How to go from one investor to two investors
How to go from one investor to two investors: Video automatically transcribed by Sonix
How to go from one investor to two investors: this mp4 video file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Ali Saif:
Private label and check out. What are we talking about as regards private label and check out?
Juan Colón:
Ok, let's let's go. Because this is related to the previous one. About the exchange, the role of the exchange.
Ali Saif:
We're recording, you're live.
Juan Colón:
OK, so, Ali, we've we've talked about about how far, so far, Darwinex powers, the most efficient, really, possible, asset management value chain. By having you trade a brokerage account and then supply through a broker, then I enter a private intellectual property for payment agreement with an FCA regulated asset manager, which then packages up your strategy as an investable asset and offers that up to now in an open exchange, which is survival of the fittest, where everybody can invest in anyone else.
Juan Colón:
So and we've also been talking about the fact that the hardest leap to perform is to go from zero investors to one investor. That's kind of one mega jump in the jump from behaving like a trader who doesn't think of return of capital to a manager who first and foremost goes for return of capital and doesn't seek return on capital if it's at the expense of the return of capital. That's that's one leap.
Juan Colón:
And then what's the next step in your trader journey? And I'm not talking about the performance. The performance always has to be there because it's conditions sine qua non. OK, but the next bid is how do you go from obviously zero to one investor? Then it's gonna take a couple of years before you get to be investable. And then comes the next quantum leap, which is how to go from one investor, which is yourself to two investors, knowing that as more and more people pile in the marginal investor should be easier because there's already... they're not going to look like fools. You know, they're not already the first way that they'll be following another herd.
Juan Colón:
And, you know, so many people cannot be wrong. And this ties into an investor manager psychology in the sense that what we've seen over time is that it takes time to crew the first half a million of AuM from from portfolio managers and the platform. And then at some point, you sort of become meta popular in the sense that you are popular because you were popular and then you become popular. Right.
Ali Saif:
So it's kind of like a bit like in exponential evolution. It goes exponential. Provided the performance ticks. Right.
Juan Colón:
But we're now thinking of how to ease that burden from zero to one and one to two. And Darwinia 1.0 was about going first and being the first seed investor in backing traders or enticing traders into behaving like managers. That's that's Darwinia one point zero. That's the 30 million, six month commitment allocation that we do now. That allocation we can afford to do because everybody who wants that piece of that allocation is going to pay us brokerage fees so we can basically subsidize the fact that we don't make any money on that, because that's not the purpose. By actually enticing our customer base to do the quantum, like the first quantum leap. Which is how to go from zero to one investor.
Juan Colón:
Now, the second quantum leap is from one to two and the question is, and a lot of people have said Darwinex has failed in their job because they have not managed to bring me investor AuM.
Juan Colón:
This comes from guys who haven't even done the leap from going from zero to one. OK, so that's the other thing.
Juan Colón:
Ok. But so. So and here comes the question is what is the easiest way to tackle that problem. And what's hit on us is that it's a question of trust. And the only way we can breach that is by empowering the people who want this the most, which is each and every one of the individual Darwin managers to seek people who trust them the most. OK. And that's the reason why we're now working on, like self prescription or like the tools whereby managers can attract third party investment and by carrying out distribution activities. OK. And we've covered the legalities of this in a previous video. And I really encourage everybody to check that out as the CEO of an FCA regulated asset manager. But I'm also talking about as an entrepreneur advising another entrepreneur. And the my advice is. And I'm talking now as a portfolio manager. I'm going to be awfully more inclined to trust Ali if Ali first, first of all, has a lot of personal skin in the game of his own pocket in his strategy. And another layer of trust this is going to be if I see that Ali has devoted time to acquiring an additional set of investors from his innermost circle of trust.
Juan Colón:
Because when that happens, I know that Ali really takes this very, very seriously and he's going to pull through all the difficulties that are coming their way.
Juan Colón:
So I'm thinking the sequence of attracting investor capital is first is zero to one. Stop being a trader. And I've defined what a trader means for that. You've got to go to the trading assets, no question about it. But you're not going to treat them like a trader. You got to treat them like a manager with, you know, return of capital first and foremost imprinted here. That's kind of step one that is going to take you depending on your time and your commitment, a long time to get to the point where your performance is worthy of your own capital and you'll double down with your own capital. So much so that at some point you feel confident enough to think "It is a waste of my time and investors time that they're investing in inferior investment opportunities. I should inform them that I am I think I am a worthy investment opportunity" and start attracting, you know, that first, second, third, fourth, fifth investment layer that gets you to something which is still not by way of business. We're going to keep this well within that "by way of business" thing.
Juan Colón:
This is still friends and family. I mean, no one can accuse you of being an unregulated producer of muffins if you're giving muffins to your neighbor. Right. So at some point, you have to meet health and safety regulations. But there's a minimum like a lower threshold under which you're still in the personal friends and family realm. OK. So we're talking about within that. So within that realm, you have to learn to defend for yourself, because, by the way, the lessons you learn in pitching to the closest people who will be the only ones to tell you the stuff that you don't want to hear are the kind of lessons that you have to internalize before you can.. Once this becomes by way of business, we have to make you an appointed representative for Darwinex or you seek your own asset management license, which is not that expensive if you've got the Darwinex stack in front of you at that point, then you will go into the regulated activity of promoting investment activities, but you will have a revenue stream without cost to go with it. And that's when you could take that leap from, you know, your existing job to making this by way of business.
Juan Colón:
But I suspect the legality is in many ways, at least with Darwinex, is just your inner fear of "I just don't have the balls to go out and do it".
Ali Saif:
Now, this is probably one of the most brilliant answers to this question you've given in all the series we've done. I think that was crisp. This is precise. Yeah.
Juan Colón:
So I guess the other thing is, you know. But before you blame Darwinex, you know, don't ask... Ask yourself, you know, don't ask what Darwinex can do for you, ask what you can do for Darwinex.
Ali Saif:
No, no. Absolutely. Ask what? Yeah, absolutely. What can you do for Darwinex to make this journey.
Juan Colón:
You're asking me?
Ali Saif:
No, no, no. I'm saying. I was just heading to what you were saying.
Juan Colón:
If you ask me, I mean, I think this is a question I'd like... That's the other thing...
Juan Colón:
Darwinex is not mine. What gets me out of bed? It's you know, there's a whole lot of shareholders. There's 50 employees and there's several thousand customers. And I'm just here, you know, I'm here like I'm the first... I'm actually the second fool. I encourage everybody to watch... there's a guy called Derek Sivers and he's got a very famous TED Talk, which goes for three minutes, which goes how to start a movement in under three minutes. And basically, there's a lone nut. And then there's the second... the first fool. And you're listening to the first fool. OK. So that's how you start a movement. And it's down to you to choose whether you further it or you don't. But, you know, we all stand to benefit if this grows. But the beauty in it is that we all put our best. It's going to get better for everybody because there are network effects. The better the managers, the more investor AuM, the more investor AuM, the bigger the trust, the better the managers.
Juan Colón:
And indeed, in the end, if we all succeed, this will all just be about your merit as a manager and nothing else. Not if you're born to Ivy League credentials. Not if you can bullshit people very well. Not if you're a crook. You know, it's just Do you have what it takes to thrive in the markets?
Ali Saif:
Brilliant, thank you.
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