TTAG product predicts market trends

by The City Wire staff ([email protected]) 128 views 

Quarterly earnings reports are a nice tool for investors, as are other financial forecasts with data pulled from elsewhere. But upon examining these tools, it's difficult to walk away with any concrete, personal-level, real-time understanding of why one company has done well or is going to do well, and why another isn't.

What if there existed a service that pulled real-time data from in-the-moment, readily available social media — the stuff that YOU say — and used the data to forecast earnings reports better and more accurately than the suits on Wall Street?

Meet Ryan Frazier, co-founder and CEO of TTAGG, a Fayetteville-based start-up that does exactly that.

Through a series of private and complex algorithms, TTAGG uses social media to track trends in purchases to provide investors with real-time insight into how specific companies are doing. With the real-time data, investors don't have to wait for quarterly reports.

"We started this because the world has gone real-time, but the information and data on these publicly traded companies hasn't," Frazier said. "With the wealth of data about these companies online, we didn't think investors should have to rely on or be satisfied obtaining progress reports only every quarter. … And it works."

Frazier and his business partners, Kenny Cason and Britt Cagnina, run the business out of their home just off the campus of the University of Arkansas, where they all obtained their undergraduate degrees. They've raised about $150,000 in investor money, Frazier said. All of the money is from Arkansas investors. TTAGG's customers consist of one financial institution and a number of private investors, and the company is "almost" to the point of being cash-positive, Frazier said.

Jeff Amerine, technology licensing offer and adjunct instructor of entrepreneurship at the University of Arkansas, is one of TTAGG's investors and one of Frazier's former professors. He said he was drawn to the project partially because of his experience with Frazier as a student, but also by the striking potential of the system.

"Everybody that's seen it has felt like it's really strong and could be a really useful tool to people who are trading frequently and want something that's really objective, but uses a large amount of data that's hard for an individual to synthesize," Amerine said.

When Frazier was in junior high school, his uncle, an investor, challenged him to observe the playground at school for trends in toys or apparel, and then report back with information about what was popular. That got him started in the observational research portion of investing.

Years later just before Christmas, when trying to decide on another company to invest in, Frazier decided to manually sift through social media data to decide what apparel company was going to be hot. He settled on Urban Outfitters. Two weeks later, the company's reported earnings were up 14%.

"I kept thinking, 'Of course this isn't going to keep working,'" Frazier said. "But it did. That's when I put a team together and we went at it full-time."

Frazier said the company remains in its beta phase, partially because he has a new goal for the coming year. In addition to marketing toward individual investors, he and his business partners want to begin marketing TTAGG to retailers in hopes of providing them with insight about what the public is saying about their company.

"Retail is a space you can just imagine how valuable this information can be," Amerine said. "If someone has a big product launch or they need to know how something is selling and why in real time, this is a way of aggregating a bunch of data that's really difficult to aggregate. It enables you to come to some reasonable conclusions with a very high degree of confidence."

The company's website offers more information about what individual users can expect. Users get basic access to the site — which includes market data, company information and news — for free.

For $29.98 per month, users gain access to TTAGG Pro and the company's entire suite of social data tools and real-time alerts. The site also has an in-depth, user-friendly walk-through explaining what the product is, how it works and how to use it.

The company doesn't disclose all of the sources that make up its social data or the algorithms they use to aggregate it, but Frazier does admit there's still plenty of work to be done and plenty of long nights ahead.

Frazier, Cason and Cagnina hope to keep making more sense of the wealth of social data they collect as they continue to build out TTAGG and to dedicate more time to fashioning a version of the product toward retailers.

"We're looking to build something for ourselves for the long term," Frazier said. "We work very long weeks, but when it's a problem you're passionate about solving, it doesn't feel like work."