Today we are joined by CEO and co-founder of Harvest, Peter Hans. Harvest connects asset management product buyers and sellers through shared expertise across a public marketplace and private networks.
Let’s find out more in today’s profile. Our questions are in bold.
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Who are you and what’s your background?
Peter Hans – Colby College ’00, BA Psychology. Vanderbilt University, ’05, MBA Finance.
After college I started at a large asset manager in NYC trading interest rate derivatives and short duration bonds. While many other traders, especially across these asset classes, had math backgrounds I found the greatest benefit by applying my interest in psychology, game theory and human behavior to trading. In short, there are a lot of very smart people on Wall Street but in order to make money and beat the market,a trader must understand the motivations and potential next moves of other market participants.
After three years I went to Vanderbilt for my MBA as I felt that I needed a core finance and accounting knowledge base – I also wanted to get out of NYC for a bit. Following business school I worked in equity capital markets for FBR, based in the DC area. In 2009 I left FBR with a small team to launch a regulatory research firm and broker-dealer, Height Securities.
It was during my time at Height that I fully realized the completely archaic communication infrastructure of the entire investment management industry. I spent an unfathomable amount of time, and money, traveling to network and speak with investors across the US and UK (and found that these investors were doing the same thing).
In 2012, knowing nothing about software development or technology, I decided that I wanted to create a scalable platform devoted to enhancing communication and efficiency across the investment industry. At the time I was more focused on increasing access to information, and the velocity of that information, but
I’ve since realized the tremendous opportunity that exists in offering those with investment products and services the opportunity to utilize content marketing in order to reach their target buyers in a very scalable, and regulatory compliant fashion.
What is your job title and what are your general responsibilities?
CEO and Co-Founder. Day–to–day activities differ depending on the current goals of the company. I have spent much of my time over the past few months on existing investor relations as well as working to close our current funding round. Beyond that I coordinate with our CTO, VP of Business Development and VP of Product in order to set the goals and direction of Harvest based on all available quantitative and qualitative data. Inherent in this process is evaluating external partnership opportunities, which are growing exponentially as we continue to scale our community and further prove the high value of our offerings.
Can you give us an overview of your business?
Harvest offers what the Street’s been waiting a long time for, a transparent, SEC and FINRA compliant way for pros and money managers to share investment ideas and brand their top stars and investment philosophies—in an open environment built for both personal investors and professionals/wealth managers.
We’re a marketplace platform for the investment management industry, meaning we help to connect buyers of financial products and services with the sellers of those products and services. We do this across a public, free to join platform (www.hvst.com) as well as via private networks, which are only accessible to those with appropriate permissions in place.
Instead of focusing on quantitative criteria that is accessible across a number of end points and services, Harvest has grown its community of buyers and sellers through crowd-sourced, high quality investment information.
As a result we have tens of thousands of buyers and sellers visiting the Harvest platform in order to access top investment perspective from the world’s best investors. Our business model focuses on high value, targeted marketing and lead generation as well as licensing our communication and investor portal technology via Harvest Private. Inherent in our platform and community is a growing an highly valuable data set, that is also provided to clients in order to help them make better decisions.
In the beginning the market reaction differed across firms and their goals. Some understood the value in a scalable platform to reach and communicate with existing and potential clients, some did not. That said, the asset management industry has a ‘snowball effect’ – no one wants to be the first to adopt a new technology, but no one wants to be last either. Over the past 18 months the reception to Harvest’s value proposition, and subsequent adoption, has been very strong, and the best part about it is that is has been proven through data and case studies.
Tell us how you are funded. (e.g. VC, bootstrap.)
We certainly have a bootstrap mentality, but we have raised institutional capital from some of the world’s top asset management firms, who also happen to be Harvest’s core user base. We will likely be closing our third round of capital in the next few weeks.
Why did you start the company?
We wanted to solve the archaic, inefficient, and expensive communication infrastructure across the investment management industry. As a result of current inefficiencies, customer acquisition costs are exceedingly high, customer retention is labor intensive and hundreds of billions spent each year by investment firms on marketing and IR in order to operate within this environment.
A more scalable, frictionless, and data driven marketplace can help to solve for these problems, reduce customer acquisition costs and marketing spend for industry, and as a result lead to reduced management fees and costs for the end consumer/buyer.
Who are your target customers? What’s your revenue model?
Our target customers are sellers of investment related products and services – wealth managers, RIAs, hedge fund managers, mutual fund sponsors, sell-side research firms, as well as investment related events, associations and conferences. We currently have over 4,000 registered financial firms on Harvest who manage well in excess of $5 trillion that include the likes of Dan Loeb to BlackRock to even the U.S. Treasury.
The Harvest platform has helped generate new clients and leads for a diverse array of firms and professionals within the investment management industry, and they have done so in less time and for less money than has ever been available to them.
As such, investment content shared on Harvest by Verified Professionals on the site outperforms the same content posted to LinkedIn by 200% – 600%; with 22.5% of Harvest users contributing to its crowd-sourced content marketplace of 60,000+ posts to date (growing at 250+/day), ranging from macro thoughts to trade ideas to white papers.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
Culture. Most would think regulation, but that’s moving in the direction of enhanced transparency and technology adoption. Now it’s really about the culture of “wall street” playing catch up with the regulation, and other industries.
Harvest is a cutting-edge platform and idea, and many SEC, CFTC and FINRA regulated firms effectively benefit from in a manner that is fully regulatory compliant. That said, there are a number firms that push back, regardless of the benefits to their business, based on “the way things have always been done,” and that is a highly destructive mentality.
What is your message for the larger players in the Finance industry?
Adapt. FinTech innovation and disruption does not have to mean displacement. The ultimate winners in FinTech will find ways to improve upon the system, not to destroy it for the sake of “disruption.”
What phone are you carrying and why?
iPhone – because iOS has done a brilliant job of locking you into their software once your family is operating with iCloud.
Where do you get your industry news from?
WSJ, CNBC, Bloomberg, Twitter…Harvest (though not for news, at least not at this point)
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
Raoul Pal – @RaoulGMI (founder of Real Vision TV, though also a brilliant investing mind)
Dave Ambrose – @daveamrose (great combo of hedge fund market and tech enthusiast)
Brian Egger – @breakingcall (forefront of social media and investing)
What’s the best FinTech product or service you’ve seen recently?
Fundrise – commercial real estate is an asset class that has typically been unavailable for AIs but Fundraise offers vetted exposure to deal flow. Most of the deals don’t offer the equity upside but it’s the best way I’ve seen to get exposure to the asset class with solid yields, especially in your local market.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
Much of FinTech right now is focused on displacement. I like to think about the difference between treating the symptoms of a disease vs treating the actual disease. In my view, the current financial architecture, both consumer and institutional, suffers from symptoms of high costs and a lack of transparency. As a result we are seeing businesses, and even industries form in order to help solve for those symptoms – think Robo-advisors or brokerage platforms with commission-free equity trading, such as RobinHood.
The real trends I see is in treating for the actual disease, which by default will eliminate the symptoms. The disease is the culture, the inefficiencies, and the friction throughout the sales and communication channels which cause excessive costs and waste. If you can cure for costs, if you can use technology to aid in efficiency in communication, then by default you can improve transparency and reduce fees through market effects.
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If you’ve any suggestions for other hot FinTech companies (startup, or established ventures) that we should be profiling, I’m all ears. Don’t hesitate to drop me a note at firstname.lastname@example.org. There’s more information on this page.