Tim Sykes, Founder and CEO of Investimonials and Profit.ly, had a different college experience from most university students: skipping classes at Tulane in favor of trading penny stocks every day, he turned $12,415 in Bar Mitzvah gift money into $2 million and started a hedge fund during his senior year. He also created a scholarship for talented/passionate people open not only to current Tulane students, but also Tulane faculty and alumni. He calls it "an economic bailout ahead of its time."
Today's interview demonstrates exactly why Tim has been so successful — and at times, so criticized. He's a straight shooter who isn't afraid to speak his mind, but don't confuse his outspoken confidence with the false front many in the financial world present. Tim knows what he's talking about, and he's got the proof to back it up. Enjoy the interview and share your thoughts with us below and on our Facebook page.
Your companies, Investimonials and Profit.ly, are unique concepts. Can you sum up what they are for our readers who aren't familiar with them?
Neither idea is totally new; we've just improved upon existing models and applied them to the finance industry. Investimonials is like TripAdvisor or Yelp, meaning it is a database of consumer ratings and reviews for everything related to finance from books, TV shows and movies about business and the stock market to brokers, software, financial commentators like Jim Cramer, websites, bloggers and newsletters. The goal is to discover the best financial products and wisest people while weeding out the worst and in the past year over 10,000 traders and investors have written nearly 20,000 reviews. Gradually our members are learning about the best and the worst the industry has to offer and I'm proud to see frequent emails from members thanking us for turning them onto things like great books and documentaries and getting them educated while also helping them avoid scams.
Profitly is similar in that we think transparency is the future of finance and our aim here is to discover the best traders on the internet based on actual performance and stock picking accuracy. There are hundreds of thousands of wannabes out there and many lie about their experience and success while really living in their parents' basements. So much so that it's almost as if you can't trust anyone on the internet because anybody could be the next Bernie Madoff.
In just one year, Profitly, with over 7,500 traders sharing their performance openly, has become the trading industry standard for not only showing off % gains and track record, but also the exact dollar amount of trading profits because while other websites focus only on beating the market indices, we know you can only pay for things in the real world with actual dollars not percentage points.
After all, there are many people who claim extraordinary percent gains like being able to turn $100 into $1,000, but those strategies are gimmicky and usually not replicable or teachable. Being a self-made multi-millionaire myself via stock trading, I know EXACTLY how important it is to be able to have a scalable strategy (and while I've done very well, as I often point out, my short selling strategy of small-cap stocks is incapable of making more than a few million/year hence why I'm a teacher and internet entrepreneur instead of a hedge fund manager).
You're a pretty controversial figure in the world of finance sometimes. What drives you to put your neck out and "tell it like it is?"
Most people in finance are full of BS because while they have studied and learned the basics, they are truly average and have no special talents that would allow them to outperform. They take advantage of the fact that 99.9% of the world doesn't know stock market basics and they use that widespread naivety to appear to be better than they actually are.
When you hear an outrageous success story like mine — turning my $12,000 Bar Mitzvah gift money into $2 million in 4 years during college — many people think I'm one of the BSers and it's my passion to prove them wrong by showing everyone EXACTLY how I did it and why it's still a great strategy which my 2,000 students learn day in day out.
I will not tolerate any lies about my strategy or me, and I've come to enjoy attacking those who tell lies and manipulate in other areas of finance. Since I'm 100% honest and transparent in everything I do (aka come at me all you want I have nothing to hide and I CRAVE the opportunity to correct ignorant assumptions made about me, my trading strategy and my business), this allows me to go on the offensive. It's not only fun, therapeutic, just, and fulfilling, it's also great for marketing purposes as I welcome the opportunity to explain exactly what it is that I teach.
Many young entrepreneurs are understandably reluctant to get involved in today's turbulent financial markets. What is your advice for them?
Quit being such babies. If you always wait for perfect opportunities, you'll waste precious time that could be used to learn and gain experience during the tough times. There's a saying "when you got nothin', you got nothin' to lose" (Yes I just quoted Leonardo DiCaprio in Titanic) and it's true for young people everywhere no matter what field, but especially young entrepreneurs.
If you can succeed even a little bit in this environment — which I'm doing quite well growing my business from roughly $1 million in 2010 to over $3 million in 2011 and yes, the margin are ridiculous — then you will most likely only do better during stock market bubbles.
Long story short, it's great to get into an industry when it's depressed and then sell out when there's too much hype and morons are willing to pay excessive premiums for something you know goes in cycles.
How is your life different today from the vision you had in college?
I'm fatter and I can't rebound from drinking like I used to so I workout more and value the serenity of old-person things like the opera, symphonies and Central Park. I still go crazy with my fine dining, and drinking, but instead of just partaking with my friends, now just about every lunch or dinner is business so I've adapted my passions to better suit my ridiculous ambition and revolutionary business model that I believe is just starting to play out. Friends take a backseat, you can ask any of them, they'll probably call me a selfish prick.
On a sadder note, I don't get the same thrill of making $5,000 to $10,000 in a day like I used to — over time you lose that "rush" which I feel tugs at me to aim for bigger thrills meaning I must try to make $100,000 in a day (I've come close a few times in 2011).
What advice do you have for young entrepreneurs interested in starting their first business?
Try every single angle to monetization ignoring your own expectations and biases. Some of my most successful projects came out of thin air (my blog readers encouraged me to create a newsletter to deliver my trade alerts in real-time and three years in, that is my single biggest revenue and profit generator) while my failures have been truly passion projects (Profitly trading cards like those I used trade of baseball players…nobody cared…and TIMbucks, a virtual currency designed to increase useful information sharing among my students).
Also, be meticulous with every new project and understand that if you want something done right, you likely will have to do it all yourself which is why entrepreneurs as a group are uniformly tired. To help, find a partner to share the load, but make sure you get along with them and your skills are complementary to achieve maximum efficiency and give you the greatest odds of success.
How do you personally define success?
How many students I can help teach to achieve wealth in the stock market, both monetarily and knowledge-wise. I've had several students who have turned $1,000 into $10,000+, one who has turned $3,000 into $75,000 and several who have made $100,000+ all in just a few months. The money is nice, but they now are self-sufficient and they know the process that they can repeat again and again on their own. You can see hundreds of testimonials from my students all over the internet, many on Investimonials and Profitly (hence the reason why I created the websites in the first place — to keep track of all the praise and to show it off and compare to the many other financial gurus.)
One of my students, Michael Goode, has earned over $300,000 in the past few years and he learned my strategies so well, I've actually hired him to help me coach the rest of our 2,000 students so I'm looking for more success stories to expand my growing mentoring team. I never had any mentors when I first started in the stock market and that cost me a ton of time, frustration and money so I love being the mentor I only wish I'd had.
The whole business is becoming more exciting by the day as the more successful traders we teach, the more we'll hire to teach others thus enabling us to teach even more people and create more success stories. Oh yes, I love this game!
Adam Toren is an Award Winning Author, Serial Entrepreneur, and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Matthew. Adam is co-author of the newly released book: Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs.