s not really so important because you have a huge market. But I think in our countries you need to think globally because if not, it’ll be more difficult.
Martin: I mean you can’t defend against it if you set up your website and Google searches you, and they provide search result to people looking for something that you offer, they will come from which ever country they are living in. So if you start a company you are international.
Martin: Thank you very much, Jesús!