Launch HN: Alinea (YC W21) – Invest in stocks you believe in
Despite our different backgrounds, the three of us struggled with the same problem. We knew we had to invest our money to build wealth, but when we tried, we felt intimidated and lost. We had so many questions - What kind of stocks do we invest in? Where do we find accurate information? And quickly realized we’re not alone, our friends and other people were also experiencing the same problem.
So in early 2020 we started working on a new approach to investing. We wanted to build an experience without the hassle and complexity of charts and financial jargon. We also wanted to move away from a gamified experience which tends to cause stress and anxiety around investing - so we’ve gone as far as removing red and green from the app entirely.
There’s a lot of misinformation and confusion around how to start investing in stocks so we guide our users through the process. First, we match you to stocks based on your interests so you can better understand a company. Second, we simplify hard to find research into bite-sized formats, so you can evaluate if it's a good investment. Lastly, we show you the impact of your investment on our environment, society, and workplace. We do the homework, so you can make an informed decision.
Underneath the hood, we’re using Drivewealth for stock prices and executing trades and extract data from ISS reports to offer visibility on a companies’ environmental, social and workplace impact scores. We sort through SEC filings and earnings reports to consolidate and synthesize information. We’ve custom built UI in native swift in“swipeable cards” so the information is easy and quick to digest.
In the past months, we’ve seen the power of retail investors who want more choices than just putting their money in ETFs, we provide the tools for them to make informed stock investments. We would love to hear your thoughts and feedback on what we’re building!
138 comments
[ 0.41 ms ] story [ 3469 ms ] threadWhile they are in different industries, I owned a derivatives trading group for years, run a tech startup (Tock), and am getting a bunch of emails from folks thinking I started this or am affiliated in some way.
So... while I dislike conflict, I really don't like be associated with something I have no control over. There will be an incoming email shortly.
https://web.archive.org/web/20190407042116/https://www.aline...
(good to see you here, Nick. big fan!)
https://www.joincolossus.com/episodes/20135760/kokonas-know-...
Edit: And fonts. Modern edgy logo font and the website complimentary font is a bit... Crayola. Not dogging on you all, I'm sure having this be a focus of your launch isn't fun for all your hard work. It's a really neat idea.
To the founders: ignore their email and consult your lawyer.
Trademark infringement generally requires an element of consumer brand confusion.
There is no way USPTO will see a restaurant and a stock trading app as likely to cause consumer confusion, as they are in completely different industries with absolutely no overlap. Sharing the same name doesn’t matter much given that fact.
Also, it's always bad form to give out legal advice on the internet.
Consumer confusion within a specific industry. Like a food company using their name.
If this were a food delivery startup, there would be an issue. Since it's an stock trading app, very few trademark attorneys would see an issue with it.
And of course, consult your attorney, as mentioned in the original comment.
You're making the assumption the email is a legal threat of some sort rather than an attempt to resolve the issue at hand.
link: https://alinea-invest.com/
ESG investing is investing. There is no difference. ISS reports or whatever ESG ranking de jure actually hinders that process because it tries to quantify and simplify something that is inherently complex (and btw, ISS do this with their other products, their proxy service exists because ETFs don't want to actually do hard work and think about how they should vote their shares...it is anti-capitalism, rewarding sloth). It is like China's "social score" system...it is identical.
I worked in this area, I met many fund managers (and worked in equity research myself). When people talk about fund managers not doing ESG work, that is because some fund managers just don't bother doing any research at all. ESG was a critical component of investing before the term ESG existed, it isn't possible to value a company without considering the value that company generates for customers, workers, suppliers, the communities in which they operate.
Also, one of the key points on this actual subject is that impact is ambigious. There are competing notions of impact and good. The number of companies that openly embrace criminality is, thankfully, quite small. In every other case, you have a company that is providing a service, someone else pays for it and you have to make a judgement, there is no magic formula...often, these conclusions are counter-intuitive. As an example, bookies...gambling is awful, you hear lots of poor people do it and waste money...where I am, we have public health, and the only people funding gambling addiction are bookies. In countries where gambling is illegal, there is no funding, and the addiction isn't recognised or treated. Sometimes you have a gambling govt monopoly, like HK, which drives people into illegal forms of gambling. So it is unclear that impact is negative (the issue is that gambling addiction actually exists, and ppl will gamble whether it is illegal or not) without actually doing research, beyond a simple: gambling = work of Satan (btw, this applies generally...the growth in ESG investing is correlated to a growth in moral Puritanism).
