A brand new app called “Sway” was just added to Microsoft’s roster of Office offerings. Sway is like Medium on steroids, a canvas-esque web and mobile app to express ideas, organize content from several channels, and beautifully display your creations. Sway automatically takes care of the entire design, allowing you to focus on the content of your ideas.
According to Microsoft’s blog post on the announcement, “Sway adapts to fit the device that it’s viewed on, large or small, so your ideas always get the best treatment. A Sway is cloud native: you just drop in your content from your cloud storage, your devices or your social networks.” One of the most interesting features of Sway is the ability to add content without really leaving the app. All within Sway, you can add content from OneDrive, Facebook, Twitter, YouTube, your devices, and more channels coming soon.
The app comes with a built-in design engine to make your Sways look beautiful. “As you add more of your content, Sway continues to analyze and arrange it based on algorithms and design styles.” You don’t have to worry about image sizes either because the app crops and alters pixels to present the best visualization possible. Plus, if you do want to change things, Sway is drag-and-drop for super simple customization.
Currently, you have to join the waiting list for Sway, which you can access here. It will be exciting to see how and if users create Sways. It seems to take aspects from various existing applications and websites such as Medium, PowerPoint, Tumblr, and Slideshare, and combine them all into an impressive, new way to share your ideas and work.
Wall Street is a dangerous place for the average investor. Of course there’s the ever present prospect of losing your shirt through through bad bets, but there’s also the all too common reality of slowly bleeding oneself dry through excessive asset management and trading fees.
Three months ago, in December, SigFig addressed both of these problems with the launch of its automated investment portfolio management platform. The “set it and forget it” system costs just $ 10 per month regardless of the size of a client’s assets under management (AUM) and promises to reduce the typical client’s fees by as much as 80 percent. SigFig focuses on creating balanced portfolios constructed of low-cost exchange traded funds (ETFs )tailored to each individual’s personal risk tolerance. Just as important, it automatically rebalances each portfolio as neeeded, to adjust for changing market conditions, something typical advisors either don’t offer or charge through the roof to do.
The reaction among consumers to this new offering has been extremely positive, according to founder and CEO Mike Sha, who says that conversion rates have been 20-times what the company initially projected. (Sha declined to disclose the number of paying customers.)
One factor that likely contributes heavily to this success rate is the fact that it has taken the average user just five minutes to setup a managed account, according to the company. Users who are currently with TD Ameritrade, Schwab, Fidelity, or other do-it-yourself brokerages don’t even need to transfer their assets to a new firm, but can simply connect their existing account to SigFig and allow the company to manage the portfolio remotely.
SigFig has been building relationships with retail investors for years, primarily through its portfolio tracking tools distributed in partnership with premium publishers like Yahoo!, CNN, USA Today, and Forbes. As of December, when the asset management product launched, the company was tracking more than $ 100 billion in investment assets. That number has doubled in the last three months alone to $ 200 million, in part as the company has added partnerships with AOL and Intuit (free asset management when doing your taxes) and in part on the buzz of the asset management platform.
Assuming the above tracked assets represent 400,000 users at $ 50,000 each (which is likely larger than the average investor’s portfolio), a hypothetical 10 percent conversion rate results in 40,000 users paying $ 10 per month, or $ 4.8 million in revenue per year. Double that if the average portfolio is $ 25,000.
SigFig has raised a total of $ 17.5 million across two rounds of funding – its backers include Union Square Ventures, Bain Capital Ventures, and DCM – meaning it will need to at least add another zero to this revenue figure before its generating the kind of returns that its founders and investors covet. But the early market feedback appears nothing if not positive.
The company is attracting a wide range of investors, Sha says, with portfolios under management now ranging from a few thousand to more than $ 1 million. This is significant because it confirms that SigFig appeals to successful, and presumably sophisticated investors, not just newbies who lack access to other asset management services. The average SigFig user is approximately 40 to 45 years old, Sha says, significantly younger than the typical traditional brokerage client.
That said, SigFig’s flat-fee business model means it’s less concerned with assets under management than it is with growing its number of paying customers. To that end, the company’s partnership-based customer acquisition model is a savvy move. Whereas typical asset managers spend heavily on sales and marketing to acquire new clients, SigFig has been able to outsource much of that cost-center. There are other technology companies looking to disrupt the financial services industry, but none with the cost structure or distribution advantages that SigFig has pulled together.
“We’ve established ourselves as the biggest and best player in the partner space, so publishers turn to us first when the want portfolio tools,” Sha says
Couple this low cost of customer acquisition with removing the expense of flesh-and-blood asset managers and flashy physical office space and it’s little surprise that SigFig can dramatically undercut the industry’s standard fee of one percent of assets under management. Ten dollars per month may not seem like a lot, but when the incremental cost of adding and servicing new customers is close to zero, it begins to look a lot more attractive. And because of the transparency around pricing, it’s not unreasonable to suggest that clients will prefer the new model and, performance and other factors being equal, choose to stay around long term.
SigFig isn’t a get-rich-quick scheme and doesn’t promise its customer outsized performance. Rather, it’s focused on portfolio stability and on building a brand around simplicity, convenience, and price. In today’s environment as the average consumer grows more comfortable with technology and, in many cases, less trusting of Wall Street, it’s a message that appears to be ringing loud and clear.
“When we first started this there was a question as to whether people wanted or would accept technology-powered advisors,” Sha says. “The data is in and it shows beyond a doubt that they do. They’re voting with their wallets.”
Michael Carney has spent his career exploring the world of early stage technology as an investor and entrepreneur and has participated in building companies in multiple countries within North and South America and Asia. Ultimately, he is an enthusiast of all things shiny and electronic and is inspired by those who build businesses and regularly tackle difficult problems. You can follow Michael on Twitter @mcarney.