Monitor110 and Me - A Big Week
Let me start by saying that Information Arbitrage is my personal blog. I write about what interests me, specifically those things that are “burning a hole in my head” that just need to find a way to get out. I have found tremendous freedom, satisfaction and comraderie in blogging - I can’t believe that it has only been a little more than two months! Thanks to all my readers, commenters and those who have reached out to me personally. I can’t tell you how much I appreciate your becoming a part of the online dialogue that has, in many cases, become an offline dialogue due to shared interests and ideas for collaboration. Whether you have agreed with me or not is not the point; it is your engagement and passion that matters. You all rock.
I do other things besides blog, however. I do selective angel investing both individually and with my partner, Jeff Stewart, through Geometric Group. I also invest in hedge funds. But principally, beyond being a devoted husband, father and friend, I am President and Chief Operating Officer of Monitor110, Inc. This is a role I love and the passion I chose to pursue after leaving Wall Street. It has been a magical 18 months, working with my partner Jeff to build the team, the technology, and the platform to make our shared vision of “Helping Institutional Investors turn Internet information into alpha generation” a reality. We recently came out of “stealth” mode, announcing our financing partners in a press release a few weeks ago. Reflecting on all that has happened since Jeff and I met at the beginning of 2005, I have neither felt so fortunate in my business career nor been so proud to be part of such an amazing group of people. Smart, dedicated, multi-dimensional, and, most importantly, fiercely passionate about our shared vision. In my spirit of blogging, e.g., the things burning a hole in my head, I feel compelled to discuss a little bit of what went on this week with Monitor110.
For starters, our company was discussed on the Front Page of last Thursday’s Financial Times, as well as being featured in a detailed write-up that same day in TechCrunch. The FT story actually hit the online edition late Wednesday night, and was quickly picked up by Drudge, Techmeme and many top sites during Wednesday evening and into Thursday. Suffice it to say, this is pretty dizzying stuff. The number of hits on both the Monitor110 website as well as my blog was, at least for us, quite impressive. My blog also got some play around this same time because of comments I had made regarding the Amaranth debacle, which were ultimately linked to by respected finance bloggers such as Trader Mike and Howard Lindzon (both of whom also linked to the FT story about Monitor110), as well as being carried on both Reuters and NPR. I have to say thanks to all of those who reached out to me in the wake of all this exciting news. The well-wishers and excited friends from the past, as well as new friends from the blogger and technology communities were awesome to behold. Whew! What a week…
So a little bit about Monitor110. As some of you know, Monitor110 is a company that is working to address some of the passions and possibilities I have been yearning for; namely, a tool for helping institutional investors access, analyze and monetize information from the internet, as a powerful extension of what they are getting from their principal news and market data portal (i.e., Bloomberg, Reuters, and Thomson). Why have we done this? Our fervent belief is that the internet is the next great data set to be monitored, mined and monetized, as has been the case with ticker plant data and what I’ll call “Tier 1” news data. Reuters ruled the day in the late 19th/early 20th centuries by leveraging technology - undersea cables (and before that, carrier pigeons) - to transmit news across the globe. This gave them a powerful advantage that was cemented over decades. Bloomberg came along in the early 1980s by giving traders (initially fixed income traders) access to data and tools - utilizing client server technology - that were previously unavailable. They have created one of the most powerful information services empires of all time. We think the opportunity presented by the internet - by leveraging the latest in text processing, signal intercept, machine learning, memory and storage technologies - has the opportunity to be the next great wave in the Information Revolution. And the power of these technologies can and will be harnessed for the institutional investor, and Monitor110 expects to be among the vanguard of this revolution.
Let me say upfront - we’ve bitten off a lot. As we all know, information from the ever-growing body of the internet comes in a variety of forms and from a variety of sources. These sources can range from Nobel Laureates to stock spammers, from accomplished scientists to shills, from thought-leaders to kids discussing Pokemon. This is why simply having a “fat pipe” is a necessary but insufficient criterion for delivering a useful and powerful tool for institutional investors (or anyone else for that matter). Our clients need data, they need it fast and they need the stuff they’re interested in and for it to be easily discoverable. Ok, so how does this happen?
Clients need data. Right. We have focused our efforts on what we call the “dynamic” portion of the internet - those places where content changes on a regular basis. This includes blogs, company websites, Government sites, regulatory sites, union sites and alternative news sites, among many others. So this data set, while a fraction of the size of the Google archive (which amounts to billions of static web pages), is currenly in the tens of millions of sites and pages, and is expected to reach 100 million by the end of next year.
They need it fast. For institutional investors it is all about real-time. So, what you need is the intersection of a ticker plant with the internet. This requires pretty slick architecture together with massive processing power. Check. We’ve got that.
They need the stuff they’re interested in and for it to be easily discoverable. Whoa. Here’s where it gets really hairy. The stuff they’re interested in…Hmm…That sounds an awful bit like, what’s that called, relevance. So, as each piece of text flows through the system, it is given a score based upon its relevance to the query (which is generally either a company or an investment theme our client is interested in). Ok, check. But, as mentioned previously, how do I know that the piece of information in question isn’t from a spammer, a fraudster or a charlatan of some stripe or variety? I know there is a word for that, what is it….Right - reputation. So, by using proprietary algorithms to analyze the reputation of the site from which the text is derived the Monitor110 system can help the client decide which of the relevant items it wants to analyze. So, we put relevance and reputation in the control of our clients, giving the them the ability to either shrink or expand the data set based upon the types of data they are looking for and the nature of the online dialogue taking place in a given company or investment theme.
There is one key thing I have neglected to mention. When building systems to extract meaning from data there is one thing above all others that can help increase the value of the system’s output. What is that thing? I’ll tell you - context. What this really means is domain knowledge, or, in our case, using the language, structure, and taxonomy of finance and investment to train our systems (read: persistent vertical search tool for investment) to assign greater weight to certain types of text. When you do a search in Google, does it know you are an investor looking for investment-related documents? No. As an investor, do you particularly care what the most popular return to a Google search is or do you just want to find what it is you want to find? And, when setting up a persistent search (one that gives real-time notification when relevant documents are identified), are you worried about spam clogging your alerts, or is such a document scored as being low in reputation and, therefore, to be ignored or completely filtered out?
Long story short, we believe that targeted vertical search for areas like finance and investment represent the state-of-the-art and requires the intersection of leading-edge technology and domain expertise. These are the skills resident within the Monitor110 team. Helping institutional investors make money by being on the left hand side of the New Information Dissemination Cycle - this is what we are all about. It’s not about being afraid of the crap that we all know is out there - its about developing the tools to identify the good stuff, quickly, and making it readily discoverable for our clients. We are still in beta. But we’re almost there. It’s getting really, really exciting.
Stay posted for some recent examples of our tool in action. It’s pretty cool.
