Between achieving double his crowd-funding goal, and discussing Impact Investing on BBC News, Tickr CEO Tom McGillycuddy spoke to The UK Investor Magazine about his vision for making the ethical, profitable.
Why do we care about Impact Investment?
With calls for more conscientious business practices gaining prevalence, many will have already encountered ideas like ‘Impact Investing’. Large companies are committing considerable resources to programmes of ethical behaviour and investing – such as Citi’s (NYSE:C) Impact Investment fund – but what is Impact, and why do we care about it?
It is perhaps the best contemporary realisation of an age-old goal. Markets weren’t designed purely for zero-sum profitability; they were created as a space for the common maximization of goods – both financial and otherwise.
Market economies are a central mechanism by which we organise our societies, and the idea that they should also be used as a force for good and fulfilment is hardly new. Speaking in 1968, Bobby Kennedy delivered a timeless polemic:
“Even if we act to erase material poverty, there is another greater task, it is to confront the poverty of satisfaction – purpose and dignity – that afflicts us all.”
“Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things.”
“[GDP] measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”
Today, market norms are at odds with the way we think of ourselves – not purely as rational and industrious – but also as creatures capable of feeling and with some sense of ‘the bigger picture’.
This is why Impact Investing is so important. By its definition, it is the creation of positive social and environmental impacts, with at least market-rate returns.
So, who are Tickr?
Tickr is an Impact Investment app based on the shared vision of its founders: a desire to change the culture of capital markets – to make them more accessible, conscious and sustainable.
“Our goal is to become the most convenient way to make a positive impact. A way to make a profit and feel good about it.” said Tom McGillycuddy.
Its mission statement is clear and effective. Beyond that, though, its narrative is relatable, and this is entirely because its origins are so personal.
While having something of a crisis of purpose, Tom happened upon a chance encounter in a lift, with the now-Head of Impact Investing at Black Rock (NYSE: BLK). He and his acquaintance discussed the idea of creating an app that would allow users to save sustainably, and soon enough Tom Co-Founded Tickr alongside his colleague, Matt Latham.
“The more we spoke about it, the more we realised that this could be a way of bringing people to the table that had never invested before. They can relate to it. It’s not couched in any jargon; it’s investing in something that does good.” Tom said.
“The narrative of our company and the stories of those impacted by the companies we support, are things that people connect with, and you don’t have to have invested before to make that connection.”
How does it work?
The app itself is very straightforward. A user chooses which Tickr ‘Theme’ they’d like to put their money into – Climate Change, Disruptive Technology, Equality, or a Combination of all three – you choose a level of risk, and the rest is done for you.
The fintech-savvy among you may already be noticing some similarities between Tickr and one of its counterparts, Moneybox; and the recent introduction of round-ups on Tickr, and World ESG Index on Moneybox, invite further comparisons. However, Tickr’s dedication to positive impact within its business model gives it an edge.
Both apps are easy to use and help novice investors navigate the new space with FAQs, advice and one-to-one messaging with staff, but only Tickr hammers home the reminder that you’re doing a good thing with your money.
It does this via regular updates of stories from the companies it has invested your money into. The user doesn’t have to do anything but make the connection between watching their investment grow, and seeing in real terms the positive effect their capital is having on real people – it’s post-purchase rationalisation at its finest.
From the employee perspective, it doesn’t sound bad either. Tickr’s Founders seem to have applied their principles to their company’s convictions, with each employee having joint ownership of the business. This doesn’t just make Tickr’s staff feel like a valued part of the company, but also provides an incentive for meaningful contributions and a strong collective output – if the company does well, so do its employees.
Is it just a fantasy?
It isn’t a stretch to imagine that most people find the idea behind Tickr to be a good one, or at the very least, one with admirable intentions. I myself mused on the idea of an impact investing mobile app, before being pointed toward the Tickr website. The question that many will inevitably ask, though, is: as a business, is it feasible?
Before I’d even finished the question, Tom had begun chuckling. He said that sceptics are just part of doing something that strays from the norm, but that he’d converted people into believers before, and he expected to do so again in future.
“There’s an assumption that if we do something good, profits will suffer. So, the best we can do is to accept when we do something bad and offset it with charity.”
“The solution is time and proof. There is enough data on company returns to pacify these people now. What we need to do is make everything equal or better than other types of investing platforms and then the only difference will be, whether you want to make a positive impact or not.”
“The time feels right for the business. We started in 2015 and since then social attitudes and awareness have escalated”.
If we accept that Tickr works, for now at least, is it merely a good idea having its day? What are the main risks it will have to face, and does it have longevity?
