Public vs. Commonstock

Yesterday Public and Commonstock were featured side by side on CNBC. Today I’ve been getting the question, which do you like better?

Public vs. Commonstock is a great question. In my opinion the debate will rage on for the next couple of years as this space starts to scale.

Obviously Commonstock is my favorite of the two. But to be totally honest, Public is special in its own way. What I care about most is that more people get exposed to how important the time value of money is.

This is why I’m so excited about the social investing space: most investors had someone in their life, whether it was a parent or friend, who got them started into investing. Developing habits like saving and investing can completely transform a person’s life. The ability to pursue a passion, the stability of a household, the resilience to withstand a crisis- these all flow from responsibly managing your own money. I might be a little too idealist, but I think that society as a whole will be stronger if more people took a little more control over their own money.

I see the social investing space as a way to draw people in and then get encouraged to save and invest in a way that is intrinsically motivated instead of externally demanded.

Anyway, for that reason I really respect Public because they are going after a very newbie demographic and encouraging them to invest. I respect that. Super excited about it.


Personally, I find Commonstock to be a much better platform for a of couple of reasons.

I really value transparent conversation and learning. Public doesn’t show you the percent allocation of stocks in people’s portfolios, so you don’t know how important any given company is. On Commonstock I can look at someone’s profile and ask them about any one of the top five stocks in their portfolio and expect to get into a really good conversation about why they believe in it.

On Public when I initiate the same conversation all I get is: “I don’t know much about that one but my friend told me to buy it”

I think this points towards the real differentiator between the two platforms which is the type of community each is optimizing for, because at the end of the day the platform doesn’t matter, it’s the people on the platform.

There needs to be a healthy mix of experts and new people all interacting in order to get a super interesting ecosystem.

Public seems to be trying to create that ecosystem by paying celebrities and gurus to post, and then also pay for a bunch for advertising to attract new users. (A person in marketing on Public reached out to me on Twitter and said they would send me swag if I tried out the app. I did and they sent me about $30 worth of swag. Not sure if they consider that a high or low customer acquisition cost, but the point is that they are trying to kickstart the community by paying both sides to be there.) What happens when you stop paying people? Who sticks around and who leaves?

Commonstock, on the other hand is taking a different approach. They are being more patient and focusing on the product and community in the hopes that the community grows organically. This is much much slower but much stronger if it succeeds.

Commonstock allows multiple brokerages to hook up to the app, meaning you get many types of investors from many different backgrounds all intermingling. Public, in contrast, forces you to open up a brokerage with them. A seasoned investor will see this as a hassle, and as a result, they will attract more brand new investors who are opening a brokerage for the very first time. The resulting mix is a bunch of brand new people who need legitimate guidance, while the only people there to help are celebrities and people being paid to be there. This might be fun for a while, but long term my money is on a community that forms around the values of research, learning, and collaboration. That kind of community is more likely to be beneficial to both new investors and experienced alike.

So what do you think? Am I too biased?
Elise's avatar
🙌🙌🙌 So glad you wrote this. At the end of the day, your choice/opinion speaks to the type of investor you are and where you are on your investing journey.

I’m hesitant to say it, but the comparison could in some ways be likened to Robinhood vs. IB.

I think the VC Public recently raised actually bodes very well for CommonStock. Team CommonStock all the way.
Arjun Banerjee's avatar
As a user of both this is right on the money🎯
Jon Gall's avatar
Couldn't agree more. I think the CS product is superior and I love the community. I also think organic growth will be better for the long term growth of social investing and CS.
Corentin Claisse's avatar
Hey Nathan, as always, great write-up. A couple of points on this though as to me we are comparing Apples to Oranges by comparing Public to Commonstock (CS).

Public - if we were to compare to others in the market - is in the likes of Robinhood, E*Trade, Schwab and other investment platforms. They generate revenue by either charging fees (RIP now thanks to RH) or by selling data to high-frequency trading platforms (fascinating play from RH who did not "invent" it as per se but really pushed it the next level)

On the flipside, I see CS as a visualization tool rather than an investment tool. I have no idea how the company currently makes money (probably fully self-funded at the moment) but I am confident in the fact that it will not turn into "another brokerage account".

