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?