“I don’t think there are any major risks unique to us. We need to grow and we need to expand. We’re working heavily on the unit economics of the business so we become profitable quicker than our peers – that’s something we’re laser-focused on. It would be great to never have to raise money again for cashflow, only for growth. It’ll probably take us a couple more years to get there, and that’ll put us in a sustainable position, business-wise.”
“2020 and 2021 are set to be big years of growth for us. We have a lot of product development in the pipeline alongside a bold marketing strategy”
“We launched in January , and now tens of thousands of people are using our app in the UK, and 80% of those people had never invested before. They’re providing for their own future, both by making returns on their investments and supporting something they want to be a part of building their future.”
“That’s 50,000 people investing in these themes with roughly 50 million quid, and look what that’s done so far. But imagine when we’re a million, or two million, and what we can achieve then.”
With Founders that have real-world experience of what it takes to achieve financial sustainability within a business model, it’s hard to question either the company’s structure or its provenance.
One area I’m keen to see it develop is the user experience of the app itself. During my two months of using the app, there was a brief moment where an incorrect balance was displayed, though the situation was quickly explained and rectified. I’d also like to see, in real terms, the increase (or, heavens-forbid, decrease) in my portfolio displayed using a tangible, combined statistic, rather than just a break-down of the growth of its individual sub-categories. On the whole, though, we can expect some teething issues and cosmetic touch-ups in the early days of any business, and Tickr certainly has some big plans for the near future.
What can we look forward to?
I’d like to make clear that by-and-large, the first generation of the app looks fresh, works well and has an intuitive lay-out, but it’s always good to make sure the small kinks are ironed out before moving onto more grand ambitions – and they certainly are grand. The company is in the process of expanding its team, and speaking on his vision for the second generation of the Tickr app, Tom said:
“The app is slick; you’ve seen it works well. The in-app experience is ok in my opinion. But in the future, there’ll be a lot more about the impact your money has had and we aim to create a more collective feel, regarding the impact of our users’ pooled investments”.
“In future we want to have success stories. On our home screen we want to create feeds with, ‘This company did THIS good thing with YOUR money’, and initially it may be a report with images but five years down the line we’d look to maybe make videos which show the impact your money makes. For instance, social housing that has been built and the families that have benefitted from this.”
“We want to bring the two points of capital together.”
To think the vision ends there would be a mistake. What really excites me about Tickr is that beyond its already impressive primary objectives, it has a grand strategy. It wants to lead the way in changing the culture of capital markets.
“There are a few big scale projects we’ve been working on, for instance we’ve been given regulatory approval to launch our own ETFs. So, we’re aiming to launch our own tickr branded ETFs into the market, and the goal would be that we would set the standard for sustainable capitalism eventually.”
“Because we would own the fund, we’d want our app users to determine which companies are good and bad from an impact point of view.”
“Our users can vote companies in or out of our ETFs and ultimately give consumers a voice they’ve never had in capital markets before. What could that do to markets and company behaviour? One day could a Tickr score of a company have a say in capital markets? If it ends up in the hands of a lot of consumers, eventually at least consumer companies will have to take notice.”
“We want to nudge capital markets in a more sustainable direction, put them in the hands of consumers, and do it in the most engaging way possible”
He finished his twinkle-eyed monologue:
“But that’s for next year.”
At the end of it all, can we really have our cake and eat it?
You might’ve heard it in other contexts, but to me Tickr is a bit of a unicorn. It’s a fairytale mix of healthy profits and potential, enthusiastic support from its backers, performing a good cause, with a team that are passionate about what they do.
After six months of using Moneybox, my investment is up 1.59%. After two months with Tickr, my investment has grown by 3.91%. This figure takes into account – and negates – the credit you earn for referring friends to the app (if you fancy £5 free on Tickr and a tree to be planted on your behalf, my code is jamieg912). It also doesn’t do justice to the consistency of growth seen in the main components of my portfolio, Clean Energy and Global Water, which have grown 38.89% and 29.88% respectively, over the last year.
At the very least, what I hope Tickr signifies is the beginning of an attitudinal shift. We have a responsibility to help tackle the issues we have a part in causing, and as time progresses, we will have better means to do so. If financial services are to have even greater prevalence in future society, the best we can do is discourage those performing zero-sum behaviours, and support those trying to innovate and carry out win-win scenarios.
The reason I’d encourage you to get involved with Tickr in particular, is simple. At its very essence, it is a feel-good app. Beyond rejecting a shrouded and severe approach to investing, I think it’s trying to show us a happier and more human way to do business. It may very well be the future; I’d urge you to be part of it.