I hope you laughed at that. Now, here’s a serious question. Have you ever noticed how most important things happen on a Friday?
There’s some Universal law of serendipity and infinite possibilities which probably comes alive on the weekends. However, I digress.
On this Friday early in 2015, I saw stocks on the Singapore market that I wanted to trade in. I had been living in SingSing for around four years by then. I had spent a few years working in one of the most prestigious investment firms in the world – JP Morgan, and then run my own hedge fund for a while. As an avid purveyor of the market, my interest in those stocks was what the millennials would call ‘legit’. There had been a blowout, but I believed it was temporary and my instinct said I could make some money if I acted quickly. I, therefore, immediately called up my banker and asked for their help with making said investments.
No reply. Reminded me of this:
This is when the truth hit home. In wealth management, someone who doesn’t have multiple millions is basically treated as if they were below the poverty line. I had been a part of the system, but I had never before understood just how broken the system itself was. Markets were open for business but my bankers were not interested on my small-size-high-conviction trades.
I ended up putting my money to use myself. Since I had the experience, I was able to make a trade; but it surely was an effort!
And the lightbulb went on – there were so many investors out there who did not have the experience or know-how to be able to do this on their own! So, maybe something had to be done about it. Maybe I would be the one to do it.
But it was a Friday, and I had already traded on a few ETFs and USDINR. An idea was brewing but there were evening beers to be had. So, I headed out.
The Monday After
By Monday it was apparent that my gut feeling was having a field day – I had made upwards of $10,000 USD Perhaps my bank had a hunch, too, for they called me up and offered to help me make the trade I had already bet and won on.
In the movie world; this is always a trope. The police guys arriving much later after the deed has been done. The phone ringing after Elvis decides to leave the building and closes the gate behind him. In most cases, you laugh. But when it’s your hard-earned money on the table, it’s not easy to laugh about delays and sub-par service.
When this happened to me, I wasn’t a known face or a brand. I was the guy at work everyone came to with high-risk challenges because he always had a solution. In the bigger ocean of global investing, I was just another average fish. And there were so many of us out there looking for the best strategies to grow, save, or pursue a goal who felt beaten by the system and its traditional limitations.
The Phase of Soul Searching
This incident taught me a valuable lesson – I realised that there was a big lacuna in the market between what investors aspired to, and the services they were being offered. In this tech-fuelled era, I thought it funny that we didn’t have a platform that allowed investors access to strategies in an unbiased manner. Or one that had made investments so intuitive that anyone could make the most of their lazy money, without depending on a middle man.
Some time later (in December of ‘15), I attended a fintech conclave organized by Goldman Sachs. The best of tech companies in the APAC region – like Ali Baba and 10Cent, were in attendance. They talked about changing norms, about technology being more than a means to an end; demystified ‘disruption’ and showed how AI is an enabler and a catalyst for growth in traditional industries. Sure, it uproots the normal and creates chaos at times. Yes, I know of the memes that abound. But when used wisely this chaos machine can pave the way for a smoother experience, and its benefits are undeniable.
As our dependence on technology grows every day, truths like these seem like a recapitulation. But sitting in that conference was someone used to over fifteen years of a regimented business model, and the facts being presented to him were changing his perspective. Every would-be startup honcho needs a shot in his arm at some point during his journey. This was mine.
The ‘I, Vineeth, and a PPT’ Phase
Every Dr. Who needs a TARDIS. Every Calvin needs a Hobbes. Vineeth has been both to me.
Friends from our IIT-Delhi days, Vineeth and I had been in talks about breaking out of the corporate rigmarole and breaking out on our own. I had the idea and domain expertise. Vineeth had the tech know-how and belief in our shared vision. We had camaraderie and some hard-saved money on our side.
Vineeth left his lush job at IBM and took on the mantle of Co-Founder. I started relearning Python and resurrected my passion for Mathematics. If I was going to provide users an AI-enabled investing platform, I didn’t want to be the CEO who didn’t understand the jargon and spoke gibberish.
We made a powerpoint presentation. We hired our first three coding ninjas to help us build a prototype. We stayed foolish, intermittently hungry, and always passionate. And our PPT went places. With every angel investor we met, we learned, tweaked, and made better. We shook off all the jibes and raised eyebrows and got very British with our poker faces.
With every rejection, we stood steadfast in our vision of what Kristal (back then we called it o2o Investments) was going to be. Nobody could shake us from that.
