An interview with Howard Lindzon of StockTwits about the role of industry specific social networks and the growth of StockTwits.
“The first two people I met on the internet that weren’t naked was Brad Feld, who quickly got naked, and Fred Wilson. I had searched for ‘term sheet.’” Howard Lindzon can’t even finish his second sentence before the audience erupts in laughter. Inspired largely by the earliest days of blogging and Twitter, Howard believes that social data can be used to target niche markets on a very high level. After tweeting about his random locations in the early days of Twitter, it occurred to him that the product he wanted, a Twitter-like channel for stock information, didn’t exist yet, so StockTwits was born.
Howard believes anyone savvy with information can launch a data-driven vertical that makes business sense, although he does attribute much of StockTwits’ success to the fact that personal finance happens in real-time offline too. Social data weaves into the broader picture after you build trust with your customers and readers. Howard talks about the poor timing of launching StockTwits during the crash in 2008 and credits its lasting success to reliably consistent data. No matter how good the curation, the content has to be trustworthy. Pulling up a StockTwits slide that demonstrates price and volume of a stock, Howard can identify a commodity. Then StockTwits builds a trusted graph over the data to reflect macro-sense information. Any vertical market’s risk is getting kicked off by the next great success story because the curator of the current hot product can’t adapt to customer needs.
The way companies release their earnings has also changed. In 2012, an audience reads its social streams before it ever sees a company’s website or version of events. “The banks don’t want the rules to go away but they already are,” says Howard. “There are no rules so you just have to dodge bullets. Just because everyone has the potential to listen to you doesn’t mean they will. We will have to learn how to live within the greatness of these massive platforms.”
The master curation aspect of social networks is what interests Howard. People and ideas have a desire to be discovered and they will continue to inundate various channels– Facebook, Twitter, Pinterest, and other places. That said, it is only those with moxie and skills to survive in that niche that will float to the top. ”Twitter is a blank canvas for you to be hateful, or intelligent, or funny,” Howard says. He believes simplicity can pave the way to success but personally still wants to compartmentalize his life. This means he keeps his StockTwits activity mostly out of his Twitter stream. Social leverage, when used properly, is powerful. Howard thinks the categories most ripe for the vertical market are sports and humor. ”You don’t have to build billion dollar companies,” he reassures us, referring to industry-focused social networks. “Trust is what matters.”
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