If there was one thing Andy Swan knew as a young law student at Boston University, it was that he hated law. What he really wanted to do was something in the world of investing.
So in 2000, he dropped out of law school, joined his brother and former Bellarmine University roommate Landon Swan, and they started their first online financial tech portal. Two successful startups and two corporate sales later, the pair are now on their third financial tech education company, Likefolio.
Likefolio is an online service that helps users invest in companies that they and their connected networks “like.” The tool searches users’ social media activity, also that of their online friends and their networks, mining data to find the companies they are talking about most. It provides stock performance charts of those companies to users, gathers press reports and general social media sentiment about popular companies, and connects users to additional financial research resources.
“It was a no-brainer, really,” Andy Swan said. “A lot of brokerages sell (their services) well to 55-year-olds who are close to retirement. But they had a hard time reaching out to investors under 35. It only made sense to turn to social media, which tells us so much about what companies young investors are connected with in real life. It allows them to feel more confident, because they understand what they are investing in.”
The company has three employees in its Louisville main offices and a small staff in Argentina. Although TD Ameritrade acquired Likefolio in 2014, the Swan brothers still operate the company and are poised to grow it even more.
Andy Swan handles marketing, product development, media appearances and his popular financial blog andyswan.com/tumblr. Landon handles back office operations, coding and content creation.
Andy Swan said the strength of Likefolio is its versatility, especially the multiple ways their product is available to users. Individual memberships in Likefolio are free, and anyone can join. For TD Ameritrade customers, Likefolio services are integrated with their platform, with the ability to fully access millions of company mentions in social media.
A strength of their product, the Swans believe, is in how Likefolio’s components are able to smoothly interact with each other and easily be used by clients – the programming nuts and bolts known as an application program interface.
“Once we realized the main value of our API, especially for the TD Ameritrade audience, things really started to grow,” Landon Swan said. “By tapping into Twitter, we can read consumer confidence and be a leading indicator of where the market is going to go. We’re basically polling 20 percent of America every day: That’s how many people use Twitter. We are able to search millions of mentions and pull together information in a way that investors can use.”
The Likefolio platform is also available as an app in the Android, iOS and Google app stores. The free app offers many of the same functionalities of the web-based version, and is also free for any individual investor.
They began as boys
Financial education began early in the Swan family, with their father allowing them to invest small amounts of their own money, and plotting out investment performance on graph paper.
“My father bought my brother some Cisco stock as a present when he was 15 or 16, and it just went crazy in valuation because it was the ’90s (when the Internet first was building out). That really got us interested,” Landon Swan recalled. “By the time we got to college, we got good at trading penny stocks, even though they are pretty volatile. Then, we graduated to more traditional stocks.”
With Internet access by then the norm, people were just beginning to trade online; and day trading became a much more plausible profession.
“We were on a bunch of investing chat rooms at the time, and our friends started to ask us if they could pay us to show them what trades we were making,” Landon said.
The request spawned their first company in 2000, DayTrade Team, a non-stop video streaming broadcast featuring Andy first, then their employee Nick Fenton, narrating what was happening minute-by-minute in the market. With a non-stop camera on his computer screen, they were tuned to Think or Swim, the world’s largest trading platform for active traders. Users could then split their screen with their own investing platform to make their own quick trades. Day traders loved the new service, and soon they had over 1,000 subscribers each paying $1,200 a year for the privilege.
They successfully ran the company until 2007, selling it to a private company in Phoenix, which they declined to name.
Not content to rest on their earnings, the brothers didn’t stop there. They created another online financial services company in 2007 called MyTrade, which the two describe as the next logical step in streaming and aggregating financial information. They created an exclusive Twitter stream for active investors, who would share information about their complex derivative trades as they made them, sharing market intelligence and strategies with each other.
This proved to be so popular that the company was sold less than one year later to the Think or Swim division of TD Ameritrade, which allowed the company to scale up even more quickly.
When they sold their second company, the Swans thought, what’s the next logical way to educate investors? The answer was social media affiliations, Landon said, and that’s how they ended up with the idea for Likefolio, one of their most successful companies yet.
Looking to the future, they are working on a mobile trading option that will allow TD Ameritrade customers to buy and sell stocks quickly from their smartphones. And, as they build out more sophisticated ways to parse the data in their system, they hope to sell more detailed and customized programs for institutional investment companies around the world.
They plan to do it all with Louisville as the company’s home base.
“Kentucky is a great place to live, and it never crossed our minds to build our company anywhere else,” Andy Swan said. “We are lucky to have a very loyal employee base that has been with us from the beginning, and we have the right tools to grow our global reach.”