- Posted by Jeff Carter
- on July 13th, 2012
Seatleaser.com is an automated website that electronically matches people that want to lease out their exchange memberships to people that want to use those memberships. When you lease a membership you can dramatically lower your costs of trading.
We are starting with the bigger exchanges, but will roll it out to anyone that wants it at any exchange. If you are a hedge fund, or trading firm that’s in a lot of markets, Seatleaser can be a one stop shop for you to lease all the seats you need. If you are a clearing firm that leases out seats, you can list them all and monitor them in one easy dashboard on the site.
To be clear, we don’t impact any of the traditional things that IB’s, CTA’s, Clearing Firms, or Exchanges do. We are just trying to make one aspect of their business easy, efficient and smooth. We support all of them, and if they have any feedback for us, don’t hesitate to give it to us.
Over the past couple of months, I have been working with two other guys on a pet project. It’s been a lot of fun, and it launches in beta today. Occasionally I have mentioned it in Breakfast Links, but today I wanted to spotlight it for a number of reasons.
It’s been fun to do because it’s an entrepreneurial venture. Normally, I am on the opposite side of this sort of thing. Judging if I want to invest and if it’s a good or bad idea. How scalable is it? I am pretty far down the learning curve on angel investing and have a good thesis for my investing.
In this case, I used the “Lean Start Up” principles on an idea I have been sitting on for a number of years. Time and people came together at the same moment, and we were able to execute it.
My partners in crime are Mark Bertrand and Zack Gilbert. In a galaxy far away they were once with Cloudbot. They were leaving Cloudbot, and we had a cup of coffee. I asked them what they were doing, and they said they had some side projects, but nothing major. I told them my idea. We decided to build the business.
What has been interesting is the process. I had an initial idea of how I thought the business would look. But both of my partners added their own flourishes. Then we started to interview potential customers. Man, did we learn a lot. So, we programmed the features and benefits that they wanted into it.
Even though we have small lifestyle business, the machinations and discussions we had were the same as if we were doing a huge scalable business. Every entrepreneur goes through the same process we did. And supposedly, I know the trading business cold but I am learning more every day. It’s been refreshing.
We have a bunch of beta users. On internal trader websites for $CME Group’s B shares, and the old CBOT member site I messaged the members and let them know what we were working on. So far, the feedback has been positive. We are getting tremendous unsolicited feedback as well.
If you trade at all, you know that there are fees to trading. Commissions. Those costs never seem to go down. The tricky problem for traders is to figure out how to cut their fixed costs, since virtually all costs to trade are fixed, not variable. If you do any sort of volume at all, you should lease a membership at an exchange. For example, in the Emini S+P contract, ($ES_F), you pay $1.89 retail to the exchange if you aren’t a member. If you leased a seat, you’d pay .71. If you trade 20 contracts a side per day, you ought to lease a seat since you could lease one for $400/month. You’d save $1038.40 in commissions. (22 trading days in a month)
The problem has always been getting to the seat lease market. Few people know about it. Secondly, the $CME has it buried on its website. Frankly, $CME has bigger fish to fry than worrying about seat leases. The market has traditionally been a call around market, or a paper market. We are automating it.
The thing is, if I were an angel investor and looked at this, the revenue and the market isn’t big enough to make an investment. But, Seatleaser.com solves a huge pain point. We will find out if it creates value or not.
Early this morning, I met with alumni from Notre Dame. They are interested in entrepreneurship. We talked about a lot of things. But one point that we interacted about was how people can become entrepreneurs. First, you have to go through life looking for problems to solve. Then, figure out how to solve them. Once you do that, check it out and see. Is the market big or small? Big, you have a scalable business on your hands that could really be something. Small, it becomes a lifestyle business that might earn you some money. But you should still do the business because you are creating value for someone.
The other things that you can do to support entrepreneurship is create customers for businesses by telling people about them. Take a meeting with a start up. Put start ups together with potential customers in your network.
So, I am hoping that after you read this blog you tell traders, hedge funds, banks, CTAs, IBs and anyone connected to the market about seatleaser.com. Sign up today and join our beta.
This is for seat owners that are on the seat list at an exchange. One thing that you can do to get the market going, is change your contact info on the lease list from whatever it is, to “contact seatleaser.com”. Then demand for seats will get directed to the site, and we will have a thicker two sided market.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Jeffrey Carter is an angel investor and independent trader. He specializes in turning concepts into profits. He co-founded Hyde Park Angels one of the most active angel groups in the United States in April of 2007. He previously served on the Chicago Mercantile Exchange Board of Directors. He has done market commentary for (More...)
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