Honestly, it is a little unfortunate that people have gone so deep into ETFs and ESG ETFs...active funds do this work, they won't necessarily align with your own system of ethics but it is a totally and complete fiction that investors do not consider impact beyond profits, and that some ESG/quant approach is the solution. I have never come across a manager who doesn't consider impact when doing research. And any quant approach I have seen is totally and completely deficient (there is no incentive to do the work properly) if you actually care about values.
"Off topic: ... sign-up pages, newsletters, lists, and other reading material. Those can't be tried out, so can't be Show HNs. Make a regular submission instead."
https://news.ycombinator.com/showhn.html
This looks like an awesome product, but kind of annoying to see a "Launch" but it's just a waitlist. Why not wait until Monday?
Besides, tons of apps and services launch via testflight, gated betas/waitlist-then-interview. Superhuman, dispo, and clubhouse all did that strategy.
> Besides, tons of apps and services launch via [insert shitty "growth hacking" launch strategies]
Yeah, tons of them do but let's avoid that here if we're trying to keep the level a bit higher than just fad-of-the-day applications.
It's a good question that has been on my mind too. I'm going to revisit the Launch HN process once the W21 stampede settles down.
You guys have probably noticed that we've been stacking two Launch HNs per day for a while now. This is because of how big the W21 batch is. Demand for Launch HNs is growing as YC grows; meanwhile frontpage supply is strictly limited. Not sure yet what to do, but the 'price' is going to have to go up somehow!
This subthread was at the top of the page. When a comment like this appears, it means that many other readers have the same question, and if it's upvoted to the top of the thread, that's even clearer.
Thanks!
Obviously 99% of the work in buidling such a system is just getting access to all the data and setting up the ETL pipelines, and that alone is value worth paying for.
I'm also a bit confused by this part:
We wanted to build an experience without the hassle and complexity of charts and financial jargon.
Yes, there are some funny terms like EBITDA out there, but ultimately this is all just part of doing due diligence. If you want to make a medium-term or long-term investment (i.e. you're not gambling on short-term options), you gotta look at that stuff.
And if I don't want to do it myself, I can log onto Schwab, Ameritrade, Fidelity, etc. and get 5-10 analyst reports on pretty much any ticker, including an "in-house" grade (e.g. "this stock has an overall D rating") that, theoretically, is all I need to know for making that kind of investment. I'm curious (not doubtful, just curious) what you offer that's better than this.
At the end of the day, the fact is that securities analysis and investing savvy is a sophisticated skill requiring many years of study before any kind of +ev outcome can be expected.
In a way, this is one of the biggest reasons I think the move from private pensions to 401ks and the like has been a gigantic disaster.
I mean, I remember working at Google and a dozen or so of us on my team would go through some fairly deep analyses and discussions regarding 401k allocations, mega-backdoor contributions, tax implications of same, HSAs, HD healthcare plans, etc.
My brother's a carpenter. My dad works in a factory.
They are both forced to make these same decisions, except with basically zero background whatsoever in any kind of financial education. They don't know the very basics about the fees their funds are taking, they aren't too interested in figuring the exact tax-efficient pathway to retirement.
And why the hell should they be?
Forcing commoners into market participation was a mistake.
Your app is well-intentioned. Seems pretty great, to be quite honest.
But you're training your users to become used to coyote-behaviour (that is, Hey Investing Can Be Quite Simple!), whereas we should train all regular existing "market-participants": Anybody who wants to get you to invest directly in markets, whether it's your RRSP organizer, your 401k, whatever, they in general are not operating with your best interests in mind.
401ks and the like were a huge boon to wallstreet and huge hit on the working class. WallStreet basically forced every Tom, Dick, and Harry into their arena. Guess who's gonna win?
It's definitely a fine balance for a product like this. You want to make investing feel "easy" but not so easy that it seems like all it takes to make money is to read a few bite-sized tidbits about a company, thereby increasing the risk-taking behavior.
Market making firms have done really well due to wsb and the increase of retail volumes but it's unclear to me that hedge funds have benefited in any material way.
https://www.wsj.com/articles/this-hedge-fund-made-700-millio...
https://www.washingtonpost.com/business/2021/02/08/gamestop-...
https://www.reuters.com/article/us-amc-ent-holdg-silver-lake...
> EBITDA is important and it's a hard concept to understand for those who aren't familiar with finance
Is there any proof that the later group has better outcomes ?
Even if you understand all the terms, aren't you ultimately just investing based on gut feeling since all the observable information has already been factored into the purchase price anyways.
Why wouldn't it already be priced into the current stock price?