The Phase In Which The Hard Work Pays Off
In my years as an investment banker, I have seen the market go through quite a few upheavals. The dot com boom and subsequent bust, the 2005-2007 rally, the European crisis, and the depression of ‘07. Post the US crisis, every investor worth his crisp white shirt knew that transmutation was inevitable.
The traditional investment model divides investors according to net worth and investing capacity. So, you have the ‘High Net Worth’ individuals who invest millions. Then you have the ‘Mass Affluent’ who have lesser money, but enough clout to demand the best of service. Then comes the ‘Retail Segment’ – the average individual, the mom-and-pop business, the student working a night shift to save up for college.
The Global Financial Crisis brought to the fore just how bad we needed new business models for the investor community. Robo Advisories and AI were the product of this process shuffle. Technology doesn’t – and shouldn’t – differentiate between investors based on how fat their wallets are. There is no financial discrimination in an AI-based process. That, for me, is true financial freedom.
The more I know of AI and deep tech, the more I’m willing to bet on it to be the future of finance. The future requires technology that marries deep-sought insights, historical data, and expert human knowledge to curate for every investor a portfolio that can help them ride out any incoming blitzes. Wobbly markets requires thoughtful decision-making and access to quality strategies. Any investment platform doing otherwise and providing sub-par investment options to its clientele is only setting them up for failure.
From the day the lightbulb in my head went ‘pop’, this is what I imagined Kristal was going to be. An unbiased digital wealth platform that offers seamless access to the best investment options at a palatable cost. I often get asked how Kristal is different than any other robo advisory and I say this – our DNA is a mix of pure code, and the best of human oversight.
We are not an investment company that pivoted to AI because it was the ‘in’ thing. We chose to make AI our core offering because we believe it has huge potential for the future.
At the same time, we haven’t completely done away with manual insights or expertise. Our bionic process is a true marriage between experience, formal knowledge, and the carefully selected benefits of a tech-based approach to money management. We are dreamers, not rank idealists. And when we say we ‘handpick’ the best for our customers, we don’t say it lightly.
Six months into our roaming-with-a-PPT phase, however, I was beginning to wonder if any of this would ever come true. We had met over fifty investors, drank copious amounts of coffee, and the worry lines on our handsome faces had begun to show.
Then, as it always happens with believers, Lady Luck decided to beam down love. The investors said yes, the bank account had $1.2 million in its name. And Kristal.AI, as it stands today, was officially a funded startup with licenses (in Singapore and Hong Kong) to disrupt.
I might have cried.
Where We Stand Today and The Phases Yet To Come
Kristal.AI is three years old now. In the startup world, that’s a cameo. But we have been gunning for the meatiest roles since the very start, and we’re up for the part. From a digital wealth management platform to a digital ‘private bank’; it’s not that huge a leap of imagination.
For the last three years, we have been working hard to provide the middle/retail segment of investors with a fully-fledged platform they can use at their will. The vision was always to democratise financial services and make it attainable across the spectrum. The Holy Grail is to deconstruct a lengthy and clunky process, and make online asset and wealth management as easy as ordering your favourite sandwich. Entrepreneurs are like dogs chasing cars, and ubiquity and seamlessness are Kristal’s BMWs.
Our latest offering is a step in this direction. We went live with the ‘Kristal Freedom Plan’ some days ago. With it, we have made investments on our platform more accessible than ever before. With the Kristal.AI ‘Investment Account’; you can make investments to the tune of $50,000 USD without paying a single penny in fees or platform charges. It is where every investor can find the best of global strategies, sans the constraints of net worth and minimum funding requirements. It also harks back to what I said before – the lack of stellar service for the biggest chunk of the investor pool. It’s a norm we’ve challenged ourselves to subvert. So, if you have ever asked yourself why you had to accept sub-par features and offerings – here’s your alternative.
On the AI front too, there is much brewing. We’re constantly refining our algorithm to perfect the process of curating strategies (which we call Kristals), and moving from a market-centric approach to a more tailored, user-centric model. More about that here. A good AI model should be a flawless mimic of a wealth manager, but I don’t think that is where we should stop. What if we built an involved algorithm that could turn thoughts to financial actions? You think it, and we’ll have a Kristal for you to invest in. In seconds.
Sounds outlandish? Well, you’re talking to an entrepreneur. A dreamer. A car chaser. We can all be outlandish at times. It’s what keeps us sane.