Finally, CS is more for "sophisticated" investor who are looking to dive into some analysis and make some well-thought investments vs Public which is more about helping people start investing. Their play around key public figure (Tony Hawk, Shaq, Prof Galloway) is a pure PR play.

To answer your question around: "is $30 a high/low CAC?" it is really really low, especially for a profile like yours who will use it actively (and therefore provide some useful data to these high frequency trading firms

FWIW, I am good friend with some people at Public and I told them to check CS as a top visualization tool 😂
Amanda's avatar
Different revenue models (and partners to optimize total growth and customer value) but when you consider the question “where do investors spend their time?” it might make sense to compare the two as competitors on that dimension. What do others think?
Corentin Claisse's avatar
That's a great point. While my comment is fairly black & white, there are obviously reasons why one should compare both.

My assumption (and one should never go with asumptions) on CS though is that it is a tad too advanced for the newbie investor (which market Public is capturing).
So yeah, the average user spends much more time on CS vs Public but again, not the same demo.
Curtis's avatar
I think Eric or David are much better people to answer a lot of questions, especially as it pertains to the company itself; but I'm personally here (as a software engineer & former investment professional) in hopes that we can make a best in class retail investing platform.

David can tell you how I love talking at length about all the crazy possibilities that open up when you're not a fiduciary (i.e. risk/sensitivity analysis performed across multiple accounts). I feel that these could really impact the community in a very new and positive way & don't personally feel that we could get there as a soft-dollar platform.

Thanks for being a great community and for all of the valuable feedback. We truly appreciate it and hope that we can continue to make things better for everyone :)
Amanda's avatar
Agree, most memos might be intimidating (as is, this could change especially as more are written and tagged beginner). However the analytics and brokerage aggregation analytics could make investing easier for newbie investors. Analytics on some brokerages are hard for non-investors to navigate, opportunities for better UX and education. Not a lot of brokerages let you learn via stimulated trades but CS has the potential to make that happen too.
Amanda's avatar
Another dimension to consider is which investing social networks are international vs only US users...
Amanda's avatar
As someone who doesn’t know a lot about international markets, I’m excited about international perspectives coming together to discuss customer groups I’m unfamiliar with and potential cultural issues that may arise across the world
David McDonough's avatar
Normally I'd mention @investmenttalk here but I haven't delivered him support for SaxxoBank yet and I am hiding from him.

Kidding, but also there's a huge precedent for it internationally... companies already exist in the Nordics and Asia (look up Snowball) and Etoro of course is the OG/biggest player in Europe, although they're focused on Forex and CFD's (derivatives, not actual equities). I'd argue the market for this behavior is actually larger internationally. It's late to arrive in the US because regulation has historically made it prohibitively hard/impossible. Other countries that don't host the actual markets, don't have the same regulatory environment, aka don't have FINRA/SEC rules.
Amanda's avatar
@mcd love how much of a reg nerd you are. You know this made me smile.
Conor Mac's avatar
Haha love that. I have tested Etoro before and for such an old platform, the UI is ugly. Genuinely can’t wait to get my broker set up!

No need to hide about Saxo 😂😂. How is that going, out of curiosity? I know US was the priority right out of the gate, so no rush from me :)
David McDonough's avatar
Wow, @nathanworden I'm speechless... (I promise everyone this isn't #SponCon)

This is basically our entire thesis. The Promised Land for me is an organic community that uses novel network incentives to amplify the best investing knowledge while suppressing all the spam for signal over noise. And I think transparency, trust, and aligned incentives are the best approach.

Our approach to that is being broker agnostic so that we attract the supply side of knowledge and maximize diversity of thought. Interestingly, exposure to diverse opinions is the only way social investing really works to improve returns. But don't take my word for it, here are some random schools who studied it:

“The effect of social learning is enormous. The traders who had the right balance and diversity of ideas in their network...had a return on investment that was 30% higher than the returns of both the isolated traders”

“decisions don’t happen in a vacuum; the best ones rarely come from deep pondering in isolation. They happen when people learn from and draw on the experiences of others.”

