A startup in the finance vertical aims to democratize investment by providing a more usable interface for financial tools and perhaps even ward off future financial calamity by decentralizing control of financial markets.
Current tools, such as Yahoo! Finance, are considered intimidating, complex, and overwhelmingly boring at a time when understanding of and interest in investment are more critical than ever to global economic revitalization. Kapitall gives investment a new face, one that will be familiar to Gen X and Y users, most of whom are novices to finance but experts in social applications and online or console gaming.
We had a telephone conversation this afternoon with Kapitall rep Eben Esterhuizen. He told us that Kapitall started when a THQ/Atari video game developer wanted to build an online investing application. He joined up with a technical lead at Bloomberg, Apple’s Human Interface head Cordell Ratzlaff (the man behind OS10), and a managing director at Morgan Stanley.
In marked contrast to many current investment tools online, Kapitall’s web interface is game-like, visual, social, customizable, and intuitive. The Kapitall team created it to appeal specifically to socially connected, casual gaming, novice investors between the ages of 25 and 40. As with any social profile, an investor’s profile GUI can be customized; collaboration between users is another feature more common to the social web than financial sites.
All of Kapitall’s tools run in a web browser and require no downloads (although a desktop app would likely be a welcome addition to the suite). Kapitall is launching their site for all users in September, hopes to open their API within a few months, and is even talking about putting their tools on gaming consoles.
As far as cost is concerned, Kapitall.com will be free to all users. Premium packages will be available and are part of the the company’s monetization strategy. Much like the World of Warcraft business model, the team predicts that a “very hardcore minority will end up subsidizing the whole community.” The site will have very limited advertising but will accept partnership fees from financial advising companies such as Fidelity who wish to use Kapitall’s platform to reach their customers.
The team hope that, within the next few months, users will be able to trade securities themselves through the Kapitall site.
“We’re trying to make finance cool,” said Esterhuizen. “It sounds corny, but look at Apple. Computers were geeky, complex, and hidden. But the Apple brand brought computing to the mainstream. Hopefully, we can get the larger audience involved in the process and make investing democratic.”
Regarding the current financial crisis, Esterhuizen believes that a more democratic investment community can change our economic climate and even prevent future catastrophes. “There’s a very small group of corrupt people who hijacked Wall Street. With applications like this, we can change that.”
The Kapitall team is looking to open up their API within a year or so, as Esterhuizen said, “to put their tech into the hands of as many people as possible and remove investing from its centralized position on Wall Street.”
The question of whether “the masses” are ready for self-education and managing their own investments “is a very big philosophical question for Kapitall. Education is going to be a big part of what we do,” said Esterhuizen.
“We’re trying to move away from the culture of thinking we have at the moment. Jim Kramer’s show [Mad Money], where he makes a scene and orders people to buy stocks, is unfair and irresponsible. We’re working with networks of financial advisors to talk to people about their individual situations. We’re working on technologies to minimize that risk [of people making bad or uneducated investments].”
Kapitall’s overall mission is one of individual empowerment. “Investing is risky,” said Esterhuizen. “But if you’re educated and have adequate access to good tools, it can be a good thing.”
