Traders Eco
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Traders Eco

Risk Reviews dropped — plus new structuring

“know you are taking it in the teeth, but the first guy through the wall… he always gets bloody… always” — John Henry, Moneyball

First, I would like to apologize to all our customers who felt betrayed when rejected on a risk review — it is not as black and white as it seems. Second, I will try to clarify and explain our new direction in this post below. In the summer of 2021, I pushed for many changes to our funding offering. I remember not being sure if our funding providers were ready for that flow, but my best friend pushed me and said, “History only remembers the risk takers.” I admit I was pretty delusional, not thinking the changes would bring consequences — but I guess as an entrepreneur, sometimes you have to be. So we pushed these changes and showed monthly growth of more than 30%. But these changes meant increased risk for our funding providers — who provide liquidity for us and many other firms.

Question — How do you convince your lp to keep taking live risk, while they know 9/10 of your trader will go bust?

Answer — You can’t.

Behind the scenes, as these changes went live, we began working on Bagley prediction — Bagley prediction builds trader profiles and allows us to know with around an 80% accuracy which trader will make or lose money when live. This provides for selling the data to other funds to offset risk; the only issue was on 100–200k account sizes, accuracy drops to under 50%. This meant having risk managers manually review statements for these two account sizes and find similarities between blown accounts and ones going live — rejecting and refunding accounts with increased similarities.

Death by a thousand cuts

A good name, like good will, is got by many actions and lost by one

The consequences of risk reviews to our brand name felt like a thousand cuts; every other day, a new youtube video would be released, “exposing us,” and a disgruntled customer would abuse our support team. Running TCF stopped being fun and felt like trying to put out fires while covered in fuel. It didn’t matter how many perks and discounts we gave customers, how many videos we did explaining risk reviews — the rumor was still spreading like flames; “TCF doesn’t fund you; they reject everyone when they pass. That was far from the truth, but we want to make things right. On paper, I believe we offered customers the most value for their dollar spent vs. competitors, but within me, I felt risk reviews were a stain on our reputation, capping the upside of our business. So for months, I have felt deep within me the right decision was to drop the 100k and 200k plans — regardless of how it hurts our bottom line — and regain customers’ trust.

Life Lately

I believe our customers complain because they love the community and enjoy being part of the ecosystem; their loudest cry was for us to remove the risk reviews. I am sorry that we acted too slowly to pay attention. I once saw a tweet that said “what’s more stressful; running an exchange, a fund or fintech” I laughed because it hit me that I run all three, and trust me when I say a part of me has lost the love of running all three because it feels like never-ending problem-solving issues. It took me a while to understand that we were trying to blitz scale a business (TCF) that doesn’t scale — the capital to fund is not unlimited, and there are only so many funding providers you can find to take on some risk. For me, TCF will be a niche business that serves users who are just getting into retail funding and want to test the waters with an affordable entry-level plan. It took me a long time to be okay with that and understand that with our business model, we weren’t going to be a unicorn, and maybe Tools was a better business to achieve this. Moving forward, our fund team will now entirely focus on improving your experience from payment to withdrawal. Expect a premium service with a lot more automation, fewer bugs, and fewer gimmicky updates you probably dont care about. Our user interface redesign for the fund going live in mid-September will start this. The focus will now be on your funding plan; everything is a secondary add-on.

Moving forward

Effective September 1st, 2022, we will be dropping the 100k and 200k plans, removing risk reviews from our funding plans, and decreasing the challenge plan discount from 30% to 15% on your first plan. Users can now expect a dedicated team focused on improving fund, your Challenge & Instant plan experience, and improving withdrawal times. The core of our product is about to get a boost, and our blitz scale culture will be focused on Tools (early October) to arm you with all you need to succeed in trading. I want to build profitable and sustainable businesses with a premium customer experience — it took me a long time to understand this and drop the “move fast break things” culture that upset many of our customers. We tried to do too many things at once, grew too quickly, and hurt our fundamentals. Thank you to all our customers who didn’t stop complaining and guided us back to the right path; for the first time in a long time, I feel free…

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Shaun Opoku

Shaun Opoku

182 Followers

Decentralizing finance at Traders Eco and building Traderstools