As @c mentioned above the ability to add a layer of intelligence to people's existing brokerages is another huge opportunity. (Oh boy, I'm going to hear about RISK again)

Anyways, yeah I think the two companies are going after very different markets and taking different approaches. We've spent years making sure we 100% get the community right before we do any real growth. It takes a ton of discipline - I would LOVE to pour gas on the fire to fill out the community - and it's counter-intuitive, but I firmly believe we'll create more long term value as a network if we can let the early community shape itself. This will also ensure it can handle scale while maintaining quality... because once you let pandora out of the box, especially with stocks... there's no going back in.
Amanda's avatar
Keep up the awesome work. You’ve got a lot of die hard fans cheering for you
Amanda's avatar
@mcd How many beers would you have to drink for everyone that offered to work for you for free? I’ll throw you a series A party to find out
David McDonough's avatar
As soon as this dang pandemic is gone, we're going to have a massive summit with all the amazing people who've helped build this early community and we're going to find out the answer to this.

I will contact the HR team to approve it.
David McDonough's avatar
HR team here... g2g
anants's avatar
Amazing Analysis and write up @nathanworden
Gannon Breslin's avatar
I would not say I am super active on any platform, but I was approached by both Commonstock and Public. Here, @mcd was directly accessible and explained clearly what Commonstock was trying to do. It was a quality over quantity approach, and you can see it taking hold.

With Public I received a Twitter DM from someone with Public saying "Hey, do you know Public?". When I said only vaguely, the reply was "Well, give me your email and we'll change that!". I said thanks but would prefer more info via DM or a link before giving out an email. I never heard anything back. Two wildly different experiences and very much in line with how @nathanworden describes the difference in conversation quality between the two.
David McDonough's avatar
To be fair, I only built Commonstock so I'd have an excuse to DM and talk to people like @stocknovice who are way cooler/smarter than I am... so being accessible isn't hard haha.
Seriously though, this means a lot to me, I really appreciate it. I had a thesis that quality over quantity is what the investing world (and the world at large) is sorely missing because I'm so tired of all the noise. Comments like this make me hopeful that I'm not alone and this different approach might actually work!
Anyways, how lucky am I that finding and talking to interesting/intelligent people is my main job.
Matthew Holbreich's avatar
I don’t do Instagram, I don’t do Twitter, I don’t do Facebook (ok fine I use WhatsApp), I don’t do tiktok. No use for vanitas vanitas vanitas. BUT I do Commonstock. Actually I’m kind of addicted (first step is realizing you have a proven). Why? Because it’s actually a really valuable tool, and the amazing thing is that it’s only in its infancy, as the product gets better the tool becomes more powerful, as it grows it becomes a more refined engine. And best of all the founder loves his product and his users and you can just write him and tell him
What you want to see that’s valuable to you. That’s rare and awesome.

As public scales it gets noisier and noisier. As Commonstock scales it’s core value proposition and future applications become more inspiring.
Jay Schlesinger's avatar
Thanks for posting this - it’s what everyone was thinking and the responses are great
Nitish Mittal's avatar
This is such an interesting comparison — thanks for sharing @nathanworden :)

@mcd @eric My only curiosity here as mentioned by some of the folks above is the sustainability of this beautiful sharing platform — what’s the revenue model, is there a freemium setup expected to be rolled out anytime soon?
Eric Pelnik's avatar
Great question, Nitish! We're still pretty early so our focus has been on building a product everyone enjoys and loves. That said, we're actively exploring a variety of different revenue streams (premium features being one) and will build those out in the near future.
Austin Cox's avatar
So true, I loved what public was trying to do, at the end of the day though, Im really happy with my broker so having to take that extra step just wasn't worth it for me
North Star Capital's avatar
Team CommonStock all the way! Thanks to @eric, @mcd, and the rest of the team for making such a great platform! 🚀
Conor Mac's avatar
Back 2 years still later and… Commonstock is the cooliest
Nathan Worden's avatar
@investmenttalk yeah revisiting this and Public still hasn’t rolled out the ability to see allocation percentages and their community is still beginner focused (not a bad thing, just different).
Aaditya Ailawadhi's avatar
@investmenttalk Totally agree!