Nearing its 20th birthday, FXStreet is an industry leading source of news and education and had a record breaking month in March with over 1.2 million unique visitors. We caught up with founder Francesc Riverola to discuss his experience blazing a trail over the past two decades, the current state of the Forex market and life in Barcelona.
Francesc was born in San Francisco, California, but grew up in Barcelona. He graduated with a degree in Economics from the University of Barcelona and later completed an executive program at IESE Business School.
He got the internet bug in 1996, while living in San Francisco for a year with his wife. On returning to Barcelona, Francesc was hired by an FX advisory company to create their website. He worked on a portal within the corporate website, which was successful in attracting clients. It was after leaving the firm that he decided to launch his own foreign exchange portal website.
In the early days of FXStreet, Francesc was in charge of advertising and content. He worked alongside his wife Miriam Pinatell (a graphic designer) and his friend Setxi Fernández (a programmer) who would become official partners in 2001 when the company was created. Currently, Miriam is the Head of Administration, Setxi is the CEO and Francesc serves as President.
Can you tell us a little bit about what it was like in the early days, starting from scratch and working from home? Did you have any idea that your project would turn into a multi-million dollar business with 60 employees?
The early days were tough. I was working from home and the only one feeding the site content was me. Back then nothing was automated, so charts, quotes, news…. everything had to be done by hand. The more content I was putting in, the more the site was growing, so I got trapped in a vicious ‘working all-day long circle’.
Of course, I had no idea that the project would turn it into what FXStreet is now… absolutely no idea. I only knew that everyday more and more people were coming to the site and that we were doing something different as there was no other FX focused portal back then on the Internet.
People sometimes discourage working with friends and family, but clearly it has worked for you. Can you give us any insights on your approach to building a team?
For me it has worked well, but of course it is dangerous to work with friends and family, but it is also dangerous to start a project with people you hardly know or that you only had a business relationship before.
What we have done very well is that each of the three of us has been the king of his kingdom, and when we have had to take a decision that affects us all, we have done it by consensus. We have never used majorities nor shares percentages to take a decision. Either we all agree in going for that or we just ignored it.
At the end, holding a long-term relationship with a friend, a business partner or your wife, will depend on how well you connect, how you respect each other, how you interact with each other and ever how you love each other without ever losing the respect for each other. Without respect is impossible to build a successful team.
We saw the retail Forex market change dramatically after the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in 2010 in the aftermath of the 2008 financial crisis. More recently, MiFID II was introduced at the beginning of 2018 by the European Union to improve protections for investors and provide greater transparency. We’re glad the the industry has moved on from the wild west days prior to Dodd-Frank, but has regulation now gone so far as to stifle growth and threaten Forex in becoming a mainstream asset class?
My view is that we have gone from the wild west to over-regulation. Both are market killers. I think that regulators must protect market participants and put boundaries in how the game is going to be played in that niche market, but never ever treat people like they were little babies. I think that currently there are many rulings that are based on the fact that ‘you can not take certain decisions cause you are not ready for them’ that I completely disagree.
I think FX as any other asset class should hit main street, and all investors/speculators should be forced to have a minimum preparation before entering into trading life. That’s my view.
The retail Forex industry faces other headwinds, such as declining trading volume and low volatility. EUR/USD has had a tighter trading range than any time since the euro was launched in 1999, with volatility falling to an all-time low in November. What are your views on the declining volatility and its impact on the industry? Can we expect volatility to pick up in 2020?
I haven’t seen so far any sign that volatility could pick up in the second half of the year. I’ve read that Trump or new geopolitical events could make volatility rise. Of course that could happen, but if they don’t I do not see how the current quietness will disappear.
Regarding the relationship between volatility and trading I hold a love/hate view on it. On one hand, a rise in volatility equals a rise in trading activity and an increase of traffic to our site. Then we serve more page views with ads on them and we generate more money. So I am happy.
On the other hand, most of the trading related to a sudden pick in volatility is trading done by unprepared traders that – even now with the excess of regulation – are lured to the market and trade irresponsibly. So I am sad. So far, this is the never ending story.
FXStreet adopted an ‘agency model’ early on and you have successfully ventured into developing and licencing products such as your charts and economic calendar. Your Premium subscription service also now figures prominently. In this way you have gone beyond being an online media publisher relying entirely on ads. What are your thoughts on the viability of display advertising as a revenue model for online publishers?