I don't necessarily agree. From Robinhood's most owned stocks by 02/25/21[0], you can 'maybe' argue that 2 out of them are 'meme' stocks. This is either an indications that investors know what they own or they follow the crowds (AAPL, AMZN, DIS, etc). It is easy to make conclusions based on media articles, but overall Robinhood investor is definitely not a meme investors
1. Apple 2. Tesla 3. AMC 4. Sundial Growers 5. Ford 6. General Electric 7. NIO 8. Microsoft 9. Walt Disney 10. Amazon
[0] https://www.nasdaq.com/articles/the-top-50-robinhood-stocks-...
I disagree. The acronym is surely a mouthful, but you can summarize EBITDA as "approximately the same as cash flow generated by the company before paying any taxes, interest on loans or making capital investments like building a new plant or buying manufacturing equipment" which should be very intuitive for someone to think through
If you're not looking at statements, all I'm saying is "EBITDA is the cash generated (i.e. the profit) before taxes or interest on loans"
Companies themselves struggle to even understand their own balance sheet.
There are plenty of services which offer aggregated data about balance sheets with typical market formulas.
Basically there's a huge industry of sell side analysts that often create huge reports about a company, or something that is going wrong etc. It isn't really possible to distill all this information in an 'bite-sized format', as there are many variables and even some outside factors like macroeconomics and so on. Sometimes, even something that isn't shown Today in the balance sheet end up making a company over time shrink until it's gone.
Wouldn't this actually create the fake perception that they are well informed before getting into a business?
What if I sign up and end up seeing that my market performance by using the Apps advice is trash? What if I end up investing in a company full of intangibles that find out that those intangibles are worth nothing?
If you even go to a hedge fund you might find out that most of the analysts suck, and they study their whole life for it and often have degrees in very respectable universities, while breathing all the 'financial jargons' you wrote. So, can an amateur really read a few sentences and make good investments and at least beat an index?
All this without reading a book about investment or understanding a balance sheet. :-)
Why would it be necessary for them to prove their customers beat the S&P but not necessary for Schwab or TDA or Robinhood?
Is that the goal of ESG filtering? My understanding is that people doing that accept potentially lower returns in exchange for greater moral alignment.
Entrepreneurs should always be open to criticism, distil it and take what they consider useful, even if it doesn't come in a constructive form.
This company is exactly what I need. I can research myself. If adults/professionals in this world can't be trusted to do things right, then you gotta do it yourself.
I don't care. I need to put my money where my mouth is. Wealth doesn't matter if we have no Earth to live in. I don't want to live in Mars.
increasingly people invest based on the story and the ebb and flow of social media. does the balance sheet play into this? it doesn't appear so...
Also, you've mentioned "value based investing" in a comment reply here.
Is this the same thing as "value investing"? Or is it something new that you're introducing?
While I kind of look down at value, I think you can outperform with it but you need to look a lot deeper than simple ratios.
The groups owner is the CEO of Tock, but I don't think that means that Alinea itself (and its name) is heavily invested in tech.
"Side by side with the wealth were the pockets of poverty. Greater numbers of people remained on the outside of the easy money, looking in but not able to enter. The crime rate soared … demoralization … crept over the common people … from watching their own precarious positions slip while others grew so conspicuously rich … Almost any kind of business could make money … The boom suspended the normal processes of natural selection … Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities … Everyone from the elevator operator up was playing the market."
Dying of Money: Lessons of the Great German and American Inflations
Meh
Part of my interest in this is that I'm sitting on a bunch of company data already - both public and private companies. I'm the founder BigPicture, a B2B sales tech startup, where we had to acquire similar data sets to power our product.
Basically, we got sick of paying Clearbit for the data, so we ended up building our own thing. Here's our API docs that shows a sample of what we have: https://bigpicture.io/docs/enrichment/company/
Getting this data is a pain in the ass, so if you're interested, I may be open to partnering in some capacity. My email is michael [at] bigpicture.io
> We also wanted to move away from a gamified experience which tends to cause stress and anxiety around investing - so we’ve gone as far as removing red and green from the app entirely
If you're taking material personal financial losses and you're not feeling stressed, I'd say there's a problem
However, there's an easy way for people to overcome this - buying an index fund (Vanguard is very cheap), which lets you capture (almost) the S&P's performance.
I disagree. Markets tend to swing around but trend upwards on average. If you are emotionally tied to the big red or green number when you see when you open up your brokerage app, you're bound to make bad, emotionally-based decisions.
(Edit: I guess our disagreement might come down to the definition of "material". In the past few days of market turbulence I've had days where I was up or down by amounts that I would be devastated to have “fall out of my pocket”, but that I can shrug off because I know I can't time the market and I'm better off not trying.)
On some level my concern is that this platform will get people interested in making highly undiversified portfolios, allow them to lose their shirt, and not give an indication that their current strategy is failing and that they should STOP putting more money in.