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Hardeep Walia has over 15 years of executive management and entrepreneurial experience. Before co-founding Motif Investing, Hardeep was CEO of a medical device startup that he led to a successful acquisition. Hardeep spent over six years at Microsoft, where he started as Director of Corporate Development and Strategy, the team responsible for managing all of Microsoft’s investments and acquisitions.
Motif Investing is a groundbreaking Web site that lets people invest in a world of big ideas. The Motif Investing platform features social capabilities that let our customers tap their Facebook relationships to create new “circles” of investing friends with whom they can share investing ideas.
MO: What makes Motif Investing so groundbreaking?
Hardeep: Motif represents a new, highly intuitive way for investors to approach the market with real-world investing ideas. We believe our leading edge platform allows individuals to draw on their own insights to take more control of their money, a need driven by today’s volatile markets and the lack of trust in big financial institutions.
MO: Can you talk a bit about the process from having the initial concept for Motif to actually creating a platform around it?
Hardeep: We’ve told the story before – it started with two friends coming up with an idea over dinner. But, really, from the time of inception a lot of what we did was market research – making sure we talked to enough potential customers to find out whether we had resonance. We weren’t interested in just having a “cool” product – we wanted to know that we were filling a need in the market.
Then, we had to begin thinking about money and where we were going to get funding. We talked to a lot of other CEOs and company founders, which led to us thinking about what kind of investors made sense for us. We wanted investors that would understand our business. Then it’s about finding those relationships, negotiating and raising money. Once that’s in place, then we moved toward building a world-class team to begin our mission.
MO: What are some real-world trends and investment ideas that you think that we should be paying attention to?
Hardeep: There are trends all around us so the key is for each investor to figure out which trend could be an opportunity. I think obesity rates will be very significant over the next decade, as will concerns about the growing costs of healthcare in general. You can see this with a newer emphasis on healthier foods, but there’s also a political element. I think there also will be an increasing political focus on income inequality and its impact on the functioning of society. And, there is always interest in energy and technology, such as the increasing dominance of mobile or cloud computing.
MO: Do you think the thematic aspect of Motif will attract people who have always been interested in investing but found it too intimidating?
Hardeep: Yes, that’s clearly one of our missions. We want to offer investors a simple and intuitive way to approach financial markets and empower them with the idea that they know more than they think about investing. But we also want to attract savvy investors who just don’t have the time to spend as much time on their investments. They like that we do the work to assemble investing themes, and they can connect with that, while also making their own tweaks.
In addition, we also want to attract people who understand specific ideas very well, and give them and easy an accessible way to invest in it. Doctors, for example, may have specific knowledge that would be useful for customizing one of our many healthcare motifs.
MO: Can you talk a little about how you came up with some of the individual motifs that offer unique investing opportunities? What’s been the most popular so far? By the way, I like the concept of the “The 7 Deadly Sins” the most.
Hardeep: We have a very rigorous process: First, our investment team searches for ideas, trends or world events that can be turned into investment opportunities. Many of the ideas come directly from our customers. Our “Mobile Internet Tsunami” motif, for instance, comes out of the ongoing boom in mobile data traffic, which is expected to grow by 26 times in the next three years.
Next, we identify companies that will play a part in the investment idea. Most people would expect that Apple would be in there, because it makes the iPhone. But they might not recognize all the other companies that are part of this sector too, like cell-tower manufacturers or semiconductor makers. Ultimately, we compile a list of up to 100 relevant stocks — something we call the Idea Index.
The stocks in the Idea Index are then weighted to reflect how much revenue they get from the “big idea” – and whether that’s a large or small part of their business. For example, Apple generates a ton of revenue from the iPhone, but that total is still just above half the company’s overall revenue. Qualcomm, on the other hand, has nowhere near the revenue of Apple, but more of it is related to cell phones, so its weighting in the motif is virtually identical.
Finally, we build a motif from a subset of up to 30 stocks that we believe will best track the Idea Index.
MO: What’s the biggest risk that you’ve ever taken and how did it turn out?
Hardeep: My parents were both physicians, and I went with them to Kuwait after the first Gulf War to do humanitarian work while all of the oil fires were still burning. Nothing comes close to that.
MO: Do you think that Motif has the potential to revolutionize the investment industry as we know it?
Hardeep: Yes! When I was at Microsoft, one of our big challenges we were trying to solve was converging the PC and the phone. The problem was that it’s hard to change two different learned behaviors – how you operate a PC and how you operate a phone were two distinct things. What I’ve learned is that change is hard, and you have to make things super-intuitive. It’s the same for Motif, and what we’re trying to do is push investors toward something they already know. It’s natural for them to generate investment ideas from things they know and see every day.
MO: Thank you so much for taking time out of your busy schedule to join us today!
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