In these 20 years, I have read many many times catastrophic opinion articles saying that traditional banners and display ads were about to die. They are still here and I do not see them dying in the next few years. What it is true is that we have seen a progressive decline of their results, so costs of acquisition for clients have gone steadily up.
As any other company, we have tried to diversify our sources of income to cut dependency from traditional advertisement. We have created excellent products to sell to brokers and financial institutions, but in the end they are the same clients that buy ads from you. So we were diversifying the business line that was generating the income but not the source. So the risk didn’t decrease, though this is a market that won’t disappear from one day to another.
As many other publishers, we are now focused on selling products to the end user. We haven’t discovered something new. We are just applying common sense.
Our goal last 20 years has been to help traders, so selling state of the art products to them is another step to really helping them to succeed in trading, but this time they will be paying for it instead.
A few years ago, people were reluctant to pay anything on the net. Now there is room only for superior products that make the difference. So, this is going to be our focus in the next few years.
In fact, in about a month or so we will be launching our Signals Service and in a year or so our new Education Service. Let’s see if traders consider them ‘state of the art`and they are willing to pay for them. If we fail, we will keep trying.
Previously you cited a dedication to quality over quantity, of creating value to users as the ultimate mission at FXStreet. In line with this commitment you’ve added world class analysts such as Joseph Trevisani and Yohay Elam to your team and have extended live coverage of major news events such as the recent UK election. Can you share any of your goals at FXStreet for the coming year?
The incorporation of Yohay or Joseph goes in the quality over quantity strategy you just stated. We know that this is not a a 100m race but a marathon. We want to celebrate another 20 years in the market by 2040, so if you want to be there, either you provide excellent value or you will be out of business. This is something lacking in our industry. Everything is short term. I am not fast, but with age, I am getting better in long distances races.
You’ve been a Business Angel in startups such as Kantox, Qbitia, Koduz, Bioo and Skitude and an active part of Barcelona-based early stage venture capital fund Lanta Digital Ventures. In addition, you are a mentor at SeedRocket and a member of the board of advisors at FemCAT, a private foundation advancing Catalonia’s economic and social development. Barcelona is often listed among the top startup cities in Europe, along with London and Berlin. As an active figure in Barcelona’s startup community, what would you like to see to ensure that the city maintains and builds on its place as a leading European startup hub?
For me it is a must that Catalonia is finally able to gain its independence. From a business perspective, it does not make sense to stay in an extremely centralized country as Spain is. For the Spanish state, the bigger and powerful Madrid becomes, the better. So there is no room for competition. They won’t allow it.
With Catalonia as a new state in Europe – if Europe stops acting against human rights – then Barcelona can really become a top player in any industry we are capable to position ourselves.
In a previous interview, you described yourself as Catalan ‘from head to toe’, despite having been born in the US. In October, we witnessed the massive protests and unrest in the wake of the severe sentencing of Catalan independence leaders. It’s a complex and sensitive subject, but as a Catalan business leader could you share your outlook for the independence movement? What are your thoughts on Scotland’s renewed push for independence after the recent Tory victory in the UK general election?
I think that I just answered this question a minute ago 🙂 I am 100% Catalan though I have the U.S. citizenship too. I am extremely proud to be American as well. I envy their capacity to handle failure. For them it is an experience that helps you to get better, while in Catalonia it is something to be ashamed of.
I consider myself a democratic person so I support what the people say. If majority of Scottish or Catalan people wish to become a country, then decision makers have to make it possible. Also, with globalization we are seeing the demise of the middle size countries. They have all the inefficiencies of the big countries but they lack of their market size. I expect that middle size countries like Spain will break down in pieces. They are simply out of league. The future is for small and extremely big countries.
FXStreet has some of the ‘pixie dust’ of a classic startup success story and represents a source of inspiration. What would you tell a bootstrapping tech entrepreneur with a vision but who has yet to make a major breakthrough? If you could go back in time and give advice to yourself as you started FXStreet, what would you say?
When I give speeches to entrepreneurs, I always tell them to not put an investor in their life. Investors have their own legitimate expectations of your company. While expectations match, there is a loving story, but when they diverge, they will make your life miserable. So, I am a fan of bootstrapping companies. Instead of trying to grow on your investors, grow on your clients.
If I had to give advice to myself, I would just stress that this is a long race, so do not get over excited for any accomplishment nor failure. Take care of your health and enjoy the ride that is going to be curvy :).
Thank you Francesc for participating in this interview and we hope that you will visit us in Stockholm one day.
I will for sure Dan. My pleasure.