When you’re in a store, how often do you ask for help finding a product?
Now think about that, investor-relations professionals, and investors. You former are in the business of telling the story – helping people in the store find a product. You latter are the shoppers seeking products.
Before I go further, on Mar 10 the IR professionals in Silicon Valley are hosting the annual Spring Seminar with content assembled by crack practitioners Kevin Kessel, Kate Scolnick and friends, and it’s one of the most compelling IR agendas I’ve seen in my 22 years in this profession. We’ll be there (ModernIR sponsors). You should be too.
Back to Story vs. Store. A hundred years ago farmers came to town and handed a list to the proprietor of the general store, who assembled groceries while buyers were at the livery or the brothel or whatever.
Today you enter your list at Amazon.com or Jet.com or whatever and a couple days later – we had two shipments yesterday at the office – your stuff shows up (probably not while you’re at the livery or the brothel but follow me here).
Apply to investing. Once long ago, you went to Merrill Lynch and while you were at the livery or the brothel or whatever your financial advisor assembled some stocks for you. Today you go to Wealthfront or Betterment and you enter your criteria and algorithms assemble exchange-traded funds for you.
The IR profession is founded on effective storytelling. As the impresario for Wall Street, you help it find you. But the money asking for help finding products is plunging. Active stock pickers cannot win (a separate story about structure over prowess). The robots are crushing it.
The IR profession is at a crossroads. Yes, keep telling your Story. But the STORE is the leviathan today. Not the Story. Amazon is massive. Call it The Store. Walmart bought Jet.com for $3.3 billion because people don’t need an impresario, the clerks on the floor.
Blackrock and Vanguard don’t use the impresario of Wall Street: Research from investment banks. But you can click on the little icon for many Web apps and get customer service, most of it outsourced to somebody outside The Store.
Do we want to be Amazon, or that little icon? We won’t be the Big Dogs in either IR or investment by being better impresarios. Success in the 21st century is ironically about minding the Store. for IR, that means data analysis is the vital key to the future.
And investors, the secret to success in this market is tracking what’s moving into and out of The Store – Blackrock and Vanguard and ETFs are the amazons of equities.
I’ll give you a case in point. A big client was a juggernaut for two weeks – nothing but green metrics, hitting the forecasts every day. Then short volume doubled in two days. Investment tumbled.
That’s Store. Not Story. You can say you don’t care about the short-term. Well, the Store does. Management does. Who’s minding the store? IR professionals, that’s you. Ignore the amazons, the leviathans, the temporal distortions at your own peril.
Let’s not be the “click here for support” icon, IR pros. Let’s be Amazon. How? Your equity is a product used by consumers wanting less help from clerks and impresarios. They’re renting it, sharing it, trading it, leveraging it more than you ever imagined.
If you’re bewildered, ask us for help. But let’s not become little icons at the bottom of screens. That’s no strategy for Boardroom domination. Let’s be amazons. Love The Store.